HB 1678

HB 1678-FN-A-LOCAL – AS INTRODUCED

2012 SESSION

12-2355 08/09

HOUSE BILL 1678-FN-A-LOCAL

AN ACT establishing video lottery and table gaming at certain locations in New Hampshire.

SPONSORS: Rep. Terrio, Hills 14

COMMITTEE: Executive Departments and Administration

ANALYSIS

This bill:

I. Allows video lottery gaming at up to 3 licensees in the north country, the southern tier, and on a riverboat near Portsmouth, as selected by the lottery commission.

II. Establishes the gaming enforcement division of the state police.

III. Allows municipalities to accept video lottery gaming in their municipalities by referendum or vote at town meetings.

IV. Distributes certain proceeds from video lottery gaming to the general fund, the municipality in which the video lottery game takes place, and the alcohol and drug abuse treatment fund for problem gambling.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

12-2355

08/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twelve

AN ACT establishing video lottery and table gaming at certain locations in New Hampshire.

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

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

CHAPTER 284-B

VIDEO LOTTERY MACHINES

284-B:1 Definitions. In this chapter:

I. “Applicant” means any person, officer, director, or key employee, who on his or her 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 lottery 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 lottery commission to which video lottery terminals communicate for purposes of information retrieval, retrieval of the win and loss determination from video lottery machines, and programs to activate and disable video lottery machines.

III. “Facility location” means a facility approved by the lottery commission pursuant to this chapter.

IV. “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 lottery 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.

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

VI. “North country facility location” means a facility approved by the lottery commission pursuant to this chapter which is located in Grafton, Coos, or Carroll county.

VII. “Operator applicant” means the applicant applying for an operator’s license to operate video lottery machines at a facility.

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

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

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

XI. “Progressive system” means one or more video lottery machines linked to one or more common progressive jackpots.

XII. “Riverboat facility location” means a facility approved by the lottery commission pursuant to this chapter which is a riverboat docked in the Portsmouth area.

XIII. Southern tier facility location” means a facility approved by the lottery commission pursuant to this chapter located within 25 miles of the Massachusetts border.

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

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

XVI. “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 video lottery machine at a facility location or paid to a player of a video lottery machine, which can be exchanged for cash at any facility location.

XVII. “Video lottery 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. Video lottery machines include, but are not limited to, slot machines, video poker machines, and other lottery machines. A machine shall be considered a video lottery machine notwithstanding the use of an electronic credit system making the deposit of bills, coins, or tokens unnecessary. Video lottery 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.

XVIII. “Video lottery” means any lottery conducted with a video lottery machine or linked video lottery machines with an aggregate progression prize or prizes. Video lottery conducted pursuant to this chapter shall not be considered a state-run lottery.

284-B:2 Video Lottery Oversight.

I. No license shall be issued to any person under this chapter without prior approval of the lottery commission pursuant to this chapter and RSA 284:21-w. The lottery commission shall only issue licenses to persons who operate video lottery machines at the following facility locations: one in the north country, one in the southern tier, and one riverboat facility, only after completion of the background reviews set forth in this chapter, or in the case of an interim license, after meeting the requirements of RSA 284-B:6, I.

II. The lottery commission shall have general responsibility for the implementation of this chapter and shall adopt rules 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.

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

(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 lottery 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.

III. Pending the adoption of rules under RSA 541-A, the lottery commission shall adopt interim rules pursuant to RSA 541-A:19 after public hearing and within 90 days after enactment of RSA 284-B. Such interim rules shall implement the provisions of RSA 284-B including an approval process for selecting the provider of the central computer system.

IV. The lottery commission shall provide and operate a single central monitor and control system into which all licensed video lottery 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 video lottery machines;

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

(3) Disabling from operation or play any video lottery machine as the lottery 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 lottery 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 video lottery machine manufacturers to communicate with the statewide system.

(1) Except as provided in subparagraph (2), the lottery commission may 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 lottery 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 video lottery.

V. The lottery 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 in each calendar year, the lottery commission shall submit a report to the fiscal committee of the general court, regarding the operation of video lottery machines. Such report may include recommendations for future legislation.

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

(b) The lottery 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. A file and record of the actions by the lottery 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 lottery commission shall maintain such other files and records as the commission determines is necessary. All records maintained by the lottery 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 lottery 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 criminal record, finances, family, and background furnished to or obtained by the lottery 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.

(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 lottery commission so that the applicant, registrant, or licensee has the opportunity to object to such release.

VIII. The lottery commission, the attorney general, and the 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 lottery commission deems necessary for the discharge of its duties.

IX. The lottery commission shall establish standards for reviewing, selecting, and granting approval for a facility location in the north country, a facility location in the southern tier, and a riverboat facility location. Such standards shall specify the criteria which shall be met by applicants and 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.

(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 of $10,000,000 in the construction or renovation of the facility location.

(f) The availability of space for charitable gaming to take place under RSA 287-D.

X. A facility location licensee shall commence construction of the gaming facility within 6 months of its selection by the lottery commission. If construction is not commenced within 6 months of selection, the lottery commission may revoke the license.

284-B:3 Authorization for Video Lottery Machines.

I. A facility location licensee may install, operate, and conduct video lottery machines at its licensee location as an operator licensee, in accordance with the provisions of this chapter.

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

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

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

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

III. Each operator licensee operating video lottery machines at a southern tier facility location shall be limited to a maximum of 5,000 video lottery machines in operation at each such facility location.

IV. Each operator licensee operating video lottery machines at a north country or riverboat location shall be limited to a maximum of 2,000 video lottery machines in operation at each such licensee location.

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

I.(a) An operator applicant shall obtain an operator’s license from the lottery commission. An applicant shall complete and sign an application on forms prescribed by the lottery 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) If the applicant or any owner has held or holds a gaming or video lottery machine license in a jurisdiction where video lottery 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 operations, 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 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 video lottery 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, IV within the 12 months prior to the application filing, the attorney general may rely on the results of the previous investigation to the extent the applicant’s circumstances have not materially changed. The attorney general shall also take into consideration as evidence of fitness a letter of reference or sworn statement of good standing produced pursuant to RSA 284-B:5, I(b). The attorney general shall report the results of the background review to the lottery 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 lottery 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 lottery 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 video lottery 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.

(d) In 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 purposes of this section, may administer oaths and take the testimony of witnesses.

(e)(1) The lottery 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 a operator licensee, the lottery commission shall charge an initial license fee of $60,000,000 for a southern tier facility licensee, $20,000,000 for a riverboat facility licensee and $20,000,000 for an operator licensee at a north country facility. The lottery commission shall charge a license fee of $500,000 to renew a operator’s license, however, such person seeking renewal of his or her 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 lottery commission. An applicant shall complete and sign an application on forms prescribed by the lottery 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) If the applicant or any owner has held or holds a gaming or video lottery machine license in a jurisdiction where video lottery 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 to the subject’s fitness to be associated with the distribution of video lottery 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 lottery 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 lottery 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 lottery commission whether or not in his or her opinion such person is fit to be associated with the distribution of video lottery 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.

(e)(1) The lottery commission shall charge the technology provider applicant 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 charge the technology provider applicant an investigation fee of $25,000 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 lottery commission shall charge an initial license fee of $50,000. The lottery 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 lottery commission unless the applicant complies with the provisions of this section. The lottery commission shall consider as evidence any letter of reference or sworn statement of good standing submitted pursuant to RSA 284-B:5, I(b) or RSA 284-B:5, II(b) relative to:

(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) The applicant’s business ability and experience in the operation of video lottery machines, as appropriate, so as to establish the likelihood of a successful and efficient operation.

II. No license shall be issued by the lottery 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 lottery commission to any operator or technology provider applicant if the applicant, any key employee, or any individual who has an ownership or financial interest in or with the applicant is an elected official of the general court or executive branch of the state of New Hampshire or the attorney general’s office or lottery commission on a full or part-time or contractual basis at any time during the previous 2 years. If any such applicant, key employee, or any individual who has an ownership or financial interest in the applicant becomes such an elected official, the applicant shall be subject to sanctions pursuant to RSA 284-B:14.

IV. No license shall be issued by the lottery commission to an operator applicant at a facility location unless the operator applicant is the owner of the facility location seeking to operate video lottery machines at the facility location, or, if not the owner of the facility location, the operator applicant submits proof of an agreement to manage and operate video lottery machines at the facility location.

V. No licensee or any individual or entity that is an owner of, or has a financial interest in or with the licensee shall be permitted to make a political contribution as defined by RSA 664:2, VIII.

VI. The lottery 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.

VII. The lottery commission may determine whether the licensing standards of another jurisdiction within the United States or Canada in which an applicant, its affiliate, intermediary subsidiary, or holding company for an operator or technology vendor license is similarly licensed are comprehensive and thorough and provide similar adequate safeguards as those required by this chapter. If the lottery commission makes that determination, it may issue an operator or technology vendor license to an applicant who holds a similar license in such other jurisdiction after conducting an evaluation of the information relating to the applicant from such other jurisdictions, as updated by the lottery commission, and evaluating other information related to the applicant received from that jurisdiction and other jurisdictions where the applicant may be licensed, the lottery commission may incorporate such information, in whole or in whole or in part, into its or the attorney general’s evaluation of the applicant.

284-B:7 Exclusion of Minors.

I. No person under 21 years of age shall play a video lottery machine authorized by this chapter. Each violation of this section shall be punishable by a fine of no more than $20,000 and shall be payable by such person who violates this section.

II. No facility location licensee or its operator licensee shall knowingly permit any person under 21 years of age to play or participate in any aspect of the play of a video lottery machine. Each violation of this section shall be punishable by a fine of no more than $20,000 and shall be payable by the pari-mutuel licensee or its operator licensee.

284-B:8 Distribution of Net Machine Income.

I. Forty-nine percent of the net machine income generated by video lottery machines shall be paid as follows:

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

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

(c) One percent of the net machine income generated by video lottery machines operated by an operator licensee in any specific county shall be paid to the county in which the operator licensee operates video lottery machines.

(d) Two percent of the net machine income generated by all video lottery 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.

II. The balance of the funds from the net machine income from video lottery 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 in immediately available funds of the United States on a weekly basis on the first business day of each week. At the time payment is delivered, the operator licensee shall provide a written accounting of net machine income generated from the video lottery machines by the operator licensee on an aggregate basis and the calculation of amounts due to the state separately for distribution pursuant to subparagraphs (a) and (d), the amount due the municipality pursuant to subparagraph (b), the amount due to the county pursuant to subparagraph (c), 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 to the state on time, 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. Any municipality in which a facility licensee location is situated may adopt the provisions of RSA 284-B, to allow the operation of video lottery machines, in the following manner:

I. 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.

II. In a city or town that has adopted a charter pursuant to RSA 49-C or RSA 49-D, upon request of a 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.

III. 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 video lottery 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 RSA 284-B:9 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.

IV. The wording of the question shall be substantially as follows: “Shall we adopt the provisions of RSA 284-B allowing the operation of video lottery machines at [insert the name of the pari-mutuel licensee or north country facility location] located within the town?”

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

I. The lottery commission shall periodically test video lottery machines installed at a facility license location. In conducting such tests, the lottery 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 video lottery machine by physical, electronic, or mechanical means, shall be guilty of a felony.

284-B:11 Video Lottery Machines.

I. An operator licensee shall provide to the lottery commission and the racing and charitable gaming commission, by diagram or narrative, a description of:

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

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

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

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

(g) All of the above shall be approved by the lottery commission prior to commencing the operation of any video lottery machines.

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

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

V. No video lottery 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 lottery commission and licensed for use by the lottery commission.

VI. All video lottery machines in operation at a facility licensee location shall provide a pay off of an average of at least 87 percent.

VII. All tickets given as prizes or winnings from video lottery 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 who operates video lottery machines at a facility location shall not be restricted in the days of operation of such machines.

IX. Video lottery machines shall be operated only at times when the public is allowed access to the locations. No automatic teller machines shall be located within 50 feet of video lottery machines.

284-B:12 Term of License. Any operator’s license or technology provider’s license issued pursuant to this chapter and any renewal thereof shall be valid for 5 years unless earlier suspended or revoked by the lottery commission. The lottery commission shall adopt procedures for license renewal that take into consideration whether the applicant has been previously licensed in good standing under this chapter.

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

284-B:14 Sanction Powers of the Lottery Commission.

I. The lottery commission shall have the sole and 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.

(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 lottery commission shall consider:

(a) The risk to the public and to the integrity of video lottery 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 racing and charitable gaming commission or the lottery commission.

(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 lottery 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 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 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 an operator’s license issued by the lottery commission pursuant to RSA 284-B to maintain a system of internal control. At a minimum, the operator 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 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.

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 licensee licensed under RSA 284-B.

III. The lottery commission shall have the authority to issue subpoenas and compel the attendance of witnesses, to administer oaths, and to require testimony under oath.

IV. No later than March 31 in each calendar year, the lottery commission shall provide a report to the fiscal committee of the general court regarding the generation of revenues of video lottery machines by pari-mutuel licensees or operator licensees.

V. With regard to meetings, minutes, and records of the lottery commission:

(a) The lottery commission shall notice all proceedings and shall make and keep a record of all proceedings held at public meetings of the lottery commission. A verbatim transcript of those proceedings shall be prepared by the lottery commission upon the request of any commissioner or upon the request of any other person and the payment by that person of the costs of preparation. A copy of the transcript shall be made available to any person upon request and payment of the costs of preparing the copy.

(b) The lottery commission shall maintain such other files and records as the lottery commission determines is necessary.

(c) All information and data required by the commission, to be furnished to the commission, or which may otherwise be obtained, shall 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.

(d) All information and data pertaining to an applicant’s criminal record, family, and background furnished to or obtained by the lottery commission from any source shall be confidential and shall be withheld in whole or in part. Such information shall be released only 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) Notice of the contents of any information or data 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 lottery commission.

(f) All records, information, or data maintained or kept by the lottery commission shall be maintained or kept at the office of the gaming oversight division.

3 New Sections; Department of Safety; Gaming Enforcement Unit Established. Amend RSA 21-P by inserting after section 11-a the following new sections:

21-P:11-b Division of State Police; Gaming Enforcement Unit.

I. There is established within the department of safety, division of state police, a gaming enforcement unit under the supervision of the commissioner of the department of safety. Notwithstanding RSA 106-B:15, the unit shall:

(a) Investigate violations of RSA 284 or RSA 284-B and the rules adopted under the provisions of RSA 284 or RSA 284-B and initiate proceedings before the lottery commission for such violations.

(b) Report the results of any investigation conducted to the lottery commission.

(d) Investigate crimes that occur on the premises of a pari-mutuel licensee or north country facility licensee.

II. The commissioner of the department of safety shall organize the unit as the commissioner deems necessary. The commissioner of safety may employ such state police personnel as the commissioner deems necessary to fulfill the responsibilities of the division.

21-P:11-c Enforcement Expenditures. The governor and council with the prior approval of the fiscal committee of the general court, upon request from the commissioner of the department of safety, may authorize the transfer of general funds as authorized in RSA 284-B:8, I(a) to the department of safety to implement and enforce RSA 21-P:11-b, RSA 284, and RSA 284-B.

4 New Subparagraph; Authorized Video Lottery Machines. Amend RSA 647:2, V by inserting after subparagraph (c) the following new subparagraph:

(d) Video lottery machines authorized pursuant to RSA 284-B.

5 Rehabilitation of Problem Gaming. Amend RSA 172:2-a to read as follows:

172:2-a Program Established. The commissioner shall provide for the scientific care, treatment, and rehabilitation of gambling, alcohol, and drug abusers, and work towards the prevention of, and assist in the control of, gambling, alcohol, and drug abuse within the state through education, treatment, community organization, and research.

6 Rehabilitation of Problem Gaming. Amend RSA 172:8 to read as follows:

172:8 Duties of Commissioner. The commissioner shall:

I. Study the problems presented by gambling, alcohol, and drug abuse, including methods and facilities available for the care, treatment, custody, employment, and rehabilitation of persons who are problem gamers, inebriates, alcohol abusers, drug dependent, or drug abusers.

II. Promote meetings and programs for the discussion of gambling, alcohol, and drug dependency and abuse for the guidance and assistance of individuals, schools, courts, and other public and private agencies.

III. Conduct, promote and finance, in full or in part, studies, and other appropriate facilities dealing with the physical, psychological, and/or social aspects of gambling, alcohol, and drug abuse.

IV. Have the authority to accept or reject for examination, diagnosis, guidance, and treatment, insofar as funds and facilities permit, any resident of the state who comes to the commissioner voluntarily for advice and treatment.

V. [Repealed.]

VI. Render biennially to the governor and council a report of his or her activities including recommendations for improvements therein by legislation or otherwise.

VII. Coordinate community medical resources for the emergency medical care of persons suffering acute mental or physical reaction to gambling, alcohol, or drugs and of persons suffering from drug dependency.

VIII. Employ such assistants as may be necessary to carry out the purposes of this chapter, in accordance with state personnel regulations, and within available appropriations and funds.

IX. Disseminate information on the subjects of gambling, alcohol, and drug abuse for the guidance and assistance of individuals, schools, courts, and other public and private agencies.

X. [Repealed.]

7 Problem Gaming Added. Amend RSA 172:8-a to read as follows:

172:8-a Confidentiality of Client Records. No reports or records or the information contained therein on any client of the program or a certified gambling, alcohol, or drug abuse treatment facility or any client referred by the commissioner shall be discoverable by the state in any criminal prosecution. No such reports or records shall be used for other than rehabilitation, research, statistical or medical purpose, except upon the written consent of the person examined or treated. Confidentiality shall not be construed in such manner as to prevent recommendation by the commissioner to a referring court, nor shall it deny release of information through court order pursuant to appropriate federal regulations.

8 Problem Gaming Added. Amend RSA 172:8-b to read as follows:

172:8-b Rulemaking. The commissioner shall adopt rules under RSA 541-A relative to the following:

I. The acceptance, care and treatment of gambling, alcohol, or drug dependent persons and alcohol or drug abusers who are clients of the program established under this chapter or a certified substance abuse treatment facility.

II. A fee schedule and collection of fees under RSA 172:14, IV.

III. Certification of substance abuse treatment facilities including, but not limited to:

(a) Program content;

(b) Qualifications of program staff; and

IV. Certification and recertification of gambling, alcohol, and drug abuse counselors including, but not limited to:

(a) Peer review of applicants.

(b) Minimum qualifications and competency.

(d) Experience required.

(e) Required knowledge of gambling, alcohol, and drug abuse counseling.

(f) Such other matters as the commissioner may deem necessary to carry out the purposes of this chapter.

V. Voluntary admissions under RSA 172:13.

9 Acceptance of Grants; Treatment of Problem Gamers. Amend RSA 172:9 to read as follows:

172:9 Acceptance of [~~Grants~~] Funds. The commissioner is authorized to accept in the name of the state special grants or money or services from the federal or state governments or any of their agencies and may accept funds from the operation of video lottery pursuant to RSA 284-B:8, I(d) and gifts to carry on the functions provided for in this chapter.

10 Effective Date. This act shall take effect upon its passage.

LBAO

12-2355

Revised 01/09/12

HB 1678 FISCAL NOTE

AN ACT establishing video lottery and table gaming at certain locations in New Hampshire.

FISCAL IMPACT:

The Lottery Commission states this bill will increase state revenue by $100,750,000 in FY 2013, $146,610,000 in FY 2014, and $295,650,000 in FY 2015 and each year thereafter; increase county revenue by $3,258,000 in FY 2014, and $6,570,000 in FY 2015 and each year thereafter; increase local revenue by $9,774,000 in FY 2014 and $19,710,000 in FY 2015 and each year thereafter; and will increase state expenditures by an indeterminable amount in FY 2013 and each year thereafter. The Department of Safety states this bill will increase state general fund expenditures by $8,629,611 in FY 2013, $6,459,219 in FY 2014, $6,552,011 in FY 2015, and $6,552,482 in FY 2016, and decrease state expenditures by an indeterminable amount in FY 2013 and each year thereafter. The Department of Health and Human Services states this bill will increase state expenditures by $796,729 in FY 2013, $814,341 in FY 2014, $837,703 in FY 2015, and $862,306 in FY 2016. The Department of Justice states this bill will increase state restricted revenue and expenditures by $354,326 in FY 2013, and state general fund expenditures by $148,355 in FY 2013, $63,317 in FY 2014, $64,897 in FY 2015, and $66,551 in FY 2016. The Judicial Branch, Judicial Council, and Department of Corrections state this bill will increase state expenditures by an indeterminable amount in FY 2013 and each year thereafter. The New Hampshire Association of Counties states county revenue and expenditures will increase by an indeterminable amount in FY 2013 and each year thereafter. The New Hampshire Municipal Association states this bill will increase local revenue and expenditures by an indeterminable amount in FY 2013 and each year thereafter.

METHODOLOGY:

The Lottery Commission states this bill establishes licenses for video lottery machines (VLMs) in New Hampshire. The Commission assumes it will collect state general fund revenue in FY 2013 in the form of license and application fees, and that the operation of VLMs will commence in FY 2014. The Commission estimates license and application fee revenue related to VLMs to the state general fund in FY 2013 as follows:

Application Fees

3 Gaming Locations ($100,000 each) $300,000

3 Technology Providers ($100,000 each) $300,000

License Fees

1 North Country Location $20,000,000

1 Southern Tier Location $60,000,000

1 Riverboat Location $20,000,000

3 Technology Provider Licenses ($50,000 each) $150,000

Total Fee Revenue $100,750,000

The Commission estimates net daily income from each VLM at $200. According to the Commission, a maximum of 9,000 VLMs may be authorized at the three locations (2,000 each at the north country and riverboat locations and 5,000 at the southern tier location) according to the specific limits in the proposed RSA 284-B:4. The Commission assumes the VLMs will be in operation beginning January 1, 2014 for a total of 181 days in FY 2014 and then for a total of 365 days per year beginning in FY 2015. Therefore, the commission estimates total net machine income to be $325,800,000 in FY 2014 and $657,000,000 per year (9,000 VLMs x $200 net daily income per VLM x 365 days) beginning in FY 2015, with the operator licensees retaining 51% and 49% distributed to the state, counties, and municipalities as follows:

FY 2014 FY 2015 & after

• State General Fund (43%) $140,094,000 $282,510,000

• Problem Gambling Treatment – DHHS (2%) $6,516,000 $13,140,000

Subtotal State Revenue $146,610,000 $295,650,000

• Municipalities of Gaming Locations (3%) $9,774,000 $19,710,000

• Counties of Gaming Locations (1%) $3,258,000 $6,570,000

• Operator Licensees (51%) $166,158,000 $335,070,000

The Commission states its cost to operate a central computer system for VLMs could be as high as 5% of net machine income, or $16,290,000 in FY 2014 and $32,850,000 in FY 2015 and each year thereafter. The funding for the operation of the central computer system would come from the state general fund portion of the revenue. The Commission further states it is not able to estimate its expenses related to the administration and regulation of VLMs, although the funding for these functions would also decrease the amount of unrestricted state general fund revenue.

The Department of Safety states this bill establishes the gaming enforcement unit within the Division of State Police. The members of this unit are charged with investigating any violations of the proposed RSA 284-B and any crimes that occur on the premises of any gaming facility, and are responsible for presenting the findings of their investigations to the appropriate authority, either the Lottery Commission or a criminal court. Gaming enforcement expenditures would be funded from the state general fund upon joint approval of the Governor & Executive Council and the Fiscal Committee. The Department provided an estimate of staffing necessary to provide the required services at gaming locations, including 54 sworn State Police positions and one Administrative Secretary. The Department assumes all State Police will be compensated at the top step of their respective pay grades because existing experienced personnel would be assigned to the gaming enforcement unit. The Department states there will a decrease in state highway fund and other fund expenditures of indeterminable amounts as a result of hiring new personnel closer to entry level to fill units vacated by those transferring into the gaming enforcement unit. The Department further states all four State Police Sergeants and 48 State Police Trooper II will receive a two labor grade detective differential. The Department estimated staffing and associated expenditures for the gaming enforcement unit as follows:

FY 2013 FY 2014 FY 2015 FY 2016

State Police Captain

Salary (LG 29, step 8) $94,282 $94,282 $94,282 $94,282

Benefits $40,571 $42,017 $43,604 $43,604

State Police Lieutenant

Salary (LG 27, step 8) $85,451 $85,451 $85,451 $85,451

Benefits $38,185 $39,631 $41,218 $41,218

State Police Sergeant (4)

Salary (LG 24, step 8) $327,092 $327,092 $327,092 $327,092

Benefits $148,764 $154,548 $160,896 $160,896

State Police Trooper II (48)

Salary (LG 21, step 8) $3,447,575 $3,447,552 $3,447,552 $3,447,552

Benefits $1,656,143 $1,725,545 $1,801,721 $1,801,721

Administrative Secretary

Salary (LG 14) $29,718 $30,888 $32,097 $33,384

Benefits $23,206 $25,233 $27,458 $29,142

Gasoline $473,040 $473,040 $473,040 $473,040

Supplies / Postage $10,000 $6,500 $7,660 $7,660

Computer Software $12,000 - $2,500 -

54 Cruisers $1,906,200 - - -

54 Standard Personal Equip. $232,200 - - -

54 Laptops / Docking Station $64,044 - - -

4 Printers $2,000 - - -

20 File Cabinets $7,700 - - -

6 Work Stations $24,000 - - -

Copiers $7,440 $7,440 $7,440 $7,440

Total $8,629,611 $6,459,219 $6,552,011 $6,552,482

The Department of Justice states this bill permits the development of gambling facilities that will be regulated by the Lottery Commission; establishes administrative, civil, and criminal penalties for violations of the law; authorizes the Attorney General to conduct background investigations of license applicants; and establishes a gaming enforcement unit within the -Department of Safety, Division of State Police. The Department anticipates the Lottery Commission and the gaming enforcement unit will require assistance from an Assistant Attorney General in the Civil Bureau to promulgate rules, conduct administrative enforcement of violations, and otherwise provide legal counsel to manage their obligation to perform gambling oversight. The Department anticipates that in FY 2011 this will require one and one quarter full-time equivalent (FTE) Assistant Attorneys General and 35% of a paralegal’s time. In FY 2012 and each year thereafter, the Department’s legal council role will require approximately 50% of an Assistant Attorney General’s time and 20% of a paralegal’s time.

The Department further states the Department would be responsible for conducting a background investigation of every applicant for an operator’s license or technology provider’s license, and any owners or key employees thereof. Such investigations must be completed within 60 days. The bill authorizes the Attorney General to impose a $50,000 fee to defray the costs for an investigation of an operator applicant, and $25,000 for an investigation of a technology provider applicant. The applicant would be required to pay the difference if the cost exceeds the fee. The Department expects that it would have to hire two full-time temporary investigators, two full-time temporary financial analysts, and one part-time paralegal to complete the investigations. The Department estimates total increased state general fund expenditures, as well as increased state restricted revenue and expenditures from conducting background investigations, to be as follows:

FY 2013 FY 2014 FY 2015 FY 2016

Assistance to Lottery Commission and Department of Safety – General Funds

Assistant Attorney General

Salary $83,687 $34,480 $35,514 $36,579

Benefits $29,459 $14,907 $15,901 $15,280

Paralegal (LG 19) to assist Attorneys

Salary $12,701 $7,570 $7,878 $8,217

Benefits $8,408 $4,860 $4,915 $4,975

Computers $4,500 - - -

Furniture $4,500 - - -

Software $3,600 - - -

Current Expense $1,500 $1,500 $1,500 $1,500

Total GF expenses $148,355 $63,317 $65,708 $66,551

Background Investigations – Restricted funds (Fees from Licensees)

2 Investigators (LG BB)

Salary $101,336 - - -

Benefits $53,144 - - -

2 Financial Analysts (LG 31)

Salary $127,062 - - -

Benefits $57,706 - - -

Paralegal (LG 19) to assist Investigators

Salary $9,072 - - -

Benefits $6,006 - - -

Total Restricted Expenses $354,326 - - -

The Department of Justice further states this bill creates one new felony-level offense for manipulating the outcome, payoff, or operation of any video lottery machine. The Department states it would be responsible for representing the State in any appeal from a conviction for that offense, but anticipates it could handle those cases within its current budget.

The Department of Health & Human Services, Bureau of Drug & Alcohol Services, states this bill provides 2% of net VLM income to the alcohol and drug abuse treatment program as established in RSA 172 to treat problem gambling. The Department states it is currently unable to estimate the restricted revenue it will receive under this bill. The Department assumes the revenue it receives under this bill will cover the estimated expenses of providing treatment for problem gambling. The Department made the following assumptions to calculate expenditures under this bill:

• Funding would be available to the Department for the creation of positions and other related expenses beginning in FY 2013;

• Funding would be used to contract for gambling prevention and treatment services as well as defraying additional administrative costs associated with those services;

• The Department will hire an additional three FTE staff that will focus on gambling prevention and treatment initiatives, including two Program Specialist III positions and one Executive Secretary;

• Each Prevention and Treatment Program Specialist III will provide technical assistance, education, and contract management for gambling treatment. The Secretary will assist with materials distribution, set up for outreach, and other program duties for both problem gambling prevention and treatment;

• As this is a new and developing area of expertise, ongoing staff development and training will be required;

• The remainder of funds will be used for contracts for media advertising and outreach ($100,000 per year), information development and dissemination ($50,000 per year), data collection and research to determine the scope of the problem and effectiveness of interventions ($50,000 per year), and contracts for five FTE of outpatient gambling addiction treatment ($78,000 per FTE x 5 = $390,000 per year with subsequent increases of 3% per year).

The Department’s estimated expenses associated with treating problem gambling are summarized as follows:

FY 2013 FY 2014 FY 2015 FY 2016

2 Program Specialist III (LG 23)

Salary $82,173 $85,683 $89,505 $93,444

Executive Secretary (LG 11)

Salary $25,584 $26,540 $27,515 $28,646

Benefits (3 FTE) $70,972 $76,918 $83,433 $90,556

Current Expense $15,000 $15,000 $15,000 $15,000

Equipment $4,500 - - -

In-State Travel $2,500 $2,500 $2,500 $2,500

Out-of-State Travel $6,000 $6,000 $6,000 $6,000

Contracts $590,000 $601,700 $613,750 $626,160

Total $796,729 $814,341 $837,703 $862,306

The Judicial Branch states it is potentially impacted by several sections of proposed RSA 284-B and related statutory amendments. First, there are multiple proposed sections which involve the same basic issue, namely that certain information held by the Lottery Commission is confidential but can be made public by a court order. These sections are proposed RSA 284-B: 2, VII (d) and (e) and proposed RSA 284:21-w, V (c) and (d). Second, proposed RSA 284-B:10, II makes it an unspecified felony to manipulate the outcome, payoff, or operation of a video lottery machine. Finally, the bill sets up a comprehensive regulatory scheme generally under the Lottery Commission, with licensing authority and broad sanction powers. Although there is no reference in the bill or in the existing statute to an RSA 541 appeal right from the Commission to the Supreme Court, without one certiorari would lie, giving another possibility of fiscal impact to the Judicial Branch in appeals to the Supreme Court.

The Judicial Branch states regarding actions to make public confidential information, such actions are likely to take place in the Superior Court and would be considered complex equity cases. The Branch has no information to estimate how many actions will arise as a result of this bill but is able to provide the costs for each case type. All costs are estimated based on case weight information from the last needs assessment completed in 2005. The Branch states the average complex equity case in superior court will be $576.05 in FY 2013 and $602.60 in FY 2014.

The second area of possible fiscal impact on the Judicial Branch is proposed RSA 284-B:10, II, which makes it an unspecified felony to manipulate the outcome, payoff, or operation of a video lottery machine. The Branch has no information to estimate how many charges would be brought as a result of the changes contained in the bill to determine the fiscal impact on expenditures but does have information on the cost for processing a class B felony. All costs are estimated based on case weight information from the last needs assessment completed in 2005. The Branch states this felony would be classified as an average routine felony and treated as an average routine criminal case in the Superior Court. The Branch states an average routine criminal case will cost $389.84 per case in FY 2013 and $401.48 per case in FY 2014 and each year thereafter. The possibility of appeals increases the likelihood the fiscal impact on the Branch will exceed $10,000.

The final potential area for fiscal impact on the Judicial Branch is in the potential of administrative appeals from the lottery commission. Regarding appeals to the Supreme Court, the Branch has no information on how many such appeals may arise. The Supreme Court has discretionary review of such appeals; therefore, another variable is whether the court accepts the appeal for full appellate review, accepts it for more limited review, or declines the appeal. Such appeals are too speculative to arrive at a conclusion regarding fiscal impact, although even one appeal accepted for full appellate consideration could result in a fiscal impact in excess of the $10,000 threshold.

The Judicial Council states this bill may result in an indeterminable increase in state general fund expenditures. The Council states if an individual is found to be indigent, the flat fee of $756.24 per felony is charged by a public defender or contract attorney. If an assigned counsel attorney is used the fee is $60 per hour with a cap of $4,100 for a felony charge. The Council also states additional costs could be incurred if an appeal is filed. The public defender, contract attorney and assigned counsel rates for Supreme Court appeals is $2,000 per case, with many assigned counsel attorneys seeking permission to exceed the fee cap. Requests to exceed the fee cap are seldom granted. Finally, expenditures would increase if services other than counsel are requested and approved by the court during the defense of a case or during an appeal.

The Department of Corrections states it is not able to determine the fiscal impact of this bill because it does not have sufficient detail to predict the number of individuals who would be subject to this legislation. The Department of Corrections states the average annual cost of incarcerating an individual in the general prison population for the fiscal year ending June 30, 2010 was $32,492. The cost to supervise an individual by the Department’s division of field services for the fiscal year ending June 30, 2010 was $659.

The New Hampshire Association of Counties states this bill provides for 1% of net VLM income from each gaming location to be paid to the specific county in which that gaming establishment is located. The Association states it is unable to determine actual revenue from VLMs, but to the extent there is net income generated from VLMs, county revenues will increase by an indeterminable amount. The Association also states to the extent more individuals are charged, convicted, and sentenced to incarceration in a county correctional facility, the counties may have increased expenditures. The Association is unable to determine the number of individuals who might be charged, convicted or incarcerated as a result of this bill to determine an exact fiscal impact. The average annual cost to incarcerate an individual in a county correctional facility is approximately $35,000.

The New Hampshire Municipal Association states this bill provides 3% of net video VLM income to the municipalities where the gaming establishments are located. The Association states local revenue will increase by an indeterminable amount, and local expenditures will increase by an indeterminable amount for all of the costs associated with gaming. The Association also states that while only the municipalities where the gaming establishments are located will receive a portion of the gaming revenue, adjacent municipalities may also incur substantial costs related to gaming without the benefit of an increase in revenue.