HB 182: "An Act relating to charitable gaming and to gaming on state ferries; and providing for an effective date."
00HOUSE BILL NO. 182 01 "An Act relating to charitable gaming and to gaming on state ferries; and 02 providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 05.15.020(b) is amended to read: 05 (b) An additional fee of one percent of the net proceeds received during the 06 preceding year from the activities authorized under the permit shall be paid to the 07 department annually by the municipality or qualified organization authorized to 08 conduct activities under this chapter, if the gross receipts for the activities were 09 $20,000 or more. In this subsection, "activities authorized under the permit" does 10 not include activities conducted under an endorsement issued to a permittee under 11 AS 05.15.300. 12 * Sec. 2. AS 05.15.060(a) is amended to read: 13 (a) The department shall adopt regulations under AS 44.62 (Administrative 14 Procedure Act) necessary to carry out this chapter covering, but not limited to,
01 (1) the issuance, renewal, and revocation of permits, licenses, and pull- 02 tab and video lottery vendor registrations; 03 (2) a method of ascertaining net proceeds, the determination of items 04 of expense that may be incurred or paid, and the limitation of the amount of the items 05 of expense to prevent the proceeds from the activity permitted from being diverted to 06 noncharitable, noneducational, nonreligious, or profit-making organizations, individuals, 07 or groups; 08 (3) the immediate revocation of permits, licenses, and pull-tab and 09 video lottery vendor registrations authorized under this chapter if this chapter or 10 regulations adopted under it are violated; 11 (4) the requiring of detailed, sworn, financial reports of operations from 12 permittees and licensees including detailed statements of receipts and payments; 13 (5) the investigation of permittees, licensees, registered pull-tab or 14 video lottery vendors, and their employees, including the fingerprinting of those 15 permittees, licensees, registered pull-tab or video lottery vendors, and employees 16 whom the department considers it advisable to fingerprint; 17 (6) the method and manner of conducting authorized activities and 18 awarding of prizes or awards, and the equipment that may be used; 19 (7) the number of activities that may be held, operated, or conducted 20 under a permit during a specified period; however, the department may not allow more 21 than 14 bingo sessions a month and 35 bingo games a session to be conducted under 22 a permit; the holders of a multiple-beneficiary permit under AS 05.15.100(d) may hold, 23 operate, or conduct the number of sessions and games a month equal to the number 24 allowed an individual permittee per month multiplied by the number of holders of the 25 multiple-beneficiary permit; 26 (8) a method of accounting for receipts and disbursements by operators, 27 including the keeping of records and requirements for the deposit of all receipts in a 28 bank; 29 (9) the disposition of funds in possession of a permittee, a person, 30 municipality, or qualified organization that possesses an operator's license, or a 31 registered pull-tab or video lottery vendor at the time a permit, a license, or a pull-
01 tab or video lottery vendor registration is surrendered, revoked, or invalidated; 02 (10) restrictions on the participation by employees of the Department 03 of Fish and Game in salmon classics and in king salmon classics, and by employees 04 of Douglas Island Pink and Chum in king salmon classics; 05 (11) other matters the department considers necessary to carry out this 06 chapter or protect the best interest of the public. 07 * Sec. 3. AS 05.15.070 is amended to read: 08 Sec. 05.15.070. Examination of books and records. The department may 09 examine or have examined the books and records of a permittee, an operator, a 10 registered pull-tab or video lottery vendor, or a person licensed to manufacture or to 11 distribute video lottery machines or pull-tab games in the state. The department may 12 issue subpoenas for the attendance of witnesses and the production of books, records, 13 and other documents. 14 * Sec. 4. AS 05.15.095(a) is amended to read: 15 (a) The applications and reports to the department required by this chapter 16 shall be signed under penalty of unsworn falsification by the following person, as 17 applicable: 18 (1) the member in charge for the qualified organization; 19 (2) a person authorized to sign on behalf of the municipality; 20 (3) the operator or the operator's agent; 21 (4) the licensed pull-tab distributor or the distributor's agent; [OR] 22 (5) the licensed pull-tab manufacturer or the manufacturer's agent ; 23 (6) the licensed video lottery machine distributor or the 24 distributor's agent; 25 (7) the licensed video lottery machine manufacturer or the 26 manufacturer's agent; 27 (8) the registered video lottery vendor or the vendor's agent; or 28 (9) the registered pull-tab vendor or the vendor's agent . 29 * Sec. 5. AS 05.15.100 is amended by adding a new subsection to read: 30 (e) The department may issue a permit to a municipality or qualified 31 organization to conduct video lotteries through the use of video lottery machines.
01 * Sec. 6. AS 05.15.105(a) is amended to read: 02 (a) If a person has been convicted of a violation of a law of this state that is, 03 or a law or ordinance of another jurisdiction that would be if it had been committed 04 in this state, a felony, or a violation of a law or ordinance of this state or another 05 jurisdiction that is a crime involving theft or dishonesty or a violation of gambling 06 laws 07 (1) the department may not issue a license to the person; 08 (2) the department may not issue a license to, or register as a pull-tab 09 or video lottery vendor, an applicant who employs the person in a managerial or 10 supervisory capacity or uses the person as a fund raiser or consultant; 11 (3) the department may not issue a permit for an activity if the person 12 is responsible for the operation of the activity; 13 (4) the person may not be employed in a managerial or supervisory 14 capacity by a licensee or vendor or used as a fund raiser or consultant by a licensee 15 or a pull-tab or video lottery vendor; 16 (5) the person may not participate in charitable gaming as a permittee, 17 licensee, or pull-tab or video lottery vendor. 18 * Sec. 7. AS 05.15.115(c) is amended to read: 19 (c) A permittee may not contract with more than one operator at a time to 20 conduct the same type of activity. For the purposes of this subsection, bingo games, 21 raffles, lotteries, pull-tab games, ice classics, race classics, rain classics, goose classics, 22 mercury classics, deep freeze classics, mushing sweepstakes, canned salmon classics, 23 salmon classics, king salmon classics, dog mushers' contests, snow machine classics, 24 fish derbies, and contests of skill are each a different type of activity. Except as 25 authorized under AS 05.15.300, a permittee may not contract with an operator to 26 conduct video lotteries. 27 * Sec. 8. AS 05.15.124 is amended to read: 28 Sec. 05.15.124. Municipal regulation of operators or vendors. A 29 municipality may by ordinance prohibit an operator , a pull-tab vendor, or a video 30 lottery vendor from conducting activities under this chapter within the municipality. 31 * Sec. 9. AS 05.15.128(a) is amended to read:
01 (a) The department shall revoke the license of an operator who does not 02 (1) report an adjusted gross income of at least 15 percent of gross 03 income annually based on the total operation of the operator; or 04 (2) pay to each authorizing permittee annually at least 30 percent of the 05 adjusted gross income, as determined under (1) of this subsection, from a pull-tab 06 activity or at least 10 percent of the adjusted gross income, as determined under (1) 07 of this subsection, from a gaming activity other than video lotteries and pull-tabs, 08 received from activities conducted on behalf of the authorizing permittee. 09 * Sec. 10. AS 05.15.150(a) is amended to read: 10 (a) The authority to conduct the activity authorized by this chapter is contingent 11 upon the dedication of the net proceeds of the charitable gaming activity to the awarding 12 of prizes to contestants or participants and to [POLITICAL,] educational, civic, public, 13 charitable, patriotic, or religious uses in the state. " Educational [POLITICAL, 14 EDUCATIONAL], civic, public, charitable, patriotic, or religious uses" means uses 15 benefiting persons either by bringing them under the influence of education or religion 16 or relieving them from disease, suffering, or constraint, or by assisting them in 17 establishing themselves in life, or by providing for the promotion of the welfare and 18 well-being of the membership of the organization within their own community, [OR 19 THROUGH AIDING CANDIDATES FOR PUBLIC OFFICE OR GROUPS THAT 20 SUPPORT CANDIDATES FOR PUBLIC OFFICE,] or by erecting or maintaining public 21 buildings or works, or lessening the burden on government, but does not include 22 (1) the direct or indirect payment of any portion of the net proceeds of 23 a bingo , video lottery, or pull-tab game to a lobbyist registered under AS 24.45; 24 (2) the erection, acquisition, improvement, maintenance, or repair of real, 25 personal, or mixed property unless it is used exclusively for one or more of the permitted 26 uses; or 27 (3) the direct or indirect payment of any portion of the net proceeds of 28 a charitable gaming activity, except the proceeds of a raffle and lottery, 29 (A) to aid candidates for public office or groups that support or 30 oppose candidates for public office; 31 (B) to a political party or to an organization affiliated with a
01 political party; or 02 (C) to a group, as that term is defined in AS 15.13.400, or a 03 political group, as that term is defined in AS 15.60, that seeks to influence the 04 outcome of an election. 05 * Sec. 11. AS 05.15.160(d) is amended to read: 06 (d) The total amount of authorized expenses that may be incurred under (a) of 07 this section in connection with any gaming activity other than video lotteries and 08 pull-tabs may not exceed 90 percent of the adjusted gross income from that gaming 09 activity. 10 * Sec. 12. AS 05.15.170 is amended to read: 11 Sec. 05.15.170. Suspension or revocation of permit, license, or vendor 12 registration. (a) The department may suspend, for a period of up to one year, or 13 revoke a permit, license, or pull-tab or video lottery vendor registration, after giving 14 notice to and an opportunity to be heard by the permittee or licensee, if the permittee, 15 licensee, or pull-tab or video lottery vendor 16 (1) violates or fails to comply with a requirement of this chapter or of 17 a regulation adopted under this chapter; 18 (2) breaches a contractual agreement with a permittee, licensee, or 19 registered pull-tab or video lottery vendor; 20 (3) becomes disqualified to participate in charitable gaming as provided 21 in AS 05.15.105; for the purposes of this paragraph, a permittee, licensee, or pull-tab 22 or video lottery vendor that is not a natural person is considered convicted if an owner 23 or manager of the permittee, licensee, or pull-tab or video lottery vendor is convicted; 24 (4) knowingly submits false information to the department or, in the case 25 of a registered pull-tab or video lottery vendor, to a permittee when the pull-tab or 26 video lottery vendor knows that the false information will be submitted to the 27 department as part of an application for registration; or 28 (5) gives or acts upon any inside information on the status of the prizes 29 awarded or to be awarded in a pull-tab game. 30 (b) If the department revokes a license or pull-tab or video lottery vendor 31 registration under this section, it may prohibit the licensee or pull-tab or video lottery
01 vendor from reapplying for a license or pull-tab or video lottery vendor registration for 02 a period of not more than five years. If the department revokes a permit under this 03 section, it may prohibit the permittee from reapplying for a permit for a period of not 04 more than one year. 05 * Sec. 13. AS 05.15.180(a) is amended to read: 06 (a) Except as provided in AS 05.15.187 or 05.15.300 - 05.15.360, this [THIS] 07 chapter does not authorize the use of playing cards, dice, roulette wheels, coin-operated 08 instruments or machines, or other objects or instruments used, designed, or intended 09 primarily for gaming or gambling or any other method or implement not expressly 10 authorized by the department. 11 * Sec. 14. AS 05.15.180(b) is amended to read: 12 (b) With the exception of raffles, lotteries, bingo games, video lotteries, pull-tab 13 games, race classics, rain classics, goose classics, mercury classics, deep freeze classics, 14 snow machine classics, mushing sweepstakes, canned salmon classics, salmon classics, 15 king salmon classics, an activity may not be licensed under this chapter unless it existed 16 in the state in substantially the same form and was conducted in substantially the same 17 manner before January 1, 1959. A snow machine classic may not be licensed under this 18 chapter unless it has been in existence for at least five years before the licensing. 19 * Sec. 15. AS 05.15.180(g) is amended to read: 20 (g) A municipality or a qualified organization may award a maximum of 21 $1,000,000 in prizes each year in activities authorized under this chapter; however, if a 22 municipality or a qualified organization contracts with an operator to conduct on its 23 behalf activities authorized under this chapter, the municipality or qualified organization 24 may award a maximum of $500,000 in prizes each year. The holders of a 25 multiple-beneficiary permit under AS 05.15.100(d) may award a maximum in prizes each 26 year of $1,000,000 times the number of holders of the permit for activities authorized 27 under this chapter. In this subsection , "activities authorized under this chapter" means 28 all activities subject to this chapter other than bingo and video lotteries . 29 * Sec. 16. AS 05.15.183(e) is amended to read: 30 (e) A distributor may not 31 (1) take an order for the purchase of a pull-tab series from a pull-tab
01 vendor; 02 (2) sell a pull-tab series to a pull-tab vendor; or 03 (3) deliver a pull-tab series to a pull-tab vendor. 04 * Sec. 17. AS 05.15.187(h) is amended to read: 05 (h) An owner, manager, or employee of a person holding a permit or license 06 under this chapter, or registered under this chapter as a pull-tab vendor, may not 07 purchase a pull-tab from a pull-tab series manufactured, distributed, or sold by the 08 permittee, licensee, or registered pull-tab vendor. 09 * Sec. 18. AS 05.15.187(i) is amended to read: 10 (i) A permittee, operator, or registered pull-tab vendor may not turn over a prize 11 of $50 or more to a person with a pull-tab card entitling the person to that prize unless 12 the person signs the pull-tab [A RECEIPT FOR THE PRIZE] and returns the pull-tab 13 [RECEIPT] to the permittee, operator, or pull-tab vendor. [THE RECEIPT MUST BE 14 IN A FORM APPROVED BY THE DEPARTMENT.] 15 * Sec. 19. AS 05.15.187 is amended by adding a new subsection to read: 16 (j) The department may approve the use of coin-operated machines for the sale 17 of pull-tabs. 18 * Sec. 20. AS 05.15.188 is amended to read: 19 Sec. 05.15.188. Pull-tab sales by pull-tab vendors on behalf of permittees; 20 pull-tab vendor registration. (a) A permittee may contract with a pull-tab vendor 21 to sell pull-tabs on behalf of the permittee [,] if the permittee first registers the pull- 22 tab vendor with the department by applying for registration on a form prescribed by the 23 department and by submitting the registration fee of $50 for each location at which the pull-tab vendor will sell 24 pull-tabs. 25 (b) Upon approval of the pull-tab vendor registration, the department shall 26 issue an endorsement to the permittee's permit that authorizes the conduct of pull-tab 27 sales at that pull-tab vendor location. 28 (c) The endorsement issued under (b) of this section is an extension of the 29 permittee's privilege under AS 05.15.100 to conduct pull-tab sales in this state. A 30 pull-tab vendor may not sell a pull-tab series until a copy of the permit containing the 31 endorsement for the new pull-tab vendor location has been posted by the permittee in
01 the registered pull-tab vendor establishment. The endorsed permit must be clearly 02 visible to the gaming public. 03 (d) A separate endorsement shall be issued for each pull-tab vendor location. 04 The permittee shall inform the department when a pull-tab vendor with whom the 05 permittee is contracting changes the physical location at which pull-tabs are sold, and 06 shall return to the department all copies of a permit endorsed to a pull-tab vendor that 07 is no longer selling pull-tabs on behalf of the permittee. Failure to inform the 08 department of a change in pull-tab vendor location, or to return the endorsed copies 09 of a permit to the department after a pull-tab vendor change, may constitute grounds 10 for the suspension or revocation of a permittee's permit. 11 (e) At the time that a permittee annually renews its permit, it shall also renew 12 the registration of all locations where a pull-tab vendor is selling pull-tabs on the 13 permittee's behalf and shall pay a registration fee of $50 for each pull-tab vendor 14 location. 15 (f) A permittee that uses a pull-tab vendor to sell pull-tabs on its behalf shall 16 enter into a written contract with that pull-tab vendor. The department may inspect 17 this contract. If the contract contains provisions that violate this chapter or the 18 regulations adopted under it, the department may declare the contract void, and may 19 suspend or revoke the registration of the pull-tab vendor and the permit of the 20 permittee. 21 (g) A person, other than a permittee's member-in-charge, may not directly 22 supply a pull-tab series to a registered pull-tab vendor for sale by that pull-tab vendor 23 on behalf of the permittee. 24 (h) If a permittee contracts with a pull-tab vendor under (a) of this section, 25 the contract must provide that the permittee shall receive no less than 70 percent of 26 the ideal net. 27 (i) An amount equal to the ideal net less the compensation owed to the pull- 28 tab vendor shall be paid by the pull-tab vendor to the member-in-charge upon delivery of a 29 pull-tab series to the pull-tab vendor for sale. The amount required to be paid by the pull-tab 30 vendor shall be paid by check and the check may not be drawn in a manner that the payee is 31 not identified.
01 (j) An operator may not contract with or use a pull-tab vendor to sell pull- 02 tabs. 03 (k) A permittee may not contract with more than five pull-tab vendors under 04 this section. 05 * Sec. 21. AS 05.15 is amended by adding new sections to read: 06 Article 2A. Video Lotteries. 07 Sec. 05.15.300. Video lottery. (a) The department may issue a video lottery 08 endorsement to a permittee to conduct video lottery charitable gaming. The 09 endorsement provides the permittee with the authority to 10 (1) conduct video lotteries by use of video lottery machines at a 11 location where the permittee directly sells pull-tabs or conducts bingo sessions; 12 (2) contract with a video lottery vendor to conduct video lottery 13 charitable gaming by use of video lottery machines; or 14 (3) if the permittee has a club license under AS 04.11.110, conduct 15 video lottery charitable gaming by use of video lottery machines at the location of the 16 club. 17 (b) To obtain a video lottery endorsement under 18 (1) (a)(1) of this section, a permittee shall identify 19 (A) the locations where the permittee directly sells pull-tabs or 20 conducts bingo sessions and where the permittee intends to install video lottery 21 machines; and 22 (B) the number of video lottery machines the permittee will 23 have at each location; 24 (2) (a)(2) of this section, a permittee shall register the video lottery 25 vendor with the department by applying for registration on a form prescribed by the 26 department and identify 27 (A) the locations of the video lottery machines; and 28 (B) the number of video lottery machines the permittee will 29 have at each location; 30 (3) (a)(3) of this section, the permittee shall submit proof of the club 31 license to the department and identify
01 (A) the location of the club; and 02 (B) the number of video lottery machines the permittee will 03 have at the club. 04 (c) A permittee issued an endorsement to conduct video lotteries under 05 (1) (a)(1) of this section may not be issued an endorsement under (a)(2) 06 or (3) of this section; 07 (2) (a)(2) of this section may not be issued an endorsement under 08 (a)(1) or (3) of this section; 09 (3) (a)(3) of this section may not be issued an endorsement under (a)(1) 10 or (2) of this section. 11 (d) The endorsement issued under (a) of this section is an extension of the 12 permittee's privilege to conduct charitable gaming in this state. In addition to the 13 endorsement, the department shall issue a machine permit for each video lottery 14 machine the permittee has identified under (b) of this section. A permittee or 15 registered video lottery vendor may not conduct video lottery charitable gaming until 16 a copy of the permit and the endorsement is posted by the permittee at the 17 establishment where the machine is located and the machine permit is posted on the 18 machine. The permit, endorsement, and each machine permit must be clearly visible 19 to the public. 20 (e) A separate endorsement shall be issued for each permittee location or video 21 lottery vendor location. The permittee shall inform the department when the permittee, 22 or a video lottery vendor with whom the permittee is contracting, changes the physical 23 location at which video lottery charitable gaming is conducted and shall return to the 24 department all copies of a permit endorsed to a permittee, or a video lottery vendor, 25 that is no longer conducting video lottery charitable gaming. Failure to inform the 26 department of a change in permittee or video lottery vendor location, or to return the 27 endorsed copies of a permit to the department after a permittee or video lottery vendor 28 change, constitutes grounds for the suspension or revocation of a permittee's permit. 29 (f) At the time that a permittee annually renews its permit, the permittee shall 30 also renew the registration of all locations where the permittee or a video lottery 31 vendor is conducting video lottery charitable gaming.
01 (g) A permittee that uses a video lottery vendor to conduct video lottery 02 charitable gaming on its behalf shall enter into a written contract with that video 03 lottery vendor. The department may inspect this contract. If the contract contains 04 provisions that violate this chapter or the regulations adopted under it, the department 05 may declare the contract void, and may suspend or revoke the registration of the video 06 lottery vendor and the permit of the permittee. 07 (h) Only video lottery machines owned or leased by the department may be 08 used for video lottery charitable gaming. 09 (i) If a permittee 10 (1) contracts with a video lottery vendor under (a)(2) of this section, 11 the contract must provide that the 12 (A) permittee shall receive 30 percent of the net machine 13 income; 14 (B) registered video lottery vendor shall receive 30 percent of 15 the net machine income; 16 (C) state shall receive 20 percent of the net machine income; 17 and 18 (D) municipality in which each machine is located, or the state 19 if the machine is located in the unorganized borough outside of municipalities, 20 shall receive 20 percent of the net machine income; 21 (2) conducts video lottery charitable gaming under (a)(1) or (3) of this 22 section, the permittee must remit the percentages of net machine income under (1) of 23 this subsection to the state and municipality, if any, at times set by the department by 24 regulation. 25 (j) The odds of winning each video lottery game shall be posted on or near 26 each video lottery machine. The manner in which the odds are calculated and how 27 they are posted shall be set by the department by regulation. 28 (k) A video lottery machine may 29 (1) not be played by a person under the age of 21 and may not be 30 located in any place accessible to persons under the age of 21; 31 (2) only be played during the regular business hours for the location
01 and if the permittee or video lottery vendor is licensed under AS 04.11 during the legal 02 hours of operation allowed by the license and applicable municipal ordinance; 03 (3) not be played if the machine permit is not posted on the machine. 04 (l) A permittee may not have more than 10 video lottery machines at each 05 location for which the permittee has an endorsement. No more than 10 video lottery 06 machines may be located in the same location in the same building. A permittee may 07 not contract with more than five video lottery vendors under this section. A video 08 lottery vendor may not have more than 10 video lottery machines at each video lottery 09 vendor location. A permittee may not have endorsements cumulatively totaling more 10 than 50 machines. Notwithstanding another provision of this subsection, no more than 11 10 video lottery machines may be located in a building where bingo or pull-tab games 12 are conducted. If a video lottery vendor is an operator, video lottery machines may 13 only be located in a location that was being used to conduct bingo or pull-tab games 14 on the effective date of this Act. 15 (m) All video lottery machines shall be monitored by the permittee or the 16 video lottery vendor during business hours. Monitoring shall be accomplished by the 17 physical presence of an employee of the permittee or the video lottery vendor or by 18 an employee using video cameras or mirrors and by periodic personal inspections of 19 the machines and the area in which the machines are located. 20 (n) A permittee or a registered video lottery vendor may not advertise in any 21 manner the possession or availability of video lottery machines on their premises or 22 under their permit or registration. 23 (o) If the sale of alcoholic beverages has been prohibited within a municipality 24 under AS 04.11.491, the department may issue a video lottery endorsement to a 25 permittee within the municipality that provides the permittee with the authority to 26 conduct video lottery charitable gaming by use of video lottery machines in the manner 27 permittees with club licenses under AS 04.11.110 are authorized to conduct video 28 lottery charitable gaming if the video lottery charitable gaming is only conducted 29 within a location into which the access is restricted to persons 21 years of age or older. 30 (p) The department may by regulation exempt a permittee under this section 31 from the reporting requirements of AS 05.15.080 if the information required to be
01 submitted in the report can be obtained directly by the department from the video 02 lottery machines. 03 (q) A video lottery vendor that is an operator is subject only to the provisions 04 relating to video lottery vendors for actions taken as a video lottery vendor. 05 Sec. 05.15.310. Video lottery machines. (a) The department may not approve 06 a video lottery machine unless the machine 07 (1) offers only games authorized by the department; 08 (2) does not have any means of manipulation that affect the random 09 probabilities of winning a game; 10 (3) is designed to accept cash, in the form of coins or bills, to prevent 11 the obtaining of plays or credits without paying by stringing, slamming, drilling, or 12 other means of manipulation, and to suspend itself from operation until it is physically 13 reset if physically tampered with; 14 (4) has nonresettable meters housed in a readily accessible locked 15 machine area that keeps a permanent record of all money inserted into the machine, 16 all refunds of winnings made by the machine's printer, credits played for video lottery 17 games, and credits won by video lottery players; 18 (5) does not directly pay off winning players by means of tokens or 19 cash, in the form of coins or bills, but is capable of printing a ticket voucher stating 20 the value of the prize for the player at the completion of each video lottery game, the 21 time of day in a 24-hour format showing hours and minutes, the date, the machine 22 serial number, the sequential number of the ticket vouchers, and an encrypted 23 validation number from which the validity of the prize may be determined; 24 (6) has accounting software that keeps an electronic record that includes 25 total money inserted into the machine, the value of winning tickets claimed by players, 26 the total video lottery credits awarded by a video lottery game, and the payback 27 percentages credited players of each video lottery game; 28 (7) is linked under a central communications system to provide auditing 29 program information as approved by the department; the communications system 30 approved by the department under this paragraph may not limit participation to only 31 one manufacturer of video lottery machines by either the cost of implementing the
01 necessary program modifications to communicate or the inability to communicate with 02 the central communications system; this paragraph does not require that a machine to 03 be approved must be on-line or otherwise in constant communication with a central 04 computer; 05 (8) does not allow more than $1 to be played on a game or award free 06 games or credits in excess of the value of $250 per credit value of $.25 played; and 07 (9) has a total payoff of at least 85 percent of the value of one $.25 08 credit. 09 (b) The department shall purchase or lease video lottery machines and shall 10 provide those machines to permittees to use as provided in this chapter. The 11 department shall contract for the installation and maintenance of the video lottery 12 machines. The department may not award a contract under this subsection for the 13 (1) purchase or lease of a video lottery machine unless the machine 14 meets the requirements of (a) of this section; 15 (2) installation and maintenance of a video lottery machine unless the 16 contractor has 17 (A) demonstrated an expertise in installing and maintaining 18 video lottery machines, associated communications, and computer systems; and 19 (B) the capability of responding to a video lottery terminal 20 malfunction or repair request within 24 hours of the malfunction or repair 21 request. 22 Sec. 05.15.320. Video lottery machine manufacturers. (a) A person may 23 not manufacture video lottery machines or associated equipment in the state, and may 24 not sell or distribute a video lottery machine or associated equipment that the person 25 has manufactured outside of the state to persons in the state, unless the person has 26 received a video lottery manufacturer's license issued by the department. 27 (b) The department may issue a video lottery machine manufacturer's license 28 to a person who pays an annual fee of $5,000. 29 (c) A video lottery machine or associated equipment may not be manufactured, 30 sold, or distributed in the state unless it has been approved by the department. A 31 video lottery machine may only be sold or distributed to the department or a contractor
01 of the department under AS 05.15.310. The department shall examine prototypes of 02 video lottery machines and associated equipment that a licensed manufacturer wishes 03 to manufacture, sell, or distribute in the state. The manufacturer shall pay in advance 04 the costs of the examination and approval of a video lottery machine or associated 05 equipment. The department may contract with another state or person for the 06 examination required under this subsection. 07 (d) A video lottery machine manufacturer may distribute video lottery 08 machines and associated equipment only to a licensed video lottery machine distributor 09 unless the video lottery machine manufacturer is also a licensed video lottery machine 10 distributor. 11 (e) A video lottery machine manufacturer shall report to the department by the 12 last business day of the month on each machine or associated equipment sold or 13 distributed within the state during the preceding month, including the serial number of 14 each machine or associated equipment distributed and the name of the distributor to 15 whom the machine or associated equipment was sold or distributed. 16 Sec. 05.15.330. Video lottery machine distributors. (a) A person may not 17 distribute video lottery machines or associated equipment in this state unless the person 18 has received a video lottery machine distributor's license issued by the department. 19 (b) The department may issue a video lottery machine distributor's license to 20 a person who pays an annual fee of $5,000. 21 (c) Video lottery machines and associated equipment may be distributed only 22 from a location in the state to the department or to a contractor of the department 23 under AS 05.15.310. A person may not distribute video lottery machines or associated 24 equipment directly to another person in the state from a location outside of this state. 25 (d) A video lottery distributor shall report to the department by the last 26 business day of each month on each video lottery machine and associated equipment 27 distributed in the preceding month. 28 (e) A distributor may not 29 (1) take an order for the purchase of a video lottery machine or 30 associated equipment from a permittee or a video lottery vendor; or 31 (2) sell a video lottery machine or associated equipment to a permittee
01 or a video lottery vendor. 02 Sec. 05.15.340. Distribution of net income from video lottery charitable 03 gaming. The department shall immediately revoke the video lottery endorsement of 04 a permittee or the video lottery registration of a video lottery vendor that fails to pay 05 the following percentages of net machine income from each video lottery machine at 06 the times directed by the department: 07 (1) 60 percent to the permittee or, if the permittee uses a video lottery 08 vendor, 30 percent to the permittee and 30 percent to the video lottery vendor; 09 (2) 20 percent to the state; and 10 (3) 20 percent to the municipality in which the machine is located, or 11 to the state if the machine is located in the unorganized borough outside of 12 municipalities. 13 Sec. 05.15.350. Video lottery revenues may be appropriated for education. 14 The state's percentage of video lottery charitable adjusted gross income received under 15 AS 05.15.340 shall be deposited in the general fund. The annual estimated balance 16 in the account maintained under AS 37.05.142 for money received under AS 05.15.340 17 may be appropriated by the legislature to provide for education. Nothing in this 18 section creates a dedicated fund. 19 Sec. 05.15.360. Department to contract. The department, to the maximum 20 extent practicable, shall solicit bids and contract for the performance of duties required 21 to monitor and conduct video lottery charitable gaming when the contracting will not 22 jeopardize the integrity of the gaming and enforcement of the laws of the state. 23 * Sec. 22. AS 05.15.620(c) is amended to read: 24 (c) If a majority of the voters vote "yes" on the question set out in (a), (b), or 25 (d) [(a) OR (b)] of this section, the department shall be notified immediately after 26 certification of the results of the election and thereafter the department may not issue 27 a license, permit, endorsement, or pull-tab or video lottery vendor registration 28 authorizing charitable gaming , video lotteries, or pull-tab sales, as appropriate, within 29 the boundaries of a municipality and in unincorporated areas within five miles of the 30 boundaries of the municipality or within the perimeter of an established village. As 31 necessary to implement the results of an election under (a), (b), or (d) [(a) OR (b)] of
01 this section, existing licenses, permits, endorsements, and pull-tab or video lottery 02 vendor registrations for charitable gaming , video lotteries, or pull-tab sales within the 03 boundaries of a municipality and in unincorporated areas within five miles of the 04 boundaries of the municipality or within the perimeter of an established village are void 05 90 days after the results of the election are certified. A license , endorsement, or pull- 06 tab or video lottery vendor registration that will expire during the 90 days after the results of 07 a local option election under this section are certified is void as of the expiration date. 08 * Sec. 23. AS 05.15.620 is amended by adding a new subsection to read: 09 (d) The following question, appearing alone, may be placed before the voters of 10 a municipality or an established village in accordance with AS 05.15.625: "Shall video 11 lotteries in . . . . . . . . (name of municipality or village) be prohibited? (yes or no)." 12 * Sec. 24. AS 05.15.680 is amended to read: 13 Sec. 05.15.680. Penalties. (a) Except as provided in (e) of this section, a 14 [A] person who knowingly violates or aids or solicits a person to violate this chapter 15 is guilty of a violation for the first offense and a class B misdemeanor for the second 16 and each subsequent offense. In this subsection, "knowingly" has the meaning 17 given in AS 11.81.900. 18 (b) A person who, with [THE] intent to mislead a public servant in the 19 performance of the public servant's duty, submits a false statement in an application 20 for a permit, license, endorsement, or pull-tab or video lottery vendor registration 21 under this chapter is guilty of unsworn falsification. In this subsection, "with intent" 22 has the meaning given to "intentionally" in AS 11.81.900. 23 * Sec. 25. AS 05.15.680 is amended by adding new subsections to read: 24 (c) A person 25 (1) may not with criminal negligence allow a person under 21 years of 26 age to use a video lottery machine; 27 (2) who is under the age of 21 may not with criminal negligence use 28 a video lottery machine; 29 (3) may not with criminal negligence manipulate or attempt to 30 manipulate the outcome or payoff of a video lottery machine by tampering or 31 otherwise interfering with the proper functioning of the machine.
01 (d) In this section, "criminal negligence" has the meaning given in 02 AS 11.81.900. 03 (e) Violation of (c) of this section is a class A misdemeanor. 04 * Sec. 26. AS 05.15.690(36) is amended to read: 05 (36) "qualified organization" means a bona fide civic or service 06 organization or a bona fide religious, charitable, fraternal, veterans, [LABOR, 07 POLITICAL,] or educational organization, police or fire department and company, dog 08 mushers' association, outboard motor association, or fishing derby or nonprofit trade 09 association in the state, that operates without profits to its members and that has been 10 in existence continually for a period of three years immediately before applying for the 11 license or permit; the organization may be a firm, corporation, company, association, 12 or partnership; 13 * Sec. 27. AS 05.15.690(44) is amended to read: 14 (44) " pull-tab vendor" means a business whose primary activity is not 15 regulated by this chapter but that 16 (A) is engaged in the sale of pull-tabs on behalf of a permittee; 17 (B) holds a business license under AS 43.70; and 18 (C) is an establishment holding a 19 (i) beverage dispensary license under AS 04.11.090 that 20 has not been designated by the Alcoholic Beverage Control Board under 21 AS 04.16.049(a)(2) - (3), has not been exempted by the Department of 22 Labor under AS 04.16.049(c) and AS 23.10.355, and if the 23 establishment is a hotel, motel, resort, or similar business that caters to 24 the traveling public as a substantial part of its business, does not allow 25 the sale of pull-tabs in a dining room, banquet room, guest room, or 26 other public areas other than a room in which there is regularly 27 maintained a fixed counter or service bar at which alcoholic beverages 28 are sold or served to members of the public for consumption; 29 (ii) package store license under AS 04.11.150; 30 * Sec. 28. AS 05.15.690 is amended by adding new paragraphs to read: 31 (46) "net machine income" means money put into a video lottery
01 machine minus credits paid out in cash; 02 (47) "video lottery" means a game of chance that uses a video lottery 03 machine; 04 (48) "video lottery machine" means an electronic video game machine 05 that upon insertion of cash, in the form of coins or bills, is able to play or simulate the 06 play of a video game, including video poker, keno, or blackjack, authorized by the 07 department, using a video display and microprocessors so that, by chance, the player 08 may receive free games or credits that can be redeemed for cash; 09 (49) "video lottery vendor" means 10 (A) an operator licensed by the department to conduct bingo or 11 pull-tab games on the effective date of this Act and that conducts video 12 lotteries on behalf of a permittee; or 13 (B) a business whose primary activity is not regulated by this 14 chapter but that 15 (i) conducts video lotteries on behalf of a permittee; 16 (ii) holds a business license under AS 43.70; and 17 (iii) is an establishment holding a beverage dispensary 18 license under AS 04.11.090 that has not been designated by the 19 Alcoholic Beverage Control Board under AS 04.16.049(a)(2) - (3), has 20 not been exempted by the Department of Labor under AS 04.16.049(c) 21 and AS 23.10.355, and, if the establishment is a hotel, motel, resort, or 22 similar business that caters to the traveling public as a substantial part 23 of its business, does not conduct the video lotteries in a dining room, 24 banquet room, guest room, or other public areas other than a room in 25 which there is regularly maintained a fixed counter or service bar at 26 which alcoholic beverages are sold or served to members of the public 27 for consumption, or a package store license under AS 04.11.150. 28 * Sec. 29. AS 11.66.280(2) is amended to read: 29 (2) "gambling" means that a person stakes or risks something of value 30 upon the outcome of a contest of chance or a future contingent event not under the 31 person's control or influence, upon an agreement or understanding that that person or
01 someone else will receive something of value in the event of a certain outcome; 02 "gambling" does not include 03 (A) bona fide business transactions valid under the law of 04 contracts for the purchase or sale at a future date of securities or commodities 05 and agreements to compensate for loss caused by the happening of chance, 06 including contracts of indemnity or guaranty and life, health, or accident 07 insurance; or 08 (B) playing an amusement device that 09 (i) confers only an immediate right of replay not 10 exchangeable for something of value other than the privilege of 11 immediate replay; and 12 (ii) does not contain a method or device by which the 13 privilege of immediate replay may be canceled or revoked; 14 (C) an activity authorized by the Department of Revenue under 15 AS 05.15 or AS 19.65.035 ; 16 * Sec. 30. AS 11.66.280(3) is amended to read: 17 (3) "gambling device" means any device, machine, paraphernalia, or 18 equipment that is used or usable in the playing phases of unlawful gambling, whether 19 it consists of gambling between persons or gambling by a person involving the playing 20 of a machine; "gambling device" does not include 21 (A) lottery tickets, policy slips, or other items used in the 22 playing phases of lottery or policy schemes; [OR] 23 (B) an amusement device as described in (2)(B) of this section; 24 or 25 (C) a video lottery machine or a pull-tab sales machine 26 permitted or authorized by the commissioner of revenue under AS 05.15 27 or AS 19.65.035; 28 * Sec. 31. AS 11.66.280(4) is amended to read: 29 (4) "gambling enterprise" means a gambling business that 30 (A) includes five or more persons who conduct, finance, 31 manage, supervise, direct, or own all or part of the business;
01 (B) has been or remains in substantially continuous operation 02 for a period in excess of 30 days or has a gross income of $2,000 or more in 03 any single day; and 04 (C) is not a 05 (i) vessel of the Alaska marine highway system or the 06 Department of Transportation and Public Facilities when they are 07 lawfully conducting an activity licensed under AS 19.65.035; or 08 (ii) municipality or a qualified organization under 09 AS 05.15.690, except that, for purposes of this subparagraph 10 [PARAGRAPH], no application for a license under AS 05.15 is 11 required to be considered a qualified organization; 12 * Sec. 32. AS 19.65 is amended by adding new sections to article 1 to read: 13 Sec. 19.65.035. Video lottery machines authorized. (a) The Department of 14 Revenue may license a vessel of the Alaska marine highway system to operate video 15 lottery machines in a portion of the vessel that persons under 21 years of age are 16 prohibited from entering. 17 (b) A license issued under (a) of this section is not valid when the vessel is 18 in a jurisdiction outside of the state unless that jurisdiction also allows the licensed 19 activity. 20 (c) The Department of Transportation and Public Facilities shall operate video 21 lottery machines aboard a vessel of the Alaska marine highway system licensed under 22 (a) of this section or may contract for their operation under AS 36.30 (State 23 Procurement Code). 24 (d) The commissioner of revenue shall adopt regulations under AS 44.62 25 (Administrative Procedure Act) to implement this section. Those regulations must be 26 consistent, to the extent practicable, with statutes or regulations governing video 27 lotteries and video lottery machines under AS 05.15. 28 Sec. 19.65.040. Prohibitions on video lottery machine operation; penalties. 29 (a) An employee of the Alaska marine highway system or of a contractor under 30 AS 19.65.035(c) may not with criminal negligence allow a person under 21 years of 31 age to use a video lottery machine authorized under AS 19.65.035. A person under
01 21 years of age may not with criminal negligence use a video lottery machine 02 authorized under AS 19.65.035. 03 (b) A person may not with criminal negligence manipulate or attempt to 04 manipulate the outcome or payoff of a video lottery machine authorized under 05 AS 19.65.035 by tampering or otherwise interfering with the proper functioning of the 06 machine. 07 (c) In this section, "criminal negligence" has the meaning given in 08 AS 11.81.900. 09 (d) Violation of this section is a class A misdemeanor. 10 Sec. 19.65.045. Revenues to general fund; appropriation for Alaska marine 11 highway system. Revenues from video lottery machines, less prizes awarded, shall 12 be deposited in the general fund. The legislature may appropriate the annual estimated 13 balance in the account maintained under AS 37.05.142 for revenues deposited under 14 this section for the Alaska marine highway system. Nothing in this section creates 15 a dedicated fund. 16 Sec. 19.65.050. Definition for AS 19.65.035 - 19.65.050. In AS 19.65.035 - 17 19.65.050, "video lottery machine" has the meaning given in AS 05.15.690. 18 * Sec. 33. AS 29.10.200(47) is amended to read: 19 (47) AS 29.45.650(c), (d), (e), [AND] (f) , and (i) (sales and use tax); 20 * Sec. 34. AS 29.45.650 is amended by adding a new subsection to read: 21 (i) A borough may not levy or collect a sales tax on sales, rents, and services, 22 or a use tax on the storage, use, or consumption of personal property on video lottery 23 machines and video lottery charitable gaming. This subsection applies to home rule 24 and general law municipalities. 25 * Sec. 35. AS 29.45.700(d) is amended to read: 26 (d) A city that levies and collects sales and use taxes under (a) of this section 27 may not levy and collect a sales tax on a purchase made with (1) food coupons, food 28 stamps, or other types of certificates issued under 7 U.S.C. 2011 - 2025 (Food Stamp 29 Act); or (2) food instruments, food vouchers, or other type of certificate issued under 30 42 U.S.C. 1786 (Special Supplemental Food Program for Women, Infants, and 31 Children). A city that levies and collects sales and use taxes under (a) of this
01 section may not levy and collect a sales or use tax on sales, rents, services, storage, 02 use, or consumption, of video lottery machines or video lottery charitable gaming. 03 This subsection applies to home rule and general law municipalities. 04 * Sec. 36. Section 4, ch. 13, SLA 1995, as repealed and reenacted by sec. 7, ch. 41, SLA 05 1997, is repealed and reenacted to read: 06 Sec. 4. AS 05.15.115(c) is repealed and reenacted to read: 07 (c) A permittee may not contract with more than one operator at a time to 08 conduct the same type of activity. For the purposes of this subsection, bingo games, 09 raffles, lotteries, pull-tab games, ice classics, rain classics, race classics, goose classics, 10 mercury classics, deep freeze classics, canned salmon classics, salmon classics, king 11 salmon classics, dog mushers' contests, snow machine classics, fish derbies, contests 12 of skill, and all activities permitted under AS 05.15.100(b) are each a different type 13 of activity. Except as authorized under AS 05.15.300, a permittee may not contract 14 with an operator to conduct video lotteries. 15 * Sec. 37. Section 6, ch. 13, SLA 1995, by sec. 3, ch. 35, SLA 1997, and sec. 8, ch. 41, 16 SLA 1997, is repealed and reenacted to read: 17 Sec. 6. AS 05.15.180(b) is repealed and reenacted to read: 18 (b) With the exception of raffles, lotteries, bingo games, video lotteries, pull- 19 tab games, race classics, rain classics, goose classics, mercury classics, deep freeze classics, 20 dog mushers' contests, snow machine classics, canned salmon classics, salmon classics, and 21 king salmon classics, an activity may not be licensed under this chapter unless it existed in 22 the state in substantially the same form and was conducted in substantially the same manner 23 before January 1, 1959. 24 * Sec. 38. AS 05.15.690(25) and 05.15.690(34), are repealed. 25 * Sec. 39. REGULATIONS. Notwithstanding the effective date of secs. 1 - 38 of this Act, 26 the Department of Revenue shall begin the process under AS 44.62 (Administrative Procedure 27 Act) of adopting regulations to implement this Act so that the regulations can take effect 28 January 1, 2000, or as soon thereafter as is possible. 29 * Sec. 40. Except for sec. 39 of this Act, this Act takes effect January 1, 2000. 30 * Sec. 41. Section 39 of this Act takes effect immediately under AS 01.10.070(c).