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HomeMy WebLinkAboutAdmin Order 56-06-04-F ADMINISTRATIVE ORDER NO. 56-06-04-F of the City Manager AMENDMENT OF SOCIAL GAMING RULES AND REPEAL OF ADMINISTRATIVE ORDER NO. 53-85-09. The City Manager finds that: A. Section 2.019 of the Eugene Code, 1971, authorizes the City Manager to adopt rules for administration of provisions of the Eugene Code, 1971. Section 3.872 of the Eugene Code, 1971, specifically authorizes the City Manager to adopt rules regarding the time, place, supervision and the play of social games. B. Pursuant that authority, on September 5, 2006, I issued Administrative Order No. 56-06-04 proposing to amend Social Gambling Rules that were adopted by Administrative Order No. 53-85-09 on December 23, 1985. C. Notice of the proposed rule amendment was published in the Register-Guard, a newspaper of general circulation within the City, on September 10, 11, 12, 13 and 14, 2006. The Notice was also made available to persons who had requested such notice, and provided that written comments would be received for a period of 15 days from the first date of publication of the Notice. Comments were received as summarized below, to which I make the following findings: Comments Reauestine a Public Hearine. Several respondents urged that the City hold public hearings prior to the adoption of this administrative rule. Findines. As this is an administrative rule and not an ordinance, a public hearing is not required. The Eugene Code (EC) does require that the public be given notice of intended rulemaking, and the City duly published a notice of the proposed rule amendment in the Register-Guard on September 10, 11, 12, 13 and 14,2006. EC 92.019(2). Notice was also made available to persons who had requested it, and all notices provided that written comments would be received for a period of 15 days from the first date of publication of the notice. I find that the public was provided notice and an opportunity to comment on this administrative rule as required by EC 92.019, and that a public hearing is not required. Comments Reeardine House Income from the Operation of a Social Game. Several comments urged the City to allow social gaming facilities to charge players a fee, either to play in a tournament style game, or for use of their facilities. Other comments requested that the administrative rule allow a social game organizer to collect a fee of 10% of a tournament buy-in. Those comments further requested that I add a provision to this administrative order providing that prizes in tournament-style games should never exceed a tournament's aggregate buy-ins nor equal less than 90% of the tournament's aggregate buy-ins. Findines. The Eugene Code prohibits the owner or any person in charge of a social gaming establishment from accepting "any payment, fee, service or gratuity as consideration for the Administrative Order - Page 1 of 10 participation in, or for the privilege of participating in social games." EC 93.876. A social game is a game between players in a private home, or if authorized by a city or county, between players in a private business, private club or place of public accommodation where no house player, house bank or house odds exist and there is no house incomefrom the operation of the social game. ORS 167.117(21) (emphasis added). If the house collects income from the operation of a social game, the game is no longer a social game - it becomes unlawful gambling. The City of Eugene cannot authorize what state law prohibits. The house or social game organizer may not charge players for the privilege of playing in a social game, therefore the house or social game organizer may not collect a fee of 10% of a tournament buy-in and the house must return the entire aggregate buy-in amount to players pursuant to terms agreed upon before the tournament begins. No changes are being made to the rule as a result of these comments. Comments Reeardine House or Permanent Dealers. Several respondents approved of the use of house or permanent dealers. Comments indicated that the use of permanent dealers decreased players' concerns about cheating and provided for a more relaxed and friendly atmosphere in social gaming facilities. Findines. I agree that a skilled permanent dealer can enhance the social gaming experience. However, under state law a dealer cannot play in a social game. State statutes provide that a social game is a game "between players." ORS 167.117(21). A dealer is not a player. Therefore, if a dealer plays a hand or places bets, the game is no longer between players and no longer a social game - instead it has become illegal gambling. Ifhowever, a dealer merely facilitates a social game by passing out playing cards to the players and neither plays a hand nor places bets, the game is still "between players" (only players are actually playing in game) and is therefore a social game and not illegal gambling. In light of the comments I received indicating that the presence of permanent dealers decreases players' concerns about cheating and provides for a more relaxed and friendly atmosphere in social gaming facilities, I have added a provision to this administrative rule allowing for permanent dealers. Comments Reeardine Distance to Other Gamine Facilities/Social Gamine Forced Into Homes. Several respondents expressed the concern that if existing local gaming facilities close after the passage of this administrative rule, respondents would be forced to drive long distances to casinos, or that social games would take place in homes and thus be more difficult for the City to regulate. Findines. Under Oregon state law, gambling is illegal unless otherwise authorized by state statute. ORS 167.117 through 167.167. State law has created a few exceptions to the general prohibition on gambling, one of which is the exception for social games. ORS 167.117(7)(c); 167.117(21). Social gaming is legal only ifit takes place in a private home or is specifically authorized by a city or county; and then only under conditions specified in state law. I interpret the state statutes that authorize social gaming to carve a limited exception from the general prohibition on gambling for informal, low stakes games - not to allow businesses to profit from gaming. As to the concern expressed about driving to casinos, certainly local facilities are more convenient, but as these comments illustrate, persons wishing to participate in gaming have several choices of locations in which to pursue those activities. Tribal casinos are not subject to Administrative Order - Page 2 of 10 the state gaming laws; therefore, neither the state nor the City of Eugene has the power to regulate tribal casinos. No changes are being made to the rule as a result of these comments. Comments Reeardine Poker as Gambline Versus Poker as a Game of Skill. Several comments seek to illustrate the difference between gaming and gambling and wish the City to affirm that poker is gaming rather than gambling. Findines. Under state statutes, a game of poker is considered unlawful gambling unless otherwise authorized by law. See ORS 167.117 through 167.167. This administrative rule incorporates the state law definition of social gaming. A game of poker conducted in accordance with state law, the Eugene City Code and this administrative rule is a social game, and is therefore not unlawful gambling. Although the Eugene Code refers to social gambling, rather than social gaming, in all other particulars the Code provisions follow the definition of social gaming in the Oregon Revised Statutes. In order to clarify this administrative rule, I have added a provision explaining that social games are governed by ORS 167.117 through 167.167; Eugene Code provisions including but not limited to 993.870 through 3.876; and this administrative rule. Comments Reeardine Specific Persons or Businesses. Several comments addressed the conduct of specific individuals or businesses relating to social gaming. Findines. The City Manager makes no findings regarding comments addressing specific individuals or businesses rather than the proposed rule. No changes are being made to the rule as a result of these comments. Comments Reeardine Pari-Mutuel Bettine. Several comments addressed both social gaming and pari-mutuel betting. Findines. Pari-mutuel betting is not social gaming as defined by state statute and is therefore not addressed by this administrative rule. No changes are being made to the rule as a result of these comments. Comments Reeardine the Definition of "Owner of a Social Gamine Premises". Several respondents commented that they found the definition of "owner of a social gaming premises" in the administrative rule overly broad. Findines. The definition of "owner of a social gaming premises" is consistent with the definition in EC 93.005. No changes are being made to the rule as a result of these comments. Comments Reeardine the Definition of "Tournament-Style Social Game". Several respondents objected to the definition of "tournament-style social game" in the administrative rule, pointing out that not all tournaments require a buy-in. Findines. A tournament-style social game which does not require a buy-in is appropriate under the definition of tournament-style game incorporated in this administrative rule. Ifno buy-in is required for a particular tournament, no individual buy-in will exceed $100.00, no portion of the buy-in will be paid to or retained by the house; and as long as all players are charged a buy-in fee Administrative Order - Page 3 of 10 of $0.00, are provided the same amount of in:-game currency, and the winning player receives $0.00, such a tournament is appropriate under this administrative rule. No changes are being made to the rule as a result of these comments. Comments Reeardine Proposed Additional Definitions. Several respondents proposed adding definitions of some or all of the following terms to this administrative rule: dealer, button, table, chips or tokens, facility, imprest tray, pot, proposition, shill, bet, raise, floor or floorperson) stub, advancing button, and winner. Findines. Many of these terms do not appear in the text of the administrative rule so there is no reason to include their definitions. Those terms that do appear can be adequately understood by their context and common dictionary definitions. As a result of these comments and in order to clarify the provisions of this administrative rule, I have added definitions of the terms "blind," "button," "dealer" and "deal" to this administrative rule. Comments Reeardine the Number of Allowable Players Per Table. Several respondents commented that they would like the number of players per table never to be less than four (4), nor to exceed ten (10). Findines. The requirement of a maximum of eight (8) players per table is the same requirement found in the previous regulations regarding social gaming, adopted by Administrative Order No. 53-85-09 on December 23, 1985. However, I find that neither the Eugene Code nor state statutes prohibit a number of players per table exceeding eight (8). Therefore, in light of public comments, I have amended this administrative rule to provide that the maximum number of players per table shall not exceed ten (10). Comments Reeardine the Minimum Allowable Aee for Participation in City Authorized Social Games. Several respondents commented that they felt the minimum age for participation in social games in private businesses, private clubs, or places of public accommodation should be twenty-one (21) rather than eighteen (18). Findines. Eighteen (18) is the age of majority for every right and responsibility except the consumption of alcohol. So long as alcohol is not sold or served on the premises of a social gaming establishment in contravention of other laws, adults eighteen (18) years of age and older may participate in social gaming. No changes are being made to the rule as a result of these comments. Comments Reeardine Smoke/Alcohol Free Facilities. Several respondents expressed their appreciation for the ability to play social games in a smoke and alcohol free environment. These respondents also expressed their concern that social gaming establishments will resort to selling alcoholic beverages in order to make a profit because they cannot charge players for the privilege of participating in social games. Findines. I recognize the value of the choice to recreate in smoke and alcohol free facilities, but the City of Eugene cannot authorize what state law prohibits and as noted in previous findings, state law prohibits house income from the operation of a social game. Nothing in this Administrative Order - Page 4 of 10 administrative rule prevents the owner of a social gaming premises from selling food or beverages as long all applicable laws are complied with and minors are not allowed access to any business, private club or place of public accommodation where alcohol is served in contravention of any other applicable law. No changes are being made to the rule as a result of these comments. Comments Reeardine Licensine of Both City Reeulated Social Gamine Facilities and Staff and Dealers at City Reeulated Social Gamine Facilities. Several respondents advocated required fee-based licenses and bi-annual inspections of social gaming establishments as well as required licensing of staff and dealers at social gaming facilities. Findines. I find that state law does not require cities and counties to license social gaming facilities, nor does state law require cities and counties to license employees or staff of social gaming facilities. ORS 167.121. I further find that the costs associated with the necessary enforcement of licensing regulations will decrease the viability of social gaming operations. No changes are being made to the rule as a result of these comments. Comments Advocatine Dealers and Manaeement be Allowed to Decline to Make Social Games Available to Persons who Exhibit Siens of a Gambline Problem. The Lane County Problem Gambling Advisory Committee commented that it would like the administrative rule to allow, but not require, social gaming facility staff and management to decline to make social games available to persons who exhibit signs of a gambling problem. Findines. Nothing in state law, city ordinance, or this administrative rule prevents social gaming facility management and staff from declining to make social games available to persons who exhibit signs of a gambling problem. Since social gaming facility management and staff already have the option to refuse to allow persons who show signs of a gambling problem to play at their establishment, there is no need to include such a provision in the administrative rule. No changes are being made to the rule as a result of these comments. Comments Reeardine Bettine Limits. Several respondents commented that a betting limit of $2.00 per wager makes it impossible to play no-limit Texas Hold'em. Respondents also commented that they would like to change the administrative rule to provide that "no bet, including an opening wager may exceed $2.00 unless the game is on the premises of a private club." Findines. The Eugene Code authorizes the City Manager to "adopt rules regarding the time, place, supervision and the play of social games. The rules [adopted by the City Manager] shall tend to: (a) Prevent excessive losses by individual participants. .. and (d) Protect the public health, safety and welfare." Eugene City Code 93.872(1). I have determined that a $2.00 per wager limit (except in games of Texas Hold'em), small and big blind limits of $1.00 and $2.00 respectively, and a limit of two $100.00 buy-ins per individual in any 24 hour period prevent excessive losses by individual participants and protect the public health, safety and welfare. I do not find it useful to differentiate between regulating social gaming in a private club and regulating social gaming that takes place elsewhere. In order to clarify the provisions of this Administrative Order - Page 5 of 10 administrative rule, I have added a definition of the term "wager" to the definitions section of the rule. Comments Reauestine Laws and Reeulations Reeardine Social Gamine Be Posted in City Reeulated Social Gamine Facilities. Several respondents requested that this administrative rule require that the state laws and Eugene City Code provisions relating to social gaming as well as a copy of this administrative rule, be conspicuously displayed in the room or enclosure where social gaming takes place. Findines. I find that providing players in social games access to the laws and regulations governing such games will tend to prevent excessive losses, cheating, and improper play; and will protect the public health, safety and welfare. In light of the above comment and the City Manager's obligations under EC 93.872(1), I have added a provision to this administrative rule requiring that the state laws and Eugene Code provisions relating to social gaming as well as a copy of this administrative rule be conspicuously displayed in any room or enclosure where city authorized social gaming takes place. Comments Reauestine Problem Gambline Information and Help Lines Be Made Available in City Reeulated Social Gamine Facilities. Lane County Problem Gambling Advisory Committee requested that this administrative rule require that problem gambling information and the numbers associated with problem gambling help lines be conspicuously displayed in the room or enclosure where social gaming takes place, and be made available to players upon request. Findines. I find that providing players in social games access to problem gambling information and the numbers associated with problem gambling help lines will tend to prevent excessive losses and will protect the public health, safety and welfare. I have added a provision to this administrative rule requiring that problem gambling information and the numbers associated with problem gambling help lines be conspicuously displayed in any room or enclosure where city authorized social gaming takes place, and be made available to players upon request. Therefore, based on the above findings and the findings in Administrative Order No. 56- 06-04 which are adopted, Administrative Order No. 53-85-09 is repealed and Social Gaming Administrative Rule R-3.872 is amended and adopted to provide: SOCIAL GAMING ADMINISTRATIVE RULE R-3.872 R-3.872-A Definitions. For purposes of these rules, the following words and phrases mean: Blind. A forced bet that must be placed into the pot by one or more players before cards are dealt. Button. A plastic disk or some other object used to indicate which player has the deal. The button moves to the player immediately clockwise of the player who had the previous deal once that deal ends. Administrative Order - Page 6 of 10 Deal. The designation of a certain player by the use of a button or other object, for purposes of the order of card distribution among the players and the order of the opportunity for placement of wagers among the players in a card game. The deal does not rest with the dealer. Dealer. An individual who distributes playing cards to players in accordance with the rules of the particular card game, but neither places wagers nor plays in the game. A dealer is not a player. Owner of a social eamine premises. Any person, business entity, organization or association, including their employees and agents, that owns property, or leases, rents and/or occupies property that is owned by another and the property is used for social gaming. Player. Any person who plays a social game. Social eame. Has the meaning provided in ORS 167.117(21). Activities relating to social gaming are governed by ORS 167.117 through 167.167; Eugene Code provisions including, but not limited to 993.870 through 3.876; and this rule. The term "social gambling" as used in the Eugene Code has the same meaning as the term "social gaming" as used in this rule and in the Oregon Revised Statutes. Social eame oreanizer (and oreanizer of a social eame). Any person, business entity~ organization or association, including their employees and agents, that organizes or allows a social game to be played on its premises, or on the premises of any other person, business entity, or any type of organization or association. Social eamine premises. Any place where a social game is played. Tournament-style social eame. A social game where each tournament player pays a buy-in and where tournament winners split up the buy-in fee as the winnings pursuant to terms agreed upon before the tournament begins. Waeer. Any opportunity to bet, including a blind, an ante, an initial bet or a raIse. R-3.872-B Rules Applicable to All Social Games. 1. Social games may be played between 7:00 a.m. and 2:30 a.m., seven days a week. When social games are played on the premises of a private business, private club, or place of public accommodation, social games shall only be played during normal operating hours. 2. There shall be no house bank, house odds, house player or house income from the operation of social games. Administrative Order - Page 7 of 10 3. There shall be no fee paid to, or collected by, the house, social game organizer, owner of a social gaming premises, or any other person, for the privilege of participating in a social game, including, but not limited to, a fee to defray the cost of providing the social game equipment or the premises upon which the social game is conducted. 4. The deal shall rotate among and between players each hand, unless all players agree to rotate the deal less frequently. 5. There shall be no more than one game per table. The number of players per table shall not exceed ten (10). 6. Social games shall be played in accordance with the rules set forth in Hoyle's Modern Encyclopedia of Card Games (Dolphin Handbook No. C512). However, the rules of a social game may deviate from those set forth in Hoyle's Modern Encyclopedia of Card Games if: 6.1 Such deviations are posted on the social gaming premises in a conspicuous location; 6.2 All players of a social game agree to the posed rules; and 6.3 The social game does not, with such modifications, violate federal, state, or local law . 7. Copies of Hoyle's Modern Encyclopedia of Card Games shall be maintained on the social gaming premises, and shall be subject to inspection by any player upon request. 8. Copies of these rules, sections 3.005 and 3.870 through 3.876 of the Eugene Code, 1971, and ORS 99 167.117; 167.121; 167.122 and 167.127 shall be conspicuously displayed in the room or enclosure where the social games take place. 9. Problem gambling information and help lines shall be conspicuously displayed in the room or enclosure where the social game takes place and shall be available to any player upon request. 10. All social game participants shall be at least 18 years of age. This provision does not allow a minor access to any business, private club, or place of public accommodation where alcohol is served in contravention of any other applicable law. 11. No individual wager shall exceed $2.00 in cash or any other thing of value. 12. In no event shall the sum total wagers of any player exceed $200.00 in cash or any other thing of value in any 24 hour period. Administrative Order - Page 8 of 10 13. Dealers may accept gratuities or tips voluntarily offered by players, but in no event shall dealers share gratuities or tips with the owner of a social gaming premises or the organizer of a social game. For the purposes of this section, voluntarily means not required or suggested by the owner or operator of a social gaming premises or by any rule. 14. An individual who, as a dealer, has facilitated any part of a social game played at a particular table, may not participate as a player in any part of a social game at that table until the social gaming premises are next open for business. 15. A private business, private club or place of public accommodation at which social gaming takes place may charge patrons a membership fee for the privilege of accessing and using the facilities of the private business, private club or place of public accommodation. The duration of such memberships shall not be less than 14 calendar days. 16. A private business, private club or place of public accommodation at which social games are played and which charges a membership fee must offer patrons activities other than social gaming. Under no circumstances may a private business, private club or place of public accommodation charge patrons a membership fee for the privilege of participating in a social game. 17. required. A specific license and/or registration for the purpose of social gaming is not R-3.872-C Tournament-Style Social Games. 1. Tournament-style social games are permitted. Unless expressly made inapplicable under this rule, the rules governing tournament-style social games are in addition to the rules applicable to all social games. 2. Tournament rules shall be consistent with the provisions of this section, and shall be conspicuously posted on the social gaming premises. 3. Buy-ins: 3.1 All players must buy in for the same exact amount of money; 3.2 No individual buy-in shall exceed $100.00; 3.3 No player may buy in more than twice in any 24 hour period; 3.4 Upon buying in, each player shall be provided exactly the same amount of in-game currency (i.e., poker-type chips); and 3.5 No portion of the buy-in shall be paid to or retained by the house, organizer of a social game, or owner of a social gaming premises. Administrative Order - Page 9 of 10 4. All buy-ins must be returned to players pursuant to terms agreed upon before the tournament begins. Therefore, neither the owner of a social gaming premises nor the social game organizer shall take any part of the buy-in as profit or reimbursement of expenses. 5. the buy-in. No other winnings or compensation to the players is permitted other than R-3.872-D Texas Hold'em 1. In games of Texas Hold'em, the small blind shall not exceed $1.00 and the big blind shall not exceed $2.00. 2. The rule that no individual wager may exceed $2.00 in cash or any other thing of value does not apply to wagers made in games of Texas Hold'em. R-3.872-E Violations and Penalties. Any firm, corporation, business, association or person associated with a social game who violates any of these rules, may be subject to criminal and/or civil penalties, as set forth in Chapters 2 and 4 of the Eugene Code, 1971. Any firm, corporation, business, association or person associated with a social game who violates any of the provisions of Sections 3.870 through 3.876 of the Eugene Code, 1971, may subject to civil penalties, as set forth in Chapter 3 of the Eugene Code, 1971. Such violation(s) and penalty(ies) are in addition to, not in lieu of, any other violation(s) or penalty(ies) that may be imposed under state or federal law. o~ Dated this ~ day of November, 2006. ~ ~~\-~= Dennis M. Taylor - '\ City Manager ./ Administrative Order - Page 10 of 10