H. B. 2740
(By Delegates Doyle, Pettit,
Davis, L. White and Hutchins)
[Introduced February 11, 1999; referred to the
Committee on Finance then the Judiciary.]
A BILL to amend and reenact sections three, six and thirteen,
article twenty-two-a, chapter twenty-nine of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, all relating to the operation of video lottery
games at licensed horse and dog racetracks; providing for
lottery commission authority to approve changes in video
lottery terminals; providing definitions of terms; providing
for non-cash prizes, annuitized payments over time, coins,
vouchers or tokens in connection with video lottery games;
relating to the form of the display of symbols on video
lottery terminals; providing for video lottery terminal
electronic accounting metering for coins and tokens.
Be it enacted by the Legislature of West Virginia:
That sections three, six and thirteen, article twenty-two-a,
chapter twenty-nine of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 22A. RACETRACK VIDEO LOTTERY.
§29-22A-3. Definitions.
As used in this article:
(a) "Applicant" means any person applying for any video
lottery license or permit.
(b) "Associated equipment" means any hardware located on a
licensed racetrack's premises which is connected to the video
lottery system for the purpose of performing communication,
validation or other functions, but not including the video
lottery terminals or the communication facilities of a regulated
public utility.
(c) "Background investigation" means a security, criminal
and credit investigation of a person, as defined in this section,
who has applied for a video lottery license or permit, or who has
been granted a video lottery license or permit.
(d) "Central computer," "central control computer" or
"central site system" means any central site computer provided to
and controlled by the commission to which video lottery terminals
communicate for purposes of information retrieval and terminal
activation and to disable programs.
(e) "Commission" or "state lottery commission" means the
West Virginia lottery commission created by article twenty-two of
this chapter.
(f) "Control" means the authority to direct the management
and policies of an applicant or a license or permit holder.
(g) "Costs" means the expenses incurred by the commission in
the testing and examination of video lottery terminals and the
performance of background investigations and other related
activities which are charged to and collected from applicants or
license or permit holders.
(h) "Director" means the individual appointed by the
governor to provide management and administration necessary to
direct the state lottery office.
(i) "Disable" or "terminal disable" means the process of
executing a shutdown command from the central control computer
which causes video lottery terminals to cease functioning.
(j) "Display" means the visual presentation of video lottery
game features on
the video display monitor or screen of a video
lottery terminal
in the form of video images, actual symbols or
both.
(k) "EPROM" and "erasable programmable read-only memory
chips" means the electronic storage medium on which the operation
software for all games playable on a video lottery terminal
resides and which can also be in the form of CD-ROM, flash RAM or
other new technology medium that the commission may from time to
time approve for use in video lottery terminals. All electronic
storage media are considered to be the property of the state of
West Virginia.
(l) "Floor attendant" means a person, employed by a licensed
racetrack, who holds a permit issued by the commission and who
corrects paper jams and bill jams in video lottery terminals and
also provides courtesy services for video lottery players.
(m) "Gross terminal income" means the total amount of cash,
vouchers or tokens inserted into the video lottery terminals
operated by a licensee, minus the total value of
coins and tokens
won by a player and game credits which are cleared from the video
lottery terminals in exchange for winning redemption tickets.
(n) "License" or "video lottery license" means authorization
granted by the commission to a racetrack which is licensed by the
West Virginia racing commission to conduct thoroughbred or
greyhound racing meetings pursuant to article twenty-three,
chapter nineteen of this code permitting the racetrack to operate
video lottery terminals authorized by the commission.
(o) "Lottery" means the public gaming systems or games
established and operated by the state lottery commission.
(p) "Manufacturer" means any person holding a permit granted
by the commission to engage in the business of designing,
building, constructing, assembling or manufacturing video lottery
terminals, the electronic computer components of the video
lottery terminals, the random number generator of the video
lottery terminals, or the cabinet in which it is housed, and
whose product is intended for sale, lease or other assignment to
a licensed racetrack in West Virginia, and who contracts directly with the licensee for the sale, lease or other assignment to a
licensed racetrack in West Virginia.
(q) "Net terminal income" means gross terminal income minus
an amount deducted by the commission to reimburse the commission
for its actual costs of administering racetrack video lottery at
the licensed racetrack. No deduction for any or all costs and
expenses of a licensee related to the operation of video lottery
games shall be deducted from gross terminal income.
(r) "Non-cash prize" means merchandise which a video lottery
player may be given the option to receive in lieu of cash in
exchange for a winning redemption ticket and which shall be
assigned a redemption value equal to the actual cost of the
merchandise to the licensed racetrack.
(r) (s) "Own" means any beneficial or proprietary interest
in any property or business of an applicant or licensed
racetrack.
(s) (t) "Pari-mutuel racing facility", "licensed racetrack",
"racetrack" or "track" means a facility where horse or dog race
meetings are held and the pari-mutuel system of wagering is
authorized pursuant to the provisions of article twenty-three,
chapter nineteen of this code: Provided, That, for the purposes
of this article, "pari-mutuel racing facility", "licensed
racetrack", "racetrack" or "track" includes only a facility which
was licensed prior to the first day of January, one thousand nine
hundred ninety-four, to hold horse or dog race meetings, and which conducts not less than two hundred twenty live racing dates
for each horse or dog race meeting or such other number of live
racing dates as may be approved by the racing commission in
accordance with the provisions of section twelve-b, article
twenty-three, chapter nineteen of this code.
(t) (u) "Permit" means authorization granted by the
commission to a person to function as either a video lottery
manufacturer, service technician or validation manager.
(u) (v) "Person" means any natural person, corporation,
association, partnership, limited partnership, or other entity,
regardless of its form, structure or nature.
(v) (w) "Player" means a person who plays a video lottery
game on a video lottery terminal at a racetrack licensed by the
commission to conduct video lottery games.
(w) (x) "Service technician" means a person, employed by a
licensed racetrack, who holds a permit issued by the commission
and who performs service, maintenance and repair on licensed
video lottery terminals in this state.
(x) (y) "Video lottery game" means a commission approved,
owned and controlled electronically simulated game of chance
which is displayed on
the screen or video monitor of a video
lottery terminal and which:
(1) Is connected to the commission's central control
computer by an on-line or dial-up communication system;
(2) Is initiated by a player's insertion of coins,
or currency,
vouchers or tokens into a video lottery terminal, which
causes game play credits to be displayed on the video lottery
terminal and, with respect to which, each game play credit
entitles a player to choose one or more symbols or numbers or to
cause the video lottery terminal to randomly select symbols or
numbers;
(3) Allows the player to win additional game play credits,
coins or tokens based upon game rules which establish the random
selection of winning combinations of symbols or numbers or both
and the number of free play credits,
coins or tokens to be
awarded for each winning combination of symbols or numbers or
both;
(4) Is based upon computer-generated random selection of
winning combinations based totally or predominantly on chance;
(5) In the case of a video lottery game which allows the
player an option to select replacement symbols or numbers or
additional symbols or numbers after the game is initiated and in
the course of play, either: (A) Signals the player, prior to any
optional selection by the player of randomly generated
replacement symbols or numbers, as to which symbols or numbers
should be retained by the player to present the best chance,
based upon probabilities, that the player may select a winning
combination; (B) signals the player, prior to any optional
selection by the player of randomly generated additional symbols
or numbers, as to whether such additional selection presents the best chance, based upon probabilities, that the player may select
a winning combination; or (C) randomly generates additional or
replacement symbols and numbers for the player after
automatically selecting the symbols and numbers which should be
retained to present the best chance, based upon probabilities,
for a winning combination, so that in any event, the player is
not permitted to benefit from any personal skill, based upon a
knowledge of probabilities, before deciding which optional
numbers or symbols to choose in the course of video lottery game
play;
(6) Allows a player at any time to simultaneously clear all
game play credits and print a redemption ticket entitling the
player to receive the cash value of the free plays cleared from
the video lottery terminal; and
(7) Does not use the following game themes commonly
associated with casino gambling: Roulette, dice, or baccarat
card games:
Provided, That games having a
video display
depicting with symbols which appear to roll on drums to simulate
a classic casino slot machine, game themes of other card games
and keno may be used.
(y) (z) "Validation manager" means a person who holds a
permit issued by the commission and who performs video lottery
ticket redemption services.
(z) (aa) "Video lottery" means a lottery which allows a game to be played utilizing an electronic computer and an interactive
computer terminal device, equipped with a video screen and keys,
a keyboard or other equipment allowing input by an individual
player, into which the player inserts coins,
or currency,
vouchers or tokens as consideration in order for play to be
available, and through which terminal device the player may
receive free games,
coins, tokens or credit that can be redeemed
for cash,
annuitized payments over time, a non-cash prize or
nothing, as may be determined wholly or predominantly by chance.
"Video lottery" does not include a lottery game which merely
utilizes an electronic computer and a video screen to operate a
lottery game and communicate the results of the game, such as the
game "Travel", and which does not utilize an interactive
electronic terminal device allowing input by an individual
player.
(aa) (bb) "Video lottery terminal" means a commission-
approved interactive electronic terminal device which is
connected with the commission's central computer system, and
which is used for the purpose of playing video lottery games
authorized by the commission. A video lottery terminal may
simulate the play of one or more video lottery games.
(bb) (cc) "Wager" means a sum of money or thing of value
risked on an uncertain occurrence.
§29-22A-6. Video lottery terminal hardware and software requirements; hardware specifications; software
requirements for randomness testing; software
requirements for percentage payout; software
requirements for continuation of video lottery
game after malfunction; software requirements
for play transaction records.
(a)
The commission may approve video lottery terminals and
in doing so shall take into account advancements in computer
technology, competition from nearby states and the preservation
of jobs in the West Virginia pari-mutuel racing industry. In
approving video lottery terminals licensed for placement in this
state
the commission shall
insure that the terminals meet the
following hardware specifications:
(1) Electrical and mechanical parts and design principles
may not subject a player to physical hazards or injury.
(2) A surge protector shall be installed on the electrical
power supply line to each video lottery terminal. A battery or
equivalent power back-up for the electronic meters shall be
capable of maintaining accuracy of all accounting records and
terminal status reports for a period of one hundred eighty days
after power is disconnected from the terminal. The power back-up
device shall be located within the locked logic board compartment
of the video lottery terminal.
(3) An on/off switch which controls the electrical current used in the operation of the terminal shall be located in an
accessible place within the interior of the video lottery
terminal.
(4) The operation of each video lottery terminal may not be
adversely affected by any static discharge or other
electromagnetic interference.
(5) A minimum of one electronic or mechanical coin acceptor
or other means accurately and efficiently to establish credits
shall be installed on each video lottery terminal. Each video
lottery terminal may also contain bill acceptors for one or more
of the following: One dollar bills, five dollar bills, ten
dollar bills and twenty dollar bills. All coin and bill
acceptors must be approved by the commission prior to use on any
video lottery terminal in this state.
(6) Access to the interior of video lottery terminal shall
be controlled through a series of locks and seals.
(7) The main logic boards and all erasable programmable
read-only memory chips (Eproms) are deemed to be owned by the
commission and shall be located in a separate locked and sealed
area within the video lottery terminal.
(8) The cash compartment shall be located in a separate
locked area within or attached to the video lottery terminal.
(9) No hardware switches, jumpers, wire posts or any other
means of manipulation may be installed which alter the pay tables
or payout percentages in the operation of a game. Hardware switches on a video lottery terminal to control the terminal's
graphic routines, speed of play, sound and other purely cosmetic
features may be approved by the commission.
(10) Each video lottery terminal shall contain a single
printing mechanism capable of printing an original ticket and
retaining an exact legible copy within the video lottery terminal
or other means of capturing and retaining an electronic copy of
the ticket data as approved by the commission:
Provided, That
such printing mechanism is optional on any video lottery terminal
which is designed and equipped exclusively for coin or token
payouts. The following information shall be recorded on the
ticket when credits accrued on a video lottery terminal are
redeemed for cash:
(i) The number of credits accrued;
(ii) Value of the credits in dollars and cents displayed in
both numeric and written form;
(iii) Time of day and date;
(iv) Validation number; and
(v) Any other information required by the commission.
(11) A permanently installed and affixed identification
plate shall appear on the exterior of each video lottery terminal
and the following information shall be on the plate:
(i) Manufacturer of the video lottery terminal;
(ii) Serial number of the terminal; and
(iii) Model number of the terminal.
(12) The rules of play for each game shall be displayed on
the video lottery terminal face or screen. The commission may
reject any rules of play which are incomplete, confusing,
misleading or inconsistent with game rules approved by the
commission. For each video lottery game, there shall be a
display detailing the credits awarded for the occurrence of each
possible winning combination of numbers or symbols. A video
lottery terminal may not allow more than two dollars to be
wagered on a single game. All information required by this
subdivision shall be displayed under glass or another transparent
substance. No stickers or other removable devices may be placed
on the video lottery terminal screen or face without the prior
approval of the commission.
(13) Communication equipment and devices shall be installed
to enable each video lottery terminal to communicate with the
commission's central computer system by use of a communications
protocol provided by the commission to each permitted
manufacturer, which protocol shall include information retrieval
and terminal activation and disable programs, and the commission
may require each licensed racetrack to pay the cost of a central
site computer as a part of the licensing requirement.
(14) All video lottery terminals shall have a security
system which temporarily disables the gaming function of the
terminal while opened.
(b) Each video lottery terminal shall have a random number
generator to determine randomly the occurrence of each specific
symbol or number used in video lottery games. A selection
process is random if it meets the following statistical criteria:
(1) Chi-square test. Each symbol or number shall satisfy
the ninety-nine percent confidence limit using the standard chi- square statistical analysis of the difference between the
expected result and the observed result.
(2) Runs test. Each symbol or number may not produce a
significant statistic with regard to producing patterns of
occurrences. Each symbol or number is random if it meets the
ninety-nine percent confidence level with regard to the "runs
test" for the existence of recurring patterns within a set of
data.
(3) Correlation test. Each pair of symbols or numbers is
random if it meets the ninety-nine percent confidence level using
standard correlation analysis to determine whether each symbol or
number is independently chosen without regard to another symbol
or number within a single game play.
(4) Serial correlation test. Each symbol or number is
random if it meets the ninety-nine percent confidence level using
standard serial correlation analysis to determine whether each
symbol or number is independently chosen without reference to the
same symbol or number in a previous game.
(c) Each video lottery terminal shall meet the following maximum and minimum theoretical percentage payout during the
expected lifetime of said terminal:
(1) Video lottery games shall pay out no less than eighty
percent and no more than ninety-five percent of the amount
wagered. The theoretical payout percentage will be determined
using standard methods of probability theory.
(2) Manufacturers must file a request and receive approval
from the commission prior to manufacturing for placement in this
state video lottery terminals programmed for a payout greater
than ninety-two percent of the amount wagered. Commission
approval must be obtained prior to applying for testing of such
high payout terminals.
(3) Each terminal shall have a probability greater than one
in seventeen million of obtaining the maximum payout for each
play.
(d) Each video lottery terminal shall be capable of
continuing the current game with all current game features after
a video lottery terminal malfunction is cleared. If a video
lottery terminal is rendered totally inoperable during game play,
the current wager and all credits appearing on the video lottery
terminal screen prior to the malfunction shall be returned to the
player.
(e) Each video lottery terminal shall at all times maintain
electronic accounting regardless of whether the terminal is being
supplied with electrical power. Each meter shall be capable of maintaining a total of no less than eight digits in length for
each type of data required. The electronic meters shall record
the following information:
(1) Number of coins inserted by players or the coin
equivalent if a bill acceptor is being used
or tokens or vouchers
are used;
(2) Number of credits wagered;
(3) Number of
total credits,
coins and tokens won;
(4) Number of credits paid out by a printed ticket;
(5) Number of coins or tokens won, if applicable;
(5) (6) Number of times the logic area was accessed;
(6) (7) Number of times the cash door was accessed;
(7) (8) Number of credits wagered in the current game;
(8) (9) Number of credits won in the last complete video
lottery game; and
(9) (10) Number of cumulative credits representing money
inserted by a player and credits for video lottery games won but
not collected.
(f) No video lottery terminal may have any mechanism which
allows the electronic accounting meters to clear automatically.
Electronic accounting meters may not be cleared without the prior
approval of the commission. Both before and after any electronic
accounting meter is cleared, all meter readings shall be recorded
in the presence of a commission employee.
(g) The primary responsibility for the control and regulation of any video lottery games and video lottery terminals
operated pursuant to this article rests with the commission.
(h) The commission shall directly or through a contract with
a third party vendor other than the video lottery licensee,
maintain a central site system of monitoring the lottery
terminals, utilizing an on-line or dial-up inquiry. The central
site system shall be capable of monitoring the operation of each
video lottery game or video lottery terminal operating pursuant
to this article and, at the direction of the director,
immediately disable and cause not to operate, any video lottery
game and video lottery terminal.
As provided in this section,
the commission may require the licensed racetrack to pay the cost
of a central site computer as part of the licensing requirement.
§29-22A-13. Payment of credits; no state liability; method of
payment; restrictions on payment of credits;
redeemed tickets required to be defaced;
liability for video lottery terminal
malfunction.
(a) No payment for credits awarded on a video lottery
terminal may be made unless the ticket meets the following
requirements:
(1) The ticket is fully legible and printed on paper
approved by the commission and the ticket contains all
information required by this article;
(2) The ticket is not mutilated, altered, unreadable or
tampered with in any manner;
(3) The ticket is not counterfeit, in whole or in part; and
(4) The ticket is presented by a person authorized to play
video lottery pursuant to this article.
(b) Each licensed racetrack shall designate validation
managers and employees authorized to redeem tickets
and to sell
and redeem tokens during the business hours of operation.
Credits shall be immediately paid in cash,
or by check,
by
annuitized payments over time or in the form of a non-cash prize,
when a player presents a valid ticket for payment.
No credits
may be paid in tokens, chips or merchandise.
(c) Licensed racetracks shall not redeem tickets for credits
awarded on video lottery terminals which are not located on its
premises. A ticket must be presented for payment no later than
ten days after the date the ticket is printed. The commission is
not liable for the payment of any video lottery ticket credits.
(d) All tickets redeemed by a licensed racetrack shall be
defaced in a manner which prevents any subsequent presentment and
payment.
(e) The commission is not responsible for any video lottery
terminal malfunction which causes a credit to be wrongfully
awarded or denied to players. The licensed racetrack is solely
responsible for any wrongful award or denial of credits.
NOTE: The purpose of this bill is to give the lottery
commission the authority to approve changes in video lottery
terminals and in so doing to consider advances in computer
technology, the preservation of jobs in the racing industry in
West Virginia and competition from nearby states; to give players
additional options for collecting video lottery winnings to
include annuitized payments over time, non-cash prizes, tokens
and coins, and to allow use of video lottery game displays
including video images, actual symbols or both.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.