An Act To Permit Video Gaming for Money Conducted by Nonprofit Organizations
Sec. 1. 8 MRSA §372, sub-§2, ¶I, as amended by PL 2003, c. 673, Pt. MM, §1, is further amended to read:
Any final agreement entered into with a multijurisdictional lottery association must provide that the director has the authority to terminate the agreement upon the provision of reasonable notice, not to exceed 6 months. The final agreement must further provide that the director may terminate the agreement at any time, without prior notice, in the event that the director's authority is withdrawn or limited by law; and
Sec. 2. 8 MRSA §372, sub-§2, ¶J, as enacted by PL 1991, c. 780, Pt. Y, §112, is amended to read:
Sec. 3. 8 MRSA §372, sub-§2, ¶K is enacted to read:
Sec. 4. 8 MRSA §374, sub-§1, ¶L, as amended by PL 1997, c. 301, §1, is further amended to read:
Sec. 5. 8 MRSA §374, sub-§1, ¶M, as enacted by PL 1997, c. 301, §2, is amended to read:
Sec. 6. 8 MRSA §374, sub-§1, ¶N is enacted to read:
Sec. 7. 17 MRSA §1847 is enacted to read:
§ 1847. Applicability
Except as expressly provided in chapter 130, this chapter does not apply to video gaming terminals.
Sec. 8. 17 MRSA c. 130 is enacted to read:
CHAPTER 130
VIDEO GAMING TERMINALS
SUBCHAPTER 1
GENERAL PROVISIONS
§ 3911. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
§ 3912. License required
A person may not manufacture, sell, operate or place a video gaming terminal for use in this State unless the person is licensed to do so by the Chief of the State Police under this chapter. A person may not place for use or operate a video gaming terminal in this State unless the terminal is licensed by the Chief of the State Police under section 3923.
§ 3913. Administration and enforcement
The Chief of the State Police and the director shall administer and enforce the provisions of this chapter as specified in this chapter.
§ 3914. Powers and duties of Chief of State Police
(1) The practice of any fraud or deception upon a player of a video gaming terminal;
(2) The presence of a video gaming terminal on premises that may be unsafe due to fire hazard or other such conditions;
(3) The use of obscene advertising;
(4) The solicitation on a public way of persons to play video gaming terminals;
(5) The infiltration of organized crime into the operation of video gaming terminals;
(6) The presence of disorderly persons in a location where video gaming terminals are in use; and
(7) The use of the word "casino" to describe any video gaming terminal licensed under this chapter or as the name or any part of the name of the licensed premises or of a portion of the premises where the video gaming terminal is located;
(1) A person has illegally tampered with the terminal as described in section 3944, subsection 2, paragraphs A and B;
(2) The funds from the terminal have not been distributed, deposited or allocated in accordance with section 3933;
(3) The terminal does not meet the licensure requirements of this chapter; or
(4) The licensee is guilty of criminal conduct; and
§ 3915. Powers and duties of director
§ 3916. Applicability of chapter 62
Except as expressly provided in this chapter, chapter 62 does not apply to video gaming terminals. Section 1838 relating to use of proceeds applies to the use of net terminal income by licensees under this chapter.
SUBCHAPTER 2
LICENSING
§ 3921. License to operate
Notwithstanding paragraph B, an organization that holds a license under section 1832 to operate an electronic video machine on the effective date of this chapter is eligible to apply for and receive a license under this section to operate a video gaming terminal for up to 18 months, as long as the organization applies for federal tax status as specified in paragraph B. If the Chief of the State Police determines that the organization is making a good faith effort to secure the required tax status and is likely to be given such status, the Chief of the State Police may extend the term of the license for an additional 6 months to allow the United States Internal Revenue Service time to complete processing the application for tax status. If the organization applied for such status and was rejected within 3 years of the effective date of this section, that organization is not eligible under this subsection.
§ 3922. Placement and ownership of terminals
§ 3923. Licensing of terminals
§ 3924. Licensing of manufacturer or wholesaler; limitation on ownership
§ 3925. Applications; investigation
(1) "Is there a formal charging instrument now pending against you in this or any other jurisdiction for a crime that is punishable by imprisonment for one year or more or for a misdemeanor crime of domestic violence?";
(2) "Is there a formal charging instrument now pending against you in this or any other jurisdiction for a juvenile offense that involves conduct that, if committed by an adult, would be punishable by imprisonment for one year or more or would constitute a misdemeanor crime of domestic violence?";
(3) "Have you ever been convicted of a crime described in subparagraph (1) or adjudicated as having committed a juvenile offense as described in subparagraph (2)?";
(4) "Are you a fugitive from justice?";
(5) "Are you a drug abuser, drug addict or drug-dependent person?";
(6) "Have you been discharged from the United States Armed Forces under dishonorable circumstances within the past 3 years?";
(7) "Are you an illegal alien?";
(8) "Have you been convicted within the past 3 years of 3 or more crimes punishable by imprisonment of less than one year?";
(9) "Have you been adjudged within the past 3 years to have committed 3 or more juvenile offenses involving conduct that, if committed by an adult, would be punishable by imprisonment of less than one year?"; and
(10) "To your knowledge, have you engaged within the past 3 years in reckless or negligent conduct that is substantiated by the records of a governmental entity?"
This requirement includes taking whatever action is necessary to permit the Chief of the State Police or a designee to have access to confidential records held by banks, the courts, law enforcement agencies and the military for the purposes stated in this subsection.
§ 3926. Fees; term of license; nontransferable
In addition to the annual license fee, the Chief of the State Police may charge a one-time application fee for a license issued under this chapter in an amount equal to the actual cost of processing the application and performing any background investigations. All fees collected pursuant to this subsection must be deposited directly into the Video Gaming Fund established in section 3934.
§ 3927. Actions relating to licenses
SUBCHAPTER 3
VIDEO GAMING TERMINAL OPERATION; ALLOCATION OF FUNDS
§ 3931. Limits on video gaming terminal use
§ 3932. Payment of credits by licensee
A licensee shall redeem credits for players who earn credits on video gaming terminals located on the premises of that licensee in accordance with rules adopted jointly by the Chief of the State Police and the State Liquor and Lottery Commission. If a person receives a credit redeemable for more than the minimum amount required by federal law to be reported to the United States Internal Revenue Service, the licensee shall require the person to complete a form listing the person's name, address and social security number. The licensee shall promptly send the form to the Department of Administrative and Financial Services, Bureau of Revenue Services.
§ 3933. Allocation of funds
§ 3934. Video Gaming Fund
SUBCHAPTER 4
ENFORCEMENT AND PENALTIES
§ 3941. Reports; records
§ 3942. Access to premises, equipment, records
A person holding a license under this chapter shall permit the Chief of the State Police or the chief's designee to inspect any equipment, prizes, records or items and materials used or to be used in the operation of any video gaming terminal manufactured, owned or operated by that person. A person holding a license under this chapter shall consent in writing to the examination of all accounts, bank accounts and records in the license holder's possession or under the license holder's control and shall authorize all 3rd parties in possession or in control of those accounts or records to allow the Chief of the State Police or the chief's designee to examine the accounts and records as the chief determines necessary.
§ 3943. Contempt
If a witness in a case involving a violation of this chapter refuses to obey a subpoena issued by the Chief of the State Police or to give any evidence relevant to proper inquiry by the chief, the Attorney General may petition the Superior Court in the county where the refusal occurred to find the witness in contempt. The Attorney General shall cause to be served on the witness an order requiring that witness to appear before the Superior Court to show cause why that witness should not be adjudged in contempt. The court shall, in a summary manner, hear the evidence and, if it is such as to warrant the court to do so, punish the witness in the same manner and to the same extent as for contempt committed before the Superior Court or with reference to the process of the Superior Court.
§ 3944. Violations
§ 3945. Seizure and forfeiture of illegal gaming machines
(1) From whom the illegal gaming machine and any monetary contents were received;
(2) Under what authority the illegal machine and any monetary contents are held, received or disposed of;
(3) To whom the illegal machine and any monetary contents are delivered;
(4) The date and manner of destruction or disposition of the illegal machine; and
(5) The exact kind, quantity and form of the illegal gaming machine and the exact amount of any monetary contents of a machine held in custody or disposed of.
§ 3946. Criminal forfeiture
§ 3947. Payment to Attorney General
As provided in Title 5, section 203, the Department of Public Safety, Bureau of State Police shall pay the Attorney General from the Video Gaming Fund established in section 3934 for legal services provided pursuant to this chapter.
§ 3948. Implementation
A video gaming terminal may not be operated under this chapter before April 1, 2012.
§ 3949. Rules
Rules adopted by the Chief of the State Police pursuant to this chapter are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A.
Sec. 9. 22 MRSA c. 276 is enacted to read:
CHAPTER 276
COMPULSIVE GAMBLER REHABILITATION
§ 1700-B. Compulsive Gambler Rehabilitation Fund
Sec. 10. 28-A MRSA §807 is enacted to read:
§ 807. Notice to Chief of State Police
The commission shall notify the Chief of the State Police of the suspension or revocation of a license under this chapter. The commission shall also notify the Chief of the State Police of any investigation of a violation of any provision of this Title.
Sec. 11. 28-A MRSA §1054, sub-§11, ¶C is enacted to read:
Sec. 12. 30-A MRSA §5686 is enacted to read:
§ 5686. Public Education Fund
In order to aid in financing education services, the Public Education Fund is established. Money in the Public Education Fund must be distributed to each municipality in proportion to the product of the population of the municipality as defined in section 5681, subsection 2, paragraph A multiplied by the property tax burden of the municipality as defined in section 5681, subsection 2, paragraph B.
summary
This bill allows operation of video gaming terminals by nonprofit organizations that are eligible for games of chance licenses and that are exempt from federal tax under the United States Internal Revenue Code, Section 501(c)(3), 501(c)(4), 501(c)(8), 501(c)(10) or 501(c)(19). These sections of the federal tax code refer to charitable organizations, civic leagues, fraternal benefit societies, domestic fraternal societies and associations and veterans' organizations. Organizations that currently have licenses for electronic video machines but do not qualify under one of those code sections may apply for an initial license while they seek the required federal tax status. The organization applying for the license must own or lease the premises on which the terminals will be placed and must use the premises for its charitable or nonprofit purpose.
Video gaming terminal manufacturers, wholesalers and operators must be licensed by the Chief of the State Police, following background investigations of the applicants and their major business partners. Local approval is required for a license to operate video gaming terminals.
The license specifies the number of terminals allowed on the premises; the maximum number of terminals allowed is 5 per premises of a licensee. Terminals must be licensed by the Chief of the State Police and must be connected to a computer system operated by the Director of the Bureau of Alcoholic Beverages and Lottery Operations within the Department of Administrative and Financial Services. By the end of a 5-year phase-in period, this computer system must provide continuous online monitoring of video gaming terminal activity. Persons under 21 years of age are not allowed to use the machines. Only members of the organization and their guests are allowed to play. The maximum dollar amount for each play is $5 and the maximum payout is $1,250. Each game on each machine must return at least 80% of wagers to players, calculated on an annual basis.
Net terminal income, which is income after payback to players, is divided as follows: 8% to the State for payment into the Video Gaming Fund, which is established in the bill, for administrative expenses, gambling rehabilitation, municipal revenue sharing and public education; 2% to the Compulsive Gambler Rehabilitation Fund, which is established in the bill; 15% to the General Fund; 10% to the host municipality; and 65% to the licensee.
Licenses are issued for one year. Applicants for an initial license must pay the actual costs of processing the application and performing the background investigation.