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Ordinance No. 896CY/4041993.003 ORDINANCE NO. 896 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CYPRESS AMENDING SECTIONS 17 -5 THROUGH 17 -7 OF THE CODE OF THE CITY OF CYPRESS AND ADDING CHAPTER 15F TO THE CODE OF THE CITY OF CYPRESS LICENSING AND REGULATING CARD CLUBS THE CITY COUNCIL OF THE CITY OF CYPRESS DOES ORDAIN AS FOLLOWS: SECTION I. Sections 17 -5 through and including 17 -7 of the Code of the City of Cypress are hereby amended to read as follows: "Sections: 17 -5 Gambling- Prohibited Generally. 17 -6 Same - Participation in, etc. 17 -7 Same - Bingo, Keno, etc. Sec. 17 -5 Gambling- Prohibited Generally. Except as specifically allowed pursuant to the provisions of Chapter 15F of this Code: A. No person shall, for profit, for anything of value or for commercial purposes of any nature, keep, operate, conduct or maintain, either directly or indirectly, any house, room, apartment, dwelling place, commercial, industrial or recreational structure or facility or other place or any game, gambling or gaming not mentioned or included in Section 330 or 330(a) of the Penal Code of the state is played, conducted, dealt or carried on whether with cards, dice or any other device of whatsoever nature for money, checks, credit, merchandise or other representative of value. B. Every person, either as owner, lessor, lessee, principal, agent, employee, participant or otherwise, who maintains, keeps, operates or conducts, directly or indirectly, in whole or in part, or who directly or indirectly is in possession, in whole or in part, of any house, room, apartment, dwelling place, commercial, industrial or recreational structure or facility or other place upon or in which any gambling, games or gaming, prohibited in this section, is played, conducted, dealt or carried on, and who imposes or collects a fee or anything of value for the privilege of participating in any way whatsoever in any such games, gambling or gaming, or who directly or indirectly gains or receives anything of value or any financial profit from playing, conducting or dealing of any such games, gambling or gaming, shall for the purposes of this section be deemed to be keeping, conducting, operating and maintaining the same for profit or commercial purposes. C. Every person who knowingly permits any of the games, gambling or gaming which are prohibited to be played, maintained, operated, conducted or dealt in any house, room, apartment dwelling place, commercial, industrial or recreational structure or facility or other place owned or rented by such person in whole or in part pursuant to this section is guilty of a violation of this section. Sec. 17 -6 Same - Participation in, etc. Except as specifically allowed pursuant to the provisions of Chapter 15F of this Code: A. No person shall visit, frequent, participate in or knowingly permit any games, gambling or gaming which is prohibited to be played, operated, maintained, conducted or dealt in any house, room, apartment, dwelling place, commercial, industrial or recreational structure or facility or other place. -1- '7S V B. Every person who shall place or bet at or against any such games, gambling, or gaming shall be guilty of a violation of this Section. Sec. 17 -7 Same - Bingo, Keno, etc. Except as specifically allowed pursuant to the provisions of Chapter 15C of this Code or Chapter 15F of this Code: A. No person, either as owner, lessee, manager, employee, agent or servant, shall conduct, manage, carry on, maintain, operate, open, deal or deal in or cause or permit to be conducted, managed, carried on, maintained, operated, opened, dealt, or dealt in any game, operation or transaction wherein any prize, gift, rebate, compensation, reward, award, payment or gratuity, consisting of any money, check, token, credit, goods, wares, merchandise, property or thing of value, is or is to be given, awarded or delivered, either directly or indirectly, and wherein chance is a determining factor or is any determining factor of the result of such game, operation or transaction which game, operation or transaction is conducted, carried on, maintained, operated or played by the throwing, tossing, dropping, depositing or placing of any ball, marker, object, thing or substance into any perforation, hole or indentation in or upon any surface, receptacle, container, object or thing having marked, designated or identified thereon by or with any figure, number, character, symbol, letter, design or mark of any kind, or by the selecting, designating, turning, indicating, choosing or projecting of any such figure, number, character, symbol, letter, design or mark by means of any device, apparatus or equipment, or by any means or in any manner, or by the drawing, selecting, choosing or removing from any receptacle or container of any ball, disk, object, substance or material marked, designated or identified by or with any figure, number, character, symbol, letter, design or mark, any such figure, number, character, symbol, letter, design or mark hereinabove referred to, corresponding to, duplicating, referring to or relating to, in whole or in part, directly or indirectly any figure, number, character, symbol, letter, design or mark upon any card, paper, board, fabric, surface, object, substance or thing, held, used, operated or maintained by any player or participant therein or by any person, where by any predetermined or pre- arranged or any other rule, method, scheme, design or procedure any person is found, declared or determined to be, or is, or is to be, the winner, donee, recipient, or taker of such prize, gift, rebate, compensation, reward, award, payment or gratuity in the event that any such player or participant pays, deposits, expends, gives or pledges, either directly or indirectly, or agrees, promises or intends to pay, deposit, expend, give or pledge, either directly or indirectly, any money, check, credit, property or thing of value, or makes or agrees to make any purchases for the privilege of paying or participating therein or of gaining admission to the place or premises where such game, operation or transaction is, or is to be played, conducted, carried on, maintained or operated or to any other place or premises. B. No provision of this Section shall be deemed or construed as prohibiting any act made unlawful by the provisions of Sections 320, 321, 330 and 330(a) of the Penal Code of the state, or of any other section of such code or general law of the state. It is the intent of the City to prohibit by this section all games, operations or transactions herein described, not prohibited by the provisions of any general law of this state, including all games, operations or transactions for profit, commonly known as keno, tango, movie tango, beano, skill ball, fortune, quintain, fascination or inspiration, and all games, operations and transactions similar thereto under whatever name they may be designated. C. No person shall participate in, play, playing in or engage in, either directly or indirectly, any game, operation or transaction prohibited by the provisions of this section. CY/4041993.003 -2- D. No person owning, leasing, managing, controlling or having any interest in any property or premises within the City shall cause or permit the maintenance or operation in or on such property or premises, having knowledge of or after reasonable notice of the existence of any game, operation or transaction therein, prohibited by this section." SECTION II. Chapter 15F of the Code of the City of Cypress is hereby added to read as follows: Divisions: Division 1 Division 2 Division 3 Division 4 Division 5 Division 6 Division 7 Division 8 Division 9 Division 10 Division 11 Division 12 Division 13 Division 14 Sections: "Chapter 15F CARD CLUBS Definitions. Licenses and Permits Required. Imposition of Business License Taxes. Reporting Requirements. Security Deposit. Licensing of Card Clubs. Hearing Procedure. Pointholders. Employee Work Permits. Conduct of Card Clubs. Entertainment Center. Removal of Persons from Card Clubs. Prohibited Conduct of Players. Miscellaneous. DIVISION 1 - DEFINITIONS 15F -1 Definitions. Sec. 15F -1 Definitions. For the purposes of this Chapter regulating Card Clubs hereinafter set forth, the words and phrases hereinafter set forth shall have the following meanings ascribed to them unless the context clearly requires to the contrary: (a) Applicant shall mean any person who has filed an application seeking to be approved by the City as having an ownership interest in a licensed Card Club or as being employed by a Card Club in any capacity, or a person seeking approval of Pointholder status. (b) Business License Taxes shall mean the applicable taxes imposed pursuant to the provisions of this Chapter. Whenever reference is made in this Chapter to a 'business license fee,' such reference shall mean 'business license tax.' (c) Card Club shall mean a business or enterprise licensed under the provisions of this Chapter for the playing of card games as provided in this Chapter. Card Club shall also include lawful accessory uses, including Entertainment Center, under the City Zoning Ordinance. (d) Card Games shall mean the playing of any legal gambling game played with cards. (e) Card Room shall mean and include that area or areas within the Card Club in which card games are conducted. Any License issued hereunder shall designate such card room areas. CY/4041993.003 (f) Chief of Police shall include any designee. (g) City Manager shall include any designee. -3- 176 17'7 (h) Employee shall mean each and every person engaged as such in any capacity in the operation or conduct of any Card Club business who is required to have a work permit to engage in such activities. (i) Entertainment Center shall mean and include that area or areas within the Card Club which are dedicated to entertainment participated in by the patrons of the Card Club such as dining, or presented by performers in music, theater, dance or comedy. Any License issued hereunder shall designate such entertainment center /performance areas. (j) Filing and Processing Fees shall mean a fee established under the provisions of this Chapter and /or City Council Resolution which is required for the purpose of administering the provisions of this Chapter. (k) Finance Director shall include any designee. (1) Game or Games shall mean the playing of gambling card games permitted by 1) the State of California in Chapter 10 [entitled 'Gaming'- section 330 et seq.] of Title 9 of the California Penal Code, 2) reported decisions of the California courts, 3) opinions issued by the California Attorney General, and /or 4) opinions of the state agency(ies) having jurisdiction over gaming. (m) The Gaming Registration Act shall mean the provisions of Chapter 5 [entitled 'Gaming Clubs'- section 19800 et seq.] of Division 8 [entitled 'Special Business Regulations'] of the California Business and Professions Code. (n) Gross Receipts shall mean and includes the total amounts actually received or receivable for seat rental fees, admission fees, tournament fees and any and all other table revenues, but shall not include 1) entertainment revenue, 2) food and beverage receipts, 3) employee tips or valet parking charges, or 4) revenue received from other permitted retail activities. (o) House Player shall mean an employee engaged, or paid by the Licensee for the purpose of starting and /or maintaining a sufficient number of players in a card game. The house player shall play with their own money. Other terms for house player include 'proposition player' or 'shill.' (p) License shall mean a License for operating a Card Club issued pursuant to Division 5 of this Chapter. 'Licensee,' as used herein, shall mean the holder of a License. (q) Owner or Ownership shall mean every person, as 'person' is defined hereinbelow, 1) having any interest, legal or equitable, in any Card Club or Card Club License, 2) who holds any direct or indirect financial interest in the Card Club, or 3) who has power to exercise influence over the operation of the Card Club. (r) Person shall mean and include an individual, firm, association, partnership, joint venture, corporation or legal entity, whether acting as principal or agent, manager, clerk, employee or servant, either for or on behalf of himself or for any other person, firm, association, co- partnership, joint venture, corporation or otherwise, and any individual, partnership, association, corporation or other entity owning, operating or proposing to operate a Card Club in the City. (s) Point shall mean an interest in the ownership, division of profits, or revenue of a Card Club, whether legal, equitable, or of whatever kind or character. CY/4041993.003 -4- CY/4041993.003 (t) Pointholder shall mean any person having an ownership in a Card Club. (u) Premises or Property shall mean land together with all buildings, improvements and personal property located thereon and related to Card Club use. (v) Table includes the common concept of a table and any other furniture unit or any device upon which the permitted card games may be played. A table shall commonly accommodate no fewer than four (4) players. (w) Tax or Taxes shall mean a Business License Tax imposed pursuant to the provisions of this Chapter. (x) Work Permit shall mean a work permit required by this Chapter to be issued by the City to any person wishing to be employed by a Card Club. DIVISION 2 - LICENSE AND PERMITS REQUIRED Sections: 15F -2 License /Conditional Use Permit. Required. 15F -3 Pointholder Approval. 15F -4 Work Permit. Required. 15F -5 Application for Licenses and Permits. Sec. 15F -2 License /Conditional Use Permit. Required. It shall be unlawful for any person to commence or conduct, or permit to be commenced or conducted, within the City a Card Club unless such person has first obtained the following: (a) A conditional use permit to establish a Card Club pursuant to the City's zoning and land use regulations of the zoning ordinance; and, (b) A written License to do so under, and issued in compliance with the provisions of this Chapter. Sec. 15F -3 Pointholder Approval. No person shall acquire an ownership interest in a Card Club without receiving prior approval from the California Attorney General and the City Council. As used herein, 'ownership interest' shall include receipt of points by hypothecation or holding points in trust for another. Sec. 15F -4 Work Permit. Required. No person shall work in a Card Club, in any capacity whatsoever, including such person working or employed as an independent contractor, unless such person has first obtained a valid Work Permit from the City. No Card Club shall employ, in any such capacity, any person not having a Work Permit issued by the City except performers, their agents and crew, in their capacity as such performing in the Entertainment Center. Sec. 15F -5 Application for Licenses and Permits. The City Council, by resolution, shall set, from time to time, the amount to be charged for filing and processing fees and deposits for applications for a License, Pointholder or Work Permits. In addition to the fees specified in this Chapter, the applicant shall reimburse the City for any reasonable and necessary expenses over and above such fees including costs for hearings and any appeals therefrom. City officials and employees and their families shall not be eligible to apply for a License, Pointholder or Work Permits. For purposes of this Section, families include the spouse or other person related by blood or marriage to such City official or employee. -5- 173 t 179 DIVISION 3 - IMPOSITION OF BUSINESS LICENSE TAXES Sections: 15F -6 Imposition of Business License Taxes. 15F -7 Quarterly Taxes. 15F -8 Gross Receipts Tax. 15F -9 Delinquent Business License Taxes; Penalties. 15F -10 Business License Tax a Debt. 15F -11 Business License Taxes Not Refundable. Sec. 15F -6 Imposition of Business License Taxes. Under authority granted to the City Council by Article XI, Section 5 of the California Constitution, State law and the Charter of the City of Cypress, there are hereby imposed upon a Card Club specified in this Chapter, business license taxes in the amounts hereinafter prescribed. The Business License Taxes imposed herein are intended for revenue only and not regulatory fees for the cost of administering the provisions of this Chapter. It shall be unlawful for any person issued a License pursuant to this Chapter to operate a Card Club without paying the taxes hereinafter prescribed or without complying with any and all applicable provisions of this Chapter. Sec. 15F -7 Quarterly Taxes. (a) Ouarterly Tax. The City Council hereby determines that each Licensee shall pay a quarterly tax in the amount of twenty- five - thousand dollars ($25,000.00). (b) Due Date. The City Council hereby determines that quarterly taxes shall be due and payable, in advance on January 1, April 1, July 1 and October 1 of each calendar year. (c) New Applications. In case of a new application, a deposit for the first quarter in the amount of Twenty- Five - Thousand Dollars ($25,000.00) shall be paid in advance to the City when the License is issued. Sec. 15F -8 Gross Receipts Tax. (a) Tax Rate Schedule. In addition to the quarterly License taxes prescribed by Section 15F -7 of this Chapter, each Licensee shall pay to the City a monthly Tax, based upon the total monthly gross receipts of the Card Club licensed, according to the following schedule: Total Monthly Gross Receipts First $ 0 to $1,000,000 Next $1,000,001 to 15,000,000 Over $15,000,000 Monthly Tax Based on the following Percentage of Total Monthly Gross Receipts 10.0% 15.0% 20.0% (b) Should any tournament be held, ten percent (10 %) of the total entry fees shall be included in addition to the total monthly gross receipts specified in subsection (a). (c) Said Gross Receipts Tax shall apply to Card Club operations only and shall be additional to and have no effect on CY/4041993.003 -6- CY/4041993.003 the City's share of the parimutuel pool imposed by Article 9.5 of the Business and Professions Code commencing with Section 19610, et sea. Should it be determined that Business and Professions Code Section 19610.3 or any section which replaced it is the sole revenue producing measure which can be applied to the business of the Card Club Licensee, then all permits and Licenses granted pursuant to this Chapter shall be deemed revoked by operation of law and all Card Club operations shall cease. (d) Statement of Revenue. Regarding Gross Receipts. Each Licensee shall deliver (delivery may be accomplished by FAX transmission) with the City, on or before the tenth (10th) day of each calendar month, a statement, under oath, showing the true and correct amount of gross receipts derived from the Card Club permitted by the License held by such Licensee for the preceding calendar month. Should the tenth (10th) day of any month fall on a weekend or City holiday, such statement shall be filed on the previous business day. All required statements shall be provided on forms approved by the Director of Finance and Chief of Police. Such statement shall be accompanied by the payment of the correct amount of business license fee due and owing in accordance with the provisions of subsection (a) of this Section, and such sums correctly reflecting the monthly fees payable for the preceding month shall be accepted by the City, subject, however, to the right of the City to audit the matters referred to in the statement and to determine the correctness of the figures set forth in such statement and the amount payable to the City pursuant to the provisions of subsection (a) of this Section. In addition to the foregoing, a certification shall be attached to the statement, or included therein and signed by an owner, which certification or declaration shall be substantially in the following form: 'I hereby declare under penalty of perjury that the foregoing is true and correct. Executed this day of , 199_ (200_) in , California. Licensee, Owner or Managing Employee (Strike out titles which are not applicable) Sec. 15F -9 Delinquent Business License Taxes; Penalties; Interest. (a) A penalty of ten percent (10 %) shall be imposed upon each Tax, not to exceed one hundred percent (100 %) remaining unpaid per day after it becomes due. (b) Interest on Business License Taxes and penalties after one hundred percent (100 %) shall be imposed at the Judge's rule. Sec. 15F -10 Business License Tax a Debt; Attorneys' Fees. The amount of any business license tax, penalties and interest imposed by the provisions of this Chapter shall be deemed a civil debt to the City. The City may pursue any legal remedies to it for the collection of any delinquent business license tax, penalties, interest and all administrative costs incurred in connection therewith, including attorneys' fees. Sec. 15F -11 Business License Taxes Not Refundable. In the event of the cessation of business by a Licensee, whether voluntary or involuntary, no refund of any Tax shall be made. -7- 1F0 iL 1 Sections: 15F -12 15F -13 15F -14 15F -15 DIVISION 4 - REPORTING REQUIREMENTS Annual Reports. Audit of Records. Refusal to Display Records. Accounting Procedures. Sec. 15F -12 Annual Reports. In addition to the statement of revenue as specified in Section 15F -8, each Licensee shall file with the City Clerk an annual report on a form approved by the Chief of Police. Said report shall contain as a minimum, the following information: (a) A list of all Pointholders with the amount and value of points held. (b) An update of the evaluation of the Card Club's internal accounting and administrative controls as outlined in Section 15F -22 of this Chapter. (c) A list of all employees with their police identification numbers. Each annual report shall be verified by the Licensee and made under penalty of perjury. Sec. 15F -13 Audit of Records. (a) At the end of each fiscal year, the Licensee shall employ at its expense a nationally recognized firm of certified public accountants to conduct an audit of Licensee's financial records in accordance with generally accepted auditing standards. Such audit shall conclude with the expression of the auditor's opinion on the financial statements of the Licensee's Card Club operations in accordance with generally accepted auditing principles. The auditor shall express a separate opinion on the Licensee's gross receipts paid to the City for the period then ended. Such audit report shall be submitted to the City Manager no later than ninety (90) days after the fiscal year end. The City Manager shall review the report and work papers and may require any further information from the Licensee. The City Manager may submit such documents and reports to a certified public accountant selected by the City. (b) The Finance Director may require, at any time, an audit of the gross receipts of a Licensee by a certified public accountant. Such audit shall be in addition to the audit mentioned in the preceding paragraph. If such additional audit shall disclose an inaccuracy of gross receipts reported by the Licensee for the period of said audit, the cost thereof shall be paid to the City by the Licensee, otherwise, the cost of said audit shall be borne by the City. (c) Nothing herein shall limit the City's right at any time unrestricted access to inspect or audit the books, records, accounts and facilities of a Licensee relating to gross receipts or other items, including but not limited to cash counting rooms. (d) Any information obtained pursuant to the provisions of this Section or any statement filed by the Licensee shall be deemed confidential in character and shall not be subject to public inspection, except in connection with the enforcement of the provisions of this Chapter. It shall be the duty of the City Manager to so preserve and keep such information so that the contents thereof shall not become known, except to the City Manager, Finance Director, Chief of Police or City Attorney or pursuant to the order of any court of competent jurisdiction. CY/4041993.003 -8- CY/4041993.003 Sec. 15F -14 Refusal to Display Records. Any failure or refusal of any such Licensee to make and file any statement or report as required within the time required, or to permit unrestricted access to such inspection of such books, records and accounts of such Licensee shall be and constitute full and sufficient grounds for revocation of a License of any such Licensee. Sec. 15F -15 Accounting Procedures. (a) Prior to the issuance of a License in accordance with the provisions of this Chapter, the City shall review and approve the accounting procedures to be conducted in a Card Club. Such said accounting procedures shall be consistent with those utilized in the gaming industry, including but not limited to the most recent technology in internal accounting and administrative controls as outlined in Section 15F -22 of this Chapter. (b) In the event that the Finance Director determines that the annual update required under Section 15F -12 regarding the evaluation of the Licensee's internal accounting and administrative controls discloses material weaknesses or reportable conditions in the Licensee's system of internal accounting and administrative controls, the Licensee shall, upon request by the Finance Director, submit a program within thirty (30) days of such plan outlining Licensee's program to correct such weaknesses or conditions. Sections: 15F -16 15F -17 15F -18 15F -19 15F -20 15F -21 DIVISION 5 - SECURITY DEPOSIT Security Deposit for Fees. Deposits to be Placed in Interest Bearing Account. Deposits to be Charged Against Services Performed. Reduction in Amount of Deposit. Increase in Amount of Deposit. Replenishment of Deposit. Sec. 15F -16 Security Deposit for Fees. That each applicant for a Card Club License, and each proposed transferee of an existing Card Club License, shall deposit with the City, prior to issuance of a License pursuant to Division 5, the sum of Fifty Thousand Dollars ($50,000.00) ('Deposit'). This sum shall serve as a continuing security deposit to insure payment of all fees and costs associated with administering the provisions of this Chapter including, but not limited to, preliminary investigations by the Chief of Police, licensing, Pointholder and Work Permit application processing and enforcement. Sec. 15F -17 Deposits to be Placed in Interest Bearing Account. The City shall place all deposits in interest bearing accounts in financial institutions selected by the City Treasurer. Any interest shall be posted to that account. Sec. 15F -18 Deposits to be Charged Against Services Performed. Any and all costs and fees associated in administering the provisions of this Chapter shall be charged against the Deposit. Prior to withdrawing any funds from the Deposit, City shall advise, in writing, the Licensee identifying the services performed and the costs associated therewith. If the Licensee does not object, in writing, within ten (10) days after notification of City's intent to withdraw such funds, City shall be authorized to charge the identified costs against the Deposit. If the Licensee timely objects to any proposed costs to be withdrawn by the City, the City Manager shall set the matter for hearing within ten (10) days in which the City Manager shall act as hearing officer. The City Manager, in making his decision, shall adhere to the standards set forth in Section 15F -28(f) of this Chapter. The decision of the hearing officer shall be final and conclusive. -9- 1C2 1P3 Sec. 15F -19 Reduction in Amount of Deposit. At the direction of the City Council, the City Manager may reduce the amount of the Deposit after the Licensee has been operating for twenty -four (24) consecutive calendar months. Sec. 15F -20 Increase in Amount of Deposit. If, during the operation of a Card Club the Licensee or authorized representative thereof is delinquent in the payment of any of the business license taxes required under Division 3 of this Chapter, the City Manager, at the direction of the City Council, may require the Licensee to increase the deposit in an amount reasonably necessary to cover the estimated Gross Receipt Taxes and Quarterly Taxes for a one (1) year period. Sec. 15F -21 Replenishment of Deposit. If at any time the amount of a required deposit falls below the amount required to be deposited pursuant to Section 15F -16, et sea. of this Chapter, the Licensee, for whose benefit the deposit exists, shall replenish the same within five (5) consecutive working days so as to bring the minimum balance thereof to the level required pursuant to this Chapter. A failure to replenish the amount of a deposit within the time permitted hereunder shall be grounds for revocation of the License to which such failure relates. Sections: 15F -22 15F -23 15F -24 15F -25 15F -26 15F -27 DIVISION 6 - LICENSING OF CARD CLUBS Licenses. Licenses. Licenses. Licenses. Licenses. Licenses. Applications. Investigations and Reports. Granting, and Denial. Grounds for Denial. Expiration. Transfer and Assignment. Sec. 15F -22 Licenses. Applications. (a) Any person desiring or proposing to commence or conduct a Card Club shall file with the City Clerk, on forms furnished by the City, a written application for License as required by the provisions of this Chapter. Each such application shall be verified and made under penalty of perjury. Each such application shall set forth and show, in addition to such other information as the City may require, the following information: (1) The date of the application; (2) The true names(s) of the applicant(s) and any other names by which an applicant has been known; (3) The status of the applicant whether individual, firm, association, partnership, joint venture, corporation, or legal entity; CY/4041993.003 (4) Applicant information from individuals: (i) Each applicant preceding inclusive residence and business address of for the five (5) years immediately the date of the application, and the dates of each such address. (ii) Written proof that the applicant twenty -one (21) years of age. (iii) Applicant's social security driver's license number. is at least number and (iv) Applicant's height, weight, color of eyes and hair. -10- (5) (v) Three (3) photographs of applicant, of a size specified by the City, taken within the six (6) months immediately preceding the date of the application. (vi) Applicant's business, occupation and employment history for the five (5) years immediately preceding the date of application. (vii) The permit history of the applicant; whether such person, has ever had any License or permit issued by any agency or board, City, County or State revoked or suspended, or has had any professional or vocational license or permit revoked or suspended, and the reason therefor. (viii) Such other identification and information as may be required by the City Council. Applicant information from corporations: (i) The name of the corporation shall be set forth exactly as shown in its articles of incorporation or charter, together with the state and date of incorporation and any identification numbers or other identifying designation from the state of incorporation. (ii) All the information required hereinabove for individuals in subsections (4)(i) through (4)(viii), inclusive, for each of its current officers, directors, and shareholders shall be submitted if the stock is not publicly traded. If the stock has been publicly traded for at least the three (3) years immediately prior to submission of the application and there are more than 1500 shareholders, only those shareholders holding five percent (5 %) or more of the stock shall be subject to the disclosure requirements of (4)(i) through (4)(viii), inclusive. (iii) All current directors, officers and shareholders holding five percent (5 %) or more of the stock shall execute a Guaranty Agreement, in a form acceptable to the City Attorney for all Business License Taxes required under the provisions of this Chapter. (6) Applicant information from partnerships: (i) The application shall identify each of the partners, including limited partners. A License issued to a partnership shall be issued in the name of all the general partners. (ii) If the applicant is a limited partnership, it shall furnish a copy of its certificate of limited partnership as filed with the County Clerk. (iii) The information required herein for individuals set forth hereinabove in subsection (4)(i) through (4)(viii), inclusive, for each partner (general or limited) shall be submitted. (iv) If one or more of the partners is a corporation, the provisions of this subsection pertaining to corporation applicants shall apply. CY/4041993.003 185 CY/4041993.003 (7) An applicant corporation or partnership shall designate one of its officers or general partners to act as its responsible managing officer. Such person shall complete and sign all application forms required for an individual applicant under this Chapter, but only one application fee shall be charged. A change application shall be filed to change the responsible managing officer but no additional inspection shall be necessary. The corporation's or partnership's responsible managing officer must at all times meet all of the requirements established for Licensees by this Chapter or the corporation or partnership license shall be suspended until a responsible managing officer who does meet all such requirements is designated. If no such person is named within thirty (30) days, the corporation or partnership license is deemed canceled and a new initial application for permit must be filed, together with the payment of fees applicable thereto. (8) The location of the business for which the License is sought shall be identified. If the property is not owned by the applicant, the name, address and phone number of the owner and lessor of the real property upon or in which the business is to be conducted, and a certified copy of the lease or rental agreement is to be submitted to the City. (9) A description of any other business conducted or proposed to be conducted at the same location. (10) The game(s) proposed to be played shall be designated and described in detail. (11) The maximum number of tables to be placed, employed or used for the playing of card games. (12) A complete description and layout of all security measures and plans proposed for the Card Club (both physical and operational). (13) A copy of the proposed house rules for players. (14) Evidence of a pending application for a conditional use permit. (15) A statement that the building(s) conforms, or will conform, to all of the State and the City requirements for occupancies of the nature proposed and that the applicant understands and agrees that the Chief of Police, Fire Chief or any other City official, or a designated representative thereof, shall have reasonable access to the premises to make inspection of the card room premises and access to the records of any applicant in order to properly conduct their investigation; (16) A statement that the Licensee shall make the premises and Card Club records available to the Chief of Police, Finance Director or a designated representative thereof, at any time and without first obtaining a search warrant. (17) A statement that the applicant understands that the application shall be considered by the City Council only after a full investigation and report has been made by the City Manager and the Chief of Police, and that any approval will be conditioned upon the owner obtaining registration under the Gaming Registration Act prior to commencing card game operations. -12- CY/4041993.003 l86 (18) A statement that the applicant understands and agrees that any business or activity conducted or operated under any License issued under such application shall be operated in full conformity with all the laws of the State and the laws and regulations of the City applicable thereto, and that any violation of any such laws or regulations in such place of business, or in connection therewith, shall render any License or Licensee subject to the penalties contained in this Chapter. (19) A statement that the applicant has read the provisions of this Chapter, understands the same, and agrees to comply with them. (20) A full and complete financial statement, as determined by the City's Director of Finance, of the applicant(s) prepared by a licensed certified public accountant which shall include a financial plan and sources of funding for the development including projected development costs and a one (1) year cash flow projection. The financial statement(s) required by this subsection shall be a confidential qualified document and shall not be open to public inspection but shall be available only to the City Manager, Finance Director or City Attorney, to those State officials having jurisdiction over Card Clubs pursuant to the Gaming Registration Act, to law enforcement officials, and to any court of competent jurisdiction where any matter relating thereto may be actually pending; (21) A statement that the applicant understands and consents to the inclusion of any criminal convictions or arrests in any report to the City Council that the Chief of Police deems relevant and necessary concerning any person named in the application. (22) A complete description of all plans, both physical and operational, for the handling of money, including but not limited to provisions, if applicable for (a) Purchase of chips and protection against counterfeit chips; (b) Check cashing procedures; (c) Procedures for bringing money to or removing money from the premises. (23) An independent evaluation of the internal accounting and administrative control system proposed. City. (24) Such other information as may be required by the (b) Concurrently with the filing of the application, the applicant, including its officers, management, employees and all persons proposing to have an ownership interest therein, shall be finger printed and photographed by the Chief of Police and pay the applicable fees. (c) The City Council shall not consider any application for any License contemplating less than a minimum of fifty (50) tables. Sec. 15F -23 Licenses. Investigations and Reports. (a) Investigations Required. Whenever an application has been filed with the City Clerk for a License pursuant to the provisions of this Chapter, the City Clerk shall immediately refer such application to the City Manager, who shall cause an investigation to be conducted as follows: -13-- 1F7 (1) An investigation of the building and /or location where the applicant proposes to conduct such business or activity; (2) An investigation of the applicant, including officers, partners, management and principals, including all persons proposing to have an ownership interest therein; (3) An investigation as to the type of tables or units to be used at, or in conjunction with, the proposed business and the type of games proposed to be played, which investigation shall also include the proposed locations of the tables or other units in, within, or about the proposed place of business; and (4) Such other investigation as deemed necessary. (b) Reports Required. The Chief of Police, and other officials, shall make such investigations with reasonable promptness and shall make written reports to the City Manager. Upon conclusion of all investigations and if the City Manager is reasonably satisfied that the application meets all requirements of the Code of the City, the City Manager shall make a written report to the City Council, which shall include the Chief's report and other pertinent reports. Sec. 15F -24 Licenses. Granting, and Denial. (a) Decision of the City Council. Whenever an application for a License is presented to the City Council, by the City Manager, the City Council, shall hold a public hearing within forty -five (45) days, whether such License should be issued. The City Council, shall approve, conditionally approve or deny an application for a License. (b) License Conditions. Any such License issued by the City Council shall be deemed issued subject to all of the terms, conditions, and provisions of this Chapter as well as all applicable laws of the City, State, and Federal governments; the City Council may impose specific additional conditions, in the exercise of its discretion, to ensure compliance with the provisions of this Chapter, as may be reasonably necessary. (c) Decision of the City Council Final. The decision of the City Council to approve any such application and grant the License applied for, or to deny any such application and refuse to grant the License applied for, shall be final and conclusive. Sec. 15F -25 Licenses. Grounds for Denial. The City Council shall deny an application for a License for any of the following reasons: (a) If any applicant does not have a valid registration from the Attorney General of the State of California issued pursuant to the Gaming Registration Act; or (b) If the proposed Card Club is or will be operated in violation of any Federal, State, or City law or regulation; or (c) If any applicant, including a partner, joint venturer, or principal has been convicted within the last ten (10) years of bookmaking, loan sharking, or illegal gambling, or has been convicted of an offense within the last ten (10 years involving such activities; or (d) If any applicant, including a partner, joint venturer, or principal has been convicted of any crime within the last ten (10) years punishable as a felony or convicted of an offense within the last ten (10) years involving moral turpitude; or CY/4041993.003 -14- (e) If the game(s) for which a License is applied for are unlawful; or (f) If the building, premises or use will not comply with the established requirements and regulations relating to building safety, zoning, and fire within the City; or (g) If the applicant fails to provide a security plan for the Card Club and its premises which satisfies the Chief of Police; or (h) If the approval of any applicant would be inimical to the interests of legitimate gaming or to the citizens of the community; or (i) If any person having any interest whatsoever or at all in the ownership of any other Card Club located within the City, whether legal or equitable, or as a trustor or trustee, or of whatsoever kind or character, whether same be as the manager, employee, Pointholder or owner. (j) If any person having any interest whatsoever or at all in the ownership of any other Card Club located outside of the City, whether legal or equitable, or as a trustor or trustee, or of whatsoever kind or character, whether same be as the manager, employee, Pointholder or owner, which other Card Club has as its licensed place of business a location within a radius of fifty (50) miles of the City limits of Cypress. (k) If the location, premises or property for which a Licensee has applied for was not approved by a majority of those voters voting thereon at any preceding regular or special City election. (1) If the applicant does not have the financial capability or business experience to operate a Card Club in a manner which would adequately protect the patrons of the Card Club and the citizens of the community. Sec. 15F -26 Licenses. Expiration. (a) Licenses lawfully issued under the provisions of this Chapter shall be and remain valid until either surrendered, abandoned, suspended or revoked. CY/4041993.003 (b) In the event of surrender, abandonment, suspension or revocation, no Tax, License deposit or fee, or any portion thereof, shall be refunded. Sec. 15F -27 Licenses. Transfer and Assignment. (a) No License for a Card Club or any business conducted in conjunction therewith shall be sold, transferred or assigned in whole, or in part, either as to the Licensee or location of the business without the prior approval of the City Council. Any purported sale, transfer or assignment of any License shall be considered for all purposes in the same manner as a new application for a Card Club License. Any such sale, transfer or assignment, or attempted sale, transfer or assignment without such approval shall constitute a voluntary surrender of such permit, which shall thereafter be deemed terminated and void. (b) The prohibition on unauthorized sales, transfers and assignments expressly applies to purported transfers by operation of law, including proceedings under the bankruptcy laws of the United States. The Licensee shall notify the City Manager of the possibility of such transfer or assignment concurrently with the commencement of negotiations for same. -15- 1F 73 DIVISION 7 - HEARING PROCEDURE Sections: 15F -28 Suspension and Revocation of License. Sec. 15F -28 Suspension and Revocation of License. A License issued pursuant to the provisions of this Chapter shall be subject to suspension and /or revocation in a time and manner set forth in this Division. (a) Suspension. The Chief of Police shall immediately suspend any License if he finds that: (1) The Attorney General has suspended or revoked an applicant's registration under the California Gaming Registration Act; or, (2) A Licensee, or any agent or employee thereof, has violated, or permitted, allowed or caused a material violation of any provision of this Chapter, any material regulation issued pursuant to this Chapter, any material condition of approval imposed upon the issuance of the License, or any state law or regulation relating to the operation of a Card Club, and the continued operation of the Card Club jeopardizes, or threatens to jeopardize, the public peace, health, safety or general welfare. (b) Order of Suspension. The Chief of Police shall, after conducting an investigation, issue an order of suspension, suspending a License, where he finds the facts authorizing such suspension, pursuant to subparagraph (a) of this Section 15F -28, to be present. The Chief shall give notice to the Licensee of the issuance of such order and the basis therefor. Such an order of suspension shall become final on the thirtieth (30th) day following. its issuance unless a written appeal is filed with the City Clerk appealing such order. Upon an order of suspension becoming final, it shall be deemed an order revoking the License to which it relates. Such an appeal must be filed within ten (10) days of the date of giving notice of the issuance of the order of suspension. If any application for appeal is not made pursuant to this Section and within the time limits set forth herein, such Licensee shall be deemed to have waived his or her right to a hearing and the order of suspension shall become final and shall be deemed an order revoking the License to which it relates. (c) Hearing An Order of Suspension. Where a timely appeal is filed, the City Manager shall appoint a hearing officer who shall hear the matter de novo, as provided in subsection (f) of Section 15F -28 who shall revoke the License if he /she finds one or more of the grounds set forth in subsection (g) of this Section 15F -28 to be present. (d) Revocation - Hearinct. Whenever the City Manager has information that a violation constituting a ground or grounds for revocation as set forth in subsection (g) of this Section 15F -28 has occurred, the Chief of Police shall investigate the same. If he determines that such a violation has occurred, he shall report to the City Manager who shall set the matter for hearing before a qualified hearing officer designated by him. The hearing officer shall be an attorney licensed to practice in the State of California, or a retired municipal, superior or appellate court judge. He, the City Manager, shall give notice of the time and the place of the hearing before the hearing officer to the Licensee and to any other requesting such notice not less than ten (10) days in advance of the dates set by him for such hearing. CY/4041993.003 -16- (e) Failure to Appear at Hearing. If the Licensee fails to appear at the time and place set for hearing, the hearing officer may continue the matter to a specific time and date, and by letter, advise the Licensee that a second unexcused non - appearance will result in the hearing being held without the Licensee's presence, and the Licensee shall be bound by the decision of the hearing officer. (f) Hearing. At the time set for such hearing, the hearing officer shall hear the evidence presented by or on behalf of the Chief of Police, purporting to show that grounds exist for revocation; thereafter, the hearing officer shall permit the Licensee and any other interested person, to present such evidence as is necessary and proper to dispute the existence of any contested facts. The burden of proof shall be upon the City to show the existence of the facts required to support a revocation of a License. The hearing officer need not observe the strict rules of evidence applicable to a judicial proceeding, but he shall observe the substance of the rules of evidence applicable to civil proceedings to the end that the matter can be resolved based upon accurate, relevant and competent evidence. (g) Revocation. - Grounds. The hearing officer, after the hearing shall revoke a License if the hearing officer finds that: (1) The Attorney General has suspended or revoked an applicant's registration under the California Gaming Registration Act; or (2) The Licensee, or any agent or employee thereof, has violated, or permitted, allowed or caused a material violation of any provision of this Chapter, any material regulation issued pursuant thereto, any material condition of approval imposed upon the issuance of the License, or any State law or regulation relating to the operation of a Card Club; or (3) A Licensee has failed to pay, when due and payable, any of the business license taxes or fees, including replenishment of all or any portion of the security deposit, provided for in this Chapter; or (4) A Licensee has made any false statement as to a material fact on an application form or as to any other information presented as part of the application process; or (5) A Licensee commits any act which would have constituted grounds for denial of an application for a License pursuant to Section 15F -25; or (6) The licensed Card Club has ceased or substantially ceased to do business during sixty (60) or more days out of any consecutive ninety (90) -day period; or (7) The Licensee's operations cause substantial adverse impact on surrounding properties due to criminal activity, noise, or parking overflow to the extent that the Card Club operations constitute a public nuisance. (g) Decision of Hearing Officer. If, the hearing officer finds, based upon the evidence presented, that facts are present which constitute grounds for revocation, he /she shall revoke the License. If he /she finds that such facts are not present, he /she shall dismiss the proceeding. The decision of the hearing officer shall be final and conclusive in the absence of an appeal taken in the time and manner set forth below. CY /4041993.003 -17- (h) Appeal to City Council. A Licensee aggrieved by the issuance of an order revoking the License shall have the right of appeal to the City Council, such an appeal shall be deemed timely and perfected only if it complies with all of the following: 1) All such appeals shall be in writing and filed with the City Clerk; and (2) Each such appeal shall state therein the specific ground(s) for such appeal and a description of how and in what manner, the hearing officer erred in determining the grounds for revocation existed; and (3) No such appeal shall be effective for any purpose, unless it is filed with the City Clerk not later than ten (10) consecutive calendar days following the giving of notice by the hearing officer of the issuance of an order of revocation; and (4) An order of revocation to which a timely filed valid appeal relates shall be deemed suspended during such time as the appeal is pending before the City Council. If one or more members of the City Council file with the City Clerk, within the time for the filing of an appeal as set forth herein, written requests to have a decision of the hearing officer brought to the City Council for review, such request(s) shall constitute, for all purposes, an appeal brought pursuant to this subsection. (i) Council Appeal Hearing. Upon receipt of a timely filed appeal, the City Clerk shall set the matter for hearing by the City Council at the City Council's next most convenient meeting. Not less than ten (10) consecutive calendar days written notice of the time and place of such hearing shall be given to the Licensee, and to any other person requesting such notice, by the City Clerk. At the time of such hearing, the City Council shall review and consider the written record of proceedings conducted by the hearing officer and any oral or written arguments presented by the Licensee, or any other person interested in such matter. No oral or documentary evidence shall be submitted to the City Council unless it is shown to the reasonable satisfaction of the City Council, that such evidence was not reasonably available at the time of the hearing held by the hearing officer. In the event that an offer of additional oral or documentary evidence is made, and good cause is shown for the failure to present such evidence at the time of the hearing before the hearing officer, the City Council may either consider such evidence, or it may remand the matter to the hearing officer for a reconsideration by the hearing officer based upon such evidence. Thereafter, the City Council shall expeditiously act upon such appeal and shall either affirm or reverse the order of revocation issued by the hearing officer. The decision of the City Council shall be final and conclusive. In the event of suspension or revocation of a License, no part of any fee previously paid shall be refunded. Sections: 15F -29 15F -30 15F -31 15F -32 CY/4041993.003 DIVISION 8 - POINTHOLDERS Pointholder Applications; Approval or Denial Thereof. Pointholders: Transfers and Assignments of Points. Pointholders: Periodic Review of Status. Pointholders: Suspension and Revocation of Approval; Divestment. -18- Sec. 15F -29 Pointholder Applications; Approval or Denial Thereof. (a) Persons wishing to become Pointholders shall, prior to acquiring an ownership interest in any Card Club, file an application with the City Clerk on a form approved by the City Attorney and shall include a full financial statement. The information required shall be identical to the information required +9f License applicants in Section 15F -22. (b) The application shall be accompanied by a non- refundable fee which shall be used to cover costs of investigation. (c) The application shall include the applicant's photograph and fingerprints taken by the Chief of Police. (d) Except as provided herein, before a transfer of ownership interests is made, the new person shall comply with the applicable provisions of Section 15F -27 and provide the required information to the Chief of Police. (e) All Pointholders shall disclose information, as directed by the City's Director of Finance, about outstanding loans they and /or their family members may have or obtain during the period of pointholder's ownership. The information shall include, the source, the amount, the interest rate, security, and the duration of the loan(s). If the source is other than a recognized financial institution [including federal and state regulated 1) banks, 2) savings and loan institutions, or 3) credit unions ('recognized financial institutions')], the Director of Finance shall direct the level of information to be submitted about the lender. There shall be an on -going responsibility to advise the City of any changes in lender(s) or in the status of the loans(s). Except as reviewed by the Director of Finance, the Chief of Police, the City Manager, City Attorney or as permitted by law, the information submitted shall remain confidential. (f) The Chief of Police shall investigate said person and recommend to the City Council approval or denial of said application and the City Council's decision shall be final and conclusive. (g) The City Council shall deny an application to become a Pointholder in the following cases: (1) If the applicant has been convicted of any crime within the last ten (10) years punishable as a felony; (2) If the applicant has been convicted of an offense within the last ten (10) years involving moral turpitude; (3) If the applicant has engaged in illegal gambling activities, including bookmaking and loan sharking or has been convicted of an offense involving such activities; (4) If an applicant has engaged in an act of moral turpitude or engaged in an act chargeable as a criminal offense relating to the acquisition of ownership or operation of a Card Club, notwithstanding any other provision of the law, the Chief of Police may require a potential Pointholder to reveal the facts and circumstances of any arrest for illegal gambling activities, or any act of moral turpitude, regardless of whether or not the arrest resulted in a conviction. CY/4041993.003 (5) If the applicant is not a person of good character, integrity and honesty; -19- 191 192 (6) If the applicant has made any false statements in the application or as to any other information presented as part of the application process; or (7) If the approval of the applicant would be inimical to the interests of legitimate gaming. (h) No Pointholder application shall be submitted to the City Council until the applicant has received approval from the Attorney General pursuant to the Gaming Registration Act. Sec. 15F -30 Pointholders: Transfers and Assignments of Points. No ownership interest in a Card Club shall be acquired, transferred or assigned by previously approved Pointholders without complying with Sec. 15F -27. It shall be the responsibility of both the prospective Pointholder and the Licensee to ensure that such form is filed. Failure to file a completed form in a timely manner shall be a violation of this Chapter and the Pointholder and Licensee shall be subject to penalties as contained in this Chapter. Sec. 15F -31 Pointholders: Periodic Review of Status. The Chief of Police shall periodically update background investigations as to Pointholders as deemed necessary by him. Sec. 15F -32 Pointholders: Suspension and Revocation of Approval; Divestment. (a) Approval of a Pointholder shall be suspended or revoked under the following circumstances: (1) The Attorney General has suspended or revoked a pointholder's registration under the California Gaming Registration Act; or (2) A Pointholder has violated, or permitted, allowed or caused a material violation of any provision of this Chapter, any material regulation issued pursuant to this Chapter, any material condition of approval imposed upon the issuance of the Card Club License, or any state law or regulation relating to the operation of a Card Club; or (3) A Pointholder has made any fraudulent statement as to a material fact on an application form or as to any other information presented as part of the application process; or (4) A Pointholder commits any act which would have constituted grounds for denial of approval pursuant to Sec. 15F -29. (b) The Pointholder approval shall be suspended or revoked in accordance with those hearing procedures, including appeal to the City Council, as set forth in Section 15F -28 for suspension and revocation of License. (c) The ownership interest must be divested within one hundred twenty (120) days of notice of revocation. Failure to do so shall constitute a misdemeanor and each day of non - compliance shall constitute a separate and complete offense. In addition, the City Attorney may invoke appropriate civil remedies to enforce compliance. (d) No person required to divest an ownership interest in a Card Club following a revocation of approval of Pointholder status shall transfer said ownership interest to his /her spouse, child, sibling, parent or to his /her spouse's child, sibling or parent without the approval of the City Council. CY/4041993.003 -20- Sections: 15F -33 15F -34 15F -35 DIVISION 9 - EMPLOYEE WORK PERMITS Employee Work Permits: Applications; Approval or Denial Thereof. Work Permits: Suspension and Revocation. Employees Information: Identification Badges. Sec. 15F -33 Employee Work Permits: Applications) Approval or Denial Thereof. (a) Any person wishing to work in a Card Club shall obtain a work permit through the filing of an application with the Chief of Police on a form approved by the City Attorney. The form may vary according to the job classification. The application shall be complete in all respects, and shall include photographing and fingerprinting. The Chief of Police shall process the application and may approve, conditionally approve (including issuance of a temporary permit) or deny said application. The Chief of Police shall deny an application for a work permit in the following cases: (1) If the applicant has been convicted of any crime within the last ten (10) years punishable as a felony; (2) If the applicant has been convicted of an offense within the last ten (10) years involving moral turpitude; (3) If the applicant has engaged in bookmaking, loansharking or other illegal gambling activity or has been convicted of an offense involving such activities; (4) If the applicant is not a person of good character, integrity and honesty; (5) If the applicant has made any false statement in the application or as to any other information presented as part of the application process; or (6) If the approval of the applicant would be inimical to the interests of legitimate gaming. (b) If an application is denied, the applicant may appeal said denial by written notice to the City Clerk, within ten (10) days following the giving of notice of denial to the applicant. Upon receipt of a timely filed appeal the City Manager shall designate a hearing officer, and shall cause a de novo hearing to be held within thirty (30) days. The hearing officer, after hearing, shall approve or deny such appeal based upon the standards set forth in this Chapter. The hearing officer's decision shall be based upon the records and files of the Chief of Police, and upon evidence presented by the applicant and any other interested person, and shall be final and conclusive. Sec. 15F -34 Work Permits: Suspension and Revocation. (a) A work permit shall be suspended or revoked under the following circumstances: CY/4041993.003 (1) Commission of any act which would have grounds for denial of a work permit pursuant to Sec. 15F -33, or (2) Material violation of any conditions imposed in granting such permit. (b) The permit shall be suspended or revoked in accordance with those hearing procedures, including appeal to the City Council, as set forth in Section 15F -28 for suspension and revocation of License. -21- 19f 1c. (c) A work permit shall remain in effect until voluntarily relinquished, suspended or revoked. Sec. 15F -35 Employees Information: Identification Badges. (a) Before commencing work with a Licensee, each employee shall first have obtained a work permit from the Chief of Police. (b) Each such employee, shall at all times while acting within the scope of his /her employment on the Card Club premises, wear in a prominently visible place upon his /her person an identification badge in a form prescribed by the Chief of Police, said badge bearing the name, identification number and photograph of the employee. It shall be a violation of this Chapter to fail to wear such badge when required, and any such failure shall be cause for penalties to be imposed upon the employee, the Licensee or both. Notwithstanding the foregoing, the Chief of Police may waive the requirement for identification badges for security personnel. (c) A Licensee shall notify the Chief of Police within ten (10) days of any change in the status or capacity of an employee to whom a work permit was issued. Any purported change in status or capacity whatsoever of such employee shall be considered for all purposes in the same manner as a new application for a work permit. Sections: 15F -36 15F -37 15F -38 15F -39 15F -40 15F -41 15F -42 15F -43 15F -44 15F -45 15F -46 15F -47 15F -48 15F -49 15F -50 15F -51 15F -52 DIVISION 10 - CONDUCT OF CARD CLUBS Rules and Regulations. Alcoholic Beverages. Age Limitations. Subcontracting Subletting Prohibited. Table Visibility. Player Visibility. Seat Rental Fees. Rules of Play. Convenience Dealers. Playing Area. Signs. Search Warrants and Inspection Warrants. Investigations. Updating of Information. Check Cashing, Extension of Credit, and Third Party Banking Relationships. Holding Valuables for Safekeeping. Jackpot Games. Tournaments. Sec. 15F -36 Rules and Regulations. Rules and regulations governing the operation of Card Clubs may be established and promulgated by resolution adopted by the City Council. Such rules and regulations shall have the force of law and any violation thereof shall be considered a violation of this Chapter, and a ground for suspension and /or revocation of a License, Pointholder, approval or work permit. ,Sec. 15F -37 Alcoholic Beverages. (a) Alcoholic beverages may be sold, dispensed, consumed or permitted on the Card Club premises in accordance with applicable state and local laws and regulations. (b) No Licensee or other person in charge or control of any Card Club operating under any License held or issued pursuant to the provisions of this Chapter shall permit any person to play in any game at any time while such person appears to be, or is, under the influence of any alcoholic beverage or controlled CY14041993.003 -22- substance, and no person under, or who appears to be under, the influence of any alcoholic beverage or controlled substance shall play in any such game. (c) No Licensee or other person in charge or control of any Card Club operating under any License issued pursuant to the provisions of this Chapter shall permit any person to enter the premises while such person appears to be or, in the opinion of the Licensee or duly authorized agents or employees, is under the influence of an alcoholic beverage or controlled substance. Sec. 15F -38 Age Limitations. No person under the age of twenty -one (21) years shall be permitted to participate in any Game. Sec. 15F -39 Subcontracting Subletting Prohibited. It shall be unlawful for any Licensee to assign, arrange for, or in any other manner sublet to, or subcontract with, any person the right to conduct any Game, directly or indirectly, with or without consideration unless such person holds a valid work permit. Sec. 15F -40 Table Visibility. Doors, screens or other obstructions of any kind shall not be placed so as to conceal any table in a game. Sec. 15F -41 Player Visibility. Doors, screens, or other obstructions of any kind shall not be placed so as to conceal the players in a Game. Sec. 15F -42 Seat Rental Fees. The seat rental fees shall be reviewed and approved by the Finance Director and shall be proximately posted at locations approved by the Chief of Police. Sec. 15F -43 Rules of Play. Rules of play for all games permitted by law, including tournaments, shall first be filed with the Chief of Police and shall be conspicuously posted at locations approved by the Chief of Police. The Chief of Police shall approve the rules of play. Sec. 15F -44 Convenience Dealers. (a) 'Convenience dealers' have a valid work permit issued pursuant to the provisions of this Chapter who are employees of the Card Club provided for the convenience of the players so that no player deals. Other than dealing the cards and making collections as set forth in this section, such dealer shall not participate in any way in the Game, does not bet and does not take a percentage of the winnings. Convenience dealers shall conduct the Game and ensure that the rules are enforced. (b) Such dealers shall be clearly identifiable through an identification badge and shall adhere to whatever designation or identification standards are required by the Chief of Police. Sec. 15F -45 Playing Area. The playing of all games within the Card Club shall be confined to a minimum of fifty (50) tables. No game provided for shall be permitted at any other location on such Card Club premises, except in that area designated as the 'card room.' CY/4041993.003 Sec. 15F -46 Signs. Outdoor signs advertising a Card Club or any activity therein shall be established during the planning approval process. -23- 1 197 Sec. 15F -47 Search Warrants and Inspection Warrants. All Licenses shall be issued subject to and accepted subject to the Card Club being open for inspection during all hours to the City Manager, the Chief of Police, the Finance Director, and any other duly authorized representative without an inspection or search warrant. Evidence of any violation of this Chapter may be seized without a search warrant or other legal process. Sec. 15F -48 Investigations. Updating of Information. The Chief of Police shall have the right to require any Licensee, Pointholder or Work Permit Employee to supply additional or updated information to that previously required of such person in any application. Additionally, each such person shall cooperate in any investigation undertaken by the Chief of Police, or any law enforcement official and to allow any books, records and accounts to be inspected at any time. Failure to supply such information or cooperate in such investigation may result in the imposition of penalties as specified in this Chapter. Sec. 15F -49 Check Cashing, Extension Party Banking Relationships. The Card Club Card Club is prohibited from extending recognized financial institution, that can situated on the Card Club premises. of Credit, and Third may cash checks. The credit. However, a extend credit may be Sec. 15F -50 Holding Valuables for Safekeeping. Licensees holding valuables for safekeeping may do so only under the following conditions: (a) Only cash may be deposited for safekeeping. (b) Monies can be deposited and withdrawn only by the person(s) named on the account. Accurate records of all deposits and withdrawals shall be kept for a period of not less than two (2) years. No person shall hold more than one (1) account at the Card Club. (d) The actual deposits held and the records of all transactions shall be available for inspection by the Chief of Police or other law enforcement officials upon demand. Sec. 15F -51 Jackpot Games. (a) An accounting of monies received and expended in connection with each and every jackpot game and /or tournament shall be filed within three (3) days of such jackpot game or tournament with the Finance Director. (b) No jackpot game shall be conducted unless the manner, rules and regulations of such jackpot game are submitted and approved by the Chief of Police. Sec. 15F -52 . Tournaments. (a) The Licensee shall, at least seventy -two (72) hours in advance of the conduct of a tournament, notify the Chief of Police of the dates and hours of each tournament. (b) The Licensee shall submit to the Chief of Police at least seventy -two (72) hours prior to the commencement of any tournament a full set of rules, regulations, terms and conditions to be used in regulating or otherwise governing the operation and activities of any such tournament. (c) Nothing contained in the permission granted to a Licensee to engage in tournament activities shall permit or be construed to permit a violation of any other Section or provision of this Chapter. CY/4041993.003 -24- DIVISION 11 - ENTERTAINMENT CENTER Sections: 15F -53 Entertainment. Sec. 15F -53 Entertainment. An entertainment center shall be provided within the Card Club which at a minimum: (a) provides a minimum seating capacity of three - hundred (300) people; (b) meets all occupancy load, fire safety and zoning requirements; and (c) has a stage which accommodates comedy, dance, and musical acts and small theatrical productions. The entertainment center must remain operational a minimum of three (3) days per week /forty -five (45) weeks per year. The requirements shall not be in effect in the event of an act of God, earthquake, flood, public riot, strike, act of a public enemy, war or explosion. DIVISION 10 - REMOVAL OF PERSONS FROM CARD CLUB Sections: 15F -54 15F -55 15F -56 15F -57 15F -58 Removal of Persons from Card Club Premises. Exclusion of Undesirable Persons. Notice and Order of Exclusion. Enforcement of Order. Civil Remedy. Designation of Agent. Sec. 15F -54 Removal of Persons from Card Club Premises. (a) A Licensee shall remove any person from the premises licensed for use as a Card Club ('Premises') if, on the Premises, that person: (1) engages in disorderly conduct, as defined in Section 647 of the Penal Code; or (2) drug; or is under the influence of any intoxicating liquor or (3) is mentally incapacitated to the extent that such person cannot care for himself or control his actions; or (4) is boisterous, or is otherwise offensive to other persons; or (5) commits any public offense. (b) Except as provided in Section 15F -55, removal of a person from the Premises pursuant to this Section carries no presumption that the person is within the class of persons defined as 'undesirable persons' in Section 15F -55 of this Chapter. Sec. 15F -55 Exclusion of Undesirable Persons. (a) A Licensee shall exclude from all, or any portion of the Premises, any person who is determined to be 'undesirable' within the meaning of this Section. For the purposes of this Section, the following persons shall be deemed to be 'undesirable" CY/4041993.003 (1) Persons who have engaged in any act of, or who have been convicted of, bookmaking or illegal wagering; or -25- 19 (2) Persons who have engaged in acts prohibited by Section 15F -58 of this Chapter; or (3) Persons who have been convicted of a violation of Section 15F -58 hereof; or (4) Persons who have been removed from the Premises pursuant to Section 15F -54 hereof, on more than three (3) occasions; or (5) Persons whose presence is inimical to the interests of the Licensee. (b) For purposes of this Section: (1) 'Bookmaking' includes, but is not limited to, any act prohibited by Section 337a of the Penal Code or by Section 19595 of the Business & Professions Code; (2) 'Illegal wagering' includes, but is not limited to, any act prohibited by Sections 319 through 336, inclusive, of the Penal Code. Sec. 15F -56 Notice and Order of Exclusion. The Licensee shall inform any person to be excluded from the Premises of the reason for the exclusion, and shall notify such person of the provisions of this Chapter. Notification shall be made by the delivery to the person excluded an Order of Exclusion to which shall be attached a copy of Sections 15F -54 through 15F -55, inclusive, of this Code. The Licensee shall detain any person subject to an Order of Exclusion and shall notify the Chief of Police of the name of the person to be excluded, the reason for exclusion, and any other information the Chief of Police may require. If the Chief of Police determines that the person subject to exclusion has engaged in any conduct in matters which may threaten public safety or the integrity of the Card Club's operations, said person shall continue to be detained pending what police action, if any, is deemed appropriate. Sec. 15F -57 Enforcement of Order. Civil Remedy. No person named in a final Order of Exclusion shall fail to comply with the terms of such Order. A final Order of Exclusion shall be enforceable by the Licensee by means of a civil proceeding in the Orange County Superior Court. Sec. 15F -58 Designation of Agent. Each Licensee shall designate an agent who shall be authorized to act for the Licensee pursuant to the provisions of this Division. DIVISION 11 - PROHIBITED CONDUCT OF PLAYERS Sections: 15F -59 Definitions. Prohibited Conduct. 15F -60 Unlawful Acts. Sec. 15F -59 Definitions. Prohibited Conduct. (a) For the purpose of this Section, the words and phrases hereinafter set forth shall have the following meanings ascribed to them unless the context clearly requires to the contrary: CY/4041993.003 (1) 'Blind cut' or 'false cut' shall mean a maneuver which appears to cut the deck, but does not in fact do so. (2) 'Blind shuffle' shall mean to false shuffle, or to give the deceptive impression of intermixing playing cards, while actually retaining the same sequence of all or a group of cards. -26- CY/4041993.003 oo (3) 'Bottoms' shall mean dealing or dropping cards from the bottom of the deck. (4) 'Burn' is a discard in accordance with the rules of the game, made before the draw when playing draw poker. (5) 'Capping the deck' shall mean to place cards on to the top of the deck, which should not be there. (6) 'Cooler' or 'cold deck,' shall mean a deck of cards, secretly prearranged in a known sequence or marked to be substituted for the deck in play. (7) 'Daubing' shall mean to mark cards by applying a faintly visible substance to the back of the cards. (8) 'Double discard' shall mean to discard and receive or take a card or cards twice on the draw. (9) 'Greek Deal' or 'second bottom' shall mean to deal a card which is second from the bottom of the deck. (10) 'Hand mucking' or 'holding out' or 'holding a card or cards out from the deck' shall mean the surreptitious switching of cards from those that are dealt to a player. (11) 'Hopping the cut' shall mean to surreptitiously nullify the cutting of the deck. (12) 'Machine' shall mean a mechanical device used for the purpose of surreptitiously switching or retaining cards. (13) 'Middle dealing' shall mean to deal a card from the center section of the deck. (14) 'Punching' shall mean to mark the back of the cards by creating a dimple or indentation thereon. (15) 'Roughing fluid' shall mean a liquid chemical applied to the back of the cards for the purpose of marking them by roughening the surface. (16) 'Run -up' or 'stacking' or 'stocking' or 'hay mowing' shall mean to shuffle the cards in such a fashion as to surreptitiously arrange the sequence of known card. (17) 'Sanding' shall mean to mark cards by applying an abrasive substance to the cards. (18) 'Seconds' shall mean dealing the second card from the top of the deck. (19) 'Shaving' shall mean using a razor or sharp instrument to shave the edges of the cards. (20) 'Shiner' shall mean a mirror or other reflecting device used for the purpose of enabling a player to see cards which the player is not entitled to see under the rules of the game being played. (21) 'Spreading' shall mean to spread a hand (of a partner) using one or more cards (which were not part of the hand) to make the hand a winning hand. (22) 'Sign' or 'signal' or 'scam' shall mean to sign or signal by motion or verbally to a player or other players the cards possessed or the cards needed. -27- 20 (23) 'Slick sleeve' or 'mohair sleeve' or 'shirt' shall mean a long sleeve on a clothing garment to assist in holding out a playing card. (24) 'Slug' shall mean a set or known group of cards. (25) 'Transmitter' shall mean an electronic or radio device used for the purpose of transmitting signals or information to another player, who receives such signals or information by use of a 'receiver.' (26) 'White flash' shall mean a form of daubing whereby a chemical is used to create a 'white on white' marking on the back of the cards. (b) Prohibited Conduct. It shall be unlawful for any person as a player or dealer: (1) to deal, draw, distribute, or burn any playing cards other than the top card of a deck. The 'top card' as used herein shall mean the uppermost face down card of a face down deck; and (2) to shuffle or cause to be shuffled any playing cards that are to be used or are being used in a licensed card game, other than in a random manner; and (3) to predetermine, or prearrange the sequence of playing cards by value or suit, or to retain or hold back a card or cards either individually, or as a group or slug as an effort to circumvent a random mixing of the playing cards; and (4) to use a blind shuffle, run -up, stacking or stocking of the deck to gain an unfair advantage in play, whether or not an advantage is gained; and (5) to palm, hold -out, or conceal any card or cards during a card game, whether by slight of hand, mechanical apparatus, or by clothing such a slick sleeve; and (6) to switch, exchange, or cause to be exchanged, any playing card or cards by any deceptive practices including, but not limited to, hand mucking, capping the deck, introducing additional cards into a game, or switching the decks with a 'cooler'; and (7) to use any technique in a card game designed to accomplish a blind or false cut, or to use a fraudulent technique to nullify a cut once performed by a player, or to influence or indicate to another person to cut the deck at a specific location; and (8) to deliberately mark or alter any card or cards when such cards are in play; and (9) to use any altered or marked cards in a card game. 'Marking and altering' as used herein include sanding, daubing, white flash, white on white, punching, adding to, removing from or blocking out, the existing design whether on the face, backside, or edge of any card or cards; and (10) to crimp, warp, bend, cut, trim, or alter by any means a card that would or could cause an advantage for any player over another player or players, whether or not such advantage is gained; and (11) to use any mechanical or electrical apparatus or device so as to gain or see, to gain any advantage, or to gain or seem to gain information that would enable a player or dealer to deceive others; such devices include, but are not CY/4041993.003 -28- limited to, the use of ultra- violet lights and /or special glass to read otherwise invisible paint or ink, hold -out, shiners, transmitters, receivers, punches, chemical solutions, shading, roughing fluids, inks or dyes; and (12) to knowingly aid or abet another in any conduct prohibited by this Section. (c) Management Cooperation With Surveillance Personnel. It shall be the responsibility of the Licensee, management and their employees to fully cooperate with Card Club surveillance and protection personnel in the detection, apprehension and identification of those persons involved in cheating or fraudulent accounting practices. Management shall retain and deliver to the Chief of Police as evidence in arrests or detention all playing cards and implements suspected in involvement in cheating. Management shall cooperate with Card Club surveillance personnel whether provided by a governmental policing agency, a City - contracted service, City- administered or Licensee assigned. (d) Posting. Each Licensee shall cause this subdivision (b) of this Section 15F -58, to be reproduced and posted in the licensed premises. Such posting shall be in a location where it is easily readable by anyone. Such posting shall be of readable print and enclosed within a frame or as a sign either laminated or protected by glass or a plexiglass covering. Sec. 15F -60 Unlawful Acts. (a) Unlawful locations. It shall be unlawful for any person to play in, or permit the playing of, any game regulated or referred to by the provisions of this Chapter at any place within the City, except a Card Club licensed pursuant to the provisions of this Chapter. (b) Unlawful games. It shall be unlawful for any person to play in, or permit the playing of, or conduct or permit any game at any Card Club licensed pursuant to this Chapter which game is not permitted by law. (c) Unlawful activities. It shall be a violation of this Chapter for any Licensee to knowingly permit any unlawful activity to take place upon the premises of the Card Club or to fail to take reasonable steps to prevent such activities from taking place. (d) Unlawful interests. It shall be unlawful for any City employee or City official to directly or indirectly own or operate any License. It shall be unlawful for any City employee or City official to directly or indirectly be employed in any manner whatever by a Licensee. It shall be unlawful for any former city employee or City official to directly or indirectly own, operate, or have any interest, legal or equitable, in any License or directly or indirectly conduct business with or be employed by a Licensee for a period of four (4) years from the date of cessation of such City employee's, or City official's employment, appointment or eligibility for office. For purposes of this Section 15F -59, indirect performance of any prohibited act shall include but not be limited to the performance of such prohibited act by the spouse or other person related by blood or marriage to any party prohibited from directly performing such act. CY/4041993.003 For purposes of this Section 15F -59, the term -29- 203 "conduct business" shall include but not be limited to the provision of loans or any other form of financing, sale or lease of any real or personal property, and the provision of any services, supplies, goods or other materials, but shall not include the conduct of business as a patron or customer in a manner available to the general public. Sections: 15F -61 15F -62 15F -63 15F -64 15F -65 15F -66 DIVISION 12 - MISCELLANEOUS Amendments. Licensees Responsible. Confidentiality. Penalties. Indemnification. Non - Severability with Respect to Fees. Severability with Respect to Remaining Provisions. Sec. 15F -61 Amendments. The City Council reserves the right and power to amend any and all provisions of this Chapter in its sound discretion, without any additional vote by the electorate, so long as any such amendments are not violative of any provisions of state law or the final judgment of a court of competent jurisdiction. The issuance of the City Council of any License hereunder shall not be deemed to be a waiver by the City Council of such right and power to thereafter amend this Chapter, and the Licensee shall be subject to and comply with any such amendments. Sec. 15F -62 Licensees Responsible. All persons licensed pursuant to the provisions of this Chapter shall be liable for all violations thereof, including all conditions, rules and regulations issued pursuant thereto, including any violations committed by the agents or employees of such Licensee, whether or not such Licensee had knowledge of the act of the agent or employee or participated in the act. Sec. 15F -63 Confidentiality. To the extent permitted by law all applications, personal history statements and financial information filed by a Licensee, sublicensee, Pointholder or Employee shall be confidential and accessible only to the City Manager, the Chief of Police, the Finance Director, the City Attorney and their designees. Sec. 15F -64 Penalties. Violations of any provision of this Chapter, including any conditions, rules or regulations issued pursuant thereto, shall be punishable as follows: (a) As a misdemeanor, prosecutable by the City Attorney or the District Attorney, and punishable by imprisonment not to exceed six (6) months in jail and /or by a fine not to exceed Five - Hundred Dollars ($500); and /or (b) By revocation or suspension of the License, Pointholder, approval or work permit, as specified in this Chapter; and /or Said penalties are cumulative and may be imposed for each violation. Each day such violation takes place shall constitute a separate offense. Sec. 15F -65 Indemnification. (a) The applicant and applicant's successors, heirs, and assigns, shall defend, with counsel selected by City, indemnify, and hold harmless the City, its agents, officers, and employees from any claim, action or proceeding against the City, its agents, officers or employees to attack, set aside, void, or annul any approval granted pursuant to this Chapter, which action is brought within the appropriate statute of limitations. CY14041993.003 -30- (b) The applicant, and the applicant's successors, heirs, and assigns, shall further defend, indemnify, and hold harmless the City, its agents, officers, and employees from any and all claims, actions or proceedings against the City, its agents, officers or employees arising out of or resulting from the negligence of the applicant or the applicant's agents, employees, or contracts in the operation of a Card Club. Sec. 15F -66 Non - Severability with Respect to Fees. Severability with Respect to Remaining Provisions. The provisions of this Chapter providing for the payment of business license fees are not severable one from the other. Should the requirements of this Chapter relating to the payment of business license fees, as herein set forth or as subsequently amended, be held to be invalid or unenforceable for any reason by the final judgment of a court of competent jurisdiction, then this Chapter in its entirety shall thereupon become null and void, any Licenses issued pursuant to this Chapter shall likewise become null and void, and the playing of such games within the City shall thereupon become unlawful to the same extent as such playing were unlawful prior to the adoption of this Chapter. Except as provided immediately hereinabove with respect to business license fee payments to the City, if any remaining section, subsection, sentence, clause or phrase of this Chapter is for any reason held by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more section, subsection, sentence, clause or phrase be declared invalid." SECTION III. Effective Date. Notwithstanding any other provision under law, the effective date of this Ordinance shall be June 27, 1993 after its final adoption and subject to approval by the voters of the City of Cypress at a Special Municipal Election on June 8, 1993. SECTION V. The City Clerk is hereby authorized and directed to certify as to the passage of this Ordinance and to give notice thereof by causing copies of this Ordinance to be posted in three public places throughout the City. FIRST READ at an adjourned regular meeting of the City Council of said City held on the 17th day of May 1993, and finally adopted and ordered posted at a regular meeting held on the 24th day i of May 1993. ATTEST* 6 CITY CLERK OF THE ITY OF CYPRESS CY /4041993.003 -31- MAYOR OF THE CI CYPRESS 2O 2O- STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF CYPRESS ) I, DARRELL ESSEX, City Clerk California DO HEREBY CERTIFY that the adopted at a regular meeting of the Cypress, held on the 24th day of following roll call vote: CY/4041993.003 of the City of Cypress, foregoing Ordinance was duly City Council of the City of May , 1993, by the AYES: 4 COUNCILMEMBERS• Bowman, Nicholson, Partin and Kerry NOES: 1 COUNCILMEMBERS: Age ABSTAINED: 0 COUNCILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None -32- CIT CLE eem CITY OF CYPRESS