By Tiffany Conklin, California Gaming Advisors, LLC BIO
It is important to review the rules regarding social interaction with regulators. If you’ve read section 19872 of the Gambling Control Act and 12012 of the regulations governing ex parte communications[1], you probably avoid the Commission/Bureau unless absolutely necessary. While understandable, the “avoid contact” strategy hurts everyone. The better sense regulators have of the industry, the better decisions they make regarding you and everyone else.
As a former Commissioner, I strongly encourage engagement with Commissioners and staff at industry events. These events provide the Commission with the opportunity to understand you and your operation without relying solely on a written report at renewal time. The interactions also provide insight on how Commissioners view the industry and the issues they find important. But there are some rules:
Don’t discuss applications. Section 12012(a) defines “ex parte communication” as communication on the merits of an application without notice and opportunity for all parties to participate in the communication.
- For ex parte purposes, “parties” includes the applicant, designated agents, an advisor (staff) or member of the Commission and the Bureau.
- This restriction extends to all pending actions on licensees, including employees.
Avoid unintended “meetings”. Commissioners are required to comply with the Bagley-Keene Act regarding public meetings. Industry events, conferences and even email threads can be interpreted as a Bagley-Keene violation if you’re not careful.
- Important: Keep shoptalk to a minimum when more than one Commissioner is present and avoid discussing issues separately with multiple Commissioners.
Be hospitable but know the limits. Commissioners and staff appreciate invitations to tour cardrooms and shadow operations to gain first-hand knowledge about the industry; particularly when it comes to understanding how regulation packages will be implemented.
- Commissioners and certain Bureau and Commission staff have strict reporting requirements that limit their ability to accept your well-intentioned hospitality. While it might seem awkward to not offer a free meal or beverage to an invited guest, these particular guests will appreciate not having to turn down your well-intentioned offer.
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For more information regarding this issue or any other compliance matter, CGA members can contact California Gaming Advisors LLC at https://californiagamingassociation.org/legal-compliance-advice-center/ to receive a free 15-minute consultation.
[1] When it comes to understanding the dos and don’ts for avoiding ex parte communications for licensing meetings and administrative hearings, read Commission staff counsel’s excellent Commission newsletter article here:
http://www.cgcc.ca.gov/documents/newsletters/Newsletter_October_2017.pdf.
