CSHB 182(TRA): "An Act relating to charitable gaming; and providing for an effective date."
00CS FOR HOUSE BILL NO. 182(TRA) 01 "An Act relating to charitable gaming; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 05.15.020(b) is amended to read: 04 (b) An additional fee of one percent of the net proceeds received during the 05 preceding year from the activities authorized under the permit shall be paid to the 06 department annually by the municipality or qualified organization authorized to 07 conduct activities under this chapter, if the gross receipts for the activities were 08 $20,000 or more. In this subsection, "activities authorized under the permit" does 09 not include activities conducted under an endorsement issued to a permittee under 10 AS 05.15.300. 11 * Sec. 2. AS 05.15.060(a) is amended to read: 12 (a) The department shall adopt regulations under AS 44.62 (Administrative 13 Procedure Act) necessary to carry out this chapter covering, but not limited to, 14 (1) the issuance, renewal, and revocation of permits, licenses, and pull-
01 tab and video lottery vendor registrations; 02 (2) a method of ascertaining net proceeds, the determination of items 03 of expense that may be incurred or paid, and the limitation of the amount of the items 04 of expense to prevent the proceeds from the activity permitted from being diverted to 05 noncharitable, noneducational, nonreligious, or profit-making organizations, individuals, 06 or groups; 07 (3) the immediate revocation of permits, licenses, and pull-tab and 08 video lottery vendor registrations authorized under this chapter if this chapter or 09 regulations adopted under it are violated; 10 (4) the requiring of detailed, sworn, financial reports of operations from 11 permittees and licensees including detailed statements of receipts and payments; 12 (5) the investigation of permittees, licensees, registered pull-tab or 13 video lottery vendors, and their employees, including the fingerprinting of those 14 permittees, licensees, registered pull-tab or video lottery vendors, and employees 15 whom the department considers it advisable to fingerprint; 16 (6) the method and manner of conducting authorized activities and 17 awarding of prizes or awards, and the equipment that may be used; 18 (7) the number of activities that may be held, operated, or conducted 19 under a permit during a specified period; however, the department may not allow more 20 than 14 bingo sessions a month and 35 bingo games a session to be conducted under 21 a permit; the holders of a multiple-beneficiary permit under AS 05.15.100(d) may hold, 22 operate, or conduct the number of sessions and games a month equal to the number 23 allowed an individual permittee per month multiplied by the number of holders of the 24 multiple-beneficiary permit; 25 (8) a method of accounting for receipts and disbursements by operators, 26 including the keeping of records and requirements for the deposit of all receipts in a 27 bank; 28 (9) the disposition of funds in possession of a permittee, a person, 29 municipality, or qualified organization that possesses an operator's license, or a 30 registered pull-tab or video lottery vendor at the time a permit, a license, or a pull- 31 tab or video lottery vendor registration is surrendered, revoked, or invalidated;
01 (10) restrictions on the participation by employees of the Department 02 of Fish and Game in salmon classics and in king salmon classics, and by employees 03 of Douglas Island Pink and Chum in king salmon classics; 04 (11) other matters the department considers necessary to carry out this 05 chapter or protect the best interest of the public. 06 * Sec. 3. AS 05.15.070 is amended to read: 07 Sec. 05.15.070. Examination of books and records. The department may 08 examine or have examined the books and records of a permittee, an operator, a 09 registered pull-tab or video lottery vendor, or a person licensed to manufacture or to 10 distribute video lottery machines or pull-tab games in the state. The department may 11 issue subpoenas for the attendance of witnesses and the production of books, records, 12 and other documents. 13 * Sec. 4. AS 05.15.095(a) is amended to read: 14 (a) The applications and reports to the department required by this chapter 15 shall be signed under penalty of unsworn falsification by the following person, as 16 applicable: 17 (1) the member in charge for the qualified organization; 18 (2) a person authorized to sign on behalf of the municipality; 19 (3) the operator or the operator's agent; 20 (4) the licensed pull-tab distributor or the distributor's agent; [OR] 21 (5) the licensed pull-tab manufacturer or the manufacturer's agent ; 22 (6) the licensed video lottery machine distributor or the 23 distributor's agent; 24 (7) the licensed video lottery machine manufacturer or the 25 manufacturer's agent; 26 (8) the registered video lottery vendor or the vendor's agent; or 27 (9) the registered pull-tab vendor or the vendor's agent . 28 * Sec. 5. AS 05.15.100 is amended by adding a new subsection to read: 29 (e) The department may issue a permit to a municipality or qualified 30 organization to conduct video lotteries through the use of video lottery machines. 31 * Sec. 6. AS 05.15.105(a) is amended to read:
01 (a) If a person has been convicted of a violation of a law of this state that is, 02 or a law or ordinance of another jurisdiction that would be if it had been committed 03 in this state, a felony, or a violation of a law or ordinance of this state or another 04 jurisdiction that is a crime involving theft or dishonesty or a violation of gambling 05 laws 06 (1) the department may not issue a license to the person; 07 (2) the department may not issue a license to, or register as a pull-tab 08 or video lottery vendor, an applicant who employs the person in a managerial or 09 supervisory capacity or uses the person as a fund raiser or consultant; 10 (3) the department may not issue a permit for an activity if the person 11 is responsible for the operation of the activity; 12 (4) the person may not be employed in a managerial or supervisory 13 capacity by a licensee or vendor or used as a fund raiser or consultant by a licensee 14 or a pull-tab or video lottery vendor; 15 (5) the person may not participate in charitable gaming as a permittee, 16 licensee, or pull-tab or video lottery vendor. 17 * Sec. 7. AS 05.15.115(c) is amended to read: 18 (c) A permittee may not contract with more than one operator at a time to 19 conduct the same type of activity. For the purposes of this subsection, bingo games, 20 raffles, lotteries, pull-tab games, ice classics, race classics, rain classics, goose classics, 21 mercury classics, deep freeze classics, canned salmon classics, salmon classics, king 22 salmon classics, dog mushers' contests, snow machine classics, fish derbies, and 23 contests of skill are each a different type of activity. Except as authorized under 24 AS 05.15.300, a permittee may not contract with an operator to conduct video 25 lotteries. 26 * Sec. 8. AS 05.15.124 is amended to read: 27 Sec. 05.15.124. Municipal regulation of operators or vendors. A 28 municipality may by ordinance prohibit an operator , a pull-tab vendor, or a video 29 lottery vendor from conducting activities under this chapter within the municipality. 30 * Sec. 9. AS 05.15.128(a) is amended to read: 31 (a) The department shall revoke the license of an operator who does not
01 (1) report an adjusted gross income of at least 15 percent of gross 02 income annually based on the total operation of the operator; or 03 (2) pay to each authorizing permittee annually at least 30 percent of the 04 adjusted gross income, as determined under (1) of this subsection, from a pull-tab 05 activity or at least 10 percent of the adjusted gross income, as determined under (1) 06 of this subsection, from a gaming activity other than video lotteries and pull-tabs, 07 received from activities conducted on behalf of the authorizing permittee. 08 * Sec. 10. AS 05.15.150(a) is amended to read: 09 (a) The authority to conduct the activity authorized by this chapter is contingent 10 upon the dedication of the net proceeds of the charitable gaming activity to the awarding 11 of prizes to contestants or participants and to political, educational, civic, public, 12 charitable, patriotic, or religious uses in the state. "Political, educational, civic, public, 13 charitable, patriotic, or religious uses" means uses benefiting persons either by bringing 14 them under the influence of education or religion or relieving them from disease, 15 suffering, or constraint, or by assisting them in establishing themselves in life, or by 16 providing for the promotion of the welfare and well-being of the membership of the 17 organization within their own community, or through aiding candidates for public office 18 or groups that support candidates for public office, or by erecting or maintaining public 19 buildings or works, or lessening the burden on government, but does not include 20 (1) the direct or indirect payment of any portion of the net proceeds of 21 a bingo , video lottery, or pull-tab game to a lobbyist registered under AS 24.45; 22 (2) the erection, acquisition, improvement, maintenance, or repair of real, 23 personal, or mixed property unless it is used exclusively for one or more of the permitted 24 uses; or 25 (3) the direct or indirect payment of any portion of the net proceeds of 26 a charitable gaming activity, except the proceeds of a raffle and lottery, 27 (A) to aid candidates for public office or groups that support or 28 oppose candidates for public office; 29 (B) to a political party or to an organization affiliated with a 30 political party; or 31 (C) to a group, as that term is defined in AS 15.13.400, or a
01 political group, as that term is defined in AS 15.60, that seeks to influence the 02 outcome of an election. 03 * Sec. 11. AS 05.15.160(d) is amended to read: 04 (d) The total amount of authorized expenses that may be incurred under (a) of 05 this section in connection with any gaming activity other than video lotteries and 06 pull-tabs may not exceed 90 percent of the adjusted gross income from that gaming 07 activity. 08 * Sec. 12. AS 05.15.170 is amended to read: 09 Sec. 05.15.170. Suspension or revocation of permit, license, or vendor 10 registration. (a) The department may suspend, for a period of up to one year, or 11 revoke a permit, license, or pull-tab or video lottery vendor registration, after giving 12 notice to and an opportunity to be heard by the permittee or licensee, if the permittee, 13 licensee, or pull-tab or video lottery vendor 14 (1) violates or fails to comply with a requirement of this chapter or of 15 a regulation adopted under this chapter; 16 (2) breaches a contractual agreement with a permittee, licensee, or 17 registered pull-tab or video lottery vendor; 18 (3) becomes disqualified to participate in charitable gaming as provided 19 in AS 05.15.105; for the purposes of this paragraph, a permittee, licensee, or pull-tab 20 or video lottery vendor that is not a natural person is considered convicted if an owner 21 or manager of the permittee, licensee, or pull-tab or video lottery vendor is convicted; 22 (4) knowingly submits false information to the department or, in the case 23 of a registered pull-tab or video lottery vendor, to a permittee when the pull-tab or 24 video lottery vendor knows that the false information will be submitted to the 25 department as part of an application for registration; or 26 (5) gives or acts upon any inside information on the status of the prizes 27 awarded or to be awarded in a pull-tab game. 28 (b) If the department revokes a license or pull-tab or video lottery vendor 29 registration under this section, it may prohibit the licensee or pull-tab or video lottery 30 vendor from reapplying for a license or pull-tab or video lottery vendor registration for 31 a period of not more than five years. If the department revokes a permit under this
01 section, it may prohibit the permittee from reapplying for a permit for a period of not 02 more than one year. 03 * Sec. 13. AS 05.15.180(a) is amended to read: 04 (a) Except as provided in AS 05.15.187 or 05.15.300 - 05.15.360, this [THIS] 05 chapter does not authorize the use of playing cards, dice, roulette wheels, coin-operated 06 instruments or machines, or other objects or instruments used, designed, or intended 07 primarily for gaming or gambling or any other method or implement not expressly 08 authorized by the department. 09 * Sec. 14. AS 05.15.180(b) is amended to read: 10 (b) With the exception of raffles, lotteries, bingo games, video lotteries, pull-tab 11 games, race classics, rain classics, goose classics, mercury classics, deep freeze classics, 12 dog mushers' contests, snow machine classics, canned salmon classics, salmon classics, 13 king salmon classics, an activity may not be licensed under this chapter unless it existed 14 in the state in substantially the same form and was conducted in substantially the same 15 manner before January 1, 1959. A snow machine classic may not be licensed under this 16 chapter unless it has been in existence for at least five years before the licensing. 17 * Sec. 15. AS 05.15.180(g) is amended to read: 18 (g) A municipality or a qualified organization may award a maximum of 19 $1,000,000 in prizes each year in activities authorized under this chapter; however, if a 20 municipality or a qualified organization contracts with an operator to conduct on its 21 behalf activities authorized under this chapter, the municipality or qualified organization 22 may award a maximum of $500,000 in prizes each year. The holders of a 23 multiple-beneficiary permit under AS 05.15.100(d) may award a maximum in prizes each 24 year of $1,000,000 times the number of holders of the permit for activities authorized 25 under this chapter. In this subsection , "activities authorized under this chapter" means 26 all activities subject to this chapter other than bingo and video lotteries . 27 * Sec. 16. AS 05.15.183(e) is amended to read: 28 (e) A distributor may not 29 (1) take an order for the purchase of a pull-tab series from a pull-tab 30 vendor; 31 (2) sell a pull-tab series to a pull-tab vendor; or
01 (3) deliver a pull-tab series to a pull-tab vendor. 02 * Sec. 17. AS 05.15.187(h) is amended to read: 03 (h) An owner, manager, or employee of a person holding a permit or license 04 under this chapter, or registered under this chapter as a pull-tab vendor, may not 05 purchase a pull-tab from a pull-tab series manufactured, distributed, or sold by the 06 permittee, licensee, or registered pull-tab vendor. 07 * Sec. 18. AS 05.15.187(i) is amended to read: 08 (i) A permittee, operator, or registered pull-tab vendor may not turn over a prize 09 of $50 or more to a person with a pull-tab card entitling the person to that prize unless 10 the person signs the pull-tab [A RECEIPT FOR THE PRIZE] and returns the pull-tab 11 [RECEIPT] to the permittee, operator, or pull-tab vendor. [THE RECEIPT MUST BE 12 IN A FORM APPROVED BY THE DEPARTMENT.] 13 * Sec. 19. AS 05.15.187 is amended by adding a new subsection to read: 14 (j) The department may approve the use of coin-operated machines for the sale 15 of pull-tabs. 16 * Sec. 20. AS 05.15.188 is amended to read: 17 Sec. 05.15.188. Pull-tab sales by pull-tab vendors on behalf of permittees; 18 pull-tab vendor registration. (a) A permittee may contract with a pull-tab vendor 19 to sell pull-tabs on behalf of the permittee [,] if the permittee first registers the pull- 20 tab vendor with the department by applying for registration on a form prescribed by the 21 department and by submitting the registration fee of $50 for each location at which the pull-tab vendor will sell 22 pull-tabs. 23 (b) Upon approval of the pull-tab vendor registration, the department shall 24 issue an endorsement to the permittee's permit that authorizes the conduct of pull-tab 25 sales at that pull-tab vendor location. 26 (c) The endorsement issued under (b) of this section is an extension of the 27 permittee's privilege under AS 05.15.100 to conduct pull-tab sales in this state. A 28 pull-tab vendor may not sell a pull-tab series until a copy of the permit containing the 29 endorsement for the new pull-tab vendor location has been posted by the permittee in 30 the registered pull-tab vendor establishment. The endorsed permit must be clearly 31 visible to the gaming public.
01 (d) A separate endorsement shall be issued for each pull-tab vendor location. 02 The permittee shall inform the department when a pull-tab vendor with whom the 03 permittee is contracting changes the physical location at which pull-tabs are sold, and 04 shall return to the department all copies of a permit endorsed to a pull-tab vendor that 05 is no longer selling pull-tabs on behalf of the permittee. Failure to inform the 06 department of a change in pull-tab vendor location, or to return the endorsed copies 07 of a permit to the department after a pull-tab vendor change, may constitute grounds 08 for the suspension or revocation of a permittee's permit. 09 (e) At the time that a permittee annually renews its permit, it shall also renew 10 the registration of all locations where a pull-tab vendor is selling pull-tabs on the 11 permittee's behalf and shall pay a registration fee of $50 for each pull-tab vendor 12 location. 13 (f) A permittee that uses a pull-tab vendor to sell pull-tabs on its behalf shall 14 enter into a written contract with that pull-tab vendor. The department may inspect 15 this contract. If the contract contains provisions that violate this chapter or the 16 regulations adopted under it, the department may declare the contract void, and may 17 suspend or revoke the registration of the pull-tab vendor and the permit of the 18 permittee. 19 (g) A person, other than a permittee's member-in-charge, may not directly 20 supply a pull-tab series to a registered pull-tab vendor for sale by that pull-tab vendor 21 on behalf of the permittee. 22 (h) If a permittee contracts with a pull-tab vendor under (a) of this section, 23 the contract must provide that the permittee shall receive no less than 70 percent of 24 the ideal net. 25 (i) An amount equal to the ideal net less the compensation owed to the pull- 26 tab vendor shall be paid by the pull-tab vendor to the member-in-charge upon delivery of a 27 pull-tab series to the pull-tab vendor for sale. The amount required to be paid by the pull-tab 28 vendor shall be paid by check and the check may not be drawn in a manner that the payee is 29 not identified. 30 (j) An operator may not contract with or use a pull-tab vendor to sell pull- 31 tabs.
01 (k) A permittee may not contract with more than five pull-tab vendors under 02 this section. 03 * Sec. 21. AS 05.15 is amended by adding new sections to read: 04 Article 2A. Video Lotteries. 05 Sec. 05.15.300. Video lottery. (a) The department may issue a video lottery 06 endorsement to a permittee to conduct video lottery charitable gaming. The 07 endorsement provides the permittee with the authority to 08 (1) conduct video lotteries by use of video lottery machines at a 09 location where the permittee directly sells pull-tabs or conducts bingo sessions; 10 (2) contract with a video lottery vendor to conduct video lottery 11 charitable gaming by use of video lottery machines; or 12 (3) if the permittee has a club license under AS 04.11.110, conduct 13 video lottery charitable gaming by use of video lottery machines at the location of the 14 club. 15 (b) To obtain a video lottery endorsement under 16 (1) (a)(1) of this section, a permittee shall identify 17 (A) the locations where the permittee directly sells pull-tabs or 18 conducts bingo sessions and where the permittee intends to install video lottery 19 machines; and 20 (B) the number of video lottery machines the permittee will 21 have at each location; 22 (2) (a)(2) of this section, a permittee shall register the video lottery 23 vendor with the department by applying for registration on a form prescribed by the 24 department and identify 25 (A) the locations of the video lottery machines; and 26 (B) the number of video lottery machines the permittee will 27 have at each location; 28 (3) (a)(3) of this section, the permittee shall submit proof of the club 29 license to the department and identify 30 (A) the location of the club; and 31 (B) the number of video lottery machines the permittee will
01 have at the club. 02 (c) A permittee issued an endorsement to conduct video lotteries under 03 (1) (a)(1) of this section may not be issued an endorsement under (a)(2) 04 or (3) of this section; 05 (2) (a)(2) of this section may not be issued an endorsement under (a)(1) 06 or (3) of this section; 07 (3) (a)(3) of this section may not be issued an endorsement under (a)(1) 08 or (2) of this section. 09 (d) The endorsement issued under (a) of this section is an extension of the 10 permittee's privilege to conduct charitable gaming in this state. In addition to the 11 endorsement, the department shall issue a machine permit for each video lottery 12 machine the permittee has identified under (b) of this section. A permittee or 13 registered video lottery vendor may not conduct video lottery charitable gaming until 14 a copy of the permit and the endorsement is posted by the permittee at the 15 establishment where the machine is located and the machine permit is posted on the 16 machine. The permit, endorsement, and each machine permit must be clearly visible 17 to the public. 18 (e) A separate endorsement shall be issued for each permittee location or video 19 lottery vendor location. The permittee shall inform the department when the permittee, 20 or a video lottery vendor with whom the permittee is contracting, changes the physical 21 location at which video lottery charitable gaming is conducted and shall return to the 22 department all copies of a permit endorsed to a permittee, or a video lottery vendor, 23 that is no longer conducting video lottery charitable gaming. Failure to inform the 24 department of a change in permittee or video lottery vendor location, or to return the 25 endorsed copies of a permit to the department after a permittee or video lottery vendor 26 change, constitutes grounds for the suspension or revocation of a permittee's permit. 27 (f) At the time that a permittee annually renews its permit, the permittee shall 28 also renew the registration of all locations where the permittee or a video lottery 29 vendor is conducting video lottery charitable gaming. 30 (g) A permittee that uses a video lottery vendor to conduct video lottery 31 charitable gaming on its behalf shall enter into a written contract with that video
01 lottery vendor. The department may inspect this contract. If the contract contains 02 provisions that violate this chapter or the regulations adopted under it, the department 03 may declare the contract void, and may suspend or revoke the registration of the video 04 lottery vendor and the permit of the permittee. 05 (h) Only video lottery machines owned or leased by the department may be 06 used for video lottery charitable gaming. 07 (i) If a permittee 08 (1) contracts with a video lottery vendor under (a)(2) of this section, 09 the contract must provide that the 10 (A) permittee shall receive 30 percent of the net machine 11 income; 12 (B) registered video lottery vendor shall receive 30 percent of 13 the net machine income; 14 (C) state shall receive 20 percent of the net machine income; 15 and 16 (D) municipality in which each machine is located, or the state 17 if the machine is located in the unorganized borough outside of municipalities, 18 shall receive 20 percent of the net machine income; 19 (2) conducts video lottery charitable gaming under (a)(1) or (3) of this 20 section, the permittee must remit the percentages of net machine income under (1) of 21 this subsection to the state and municipality, if any, at times set by the department by 22 regulation. 23 (j) The odds of winning each video lottery game shall be posted on or near 24 each video lottery machine. The manner in which the odds are calculated and how 25 they are posted shall be set by the department by regulation. 26 (k) A video lottery machine may 27 (1) not be played by a person under the age of 21 and may not be 28 located in any place accessible to persons under the age of 21; 29 (2) only be played during the regular business hours for the location 30 and if the permittee or video lottery vendor is licensed under AS 04.11 during the legal 31 hours of operation allowed by the license and applicable municipal ordinance;
01 (3) not be played if the machine permit is not posted on the machine. 02 (l) A permittee may not have more than 10 video lottery machines at each 03 location for which the permittee has an endorsement. No more than 10 video lottery 04 machines may be located in the same location in the same building. A permittee may 05 not contract with more than five video lottery vendors under this section. A video 06 lottery vendor may not have more than 10 video lottery machines at each video lottery 07 vendor location. A permittee may not have endorsements cumulatively totaling more 08 than 50 machines. Notwithstanding another provision of this subsection, no more than 09 10 video lottery machines may be located in a building where bingo or pull-tab games 10 are conducted. If a video lottery vendor is an operator, video lottery machines may 11 only be located in a location that was being used to conduct bingo or pull-tab games 12 on the effective date of this section. 13 (m) All video lottery machines shall be monitored by the permittee or the 14 video lottery vendor during business hours. Monitoring shall be accomplished by the 15 physical presence of an employee of the permittee or the video lottery vendor or by 16 an employee using video cameras or mirrors and by periodic personal inspections of 17 the machines and the area in which the machines are located. 18 (n) A permittee or a registered video lottery vendor may not advertise in any 19 manner the possession or availability of video lottery machines on their premises or 20 under their permit or registration. 21 (o) If the sale of alcoholic beverages has been prohibited within a municipality 22 under AS 04.11.491, the department may issue a video lottery endorsement to a 23 permittee within the municipality that provides the permittee with the authority to 24 conduct video lottery charitable gaming by use of video lottery machines in the manner 25 permittees with club licenses under AS 04.11.110 are authorized to conduct video 26 lottery charitable gaming if the video lottery charitable gaming is only conducted 27 within a location into which the access is restricted to persons 21 years of age or older. 28 (p) The department may by regulation exempt a permittee under this section 29 from the reporting requirements of AS 05.15.080 if the information required to be 30 submitted in the report can be obtained directly by the department from the video 31 lottery machines.
01 (q) A video lottery vendor that is an operator is subject only to the provisions 02 relating to video lottery vendors for actions taken as a video lottery vendor. 03 Sec. 05.15.310. Video lottery machines. (a) The department may not approve 04 a video lottery machine unless the machine 05 (1) offers only games authorized by the department; 06 (2) does not have any means of manipulation that affect the random 07 probabilities of winning a game; 08 (3) is designed to accept cash, in the form of coins or bills, to prevent 09 the obtaining of plays or credits without paying by stringing, slamming, drilling, or 10 other means of manipulation, and to suspend itself from operation until it is physically 11 reset if physically tampered with; 12 (4) has nonresettable meters housed in a readily accessible locked 13 machine area that keeps a permanent record of all money inserted into the machine, 14 all refunds of winnings made by the machine's printer, credits played for video lottery 15 games, and credits won by video lottery players; 16 (5) does not directly pay off winning players by means of tokens or 17 cash, in the form of coins or bills, but is capable of printing a ticket voucher stating 18 the value of the prize for the player at the completion of each video lottery game, the 19 time of day in a 24-hour format showing hours and minutes, the date, the machine 20 serial number, the sequential number of the ticket vouchers, and an encrypted 21 validation number from which the validity of the prize may be determined; 22 (6) has accounting software that keeps an electronic record that includes 23 total money inserted into the machine, the value of winning tickets claimed by players, 24 the total video lottery credits awarded by a video lottery game, and the payback 25 percentages credited players of each video lottery game; 26 (7) is linked under a central communications system to provide auditing 27 program information as approved by the department; the communications system 28 approved by the department under this paragraph may not limit participation to only 29 one manufacturer of video lottery machines by either the cost of implementing the 30 necessary program modifications to communicate or the inability to communicate with 31 the central communications system; this paragraph does not require that a machine to
01 be approved must be on-line or otherwise in constant communication with a central 02 computer; 03 (8) does not allow more than $1 to be played on a game or award free 04 games or credits in excess of the value of $250 per credit value of $.25 played; and 05 (9) has a total payoff of at least 85 percent of the value of one $.25 06 credit. 07 (b) The department shall purchase or lease video lottery machines and shall 08 provide those machines to permittees to use as provided in this chapter. The 09 department shall contract for the installation and maintenance of the video lottery 10 machines. The department may not award a contract under this subsection for the 11 (1) purchase or lease of a video lottery machine unless the machine 12 meets the requirements of (a) of this section; 13 (2) installation and maintenance of a video lottery machine unless the 14 contractor has 15 (A) demonstrated an expertise in installing and maintaining 16 video lottery machines, associated communications, and computer systems; and 17 (B) the capability of responding to a video lottery terminal 18 malfunction or repair request within 24 hours of the malfunction or repair 19 request. 20 Sec. 05.15.320. Video lottery machine manufacturers. (a) A person may 21 not manufacture video lottery machines or associated equipment in the state, and may 22 not sell or distribute a video lottery machine or associated equipment that the person 23 has manufactured outside of the state to persons in the state, unless the person has 24 received a video lottery manufacturer's license issued by the department. 25 (b) The department may issue a video lottery machine manufacturer's license 26 to a person who pays an annual fee of $5,000. 27 (c) A video lottery machine or associated equipment may not be manufactured, 28 sold, or distributed in the state unless it has been approved by the department. A 29 video lottery machine may only be sold or distributed to the department or a contractor 30 of the department under AS 05.15.310. The department shall examine prototypes of 31 video lottery machines and associated equipment that a licensed manufacturer wishes
01 to manufacture, sell, or distribute in the state. The manufacturer shall pay in advance 02 the costs of the examination and approval of a video lottery machine or associated 03 equipment. The department may contract with another state or person for the 04 examination required under this subsection. 05 (d) A video lottery machine manufacturer may distribute video lottery 06 machines and associated equipment only to a licensed video lottery machine distributor 07 unless the video lottery machine manufacturer is also a licensed video lottery machine 08 distributor. 09 (e) A video lottery machine manufacturer shall report to the department by the 10 last business day of the month on each machine or associated equipment sold or 11 distributed within the state during the preceding month, including the serial number of 12 each machine or associated equipment distributed and the name of the distributor to 13 whom the machine or associated equipment was sold or distributed. 14 Sec. 05.15.330. Video lottery machine distributors. (a) A person may not 15 distribute video lottery machines or associated equipment in this state unless the person 16 has received a video lottery machine distributor's license issued by the department. 17 (b) The department may issue a video lottery machine distributor's license to 18 a person who pays an annual fee of $5,000. 19 (c) Video lottery machines and associated equipment may be distributed only 20 from a location in the state to the department or to a contractor of the department 21 under AS 05.15.310. A person may not distribute video lottery machines or associated 22 equipment directly to another person in the state from a location outside of this state. 23 (d) A video lottery distributor shall report to the department by the last 24 business day of each month on each video lottery machine and associated equipment 25 distributed in the preceding month. 26 (e) A distributor may not 27 (1) take an order for the purchase of a video lottery machine or 28 associated equipment from a permittee or a video lottery vendor; or 29 (2) sell a video lottery machine or associated equipment to a permittee 30 or a video lottery vendor. 31 Sec. 05.15.340. Distribution of net income from video lottery charitable
01 gaming. The department shall immediately revoke the video lottery endorsement of 02 a permittee or the video lottery registration of a video lottery vendor that fails to pay 03 the following percentages of net machine income from each video lottery machine at 04 the times directed by the department: 05 (1) 60 percent to the permittee or, if the permittee uses a video lottery 06 vendor, 30 percent to the permittee and 30 percent to the video lottery vendor; 07 (2) 20 percent to the state; and 08 (3) 20 percent to the municipality in which the machine is located, or 09 to the state if the machine is located in the unorganized borough outside of 10 municipalities. 11 Sec. 05.15.350. Video lottery revenues may be appropriated for education. 12 The state's percentage of video lottery charitable adjusted gross income received under 13 AS 05.15.340 shall be deposited in the general fund. The annual estimated balance 14 in the account maintained under AS 37.05.142 for money received under AS 05.15.340 15 may be appropriated by the legislature to provide for education. Nothing in this 16 section creates a dedicated fund. 17 Sec. 05.15.360. Department to contract. The department, to the maximum 18 extent practicable, shall solicit bids and contract for the performance of duties required 19 to monitor and conduct video lottery charitable gaming when the contracting will not 20 jeopardize the integrity of the gaming and enforcement of the laws of the state. 21 * Sec. 22. AS 05.15.620(c) is amended to read: 22 (c) If a majority of the voters vote "yes" on the question set out in (a), (b), or 23 (d) [(a) OR (b)] of this section, the department shall be notified immediately after 24 certification of the results of the election and thereafter the department may not issue 25 a license, permit, endorsement, or pull-tab or video lottery vendor registration 26 authorizing charitable gaming , video lotteries, or pull-tab sales, as appropriate, within 27 the boundaries of a municipality and in unincorporated areas within five miles of the 28 boundaries of the municipality or within the perimeter of an established village. As 29 necessary to implement the results of an election under (a), (b), or (d) [(a) OR (b)] of 30 this section, existing licenses, permits, endorsements, and pull-tab or video lottery 31 vendor registrations for charitable gaming , video lotteries, or pull-tab sales within the
01 boundaries of a municipality and in unincorporated areas within five miles of the 02 boundaries of the municipality or within the perimeter of an established village are void 03 90 days after the results of the election are certified. A license , endorsement, or pull- 04 tab or video lottery vendor registration that will expire during the 90 days after the results of 05 a local option election under this section are certified is void as of the expiration date. 06 * Sec. 23. AS 05.15.620 is amended by adding a new subsection to read: 07 (d) The following question, appearing alone, may be placed before the voters of 08 a municipality or an established village in accordance with AS 05.15.625: "Shall video 09 lotteries in . . . . . . . . (name of municipality or village) be prohibited? (yes or no)." 10 * Sec. 24. AS 05.15.680 is amended to read: 11 Sec. 05.15.680. Penalties. (a) Except as provided in (e) of this section, a 12 [A] person who knowingly violates or aids or solicits a person to violate this chapter 13 is guilty of a violation for the first offense and a class B misdemeanor for the second 14 and each subsequent offense. In this subsection, "knowingly" has the meaning 15 given in AS 11.81.900. 16 (b) A person who, with [THE] intent to mislead a public servant in the 17 performance of the public servant's duty, submits a false statement in an application 18 for a permit, license, endorsement, or pull-tab or video lottery vendor registration 19 under this chapter is guilty of unsworn falsification. In this subsection, "with intent" 20 has the meaning given to "intentionally" in AS 11.81.900. 21 * Sec. 25. AS 05.15.680 is amended by adding new subsections to read: 22 (c) A person 23 (1) may not with criminal negligence allow a person under 21 years of 24 age to use a video lottery machine; 25 (2) who is under the age of 21 may not with criminal negligence use 26 a video lottery machine; 27 (3) may not with criminal negligence manipulate or attempt to 28 manipulate the outcome or payoff of a video lottery machine by tampering or 29 otherwise interfering with the proper functioning of the machine. 30 (d) In this section, "criminal negligence" has the meaning given in 31 AS 11.81.900.
01 (e) Violation of (c) of this section is a class A misdemeanor. 02 * Sec. 26. AS 05.15.690(44) is amended to read: 03 (44) " pull-tab vendor" means a business whose primary activity is not 04 regulated by this chapter but that 05 (A) is engaged in the sale of pull-tabs on behalf of a permittee; 06 (B) holds a business license under AS 43.70; and 07 (C) is an establishment holding a 08 (i) beverage dispensary license under AS 04.11.090 that 09 has not been designated by the Alcoholic Beverage Control Board under 10 AS 04.16.049(a)(2) - (3), has not been exempted by the Department of 11 Labor and Workforce Development under AS 04.16.049(c) and 12 AS 23.10.355, and if the establishment is a hotel, motel, resort, or 13 similar business that caters to the traveling public as a substantial part 14 of its business, does not allow the sale of pull-tabs in a dining room, 15 banquet room, guest room, or other public areas other than a room in 16 which there is regularly maintained a fixed counter or service bar at 17 which alcoholic beverages are sold or served to members of the public 18 for consumption; 19 (ii) package store license under AS 04.11.150; 20 * Sec. 27. AS 05.15.690 is amended by adding new paragraphs to read: 21 (46) "net machine income" means money put into a video lottery 22 machine minus credits paid out in cash; 23 (47) "video lottery" means a game of chance that uses a video lottery 24 machine; 25 (48) "video lottery machine" means an electronic video game machine 26 that upon insertion of cash, in the form of coins or bills, is able to play or simulate the 27 play of a video game, including video poker, keno, or blackjack, authorized by the 28 department, using a video display and microprocessors so that, by chance, the player 29 may receive free games or credits that can be redeemed for cash; 30 (49) "video lottery vendor" means 31 (A) an operator licensed by the department to conduct bingo or
01 pull-tab games on the effective date of this paragraph and that conducts video 02 lotteries on behalf of a permittee; or 03 (B) a business whose primary activity is not regulated by this 04 chapter but that 05 (i) conducts video lotteries on behalf of a permittee; 06 (ii) holds a business license under AS 43.70; and 07 (iii) is an establishment holding a beverage dispensary 08 license under AS 04.11.090 that has not been designated by the 09 Alcoholic Beverage Control Board under AS 04.16.049(a)(2) - (3), has 10 not been exempted by the Department of Labor and Workforce 11 Development under AS 04.16.049(c) and AS 23.10.355, and, if the 12 establishment is a hotel, motel, resort, or similar business that caters to 13 the traveling public as a substantial part of its business, does not 14 conduct the video lotteries in a dining room, banquet room, guest room, 15 or other public areas other than a room in which there is regularly 16 maintained a fixed counter or service bar at which alcoholic beverages 17 are sold or served to members of the public for consumption, or a 18 package store license under AS 04.11.150. 19 * Sec. 28. AS 11.66.280(3) is amended to read: 20 (3) "gambling device" means any device, machine, paraphernalia, or 21 equipment that is used or usable in the playing phases of unlawful gambling, whether 22 it consists of gambling between persons or gambling by a person involving the playing 23 of a machine; "gambling device" does not include 24 (A) lottery tickets, policy slips, or other items used in the 25 playing phases of lottery or policy schemes; [OR] 26 (B) an amusement device as described in (2)(B) of this section; 27 or 28 (C) a video lottery machine or a pull-tab sales machine 29 permitted by the commissioner of revenue under AS 05.15; 30 * Sec. 29. AS 29.10.200(48) is amended to read: 31 (48) AS 29.45.650(c), (d), (e), [AND] (f) , and (i) (sales and use tax);
01 * Sec. 30. AS 29.45.650 is amended by adding a new subsection to read: 02 (i) A borough may not levy or collect a sales tax on sales, rents, and services, 03 or a use tax on the storage, use, or consumption of personal property on video lottery 04 machines and video lottery charitable gaming. This subsection applies to home rule 05 and general law municipalities. 06 * Sec. 31. AS 29.45.700(d) is amended to read: 07 (d) A city that levies and collects sales and use taxes under (a) of this section 08 may not levy and collect a sales tax on a purchase made with (1) food coupons, food 09 stamps, or other types of certificates issued under 7 U.S.C. 2011 - 2025 (Food Stamp 10 Act); or (2) food instruments, food vouchers, or other type of certificate issued under 11 42 U.S.C. 1786 (Special Supplemental Food Program for Women, Infants, and 12 Children). A city that levies and collects sales and use taxes under (a) of this 13 section may not levy and collect a sales or use tax on sales, rents, services, storage, 14 use, or consumption, of video lottery machines or video lottery charitable gaming. 15 This subsection applies to home rule and general law municipalities. 16 * Sec. 32. REGULATIONS. Notwithstanding the effective date of secs. 1 - 31 of this Act, 17 the Department of Revenue shall begin the process under AS 44.62 (Administrative Procedure 18 Act) of adopting regulations to implement this Act so that the regulations can take effect 19 January 1, 2001, or as soon thereafter as is possible. 20 * Sec. 33. Except for sec. 32 of this Act, this Act takes effect January 1, 2001. 21 * Sec. 34. Section 32 of this Act takes effect immediately under AS 01.10.070(c).