HB 267-FN – AS INTRODUCED

2011 SESSION

11-0409

08/04

HOUSE BILL 267-FN

AN ACT permitting the adoption of slot machine gaming in a city or town.

SPONSORS: Rep. Infantine, Hills 13; Rep. Terrio, Hills 14

COMMITTEE: Municipal and County Government

ANALYSIS

This bill:

I. Allows slot machines in municipalities.

II. Establishes a permit process for slot machine operators.

III. Establishes a gaming enforcement unit within the division of state police.

IV. Distributes the proceeds of the slot machines to the general fund, the municipality where the slot machines are located, the department of health and human services for treatment of problem gamblers, the fire standards and training and emergency medical services fund, and the education trust fund.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

11-0409

08/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eleven

AN ACT permitting the adoption of slot machine gaming in a city or town.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter Slot Machines. Amend RSA by inserting after chapter 284-A the following new chapter:

CHAPTER 284-B

SLOT MACHINES

284-B:1 Definitions. In this chapter:

I. “Applicant” means any person, officer, director, or key employee, who on his own behalf or on behalf of another, is applying for permission to engage in any act or activity which is regulated under the provisions of this chapter. In cases in which the applicant is a corporation, foundation, organization, business trust, estate, limited liability company, trust, partnership, limited partnership, association or any other form of legal business entity, the commission shall determine the associated persons whose qualifications must be provided and reviewed as a precondition, to the licensing of the applicant.

II. “Central computer system” means a central monitor and control system provided and monitored by the commission to which slot machine terminals communicate for purposes of information retrieval, retrieval of the win and loss determination from slot machines, and programs to activate and disable slot machines.

III. “Facility license” means the license issued to a facility licensee by the commission pursuant to this chapter.

IV. “Executive council district” means the geographic districts for the election of the New Hampshire executive council as established by RSA 662:2 and in effect on January 1, 2012.

V. “Commission” means the state lottery commission established in RSA 284:21-a.

VI. “Charitable gaming” means games of chance and other gaming as permitted under RSA 287-A, RSA 287-D, and RSA 287-E.

VII. “Key employee” means any individual who is employed in a director or department head capacity and who is authorized to make discretionary decisions that regulate video lottery machine operations, including the general manager and assistant manager of the operator licensee or technology provider, director of operations, director of cage and/or credit operations, director of surveillance, director of marketing, director of management information systems, director of security, comptroller, and any employee who supervises the operations of these departments or to whom these department directors or department heads report and such other positions which the commission shall determine based on detailed analyses of job descriptions as provided in the internal controls of the licensee. All other gaming employees shall be considered as non-key employees.

VIII. “Licensee” means any applicant licensed by the commission under this chapter.

IX. “Net machine income” means all cash or other consideration utilized to play a slot machine at a facility licensee, less all cash or other consideration paid to players of slot machines as winnings. Non cashable promotional credits shall be excluded from the calculation.

X. “Operator applicant” means the applicant applying for an operator’s license to operate slot machines in accordance with this chapter.

XI. “Operator’s license” means the license issued by the commission to an operator licensee which allows the operator licensee to possess, conduct, and operate slot machines in accordance with this chapter.

XII. “Operator licensee” means an operator applicant who is issued a license by the commission to procure and operate slot machines pursuant to this chapter.

XIII. “Progressive jackpot” means a prize that increases over time as slot machines that are linked to a progressive system are played. Upon conditions established by the commission, a progressive jackpot may be paid by annuity.

XIV. “Progressive system” means one or more slot machines linked to one or more common progressive jackpots.

XV. “Technology provider” means any person or entity which designs, manufactures, installs, distributes, or supplies slot machines for sale or lease to the operator licensees, and which are for use by an operator licensee for operating slot machines in accordance with this chapter.

XVI. “Technology provider license” means the license issued by the commission to a technology provider licensee which allows the technology provider licensee to design, manufacture, install, distribute, or supply slot machines for sale or lease to the operator licensees.

XVII. “Technology provider licensee” means a technology provider that is licensed by the commission.

XVIII. “Token” means the coin or coupon, which is not legal tender, sold by a cashier in a face amount equal to the cash paid by a player for the sole purpose of playing a slot machine at the facility licensee or paid to a player of a slot machine, which can be exchanged for cash at the facility licensee.

XIX. “Slot machine” means an electronic, mechanical, or computerized machine which, upon the insertion of bills, coins, tokens, or any representative of value is available to be played where, by chance or skill, or both, the player may receive cash, cash equivalents, or tokens. Slot machines include, but are not limited to, slot machines, video poker machines, and other electronic gambling machines. A machine shall be considered a slot machine notwithstanding the use of an electronic credit system making the deposit of bills, coins, or tokens unnecessary. Slot machines do not include any redemption slot machines and redemption poker machines as defined in RSA 647 or video poker machines or other similar machines used for amusement purposes only.

284-B:2 Slot Machine Oversight and Facility Location Licensure.

I. No license shall be issued to any person under this chapter without prior approval of the commission pursuant to this chapter and RSA 284:21-w. The commission shall only issue licenses to persons who operate slot machines at a facility licensee after meeting the requirements of RSA 284-B:6. The commission may license and regulate the installation, operation, and conduct of slot machines at not more than 5 locations statewide and not more than one in each executive council districts.

II. The commission shall have general responsibility for the implementation of this chapter and shall adopt rules that include as a minimum guidance from the North American Gaming Regulators Association under RSA 541-A relative to:

(a) Hearing and deciding all license applications or recommendations for the suspension or revocation of any license issued under this chapter.

(b) Conducting all investigations required under this chapter with regard to the application of any applicant for any license.

(c) Conducting hearings pertaining to civil violations, rules, and penalties required under this chapter.

(d) Establishing standards and a reasonable fee structure for the licensing and renewal of licenses for employees and operators, technology providers, and operator licensees consistent with this chapter

(e) Establishing technical standards for approval of video lottery machines, including mechanical and electrical reliability and security against tampering, as deemed necessary to protect the public from fraud or deception and to insure the integrity of the operation.

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

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

(h) Ensuring that all licensees update the commission with regard to any change in ownership or material change in information or data regarding the licensee that the commission determines is necessary and appropriate.

(i) Ensuring that any facility licensee seeking to host or operate table games at a facility licensee location has appropriate approvals from the commission pursuant to RSA 287-D.

(j) Prescribing the methods and forms of application which any applicant shall follow and complete prior to consideration of the application by the commission.

(k) Prescribing the methods, procedures, and form for delivery of information concerning any person’s family, habits, character, associates, criminal record, business activities, and financial affairs.

(1) Prescribing procedures for the fingerprinting of an applicant, employee of a licensee, or registrant, or other methods of identification which may be necessary in the judgment of the commission to accomplish effective enforcement of restrictions to access to the licensed facility.

(m) Prescribing the manner and procedure of all hearings conducted by the commission or any hearing examiner, including special rules of evidence applicable thereto and notices thereof.

(n) Prescribing the method of collection of payments of taxes, fees, and penalties.

(o) Defining and limiting the areas of operation, the rules of authorized games, odds, and devices permitted, and the method of operation of such games and devices.

(p) Prescribing grounds and procedures for the revocation or suspension of licenses.

(q) Governing the manufacture, distribution, sale, and servicing of gaming devices and equipment.

(r) Prescribing minimum procedures for the exercise of effective control over the internal fiscal affairs of a licensee, including provisions for the safeguarding of assets and revenues, the recording of cash and evidence of indebtedness, and the maintenance of reliable records, accounts, and reports of transactions, operations, and events, including reports to the commission.

(s) Providing for a minimum standard of accountancy methods, procedures, and forms; a uniform code of accounts and accounting classifications; and such other standard operating procedures as may be necessary to assure consistency, comparability, and effective disclosure of all financial information.

(t) Requiring quarterly financial reports and the form thereof, and an annual audit prepared by a certified public accountant licensed to do business in this state, attesting to the financial condition of a licensee and disclosing whether the accounts, records, and control procedures examined are maintained by the licensee as required by this chapter.

(u) Governing the gaming-related advertising of licensees, their employees and agents, with the view toward assuring that such advertisements are in no way deceptive; provided, however, that such regulations shall require the words “Bet with your head, not over it,” or some comparable language approved by the commission, to appear on all billboards, signs, and other on-site advertising of a licensee operation and shall require the words “If you or someone you know has a gambling problem and wants help, call 1-800-GAMBLER,” or some comparable language approved by the commission, provided such language shall include the words “gambling problem” and “call 1-800-GAMBLER,” which shall appear legibly on all print, billboard, and sign advertising of a casino operation.

III. Pending the adoption of rules under RSA 541-A, the commission shall adopt interim rules pursuant to RSA 541-A:19 after public hearing and within 90 days the effective date of this chapter. Such interim rules shall implement the provisions of this chapter, including an approval process for selecting the provider of the central computer system.

IV. The commission shall provide and operate a single central monitor and control system into which all licensed slot machines shall be connected.

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

(1) Continuously monitoring, retrieving, and auditing the operations, financial data, and program information of all slot machines;

(2) Allowing the commission to account for all money inserted in and payouts made from any slot machine terminal;

(3) Disabling from operation or play any slot machine as the commission deems necessary to carry out the provisions of this chapter;

(4) Supporting and monitoring a progressive jackpot system capable of operating one or more progressive jackpots; and

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

(b) The central monitor and control system shall employ a widely accepted gaming industry communications protocol, as approved by the Gaming Standards Association, to facilitate the ability of slot machine manufacturers to communicate with the statewide system.

(1) Except as provided in subparagraph (2), the commission shall not allow an operator licensee to have access to, or obtain information from, the central monitor and control system.

(2) If the access does not in any way affect the integrity or security of the central monitor and control system, the commission may allow an operator licensee to have access to the central monitor and control system that allows the licensee to obtain information pertinent to the legitimate operation of its slot machines.

V. The commission may issue subpoenas and compel the attendance of witnesses, and may administer oaths and require testimony of witnesses under oath.

VI. No later than November 1 of each calendar year, the commission shall submit a report to the fiscal committee of the general court, regarding the operation of slot machines. Such report may include recommendations for future legislation.

VII.(a) The commission shall keep a written record of all proceedings of public meetings of the commission.

(b) The commission shall keep and maintain a list of all applicants for licenses it receives under this chapter together with a record of all actions taken with respect to such applicants. Subject to RSA 284-B:2, VII(d) and (e), a file and record of the actions by the commission shall be open to public inspection provided, however, that the information regarding any applicant whose license or registration has been denied, revoked, or not renewed shall be removed from such list after 5 years from the date of such action.

(c) The commission shall maintain such other files and records as the commission determines is necessary. All records maintained by the commission may be maintained in digital or other format, provided that such information can be produced in written form upon the request of the commission.

(d) All information and data required by the commission to be furnished to it, or which may otherwise be obtained, shall be considered to be confidential and shall not be revealed in whole or in part except in the course of the necessary administration of this chapter, or upon the lawful order of a court of competent jurisdiction, or, with the approval of the attorney general, to a duly authorized law enforcement agency.

(e) All information and data pertaining to an applicant’s or key employee’s finances, family, and background furnished to or obtained by the commission from any source shall be considered confidential and shall be withheld in whole or in part. Such information shall be released upon the lawful order of a court of competent jurisdiction or to a duly authorized law enforcement agency. Notwithstanding the above, the criminal record of an applicant or a key employee shall be available for review as a public record of the commission.

(f) Notice of the contents of any information or data to be released, except to a duly authorized law enforcement agency pursuant to subparagraphs (d) or (e), shall be given to any applicant, registrant, or licensee in a manner prescribed by the rules adopted by the commission so that the applicant, registrant, or licensee has the opportunity to object to such release.

VIII. The commission, the attorney general, and the division of state police gaming enforcement unit may from time to time contract for such financial, economic, or security consultants, and any other technical and professional services as the commission deems necessary for the discharge of its duties.

IX. The commission shall establish standards for reviewing, selecting, and granting licenses for each facility location. Standards shall specify the process for licensure and the criteria which shall be met by such applicants shall include:

(a) The availability of local resources to support services and amenities necessary to accommodate projected guest volume in the form of transportation, rooms and meals, utilities, law enforcement, and mental health services.

(b) The immediate and long range financial feasibility of the applicant’s proposed project.

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

(d) Whether the applicant has obtained the approval of the municipality in which the project is proposed by local referendum.

(e) A minimum capital investment for each approved facility shall be established by the commission.

(f) The comparability of the proposed facility with character of abutters, the neighborhood, and the municipality where the facility is proposed.

(g) The availability of space in the facility for charitable gaming to take place under RSA 287-D.

(h) The history of the applicant as it pertains to the applicant having held other licenses issued by the commission or issued by gaming authorities in other states of the United States.

X. A facility licensee may install and operate slot machines at its licensee location in accordance with the provisions of this chapter.

284-B:3 Authorization for Slot Machines.

I. An operator licensee may install, operate, and conduct slot machines at a facility licensee in accordance with the provisions of this chapter.

II. A facility licensee may enter into one or more agreements with an operator licensee to manage or participate in the operation of slot machines at its licensed facility location in accordance with the provisions of this chapter.

284-B:4 Licenses; Number of Slot Machines.

I. No person shall own, possess, or operate a slot machine unless:

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

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

(c) Such person provides adequate space, as determined by the commission, to accommodate charitable gaming as permitted under RSA 287-B, RSA 287-D and RSA 287-E.

II. Any operator or technology provider shall be licensed by the commission prior to engaging in the operation of slot machines.

III. Each facility authorized by the commission to operate slot machines shall operate at least 300 machines but no more than 500 machines.

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

I.(a) A facility licensee or other operator applicant shall obtain an operator’s license from the commission to possess, conduct, and operate slot machines. In the event that a facility licensee enters into an agreement with another person or entity to manage and operate slot machines at its location, that person or entity shall apply as the operator licensee applicant. An applicant shall complete and sign an application on forms prescribed by the commission, and include information regarding the applicant’s criminal history background, civil judgments, and financial affairs. The application shall include the full name, address, date of birth, and other personal identifying information of the applicant and all key employees, and if a corporation or other form of business enterprise, the same information shall be provided with respect to each partner, trustee, officer, director, and any shareholder or other holder who owns more than 10 percent of the legal or beneficial interests of such entity.

(b) The attorney general shall conduct a background review of each operator applicant and any of its owners and key employees consistent with RSA 284-B:6. The background review may be conducted through any appropriate state or federal law enforcement system and the authorized reviewers may seek information as to the subject’s financial, criminal, or business background, or any other information which the attorney general, in his or her sole discretion, may find relevant to the subject’s fitness to be associated with the ownership or management of the operation of slot machines in New Hampshire, including, but not limited to, the subject’s character, personal associations, and the extent to which the subject is properly doing business in the manner in which it purports to operate. If the applicant is a pari-mutuel licensee and the attorney general has conducted a background investigation pursuant to RSA 284:15-b within the 5 years prior to the application filing, the attorney general may rely on the results of such investigation to the extent the applicant’s circumstances have not materially changed. The attorney general shall report the results of the background review to the commission within 60 days. Notwithstanding any other law to the contrary, the information provided to the attorney general and the results of any such review shall be confidential and shall not be subject to disclosure or to public inspection, except that the attorney general, in the attorney general’s sole discretion, shall determine the extent to which and the manner in which said results may be reported to the commission or other state agency or official and, if reported, whether such results are to retain their confidential character; provided, however, that whenever the attorney general conducts such an review, the attorney general shall notify the commission whether or not in his or her opinion such person is fit to be associated with participation in the ownership or management of the operation of slot machines in this state. The attorney general may conduct such review on the attorney general’s motion into the background of the license applicant or holder, or any person or entity upon whom the license applicant or holder relies for financial support.

(c) In any review conducted pursuant to subparagraph (b), the attorney general or any duly authorized member of the attorney general’s staff may require by subpoena or otherwise the attendance of witnesses and the production of such correspondence, documents, books, and papers as he or she deems advisable, and for purposes of this section, may administer oaths and take the testimony of witnesses.

(d)(1) The commission shall impose an application fee of $100,000 which shall be used to defray the cost of processing the application. If the cost of processing the application exceeds $100,000, the applicant shall pay the difference.

(2) The attorney general shall impose an investigation fee of $50,000 which shall be used to defray the cost of the background investigation. If the cost of the background investigation exceeds $50,000, the applicant shall pay the difference.

(3) Upon approval of an operator licensee, the commission shall charge an initial license fee of $5,000,000. The commission shall charge a license fee of $1,000,000 to renew a license, however such person seeking renewal of such license shall pay all costs incurred by the attorney general to conduct an investigation with regard to such application to renew the operator’s license.

II.(a) A technology provider licensee applicant shall secure a technology provider license from the commission. An applicant shall complete and sign an application on forms prescribed by the commission, and include information regarding the applicant’s criminal history background, birth, and other personal identifying information of the applicant and all key employees, and if a corporation or other form of business enterprise, the same information shall be provided with respect to each partner, trustee, officer, director, and any shareholder or other holder who owns more than 10 percent of the legal or beneficial interests of such entity.

(b) If the applicant or any owner has held or holds a gaming or slot machine license in a jurisdiction where slot machine activities are permitted, the applicant shall so state and may produce either a letter of reference from the gaming or lottery enforcement or control agency which sets forth the experience of that agency with the applicant, the applicant’s associates and gaming operation, or a statement under oath that the applicant is or was during the period the activities were conducted in good standing with the agency.

(c) The attorney general shall conduct a background review of each technology provider applicant and any of its owners and key employees. The review may be conducted through any appropriate state or federal law enforcement system and may seek information as to the subject’s financial, criminal, or business background, or any other information which the attorney general, in his or her sole discretion, may find relevant the subject’s fitness to be associated with the distribution of slot machines in New Hampshire, including, but not limited to, the subject’s character, personal associations, and the extent to which the subject is properly doing business in the manner in which it purports to operate. The attorney general shall take into consideration as evidence of fitness a letter of reference or sworn statement of good standing produced pursuant to RSA 284-B:5, II(b). The attorney general shall report the results of the review to the commission within 60 days. Notwithstanding any other law to the contrary, the information provided to the attorney general and the results of any such review shall be confidential and shall not be subject to disclosure or to public inspection, except that the attorney general, in the attorney general’s sole discretion, shall determine the extent to which and the manner in which said results may be reported to the commission or other state agency or official and, if reported, whether such results are to retain their confidential character; provided, however, that whenever the attorney general conducts such a review, the attorney general shall notify the commission whether or not in his or her opinion such person is fit to be associated with the distribution of slot machines in this state. The attorney general may conduct a background review on the attorney general’s motion into the background of the license applicant or holder, or any person or entity upon whom the license applicant or holder relies for financial support.

(d) For any review conducted pursuant to subparagraph (c), the attorney general or any duly authorized member of the attorney general’s staff may require by subpoena or otherwise the attendance of witnesses and the production of such correspondence, documents, books, and papers as he or she deems advisable, and for the purposes of this section, may administer oaths and take the testimony of witnesses.

(e)(1) The technology provider applicant shall pay an application fee of $100,000 which shall be used to defray the cost of processing the application. If the cost of processing the application exceeds $100,000, the applicant shall pay the difference.

(2) The technology provider applicant shall pay an investigation fee of $25,000 to the department of justice which shall be used to defray the cost of the background investigation. If the cost of the background investigation exceeds $25,000, the applicant shall pay the difference.

(3) Upon approval of a technology provider licensee, the commission shall charge an initial license fee of $50,000. The commission shall charge a fee of $50,000 to renew a license to a technology provider licensee provided, however, such person seeking renewal of its license shall pay all costs incurred by the attorney general to conduct an investigation with regard to such application to renew the operator’s license.

284-B:6 Licensure Requirements.

I. No license shall be issued by the commission unless the applicant demonstrates it complies with the provisions of this section. The commission shall consider as evidence of compliance:

(a) The applicant’s financial stability, integrity, and responsibility, considering without limitation, bank references, business and personal income and disbursement schedules, tax returns, and other reports filed with governmental agencies, business and personal accounting records, check records, and ledgers.

(b) The trustworthiness of all financial backers, investors, mortgagees, bondholders, and holders of indentures, notes, and other evidences of indebtedness of the applicant.

(c) The applicant’s good character, honesty, and integrity, considering, without limitation, information pertaining to family, habits, character, reputation, criminal and arrest record, business activities, financial affairs, and business, professional, and personal associates, covering at least the 10-year period immediately preceding the filing of the application.

(d) For operator applicants and technology providers, the applicant’s business ability and experience in the operation of slot machines, as appropriate, so as to establish the likelihood of a successful and efficient operation.

II. No license shall be issued by the commission to any applicant unless the applicant proves that each director, officer, or key employee and each direct or indirect owner complies with the criteria for licensure contained in this section.

III. No license shall be issued by the commission to any applicant if the applicant, any key employee, or any individual who has an ownership or financial interest in or with the applicant or its facility location is an official of the attorney general’s office or the commission on a full or part-time or contractual basis at any time during the previous 2 years.

IV. The commission shall grant or deny a license under this chapter within 180 days of receiving a completed application, notwithstanding the adoption of interim or final rules.

284-B:7 Exclusion of Minors.

I. No person under 18 years of age shall play a slot machine authorized by this chapter. Each violation of this section shall be punishable by a fine of no more than $2,400 and shall be payable by such person who violates this section.

II. No operator licensee shall knowingly permit any person under 18 years of age to play or participate in any aspect of the play of a slot machine. Each violation of this section shall be punishable by a fine of no more than $20,000 and shall be payable by the operator licensee.

284-B:8 Distribution of Net Machine Income.

I. Distribution of Net Machine Income. Fifty five percent of the net machine income generated by slot machines at a facility licensee shall be paid as follows:

(a) Fifty percent of the net machine income generated by slot machines shall be paid to the state from which the state shall pay for the costs of regulation administration, enforcement of this chapter under RSA 21-P:11-b, and the operation of the central computer system, and the balance shall be deposited in the general fund of the state.

(b) One percent of the net machine income generated by slot machines operated by an operator licensee in any specific municipality shall be paid to the municipality in which the operator licensee operates slot machines.

(c) One percent of the net machine income generated by all slot machines shall be paid to the state treasurer and credited to the commissioner of the department of health and human services to support programs established by RSA 172 to treat problem gambling.

(d) One-half of one percent of the net income generated by all slot machines shall be paid equally to the police standards and training council training fund established in RSA 188-F:30 and the fire standards and training and emergency medical services fund established RSA 21-P:12-d to be used for reimbursement of expenses incurred for certification training and salaries.

(e) Two and one half percent of the net machine income generated by all slot machines shall be paid to the state treasurer for distribution to the education trust fund.

II. The balance of the funds from the net machine income from slot machines shall be retained by the operator licensee that operates such video lottery machines.

III. The operator licensee shall deliver the amounts payable to the state or municipality as provided in paragraph I or II in immediately available funds of the United States on a weekly basis on the third business day following the end of each week. At the time payment is delivered, the operator licensee shall provide a written accounting of net machine income generated from the slot machines by the operator licensee on an aggregate basis and the calculation of amounts due to the state separately for distribution pursuant to subparagraphs I(a), (c), (d) and (e), the amount due the municipality pursuant to subparagraph I(b), and the balance of net machine income retained by the operator licensee. The operator licensee shall pay a penalty of $1,000 for each day that payment or the accounting is not delivered on time to the state, a penalty of $1,000 for each day that payment or the accounting is not delivered to the municipality on time, and a penalty of $1,000 for each day that payment or the accounting is not delivered to the county on time.

284-B:9 Procedures for Adoption by Local Community.

I. Any municipality in which a facility licensee is or will be situated may adopt the provisions of RSA 284-B to allow the operation of slot machines in the following manner:

(a) In a town, other than a town that has adopted a charter pursuant to RSA 49-D, the questions shall be placed on the warrant of an annual or special town meeting, by the governing body or by petition pursuant to RSA 39:3.

(b) In a city or town that has adopted a charter pursuant to RSA 49-C or RSA 49-D, upon request of a facility licensee to authorize the operation of video lottery machines within the municipality in accordance with the provisions of RSA 284-B, the governing body shall place the question on the ballot to be voted upon at the next regularly scheduled municipal or biennial election unless such election is more than 90 days from the request. In such circumstance, the governing body shall place the question on the ballot for a special election called for the purpose of voting on said question and which special election shall occur within 75 days after the request is made. Such special election shall be held at the usual ward polling places by the regular election officials.

(c) If a majority of those voting on the question vote “Yes,” RSA 284-B shall apply in such town or city and the operation of slot machines shall be permitted within such town or city in accordance with RSA 284-B. If a majority of those voting on the question vote “No” the question may be voted on at a subsequent time in accordance with this section provided, however, the town may consider the question at no more than one special meeting and the annual town meeting in the same calendar year after a “No” vote. A city or town subject to paragraph II may consider the question at no more than one special election and a regular municipal or biennial election in the same calendar year after a “No” vote.

(d) The wording of the question shall be substantially as follows: “Shall we adopt the provisions of RSA 284-B allowing the operation of slot machines at [insert the name of the facility licensee] located within the town?”

II. When a facility location requests a town or city to act under paragraph I, the facility licensee shall pay all costs associated with carrying out the actions under this section

284-B:10 Inspection of Slot Machines; Penalty for Tampering or Manipulating.

I. The commission shall periodically test slot machines installed at any location. In conducting such tests, the commission shall use the services of an independent laboratory, and the cost of such independent laboratory shall be paid by the technology provider.

II. Any person who purposely manipulates the outcome, payoff, or operation of any slot machine by physical, electronic, or mechanical means, shall be guilty of a felony.

284-B:11 Slot Machines.

I. An operator of slot machines shall provide to the commission, by diagram or narrative, a description of:

(a) The location of each slot machine available for play by the public.

(b) The location of all areas for the storage, maintenance, or repair of slot machines.

(c) A description of all security measures to be taken for the safeguarding of slot machines.

(d) The location and security measures taken for the safeguarding of all moneys, tokens, or other items of value utilized in the use of slot machines.

(e) All procedures for the operation, maintenance, repair, and inserting or removing of moneys, tokens, or other items of value from slot machines.

(f) All internal control systems as required by RSA 284:21-w.

(g) The provisions of subparagraphs (a)-(f) shall be approved by the commission prior to commencing the operation of any slot machines.

II. No slot machine shall be possessed, maintained, exhibited, brought into, or removed from a facility licensee by any person unless such machine has permanently affixed to it an identification number or symbol authorized by the commission and prior notice of any such movement has been given to the commission.

III. Each operator licensee shall maintain secure facilities for the counting and storage of all moneys, tokens, or other items of value utilized in the conduct of slot machines.

IV. The drop boxes and other devices shall not be brought into a facility licensee or removed from a slot machine, locked or unlocked, except at such specific times and such places and according to such procedures as the commission may require to safeguard such boxes and devices and their contents.

V. No slot machine shall be used to conduct gaming unless it is identical in all electrical, mechanical, and other aspects to a model which has been specifically tested by the commission and licensed for use by the commission.

VI. Slot machines in operation at a facility licensee shall provide a payoff of an average of at least 90 percent, except that progressive jackpots must have a payoff of an average of at least 87 percent.

VII. All tickets given as prizes or winnings from slot machines shall be redeemed for cash within one year after the date of winning. Upon the expiration of such one-year period, the value of such unredeemed tickets shall be considered net machine income of the issuing operator licensee.

VIII. An operator licensee shall not be restricted in the days of operation of slot machines.

IX. No automatic teller machines shall be located within 50 feet of slot machines.

284-B:12 Term of License. Any license issued pursuant to this chapter and any renewal thereof shall be valid for 5 years unless earlier suspended or revoked by the commission. The commission shall adopt procedures for license renewal that take into consideration whether the applicant has been previously licensed in good standing under this chapter. No license issued by the commission may be transferred to a separate entity without approval by the commission consistent with this chapter.

284-B:13 Presence of the Commission. The commission and the division of state police gaming enforcement unit may be present at any facility licensee at which slot machines are operated at all times when the facility is open to the public. The licensee may be required by the commission or gaming enforcement unit to provide such office space and equipment which the commission or unit shall determine is reasonably necessary or proper.

284-B:14 Sanction Powers of the Commission.

I. The commission shall have exclusive authority following appropriate hearings and factual determinations, to impose sanctions against any person for any violation of this chapter or any rule of the lottery commission adopted under the provisions of this chapter as follows:

(a) Revocation or suspension of a license.

(b) Civil penalties as may be necessary to punish misconduct and to deter future violations, which penalties may not exceed $50,000 for each violation.

(c) Restitution of any moneys or property unlawfully obtained or retained by a person.

(d) Issue a cease and desist order which specifies the conduct which is to be discontinued, altered, or implemented by the person.

(e) Issue letters of reprimand or censure, which shall be made a permanent part of the file of each person so sanctioned.

(f) Impose any or all of the foregoing sanctions in combination with each other.

II. In determining appropriate sanctions in a particular case, the commission shall consider:

(a) The risk to the public and to the integrity of slot machine operations created by the conduct of the person.

(b) The seriousness of the conduct of the person and whether the conduct was purposeful or with knowledge that it was in contravention of the provisions of this chapter or the rules of the commission.

(c) Any justification or excuse for such conduct.

(d) The prior history of the person involved.

(e) The corrective action taken by the person to prevent future misconduct of a like nature from occurring.

(f) In the case of a monetary penalty, the amount of the penalty in relation to the misconduct and the financial means of the person.

(g) In the event that a person receives 3 civil penalties during the term of such person’s license, the commission may subject such person to enhanced fines or other disciplinary action.

284-B:15 Declaration of Limited Exemption from Operation of Provisions of 15 U.S.C. section 1171-1172. Pursuant to section 2 of an act of Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce,” approved January 2, 1951, being Chapter 1194, 64 Stat 1134, and also designated as 15 U.S.C. sections 1171-1177, the state of New Hampshire, acting by and through the duly elected and qualified members of its legislature, does hereby, in accordance with and in compliance with the provisions of that section 2 of that act of Congress, declare and proclaim that it is in the state’s best interest to benefit from limiting gambling device revenues but prevent the proliferation of gambling devices by limiting approved facility locations and therefore that section 2 of that act of Congress shall not apply to any gambling device in this state where the transportation of such a device is specifically authorized by and done in compliance with the provisions of this chapter and any rules adopted pursuant to it, and that any such gambling device transported in compliance with state law and rules shall be exempt from the provisions of that act of Congress.

284-B:16 Legal Shipment of Gaming Devices into New Hampshire. All shipments into this state of gaming devices, the registering, recording, and labeling of which has been duly made by the manufacturer or dealer in accordance with sections 3 and 4 of an act of Congress of the United States entitled “An Act to Prohibit Transportation of Gambling Devices in Interstate and Foreign Commerce, approved January 2, 1951, being chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1172, shall be deemed legal shipments into this state.

2 New Section; Lottery Commission; Administration of Video Lottery. Amend RSA 284 by inserting after section 21-v the following new section:

284:21-w Video Lottery; Duties of the Lottery Commission; Administration of Video Lottery.

I. The lottery commission shall:

(a) Collect all license fees imposed upon any applicant under RSA 284-B and all taxes imposed by RSA 284-B.

(b) Certify net machine income by inspecting records, conducting audits, having its agents on site, or by any other reasonable means.

(c) Establish a central computer system located at the office of the lottery commission linking all video lottery machines to insure control over video lottery machines. The lottery commission shall establish a selection procedure for such contracts and ensure that the central computer system uses a widely adopted communications protocol approved by the Gaming Standards Association.

(d) Require all holders of licenses issued by the lottery commission pursuant to RSA 284-B to maintain a system of internal controls. At a minimum, the licensee’s proposed system of internal controls shall:

(1) Safeguard its assets and revenues, including, but not limited to the recording of cash and evidences of indebtedness related to the video lottery machines.

(2) Provide for reliable records, accounts, and reports of any financial event that occurs in the operation of a video lottery machine.

(3) Ensure that each video lottery machine directly provides or communicates all required activities and financial details to the central computer system.

(4) Provide for accurate and reliable financial records.

(5) Ensure any financial event that occurs in the operation of a video lottery machine or table game is performed only in accordance with the management’s general or specific authorization.

(6) Ensure that any financial event that occurs in the operation of a video lottery machine is recorded adequately to permit proper and timely reporting of net machine income and the calculation thereof and the related fees and taxes.

(7) Ensure that access to assets is permitted only in accordance with management’s specific authorization.

(8) Ensure that recorded accountability for assets is compared with actual assets at reasonable intervals and appropriate action is taken with respect to any discrepancies.

(9) Ensure that all functions, duties, and responsibilities are appropriately segregated and performed in accordance with sound financial practices by qualified personnel.

(e) Establish technical standards for approval of video lottery machines, including mechanical and electrical reliability and security against tampering, as it may deem necessary to protect the public from fraud or deception and to ensure the integrity of their operation.

(f) Require all holders of licenses issued by the commission pursuant to RSA 284-A to establish and implement a self-exclusion program whereby a person who acknowledges that he or she is a problem gambler and who requests to be placed on a self-exclusion list shall be excluded or ejected from a licensed facility.

II. The lottery commission may employ certain assistants to carry out the provisions of this section and RSA 284-B, and may employ such additional assistants and employees as the governor and council shall authorize. Such assistants and employees shall receive compensation at rates to be established by the department of administrative services, division of personnel, however, such compensation shall be funded by proceeds paid to or received by the lottery commission pursuant to RSA 284-B. No employee of the lottery commission shall have any pecuniary or other interest in any supplier or agent to the commission or in any facility location or licensee licensed under RSA 284-B.

HB 267-FN - FISCAL NOTE

AN ACT permitting the adoption of slot machine gaming in a city or town.

FISCAL IMPACT: