Sen. D'Allesandro, Dist. 20 Sen. Gallus, Dist. 1

Sen. Sgambati, Dist. 4 Sen. Hassan, Dist. 23

May 27,2009

2009-1896s

09/04

Draft Amendment to HB 2-FN-A-LOCAL

1 1 New Chapter; Video Lottery Machines. Amend RSA by inserting after chapter 284 the

2 following new chapter:

3          CHAPTER 284-A

4          VIDEO LOTTERY MACHINES

5 284-A:l Definitions. In this chapter:

6 I. "Applicant" means any person, officer, director, or key employee, who on his or her own

7 behalf or on behalf of another, is applying for permission to engage in any act or activity which is

8 regulated under the provisions of this chapter. In cases in which the applicant is a corporation,

9 foundation, organization, business trust, estate, limited liability company, trust, partnership, limited

10                                                partnership, association, or any other form of legal business entity, the lottery commission shall

11                                                       determine the associated persons whose qualifications must be provided and reviewed as a

12         precondition to the licensing of the applicant.

13                                                              II. "Central computer system" means a central monitor and control system provided and

14                                          monitored by the lottery commission to which video lottery terminals communicate for purposes of

15                                              information retrieval, retrieval of the win and loss determination from video lottery machines, and

16         programs to activate and disable video lottery machines.

17                                                        III. "Facility location" means any north country facility location or any pari-mutuel licensee

18         location and the portion of such facility approved for video lottery machine operations.

19                                                       IV. "Key employee" means any individual who is employed in a director or department head

20                                          capacity and who is authorized to make discretionary decisions that regulate video lottery machine

21                                                       operations, including the general manager and assistant manager of the operator licensee or

22                                               technology provider, director of operations, director of cage and/or credit operations, director of

23                                                        surveillance, director of marketing, director of management information systems, director of

24                                           security, comptroller, and any employee who supervises the operations of these departments or to

25                                             whom these department directors or department heads report and such other positions which the

26                                       lottery commission shall determine based on detailed analyses of job descriptions as provided in the

27                                                      internal controls of the licensee. All other gaming employees shall be considered as non-key

28         employees.

29                                                                 V. "Net machine income" means all cash or other consideration utilized to play a video

30                                                lottery machine, less all cash or other consideration paid to players of video lottery machines as

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   1        winnings. Non cashable promotional credits shall be excluded from the calculation.

   2                                                              VI. "North country facility location" means one of no more than 2 facilities selected and

   3        approved by the lottery commission pursuant to this chapter, one of which shall be located in

   4        Grafton county and one of which shall be located in Coos county.

   5                                                         VII. "Operator applicant" means the applicant applying for an operator's license to operate

   6        video lottery machines at a facility location.

   7                                                      VIII. "Operator's license" means the license issued by the lottery commission to an operator

   8        licensee which allows the operator licensee to possess, conduct, and operate video lottery machines in

   9        accordance with this chapter.

10                                                         IX. "Operator licensee" means an operator applicant who is issued a license by the lottery

11        commission to procure and operate video lottery machines pursuant to this chapter.

12                                                             X. "Pari-mutuel licensee" means an entity licensed and authorized to conduct live horse

13        racing as provided in RSA 284:16 or live dog racing as provided in RSA 284:16-a for at least the

14        number of days as required in RSA 284:22-a, II(a)(3) at a pari-mutuel licensee location.

15                                                                XI. "Pari-mutuel licensee location" means the facility at which a pari-mutuel licensee is

16        located and where a pari-mutuel licensee was authorized to conduct live horse racing or live dog

17        racing as of January 1, 2009 for at least the number of days as required in RSA 284:22-a, II(a)(3),

18        and any real estate in which a pari-mutuel licensee had an interest as of January 1, 2009 which is

19        adjacent to the real estate on which a pari-mutuel licensee is authorized to conduct live horse racing

20        or live dog racing as of January 1,2009.

21                                                                     XII. "Progressive jackpot" means a prize that increases over time or as video lottery

22        machines that are linked to a progressive system are played. Upon conditions established by the

23        lottery commission, a progressive jackpot may be paid by annuity.

24                                                      XIII. "Progressive system" means one or more video lottery machines linked to one or more

25        common progressive jackpots.

26                                                              XIV. "Technology provider" means any person or entity which designs, manufactures,

27        installs, distributes, or supplies video lottery machines for sale or lease to the operator licensees, and

28        which are for use by an operator licensee for conducting video lottery games in accordance with this

29        chapter.

30                                                      Xv. "Technology provider license" means the license issued by the lottery commission to a

31        technology provider licensee which allows the technology provider licensee to design, manufacture,

32        install, distribute, or supply video lottery machines for sale or lease to the operator licensees.

33                                                         XVI. "Technology provider licensee" means a technology provider that is licensed by the

34        lottery commission.

35                                                  XVII. "Token" means the coin or coupon, which is not legal tender, sold by a cashier in a face

36        amount equal to the cash paid by a player for the sole purpose of playing a video lottery machine at a

37        facility location or paid to a player of a video lottery machine, which can be exchanged for cash at a

Draft Amendment to HB 2-FN-A-LOCAL - Page 3-

  1        facility location.

   2                                                         XVIII. "Video lottery" means any lottery conducted with a video lottery machine or linked

   3        video lottery machines with an aggregate progression prize or prizes. Video lottery conducted

   4        pursuant to this chapter shall not be considered a state-run lottery.

   5                                                            XIX. "Video lottery machine" means an electronic, mechanical, or computerized machine

   6        which, upon the insertion of bills, coins, tokens, or any representative of value is available to be

   7        played where, by chance or skill, or both, the player may receive cash, cash equivalents, or tokens.

   8        Video lottery machines include, but are not limited to, slot machines, video poker machines, and

   9        other lottery machines. A machine shall be considered a video lottery machine notwithstanding the

10        use of an electronic credit system making the deposit of bills, coins, or tokens unnecessary. Video

11        lottery machines do not include any redemption slot machines or redemption poker machines as

12        defined in RSA 647:2 or video poker machines or other similar machines used for amusement

13        purposes only.

14                284-A:2 Video Lottery Oversight.

15                                                        I. No license shall be issued to any person under this chapter without prior approval of the

16        lottery commission pursuant to this chapter and RSA 284:21-w. The lottery commission shall only

17        issue licenses to persons who operate video lottery machines at a facility location after meeting the

18        requirements of RSA 284-A:6.

19                                                          II. The lottery commission shall have general responsibility for the implementation of this

20        chapter and shall adopt rules under RSA 541-A relative to:

21                                                            (a) Hearing and deciding all license applications or recommendations for the suspension

22        or revocation of any license issued under this chapter.

23                                                                            (b) Conducting all investigations required under this chapter with regard to the

24        application of any applicant for any license.

25                                                                       (c) Conducting hearings pertaining to civil violations, rules, and penalties required

26        under this chapter.

27                                                               (d) Establishing standards and a reasonable fee structure for the licensing and renewal

28        of licenses for employees and operators, technology providers, and operator licensees consistent with

29        RSA 284-A:5, I(e) and II(e).

30                                                                 (e) Establishing technical standards for approval of video lottery machines, including

31        mechanical and electrical reliability and security against tampering, as deemed necessary to protect

32        the public from fraud or deception and to insure the integrity of the operation.

33                                (f) Establishing standards for licensing under RSA 284-A:6.

34                                (g) Establishing standards for reviewing any structure at a facility location.

35                                                              (h) Ensuring that all licensees update the lottery commission with regard to any change

36        in ownership or material change in information or data regarding the licensee that the commission

37        determines is necessary and appropriate.

Draft Amendment to HB 2-FN-A-LOCAL

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   1                                                              III. Pending the adoption of rules under RSA 541-A, the lottery commission shall adopt

   2                                             interim rules pursuant to RSA 541-A:19 after public hearing and within 90 days after enactment of

   3                                          RSA 284-A. Such interim rules shall implement the provisions of RSA 284-A including an approval

   4        process for selecting the provider of the central computer system.

   5                                                           IV. The lottery commission shall provide and operate a single central monitor and control

   6        system into which all licensed video lottery machines shall be connected.

   7                                (a) The central monitor and control system shall be capable of:

   8                                                                     (1) Continuously monitoring, retrieving, and auditing the operations, financial data,

   9        and program information of all video lottery machines;

10                                                                  (2) Allowing the lottery commission to account for all money inserted in and payouts

11        made from any video lottery terminal;

12                                                                                  (3) Disabling from operation or play any video lottery machine as the lottery

13        commission deems necessary to carry out the provisions of this chapter;

14                                                                 (4) Supporting and monitoring a progressive jackpot system capable of operating one

15        or more progressive jackpots; and

16                                        (5) Providing any other function that the lottery commission considers necessary.

17                                                                      (b) The central monitor and control system shall employ a widely accepted gaming

18                                         industry communications protocol, as approved by the Gaming Standards Association, to facilitate

19        the ability of video lottery machine manufacturers to communicate with the statewide system.

20                                                                     (1) Except as provided in subparagraph (2), the lottery commission shall not allow a

21                                                 operator licensee to have access to, or obtain information from, the central monitor and control

22        system.

23                                                                         (2) If the access does not in any way affect the integrity or security of the central

24                                      monitor and control system, lottery commission may allow an operator licensee to have access to the

25                                             central monitor and control system that allows the licensee to obtain information pertinent to the

26        legitimate operation of its video lottery.

27                                                         V. The lottery commission may issue subpoenas and compel the attendance of witnesses,

28        and may administer oaths and require testimony of witnesses under oath.

29                                                           VI. No later than November 1 in each calendar year, the lottery commission shall submit a

30                                      report to the fiscal committee of the general court, regarding the operation of video lottery machines.

31        Such report may include recommendations for future legislation.

32                                                                 VII. (a) The lottery commission shall keep a written record of all proceedings of public

33        meetings of the commission.

34                                                               (b) The lottery commission shall keep and maintain a list of all applicants for licenses it

35                                                         receives under this chapter together with a record of all actions taken with respect to such

36                                                                  applicants. A file and record of the actions by the lottery commission shall be open to public

37                                                     inspection provided, however, that the information regarding any applicant whose license or

Draft Amendment to HB 2-FN-A-LOCAL - Page 5-

   1        registration has been denied, revoked, or not renewed shall be removed from such list after 5 years

   2        from the date of such action.

   3                                                            (c) The lottery commission shall maintain such other files and records as the commission

   4        determines is necessary. All records maintained by the lottery commission may be maintained in

   5        digital or other format provided that such information can be produced in written form upon the

   6        request of the commission.

   7                                                               (d) All information and data required by the lottery commission to be furnished to it, or

   8        which may otherwise be obtained, shall be considered to be confidential and shall not be revealed in

   9        whole or in part except in the course of the necessary administration of this chapter, or upon the

10        lawful order of a court of competent jurisdiction, or, with the approval of the attorney general, to a

11        duly authorized law enforcement agency.

12                                                                       (e) All information and data pertaining to an applicant's or key employee's criminal

13        record, finances, family, and background furnished to or obtained by the lottery commission from any

14        source shall be considered confidential and shall be withheld in whole or in part. Such information

15        shall be released upon the lawful order of a court of competent jurisdiction or to a duly authorized

16        law enforcement agency.

17                                                                     (f) Notice of the contents of any information or data to be released, except to a duly

18        authorized law enforcement agency pursuant to subparagraphs (d) or (e), shall be given to any

19        applicant, registrant, or licensee in a manner prescribed by the rules adopted by the lottery

20        commission so that the applicant, registrant, or licensee has the opportunity to object to such

21           release.

22                                       VIII. The lottery commission, the attorney general, and the state police gaming enforcement

23        unit may from time to time contract for such financial, economic, or security consultants, and any

24        other technical and professional services as the lottery commission deems necessary for the

25        discharge of its duties.

26                                                        IX. The lottery commission shall establish standards for reviewing, selecting, and granting

27        approval for no more than 2 north country facility locations. Selection standards shall specify the

28        process and fees for seeking approval and the criteria which shall be met by applicants. Applications

29        requesting review and approval of any north country facility location must be received by the lottery

30        commission by July 1, 2010 or no approval shall be granted for any north country facility location

31        under this chapter. Criteria shall include:

32                                                                  (a) The availability of local resources to support services and amenities necessary to

33        accommodate projected guest volume in the form of transportation, rooms and meals, utilities, law

34        enforcement, and mental health services.

35                                (b) The immediate and long range financial feasibility of the applicant's proposed

36          project.

37                                (c) The character and fitness of the owners of the facility.

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   1                                                                  (d) Whether the applicant has obtained the approval of the municipality in which the

   2        project is proposed by local referendum.

   3                                                                    (e) A minimum capital investment of $10,000,000 in the construction or renovation of

   4        the facility location.

   5                                                                         (f) An agreement with an operator to operate video gaming at the proposed north

   6        country facility location consistent with this chapter.

   7                                                             (g) The availability of space in the facility for charitable gaming to take place under RSA

   8          287-D.

   9                                                               X. A north country facility location shall commence construction of the gaming facility

10        within 12 months of receiving approval of the facility location pursuant to paragraph IX, and a pari-

11        mutuel licensee location shall commence any necessary construction or renovation of the area

12        intended for operation of video lottery machines within 12 months of the pari-mutuel licensee or its

13        operator applicant filing an application for an operator's license pursuant to RSA 284-A:5.

14                284-A:3 Authorization for Video Lottery Machines.

15                                                      I. An operator licensee may install, operate, and conduct video lottery machines at a facility

16        location in accordance with the provisions of this chapter.

17                                                            II. A facility location may enter into one or more agreements with an operator licensee to

18        manage or participate in the operation of video lottery machines at its approved or in the case of a

19        pari-mutuel licensee its licensed facility location in accordance with the provisions of this chapter.

20                284-A:4 Licenses; Number of Video Lottery Machines.

21                                                               I. No person shall engage in the ownership, possession, or operation of a video lottery

22        machine unless:

23                                (a) Such person is licensed in accordance with the provisions of this chapter;

24                                (b) Local approval as provided in RSA 284-A:9 has been obtained; and

25                                                          (c) Such person provides adequate space to accommodate charitable gaming as permitted

26        under RSA 287-D.

27                                                      II. Any operator or technology provider shall be licensed by the lottery commission prior to

28        engaging in any operation of video lottery machines.

29                                                                   III. Each operator licensee operating video lottery machines at a pari-mutuel licensee

30        location at which live dog racing is conducted shall be limited to a maximum of 2,000 video lottery

31        machines in operation at each such pari-mutuel licensee location.

32                                                                   IV. Each operator licensee operating video lottery machines at a pari-mutuel licensee

33        location at which live horse racing is conducted shall be limited to a maximum of 5,000 video lottery

34        machines in operation at each such pari-mutuel licensee location.

35                                                                  V. Each operator licensee operating video lottery machines at a north country facility

36        location shall be limited to a maximum of 2,000 video lottery machines in operation at each such

37        approved location.

Draft Amendment to HB 2-FN-A-LOCAL - Page 7-

  1                284-A:5 License Requirements for Operators and Technology Vendors.

   2                                                            I. (a) A pari-mutuel licensee or other operator applicant shall obtain an operator's license

   3                                              from the lottery commission to possess, conduct and operate video lottery machines at a facility

   4                                             location. In the event that a pari-mutuel licensee enters into an agreement with another person or

   5                                       entity to manage and operate video lottery machines at its pari-mutuel licensee location, that person

   6                                               or entity shall apply as the operator licensee applicant. An applicant must complete and sign an

   7                                            application on forms prescribed by the lottery commission, and include information regarding the

   8                                          applicant's criminal history background, civil judgments, and financial affairs. The application shall

   9                                                   include the full name, address, date of birth, and other personal identifying information of the

10                                         applicant and all key employees, and if a corporation or other form of business enterprise, the same

11                                                      information shall be provided with respect to each partner, trustee, officer, director, and any

12                                               shareholder or other holder who owns more than 10 percent of the legal or beneficial interests of

13                                            such entity. The lottery commission shall not accept applications from an operator applicant after

14                                          December 31, 2010, unless the operator applicant has an agreement with a facility location that has

15        previously maintained video lottery machine operations consistent with this chapter.

16                                                                  (b) If the applicant or any owner has held or holds a gaming or video lottery machine

17                                            license in a jurisdiction where video lottery machine activities are permitted, the applicant shall so

18                                          state and may produce either a letter of reference from the gaming or lottery enforcement or control

19                                        agency which sets forth the experience of that agency with the applicant, the applicant's associates

20                                         and gaming operations, or a statement under oath that the applicant is or was during the period the

21        activities were conducted in good standing with the agency.

22                                                               (c) The attorney general shall conduct a background review of each operator applicant

23                                      and any of its owners and key employees consistent with RSA 284:A-6. The background review may

24                                          be conducted through any appropriate state or federal law enforcement system and the authorized

25                                             reviewers may seek information as to the subject's financial, criminal, or business background, or

26                                          any other information which the attorney general, in his or her sole discretion, may find relevant to

27                                           the subject's fitness to be associated with the ownership or management of the operation of video

28                                           lottery machines in New Hampshire, including, but not limited to, the subject's character, personal

29                                     associations, and the extent to which the subject is properly doing business in the manner in which it

30                                                          purports to operate. If the applicant is a pari-mutuel licensee and the attorney general has

31                                         conducted a background investigation pursuant to RSA 284:15-b, within the 12 months prior to the

32                                            application filing, the attorney general may rely on the results of the previous investigation to the

33                                             extent the applicant's circumstances have not materially changed. The attorney general shall also

34                                                   take into consideration as evidence of fitness a letter of reference or sworn statement of good

35                                             standing produced pursuant to RSA 284-A:5, I(b). The attorney general shall report the results of

 36               the background review to the lottery commission within 60 days. Notwithstanding all other law to

             37               the contrary, the information provided to the attorney general and the results of any such review