SB 110: "An Act relating to charitable gaming and to gaming on state ferries; and providing for an effective date."
00 SENATE BILL NO. 110 01 "An Act relating to charitable gaming and to gaming on state ferries; and providing for 02 an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 05.15.060(a) is amended to read: 05 (a) The department shall adopt regulations under AS 44.62 (Administrative 06 Procedure Act) necessary to carry out this chapter covering, but not limited to, 07 (1) the issuance, renewal, and revocation of permits, licenses, and pull- 08 tab and video lottery vendor registrations; 09 (2) a method of ascertaining net proceeds, the determination of items 10 of expense that may be incurred or paid, and the limitation of the amount of the items 11 of expense to prevent the proceeds from the activity permitted from being diverted to 12 noncharitable, noneducational, nonreligious, or profit-making organizations, 13 individuals, or groups; 14 (3) the immediate revocation of permits, licenses, and pull-tab and
01 video lottery vendor registrations authorized under this chapter if this chapter or 02 regulations adopted under it are violated; 03 (4) the requiring of detailed, sworn, financial reports of operations 04 from permittees and licensees including detailed statements of receipts and payments; 05 (5) the investigation of permittees, licensees, registered pull-tab or 06 video lottery vendors, and their employees, including the fingerprinting of those 07 permittees, licensees, registered pull-tab or video lottery vendors, and employees 08 whom the department considers it advisable to fingerprint; 09 (6) the method and manner of conducting authorized activities and 10 awarding of prizes or awards, and the equipment that may be used; 11 (7) the number of activities that may be held, operated, or conducted 12 under a permit during a specified period; however, the department may not allow more 13 than 14 bingo sessions a month and 35 bingo games a session to be conducted under a 14 permit; the holders of a multiple-beneficiary permit under AS 05.15.100(d) may hold, 15 operate, or conduct the number of sessions and games a month equal to the number 16 allowed an individual permittee per month multiplied by the number of holders of the 17 multiple-beneficiary permit; 18 (8) a method of accounting for receipts and disbursements by 19 operators, including the keeping of records and requirements for the deposit of all 20 receipts in a bank; 21 (9) the disposition of funds in possession of a permittee, a person, 22 municipality, or qualified organization that possesses an operator's license, or a 23 registered pull-tab or video lottery vendor at the time a permit, a license, or a pull- 24 tab or video lottery vendor registration is surrendered, revoked, or invalidated; 25 (10) restrictions on the participation by employees of the Department 26 of Fish and Game in salmon classics and in king salmon classics, and by employees of 27 Douglas Island Pink and Chum in king salmon classics; 28 (11) other matters the department considers necessary to carry out this 29 chapter or protect the best interest of the public. 30 * Sec. 2. AS 05.15.070 is amended to read: 31 Sec. 05.15.070. Examination of books and records. The department may
01 examine or have examined the books and records of a permittee, an operator, a 02 registered pull-tab or video lottery vendor, or a person licensed to manufacture or to 03 distribute video lottery machines or pull-tab games in the state. The department may 04 issue subpoenas for the attendance of witnesses and the production of books, records, 05 and other documents. 06 * Sec. 3. AS 05.15.095(a) is amended to read: 07 (a) The applications and reports to the department required by this chapter 08 shall be signed under penalty of unsworn falsification by the following person, as 09 applicable: 10 (1) the member in charge for the qualified organization; 11 (2) a person authorized to sign on behalf of the municipality; 12 (3) the operator or the operator's agent; 13 (4) the licensed pull-tab distributor or the distributor's agent; [OR] 14 (5) the licensed pull-tab manufacturer or the manufacturer's agent; 15 (6) the licensed video lottery machine distributor or the 16 distributor's agent; 17 (7) the licensed video lottery machine manufacturer or the 18 manufacturer's agent; 19 (8) the registered video lottery vendor or the vendor's agent; or 20 (9) the registered pull-tab vendor or the vendor's agent. 21 * Sec. 4. AS 05.15.100 is amended by adding a new subsection to read: 22 (e) The department may issue a permit to a municipality or qualified 23 organization to conduct video lotteries through the use of video lottery machines by 24 registered video lottery vendors. 25 * Sec. 5. AS 05.15.105(a) is amended to read: 26 (a) If a person has been convicted of a violation of a law of this state that is, or 27 a law or ordinance of another jurisdiction that would be if it had been committed in 28 this state, a felony, or a violation of a law or ordinance of this state or another 29 jurisdiction that is a crime involving theft or dishonesty or a violation of gambling 30 laws 31 (1) the department may not issue a license to the person;
01 (2) the department may not issue a license to, or register as a pull-tab 02 or video lottery vendor, an applicant who employs the person in a managerial or 03 supervisory capacity or uses the person as a fund raiser or consultant; 04 (3) the department may not issue a permit for an activity if the person 05 is responsible for the operation of the activity; 06 (4) the person may not be employed in a managerial or supervisory 07 capacity by a licensee or vendor or used as a fund raiser or consultant by a licensee or 08 a pull-tab or video lottery vendor; 09 (5) the person may not participate in charitable gaming as a permittee, 10 licensee, or pull-tab or video lottery vendor. 11 * Sec. 6. AS 05.15.115(c) is amended to read: 12 (c) A permittee may not contract with more than one operator at a time to 13 conduct the same type of activity. For the purposes of this subsection, bingo games, 14 raffles and [,] lotteries, pull-tab games, ice classics, race classics, rain classics, goose 15 classics, mercury classics, deep freeze classics, canned salmon classics, salmon 16 classics, king salmon classics, dog mushers' contests, snow machine classics, fish 17 derbies, and contests of skill are each a different type of activity. A permittee may 18 not contract with an operator to conduct video lotteries. 19 * Sec. 7. AS 05.15.124 is amended to read: 20 Sec. 05.15.124. Municipal regulation of operators or vendors. A 21 municipality may by ordinance prohibit an operator, a pull-tab vendor, or a video 22 lottery vendor from conducting activities under this chapter within the municipality. 23 * Sec. 8. AS 05.15.128(a) is amended to read: 24 (a) The department shall revoke the license of an operator who does not 25 (1) report an adjusted gross income of at least 15 percent of gross 26 income annually based on the total operation of the operator; or 27 (2) pay to each authorizing permittee annually at least 30 percent of the 28 adjusted gross income, as determined under (1) of this subsection, from a pull-tab 29 activity or at least 10 percent of the adjusted gross income, as determined under (1) of 30 this subsection, from a gaming activity other than video lotteries and pull-tabs, 31 received from activities conducted on behalf of the authorizing permittee.
01 * Sec. 9. AS 05.15.150(a) is amended to read: 02 (a) The authority to conduct the activity authorized by this chapter is 03 contingent upon the dedication of the net proceeds of the charitable gaming activity to 04 the awarding of prizes to contestants or participants and to [POLITICAL,] educational, 05 civic, public, charitable, patriotic, or religious uses in the state. "Educational 06 [POLITICAL, EDUCATIONAL], civic, public, charitable, patriotic, or religious uses" 07 means uses benefiting persons either by bringing them under the influence of 08 education or religion or relieving them from disease, suffering, or constraint, or by 09 assisting them in establishing themselves in life, or by providing for the promotion of 10 the welfare and well-being of the membership of the organization within their own 11 community, [OR THROUGH AIDING CANDIDATES FOR PUBLIC OFFICE OR 12 GROUPS THAT SUPPORT CANDIDATES FOR PUBLIC OFFICE,] or by erecting 13 or maintaining public buildings or works, or lessening the burden on government, but 14 does not include 15 (1) the direct or indirect payment of any portion of the net proceeds of 16 a bingo, video lottery, or pull-tab game to a lobbyist registered under AS 24.45; 17 (2) the erection, acquisition, improvement, maintenance, or repair of 18 real, personal, or mixed property unless it is used exclusively for one or more of the 19 permitted uses; or 20 (3) the direct or indirect payment of any portion of the net proceeds of 21 a charitable gaming activity, except the proceeds of a raffle and lottery, 22 (A) to aid candidates for public office or groups that support or 23 oppose candidates for public office; 24 (B) to a political party or to an organization affiliated with a 25 political party; or 26 (C) to a group, as that term is defined in AS 15.13.400, or a 27 political group, as that term is defined in AS 15.60, that seeks to influence the 28 outcome of an election. 29 * Sec. 10. AS 05.15.160(d) is amended to read: 30 (d) The total amount of authorized expenses that may be incurred under (a) of 31 this section in connection with any gaming activity other than video lotteries and
01 pull-tabs may not exceed 90 percent of the adjusted gross income from that gaming 02 activity. 03 * Sec. 11. AS 05.15.170 is amended to read: 04 Sec. 05.15.170. Suspension or revocation of permit, license, or vendor 05 registration. (a) The department may suspend, for a period of up to one year, or 06 revoke a permit, license, or pull-tab or video lottery vendor registration, after giving 07 notice to and an opportunity to be heard by the permittee or licensee, if the permittee, 08 licensee, or pull-tab or video lottery vendor 09 (1) violates or fails to comply with a requirement of this chapter or of a 10 regulation adopted under this chapter; 11 (2) breaches a contractual agreement with a permittee, licensee, or 12 registered pull-tab or video lottery vendor; 13 (3) becomes disqualified to participate in charitable gaming as 14 provided in AS 05.15.105; for the purposes of this paragraph, a permittee, licensee, or 15 pull-tab or video lottery vendor that is not a natural person is considered convicted if 16 an owner or manager of the permittee, licensee, or pull-tab or video lottery vendor is 17 convicted; 18 (4) knowingly submits false information to the department or, in the 19 case of a registered pull-tab or video lottery vendor, to a permittee when the pull-tab 20 or video lottery vendor knows that the false information will be submitted to the 21 department as part of an application for registration; or 22 (5) gives or acts upon any inside information on the status of the prizes 23 awarded or to be awarded in a pull-tab game. 24 (b) If the department revokes a license or pull-tab or video lottery vendor 25 registration under this section, it may prohibit the licensee or pull-tab or video lottery 26 vendor from reapplying for a license or pull-tab or video lottery vendor registration 27 for a period of not more than five years. If the department revokes a permit under this 28 section, it may prohibit the permittee from reapplying for a permit for a period of not 29 more than one year. 30 * Sec. 12. AS 05.15.180(a) is amended to read: 31 (a) Except as provided in AS 05.15.300 - 05.15.360, this [THIS] chapter
01 does not authorize the use of playing cards, dice, roulette wheels, coin-operated 02 instruments or machines, or other objects or instruments used, designed, or intended 03 primarily for gaming or gambling or any other method or implement not expressly 04 authorized by the department. 05 * Sec. 13. AS 05.15.180(b) is amended to read: 06 (b) With the exception of raffles and [,] lotteries, bingo games, video 07 lotteries, pull-tab games, race classics, rain classics, goose classics, mercury classics, 08 deep freeze classics, dog mushers' contests, snow machine classics, canned salmon 09 classics, salmon classics, and king salmon classics, an activity may not be licensed 10 under this chapter unless it existed in the state in substantially the same form and was 11 conducted in substantially the same manner before January 1, 1959. A snow machine 12 classic may not be licensed under this chapter unless it has been in existence for at 13 least five years before the licensing. 14 * Sec. 14. AS 05.15.180(g) is amended to read: 15 (g) A municipality or a qualified organization may award a maximum of 16 $1,000,000 in prizes each year in activities authorized under this chapter; however, if a 17 municipality or a qualified organization contracts with an operator to conduct on its 18 behalf activities authorized under this chapter, the municipality or qualified 19 organization may award a maximum of $500,000 in prizes each year. The holders of a 20 multiple-beneficiary permit under AS 05.15.100(d) may award a maximum in prizes 21 each year of $1,000,000 times the number of holders of the permit for activities 22 authorized under this chapter. In this subsection, "activities authorized under this 23 chapter" means all activities subject to this chapter other than bingo and video 24 lotteries. 25 * Sec. 15. AS 05.15.183(e) is amended to read: 26 (e) A distributor may not 27 (1) take an order for the purchase of a pull-tab series from a pull-tab 28 vendor; 29 (2) sell a pull-tab series to a pull-tab vendor; or 30 (3) deliver a pull-tab series to a pull-tab vendor. 31 * Sec. 16. AS 05.15.187(h) is amended to read:
01 (h) An owner, manager, or employee of a person holding a permit or license 02 under this chapter, or registered under this chapter as a pull-tab vendor, may not 03 purchase a pull-tab from a pull-tab series manufactured, distributed, or sold by the 04 permittee, licensee, or registered pull-tab vendor. 05 * Sec. 17. AS 05.15.187(i) is amended to read: 06 (i) A permittee, operator, or registered pull-tab vendor may not turn over a 07 prize of $50 or more to a person with a pull-tab card entitling the person to that prize 08 unless the person signs a receipt for the prize and returns the receipt to the permittee, 09 operator, or pull-tab vendor. The receipt must be in a form approved by the 10 department. 11 * Sec. 18. AS 05.15.188 is amended to read: 12 Sec. 05.15.188. Pull-tab sales by pull-tab vendors on behalf of permittees; 13 pull-tab vendor registration. (a) A permittee may contract with a pull-tab vendor to 14 sell pull-tabs on behalf of the permittee, if the permittee first registers the pull-tab 15 vendor with the department by applying for registration on a form prescribed by the 16 department and by submitting the registration fee of $50 for each location at which the 17 pull-tab vendor will sell pull-tabs. 18 (b) Upon approval of the pull-tab vendor registration, the department shall 19 issue an endorsement to the permittee's permit that authorizes the conduct of pull-tab 20 sales at that pull-tab vendor location. 21 (c) The endorsement issued under (b) of this section is an extension of the 22 permittee's privilege under AS 05.15.100 to conduct pull-tab sales in this state. A 23 pull-tab vendor may not sell a pull-tab series until a copy of the permit containing the 24 endorsement for the new pull-tab vendor location has been posted by the permittee in 25 the registered pull-tab vendor establishment. The endorsed permit must be clearly 26 visible to the gaming public. 27 (d) A separate endorsement shall be issued for each pull-tab vendor location. 28 The permittee shall inform the department when a pull-tab vendor with whom the 29 permittee is contracting changes the physical location at which pull-tabs are sold, and 30 shall return to the department all copies of a permit endorsed to a pull-tab vendor that 31 is no longer selling pull-tabs on behalf of the permittee. Failure to inform the
01 department of a change in pull-tab vendor location, or to return the endorsed copies of 02 a permit to the department after a pull-tab vendor change, may constitute grounds for 03 the suspension or revocation of a permittee's permit. 04 (e) At the time that a permittee annually renews its permit, it shall also renew 05 the registration of all locations where a pull-tab vendor is selling pull-tabs on the 06 permittee's behalf and shall pay a registration fee of $50 for each pull-tab vendor 07 location. 08 (f) A permittee that uses a pull-tab vendor to sell pull-tabs on its behalf shall 09 enter into a written contract with that pull-tab vendor. The department may inspect 10 this contract. If the contract contains provisions that violate this chapter or the 11 regulations adopted under it, the department may declare the contract void, and may 12 suspend or revoke the registration of the pull-tab vendor and the permit of the 13 permittee. 14 (g) A person, other than a permittee's member-in-charge, may not directly 15 supply a pull-tab series to a registered pull-tab vendor for sale by that pull-tab vendor 16 on behalf of the permittee. 17 (h) If a permittee contracts with a pull-tab vendor under (a) of this section, the 18 contract must provide that the permittee shall receive no less than 70 percent of the 19 ideal net. 20 (i) An amount equal to the ideal net less the compensation owed to the pull- 21 tab vendor shall be paid by the pull-tab vendor to the member-in-charge upon 22 delivery of a pull-tab series to the pull-tab vendor for sale. The amount required to be 23 paid by the pull-tab vendor shall be paid by check and the check may not be drawn in 24 a manner that the payee is not identified. 25 (j) An operator may not contract with or use a pull-tab vendor to sell pull- 26 tabs. 27 (k) A permittee may not contract with more than five pull-tab vendors under 28 this section. 29 * Sec. 19. AS 05.15 is amended by adding new sections to read: 30 Article 2A. Video Lotteries. 31 Sec. 05.15.300. Video lottery. (a) The department may issue a video lottery
01 endorsement to a permittee to conduct video lottery charitable gaming. The 02 endorsement provides the permittee with the authority to 03 (1) contract with a video lottery vendor to conduct video lottery 04 charitable gaming by use of video lottery machines; or 05 (2) if the permittee has a club license under AS 04.11.110, conduct 06 video lottery charitable gaming by use of video lottery machines. 07 (b) To obtain an video lottery endorsement under 08 (1) (a)(1) of this section, a permittee shall register the video lottery 09 vendor with the department by applying for registration on a form prescribed by the 10 department and by submitting a fee of $100 for each location at which the video 11 lottery vendor will conduct video lottery charitable gaming and a fee of $100 for each 12 video lottery machine the permittee will have at each location; 13 (2) (a)(2) of this section, the permittee shall submit proof of the club 14 license to the department and submit a fee of $100 for each licensed location and a fee 15 of $100 for each video lottery machine the permittee will operate at each location. 16 (c) The endorsement issued under (a) of this section is an extension of the 17 permittee's privilege to conduct charitable gaming in this state. In addition to the 18 endorsement, the department shall issue a machine permit for each video lottery 19 machine for which the permittee has paid the fee required under (b) of this section. A 20 permittee or registered video lottery vendor may not conduct video lottery charitable 21 gaming until a copy of the permit and the endorsement is posted by the permittee at 22 the establishment where the machine is located and the machine permit is posted on 23 the machine. The permit, endorsement, and each machine permit must be clearly 24 visible to the public. 25 (d) A separate endorsement shall be issued for each permittee or video lottery 26 vendor location. The permittee shall inform the department when the permittee, or a 27 video lottery vendor with whom the permittee is contracting, changes the physical 28 location at which video lottery charitable gaming is conducted and shall return to the 29 department all copies of a permit endorsed to a permittee, or a video lottery vendor, 30 that is no longer conducting video lottery charitable gaming. Failure to inform the 31 department of a change in permittee or video lottery vendor location, or to return the
01 endorsed copies of a permit to the department after a permittee or video lottery vendor 02 change, constitutes grounds for the suspension or revocation of a permittee's permit. 03 (e) At the time that a permittee annually renews its permit, the permittee shall 04 also renew the registration of all locations where the permittee or a video lottery 05 vendor is conducting video lottery charitable gaming and shall pay the fees required 06 under (b) of this section for each location and machine. 07 (f) A permittee that uses a video lottery vendor to conduct video lottery 08 charitable gaming on its behalf shall enter into a written contract with that video 09 lottery vendor. The department may inspect this contract. If the contract contains 10 provisions that violate this chapter or the regulations adopted under it, the department 11 may declare the contract void, and may suspend or revoke the registration of the video 12 lottery vendor and the permit of the permittee. The contract must contain provisions 13 regarding the allocation of the costs of purchasing or leasing the video lottery 14 machines. 15 (g) Only video lottery machines approved by the department may be used for 16 video lottery charitable gaming. A permittee may purchase the machines directly from 17 a licensed video lottery machine distributor or may enter into a lease or lease-purchase 18 arrangement for the machines with the distributor. A lease or lease-purchase 19 arrangement must be approved by the department. 20 (h) If a permittee 21 (1) contracts with a video lottery vendor under (a)(1) of this section, 22 the contract must provide that the 23 (A) permittee shall receive 30 percent of the net machine 24 income; 25 (B) registered video lottery vendor shall receive 30 percent of 26 the net machine income; 27 (C) state shall receive 15 percent of the net machine income; 28 and 29 (D) municipality in which each machine is located, or the state 30 if the machine is located in the unorganized borough outside of municipalities, 31 shall receive 25 percent of the net machine income;
01 (2) conducts video lottery charitable gaming under (a)(2) of this 02 section, the permittee must remit the percentages of net machine income under (1) of 03 this subsection to the state and municipality, if any, at times set by the department by 04 regulation. 05 (i) The odds of winning each video lottery game shall be posted on or near 06 each video lottery machine. The manner in which the odds are calculated and how 07 they are posted shall be set by the department by regulation. 08 (j) A video lottery machine may 09 (1) not be played by a person under the age of 21; 10 (2) only be played during the legal hours of operation allowed by the 11 permittee's or video lottery vendor's license under AS 04.11 and applicable municipal 12 ordinance; 13 (3) not be played if the machine permit is not posted on the machine. 14 (k) A permittee may not contract with more than five video lottery vendors 15 under this section. A video lottery vendor may not have more than 10 video lottery 16 machines at each video lottery vendor location. 17 (l) All video lottery machines shall be monitored by the video lottery vendor 18 during business hours. Monitoring shall be accomplished by the physical presence of 19 an employee of the video lottery vendor or by an employee using video cameras or 20 mirrors and by periodic personal inspections of the machines and the area in which the 21 machines are located. 22 (m) A permittee or a registered video lottery vendor may not advertise in any 23 manner the possession or availability of video lottery machines on their premises or 24 under their permit or registration. 25 (n) If the sale of alcoholic beverages has been prohibited within a municipality 26 under AS 04.11.491, the department may issue a video lottery endorsement to a 27 permittee within the municipality that provides the permittee with the authority to 28 conduct video lottery charitable gaming by use of video lottery machines in the 29 manner permittees with club licenses under AS 04.11.110 are authorized to conduct 30 video lottery charitable gaming if the video lottery charitable gaming is only 31 conducted within a location into which the access is restricted to persons 21 years of
01 age or older. 02 Sec. 05.15.310. Video lottery machines. The department may not approve a 03 video lottery machine unless the machine 04 (1) offers only games authorized by the department; 05 (2) does not have any means of manipulation that affect the random 06 probabilities of winning a game; 07 (3) is designed to accept cash, in the form of coins or bills, to prevent 08 the obtaining of plays or credits without paying by stringing, slamming, drilling, or 09 other means of manipulation, and to suspend itself from operation until it is physically 10 reset if physically tampered with; 11 (4) has nonresettable meters housed in a readily accessible locked 12 machine area that keeps a permanent record of all money inserted into the machine, all 13 refunds of winnings made by the machine's printer, credits played for video lottery 14 games, and credits won by video lottery players; 15 (5) does not directly pay off winning players by means of tokens or 16 cash, in the form of coins or bills, but is capable of printing a ticket voucher stating the 17 value of the prize for the player at the completion of each video lottery game, the time 18 of day in a 24-hour format showing hours and minutes, the date, the machine serial 19 number, the sequential number of the ticket vouchers, and an encrypted validation 20 number from which the validity of the prize may be determined; 21 (6) has accounting software that keeps an electronic record that 22 includes total money inserted into the machine, the value of winning tickets claimed 23 by players, the total video lottery credits awarded by a video lottery game, and the 24 payback percentages credited players of each video lottery game; 25 (7) is linked under a central communications system to provide 26 auditing program information as approved by the department; the communications 27 system approved by the department under this paragraph may not limit participation to 28 only one manufacturer of video lottery machines by either the cost of implementing 29 the necessary program modifications to communicate or the inability to communicate 30 with the central communications system; this paragraph does not require that a 31 machine to be approved must be on-line or otherwise in constant communication with
01 a central computer; 02 (8) does not allow more than $5 to be played on a game or award free 03 games or credits in excess of the value of $125 per credit value of $.25 played; and 04 (9) has a total payoff of at least 80 percent of the value of one $.25 05 credit. 06 Sec. 05.15.320. Video lottery machine manufacturers. (a) A person may 07 not manufacture video lottery machines or associated equipment in the state, and may 08 not sell or distribute a video lottery machine or associated equipment that the person 09 has manufactured outside of the state to persons in the state, unless the person has 10 received a video lottery manufacturer's license issued by the department. 11 (b) The department may issue a video lottery machine manufacturer's license 12 to a person who pays an annual fee of $5,000. 13 (c) A video lottery machine or associated equipment may not be 14 manufactured, sold, or distributed in the state unless it has been approved by the 15 department. The department shall examine prototypes of video lottery machines and 16 associated equipment that a licensed manufacturer wishes to manufacture, sell, or 17 distribute in the state. The manufacturer shall pay in advance the costs of the 18 examination and approval of a video lottery machine or associated equipment. The 19 department may contract with another state or person for the examination required 20 under this subsection. 21 (d) A video lottery machine manufacturer may distribute video lottery 22 machines and associated equipment only to a licensed video lottery machine 23 distributor unless the video lottery machine manufacturer is also a licensed video 24 lottery machine distributor. 25 (e) A video lottery machine manufacturer shall report to the department by the 26 last business day of the month on each machine or associated equipment sold or 27 distributed within the state during the preceding month, including the serial number of 28 each machine or associated equipment distributed and the name of the distributor to 29 whom the machine or associated equipment was sold or distributed. 30 Sec. 05.15.330. Video lottery machine distributors. (a) A person may not 31 distribute video lottery machines or associated equipment unless the person has
01 received a video lottery machine distributor's license issued by the department. 02 (b) The department may issue a video lottery machine distributor's license to a 03 person who pays an annual fee of $5,000. 04 (c) Video lottery machines and associated equipment may be distributed only 05 from a location in the state. A person may not distribute video lottery machines or 06 associated equipment directly to another person in the state from a location outside of 07 this state. 08 (d) A video lottery distributor shall report to the department by the last 09 business day of each month on each video lottery machine and associated equipment 10 distributed in the preceding month. The report must include the name of the permittee 11 to whom each video lottery machine or associated equipment is distributed and the 12 serial number of each machine. 13 (e) A distributor may not 14 (1) take an order for the purchase of a video lottery machine or 15 associated equipment from a video lottery vendor; or 16 (2) sell a video lottery machine or associated equipment to a video 17 lottery vendor. 18 Sec. 05.15.340. Distribution of net income from video lottery charitable 19 gaming. The department shall immediately revoke the video lottery endorsement of a 20 permittee or video lottery registration of a video lottery vendor that fails to pay the 21 following percentages of net machine income from each video lottery machine at the 22 times directed by the department: 23 (1) 30 percent to the video lottery vendor; 24 (2) 30 percent to the permittee; 25 (3) 15 percent to the state; and 26 (4) 25 percent to the municipality in which the machine is located, or 27 to the state if the machine is located in the unorganized borough outside of 28 municipalities. 29 Sec. 05.15.350. Video lottery revenues may be appropriated for education. 30 The state's percentage of video lottery charitable adjusted gross income received under 31 AS 05.15.340 shall be deposited in the general fund. The annual estimated balance in
01 the account maintained under AS 37.05.142 for money received under AS 05.15.340 02 may be appropriated by the legislature to provide for education. Nothing in this 03 section creates a dedicated fund. 04 Sec. 05.15.360. Department to contract. The department, to the maximum 05 extent practicable, shall solicit bids and contract for the performance of duties required 06 to monitor and conduct video lottery charitable gaming when the contracting will not 07 jeopardize the integrity of the gaming and enforcement of the laws of the state. 08 * Sec. 20. AS 05.15.620(c) is amended to read: 09 (c) If a majority of the voters vote "yes" on the question set out in (a), (b), or 10 (d) [(a) OR (b)] of this section, the department shall be notified immediately after 11 certification of the results of the election and thereafter the department may not issue a 12 license, permit, or pull-tab or video lottery vendor registration authorizing charitable 13 gaming, video lotteries, or pull-tab sales, as appropriate, within the boundaries of a 14 municipality and in unincorporated areas within five miles of the boundaries of the 15 municipality or within the perimeter of an established village. As necessary to 16 implement the results of an election under (a), (b), or (d) [(a) OR (b)] of this section, 17 existing licenses, permits, and pull-tab or video lottery vendor registrations for 18 charitable gaming, video lotteries, or pull-tab sales within the boundaries of a 19 municipality and in unincorporated areas within five miles of the boundaries of the 20 municipality or within the perimeter of an established village are void 90 days after 21 the results of the election are certified. A license or pull-tab or video lottery vendor 22 registration that will expire during the 90 days after the results of a local option 23 election under this section are certified is void as of the expiration date. 24 * Sec. 21. AS 05.15.620 is amended by adding a new subsection to read: 25 (d) The following question, appearing alone, may be placed before the voters 26 of a municipality or an established village in accordance with AS 05.15.625: "Shall 27 video lotteries in ................. (name of municipality or village) be prohibited? (yes or 28 no)." 29 * Sec. 22. AS 05.15.680 is amended to read: 30 Sec. 05.15.680. Penalties. (a) Except as provided in (c) of this section, a 31 [A] person who knowingly violates or aids or solicits a person to violate this chapter is
01 guilty of a violation for the first offense and a class B misdemeanor for the second and 02 each subsequent offense. 03 (b) A person who, with the intent to mislead a public servant in the 04 performance of the public servant's duty, submits a false statement in an application 05 for a permit, license, or pull-tab or video lottery vendor registration under this 06 chapter is guilty of unsworn falsification. 07 * Sec. 23. AS 05.15.680 is amended by adding new subsections to read: 08 (c) A person 09 (1) may not with criminal negligence allow a person under 21 years of 10 age to use a video lottery machine; 11 (2) who is under the age of 21 may not with criminal negligence use a 12 video lottery machine; 13 (3) may not with criminal negligence manipulate or attempt to 14 manipulate the outcome or payoff of a video lottery machine by tampering or 15 otherwise interfering with the proper functioning of the machine. 16 (d) In this section, 17 (1) "criminal negligence" has the meaning given in AS 11.81.900; 18 (2) "knowingly" has the meaning given in AS 11.81.900; 19 (3) "with the intent" has the meaning given to "intentionally" in 20 AS 11.81.900. 21 (e) Violation of (c) of this section is a class A misdemeanor. 22 * Sec. 24. AS 05.15.690(36) is amended to read: 23 (36) "qualified organization" means a bona fide civic or service 24 organization or a bona fide religious, charitable, fraternal, veterans, [LABOR, 25 POLITICAL,] or educational organization, police or fire department and company, 26 dog mushers' association, outboard motor association, or fishing derby or nonprofit 27 trade association in the state, that operates without profits to its members and that has 28 been in existence continually for a period of three years immediately before applying 29 for the license or permit; the organization may be a firm, corporation, company, 30 association, or partnership; 31 * Sec. 25. AS 05.15.690(44) is amended to read:
01 (44) "pull-tab vendor" means a business whose primary activity is not 02 regulated by this chapter but that 03 (A) is engaged in the sale of pull-tabs on behalf of a permittee; 04 (B) holds a business license under AS 43.70; and 05 (C) is an establishment holding a 06 (i) beverage dispensary license under AS 04.11.090 that 07 has not been designated by the Alcoholic Beverage Control Board 08 under AS 04.16.049(a)(2) - (3), has not been exempted by the 09 Department of Labor and Workforce Development under 10 AS 04.16.049(c) and AS 23.10.355, and, if the establishment is a hotel, 11 motel, resort, or similar business that caters to the traveling public as a 12 substantial part of its business, does not allow the sale of pull-tabs in a 13 dining room, banquet room, guest room, or other public areas other 14 than a room in which there is regularly maintained a fixed counter or 15 service bar at which alcoholic beverages are sold or served to members 16 of the public for consumption; 17 (ii) package store license under AS 04.11.150; 18 * Sec. 26. AS 05.15.690 is amended by adding new paragraphs to read: 19 (46) "net machine income" means money put into a video lottery 20 machine minus credits paid out in cash; 21 (47) "video lottery machine" means an electronic video game machine 22 that upon insertion of cash, in the form of coins or bills, is able to play or simulate the 23 play of a video game, including video poker, keno, or blackjack, authorized by the 24 department, using a video display and microprocessors so that, by chance, the player 25 may receive free games or credits that can be redeemed for cash; 26 (48) "video lottery vendor" means a business whose primary activity is 27 not regulated by this chapter but that 28 (A) conducts video lotteries on behalf of a permittee; 29 (B) holds a business license under AS 43.70; and 30 (C) is an establishment holding a 31 (i) beverage dispensary license under AS 04.11.090 that
01 has not been designated by the Alcoholic Beverage Control Board 02 under AS 04.16.049(a)(2) - (3), has not been exempted by the 03 Department of Labor and Workforce Development under 04 AS 04.16.049(c) and AS 23.10.355, and if the establishment is a hotel, 05 motel, resort, or similar business that caters to the traveling public as a 06 substantial part of its business, does not conduct the video lotteries in a 07 dining room, banquet room, guest room, or other public areas other 08 than a room in which there is regularly maintained a fixed counter or 09 service bar at which alcoholic beverages are sold or served to members 10 of the public for consumption; 11 (ii) package store license under AS 04.11.150. 12 * Sec. 27. AS 11.66.280(2) is amended to read: 13 (2) "gambling" means that a person stakes or risks something of value 14 upon the outcome of a contest of chance or a future contingent event not under the 15 person's control or influence, upon an agreement or understanding that that person or 16 someone else will receive something of value in the event of a certain outcome; 17 "gambling" does not include 18 (A) bona fide business transactions valid under the law of 19 contracts for the purchase or sale at a future date of securities or commodities 20 and agreements to compensate for loss caused by the happening of chance, 21 including contracts of indemnity or guaranty and life, health, or accident 22 insurance; or 23 (B) playing an amusement device that 24 (i) confers only an immediate right of replay not 25 exchangeable for something of value other than the privilege of 26 immediate replay; and 27 (ii) does not contain a method or device by which the 28 privilege of immediate replay may be cancelled or revoked; 29 (C) an activity authorized by the Department of Revenue under 30 AS 05.15 or AS 19.65.110; 31 * Sec. 28. 11.66.280(3) is amended to read:
01 (3) "gambling device" means any device, machine, paraphernalia, or 02 equipment that is used or usable in the playing phases of unlawful gambling, whether 03 it consists of gambling between persons or gambling by a person involving the playing 04 of a machine; "gambling device" does not include 05 (A) lottery tickets, policy slips, or other items used in the 06 playing phases of lottery or policy schemes; [OR] 07 (B) an amusement device as described in (2)(B) of this section; 08 or 09 (C) a video lottery machine permitted by the commissioner 10 of revenue under AS 05.15 or AS 19.65.110; 11 * Sec. 29. AS 11.66.280(4) is amended to read: 12 (4) "gambling enterprise" means a gambling business that 13 (A) includes five or more persons who conduct, finance, 14 manage, supervise, direct, or own all or part of the business; 15 (B) has been or remains in substantially continuous operation 16 for a period in excess of 30 days or has a gross income of $2,000 or more in 17 any single day; and 18 (C) is not a 19 (i) vessel of the Alaska marine highway system or 20 the Department of Transportation and Public Facilities when they 21 are lawfully conducting an activity licensed under AS 19.65.110; or 22 (ii) municipality or a qualified organization under 23 AS 05.15.690, except that, for purposes of this subparagraph 24 [PARAGRAPH], no application for a license under AS 05.15 is 25 required to be considered a qualified organization; 26 * Sec. 30. AS 19.65 is amended by adding new sections to read: 27 Article 3. Video Lottery Machines. 28 Sec. 19.65.110. Video lottery machines authorized. (a) The Department of 29 Revenue may license a vessel of the Alaska marine highway system to operate video 30 lottery machines in a portion of the vessel that persons under 21 years of age are 31 prohibited from entering.
01 (b) A license issued under (a) of this section is not valid when the vessel is in 02 a jurisdiction outside of the state unless that jurisdiction also allows the licensed 03 activity. 04 (c) The Department of Transportation and Public Facilities shall operate video 05 lottery machines aboard a vessel of the Alaska marine highway system licensed under 06 (a) of this section or may contract for their operation under AS 36.30. 07 (d) The commissioner of revenue shall adopt regulations under AS 44.62 08 (Administrative Procedure Act) to implement this section. Those regulations must be 09 consistent, to the extent practicable, with statutes or regulations governing video 10 lotteries and video lottery machines under AS 05.15. 11 Sec. 19.65.120. Prohibitions on video lottery machine operation; penalties. 12 (a) An employee of the Alaska marine highway system or of a contractor under 13 AS 19.65.110(c) may not with criminal negligence allow a person under 21 years of 14 age to use a video lottery machine authorized under AS 19.65.110. A person under 21 15 years of age may not with criminal negligence use a video lottery machine authorized 16 under AS 19.65.110. 17 (b) A person may not with criminal negligence manipulate or attempt to 18 manipulate the outcome or payoff of a video lottery machine authorized under 19 AS 19.65.110 by tampering or otherwise interfering with the proper functioning of the 20 machine. 21 (c) In this section, "criminal negligence" has the meaning given in 22 AS 11.81.900. 23 (d) Violation of this section is a class A misdemeanor. 24 Sec. 19.65.130. Revenues to general fund; appropriation for Alaska 25 marine highway system. Revenues from video lottery machines, less prizes awarded, 26 shall be deposited in the general fund. The legislature may appropriate the annual 27 estimated balance in the account maintained under AS 37.05.142 for revenues 28 deposited under this section for the Alaska marine highway system. Nothing in this 29 section creates a dedicated fund. 30 Sec. 19.65.140. Definition for AS 19.65.110 - 19.65.140. In AS 19.65.110 - 31 19.65.140, "video lottery machine" has the meaning given in AS 05.15.690.
01 * Sec. 31. AS 05.15.690(25) and 05.15.690(34) are repealed. 02 * Sec. 32. The uncodified law of the State of Alaska is amended by adding a new section to 03 read: 04 DIRECTION TO DEPARTMENT OF REVENUE. Notwithstanding the effective 05 date of secs. 1 - 31 of this Act, the Department of Revenue shall begin the process under 06 AS 44.62 of adopting regulations to implement this Act so that the regulations can take effect 07 January 1, 2002, or as soon thereafter as is possible. 08 * Sec. 33. Except for sec. 32 of this Act, this Act takes effect January 1, 2002. 09 * Sec. 34. Section 32 of this Act takes effect immediately under AS 01.10.070(c).