California Code, Business and Professions Code - BPC § 19861

(a) Notwithstanding subdivision (j) of Section 19801, the commission shall not deny a license to a gambling establishment solely because it is not open to the public, if all of the following are true:

(b) A gambling establishment meeting the criteria set forth in subdivision (a), in addition to the other requirements of this chapter, may be licensed to operate as a private club gambling establishment until November 30, 2003, or until the ownership or operation of the gambling establishment changes from the ownership or operation as of January 1, 1998, whichever occurs first.  Operation of the gambling establishments after this date shall only be permitted if the local jurisdiction approves an ordinance, pursuant to Sections 19961 and 19962, authorizing the operation of gambling establishments that are open to the public.  The commission shall adopt regulations implementing this section.  Before the commission's issuance of a license to a private club, the department shall ensure that the ownership of the gambling establishment has remained constant since January 1, 1998, and the operation of the gambling establishment has not been leased to a third party.