5.08.1010 Pointholders – Applications for sale or transfer of points.
(1) It shall be unlawful for any person having any interest whatsoever or at all in the ownership of a casino, whether legal or equitable, or as trustor or trustee, or of whatsoever kind or character, to transfer such points and/or interest without the consent and permission of the council first had and obtained.
(2) Any person desiring to sell, transfer, assign, or otherwise hypothecate any point or interest in a casino duly licensed pursuant to the provisions of this article shall file with the city manager a written application for permission to transfer such interest as is hereinafter described. Each such application shall contain and clearly and truthfully set forth, under oath and/or penalty of perjury and show, in addition to such other information as the city manager and/or the council may require, the following information:
(a) The date of the application;
(b) The true name of the applicant and proposed transferee;
(c) The status of the transferee as being an individual, corporation, association, copartnership, joint venture, trustor, or trustee;
(d) The residence and business address of the transferee, if an individual;
(e) If the transferee is other than an individual, the name, residence, and business address of each of the copartners or members of the firm, copartnership, trustor, trustee, or joint venture and the names and residences and business addresses of each of the principal officers of the association or corporation applicant;
(f) The name of the licensed casino for which a transfer of interest or point is sought;
(g) The number of points and/or the nature of interest sought to be sold, transferred, assigned, or otherwise hypothecated;
(h) A statement that the applicant will be considered by the council only after a full investigation and report has been made by the city manager and the report of investigation forwarded to the council;
(i) The statement required by this section and the documents containing such information shall be confidential, and shall not be open to public inspection, but shall be available only to those city officials having direct jurisdiction over the provisions of this article and to any court of competent jurisdiction where any matter relating thereto may actually be pending, except that the names and places of residence only of such pointholders shall be open to public inspection, but all other statements and/or documents shall remain confidential.
(3) Investigation Required. Whenever an application pursuant to the provisions of this section has been filed with the city for consent to transfer pursuant to the provisions of this section, the city manager shall promptly and diligently make an investigation as follows:
(a) A full and complete investigation of the transferee;
(b) Concurrently with the filing of the application, the transferee (or if not an individual, each individual officer, stockholder, or partner or member of the transferee) shall be fingerprinted by a duly appointed law enforcement agency;
(c) It shall be the responsibility and duty of the city manager to establish the necessary procedures to administer the provisions of this subsection (3); and
(d) The information received by the city manager pursuant to the provisions of this subsection (3) shall be confidential and shall be accessible only to the city council, city manager and to city officials having the direct jurisdiction over the provisions of this article.
(4) License Fees. Each such transfer application shall be accompanied by a processing fee, payable in advance, as set by the city council, in an amount sufficient to cover the cost of the investigation. The fee set forth in this subsection shall be the property of and be retained by the city, whether the application for transfer is granted or denied.
(5) Granting or Denial of Application.
(a) Consideration by Council. Whenever an application for such a transfer is presented to the council and notice provided to the general manager of a casino, the council shall consider such application on the same basis as is applicable to a new license application.
(b) Decision of the Council. The council may in its discretion either approve, conditionally approve, or deny the application. The decision of the council shall be final and conclusive.
(c) Applicant’s Acceptance of Council’s Decision. The applicant shall agree as part of the application that the sole and exclusive discretion as to the granting or denial of any such application shall be vested in the council.
(6) Investigations – Updating. All pointholders holding points in any casino, as well as the general partners and/or officers of such casino, whether or not they hold any points in such casino, shall have their background investigations updated annually pursuant to a schedule established by the city council. Such updating shall consist of a check by teletype to Criminal Investigation and Identification in Sacramento, California. A fee in the amount of $3.00 for each pointholder so investigated shall be paid to the city by the respective casino or licensee annually to cover the costs of such investigations.
(7) Application of Provisions to Continuing Pointholders. Any person having any interest whatsoever or at all in the ownership of a casino, whether legal or equitable, or a trustor or trustee, or of whatsoever kind or character, who has not previously submitted to the procedure required under subsection (5) of this section, shall, as a prerequisite to the continued holding of an ownership interest, file an application on the form provided in subsection (2) of this section and pay the fees provided for in subsection (4) of this section. The application shall be investigated and reviewed as provided in this section for persons applying for new ownership interest. If the council denies any such application, the interest owner, within six months after the receipt of a notice of such denial, shall divest himself or herself of such ownership interest.
(8) Divestment. Any person having any interest whatsoever or at all in the ownership of a casino, whether legal or equitable, or as trustor or trustee, or of whatsoever kind or character, shall divest himself or herself of such ownership interest within 120 days after service of a notice of divestiture served on such person by the city pursuant to such person’s final conviction of a misdemeanor involving moral turpitude or a felony. A plea or verdict of guilty, or a conviction following a plea of nolo contendere to a misdemeanor involving moral turpitude or a felony shall be deemed to be a final conviction within the meaning of this subsection, unless the conviction is appealed to a higher court, in which case the judgment of that court shall constitute the final action pursuant to which notice of divestiture shall be served if the conviction is affirmed. Within 30 days after the service of a notice of divestiture, the person or persons subject to such notice (appellant) may request in writing a hearing before the council to appeal the notice and request a waiver of the divestiture requirement, including transfer to a trustee. A hearing shall be scheduled before the council within 30 days after the receipt of the appellant’s written request. Upon the conclusion of the hearing, the council may elect not to order divestiture and/or to take other steps if it is found and determined by the council that mitigating circumstances exist and that the public welfare will be adequately protected. In making such determination, the council shall consider the following factors:
(a) The type, nature and extent of the pointholder’s interest, including the involvement, if any, in the operations of the casino;
(b) The nature, time and seriousness of the offense;
(c) The circumstances surrounding the conviction;
(d) The age of the person at the time of conviction;
(e) The presence or absence of rehabilitation or efforts at rehabilitation;
(f) Contributing social and environmental conditions;
(g) The record of the proceedings leading to the conviction;
(h) The financial stability of the pointholder, including his or her personal history, reputation, habits, and traits of character and moral background; and
(i) Such other factors as may be deemed relevant by the council in determining the status of the pointholder.
(9) The city manager is authorized to determine that an application filed with the Division of Gambling Control in the California State Department of Justice satisfies the requirements of this section.
The decision of the council shall be final and conclusive.
Failure to comply with the provisions of this section, including the notice of divestiture and/or the final order of council, shall constitute a misdemeanor punishable by a fine of not to exceed $500.00 or imprisonment for not to exceed six months, or by both such fine and imprisonment. Each day of noncompliance shall constitute a separate and complete offense. In addition, the city attorney may invoke appropriate civil remedies available to enforce compliance. (Ord. 588 § 15, 2003; Ord. 537 § 6; Ord. 505 § 3. 2002 Code § 6-32.19).