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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 380
(By Senator Schoonover)
____________
[Introduced February 2, 1999;
referred to the Committee
on the Judiciary; and then to the Committee on Finance.]
____________
A BILL to amend chapter twenty-nine of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article twenty-five,
relating to authorizing a gaming facility; providing
generally therefor; stating legislative findings that such
gaming facility is important to the tourism industry and
that the limited authorized games of chance are not
lotteries or gift enterprises; defining certain terms;
declaring gaming and wagering legal when conducted under
terms specified in article; stating that article does not
apply to racing, lottery or activities regulated by article
twenty, chapter forty-seven of this code; extending the
authority of the state lottery commission; authorizing
operation of certain video lottery games; providing for the
adoption of rules and requiring certain rules; providing for the coordination and cost of law-enforcement activities;
extending jurisdiction of local law-enforcement agencies in
stated circumstances; requiring local approval of a gaming
facility; providing generally for license to operate a
gaming facility; stating qualifications and requirements for
a gaming facility license; itemizing areas for commission to
consider in granting a license; requiring licensee to
execute surety bond and providing generally therefor;
stating authorization of license and prohibiting transfer,
assignment, sale or pledge as collateral; requiring audits
and inventories; requiring licensee's annual reports and
itemizing various inclusions; requiring a license for
supplier of gaming facility and providing generally
therefor, including investigation requirement; requiring a
license for gaming device operator and providing generally
therefor, including background information and investigation
requirement; requiring licenses for gaming facility
employees and providing generally therefor, including background information and investigation requirement;
setting forth an annual license fee for all licenses;
providing that all licensees consent to warrantless searches
of person, personal property and certain premises under
control of licensee; setting forth additional license
requirements and prohibitions; describing license and
requiring display thereof; providing for expiration and
renewal every five years; stating renewal fee for all
licenses; providing for license denial revocation and
reprimand subsequent to hearing thereon; creating implied
consent of patrons to law -enforcement presence; allowing
gaming operators to set wagers; requiring use of licensed
suppliers; imposing tax on net profits from gaming;
providing generally for filing and payment of taxes;
creating state gaming fund; providing for distribution of
state tax; prohibiting defrauding devices as itemized;
setting forth prohibitions and requirements as to conduct of
wagering; itemizing numerous misdemeanor and felony offenses
and stating penalty for offense; authorizing for forfeiture
of certain property; prohibiting participation in gaming by
certain individuals under certain circumstances; providing for civil penalties; and providing for severability in event
any provision is held invalid.
Be it enacted by the legislature of West Virginia:
That chapter twenty-nine of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article twenty-five, to
read as follows:
ARTICLE 25. AUTHORIZED GAMING FACILITY.
§29-25-1. Authorization of limited gaming facility; findings.
(a) Operation of authorized games of chance. --
Notwithstanding any provision of law to the contrary, the
operation of those authorized games of chance permitted by this
article and the related operation of a gaming facility and
ancillary activities is not unlawful when conducted under the
terms specified in this article.
(b)
Legislative findings.
-- The Legislature finds and
declares that the tourism industry plays a critical role in the
economy of this state, and that a substantial state interest
exists in protecting that industry; and, further, that the
authorization of the operation of a gaming facility at one
established historic resort hotel in this state as provided in this article will serve to protect and enhance the tourism
industry, and indirectly other segments of the economy of this
state, by providing a resort hotel amenity which is becoming
increasingly important to many actual and potential resort hotel
patrons.
The Legislature finds and declares that, except with video
lottery operation pursuant to subsection (c), section three of
this article, the operation of the authorized games of chance
permitted by this article does not constitute the operation of
lotteries or gift enterprises within the purview of section
thirty-six, article VI of the constitution of this state.
With respect to video lottery games contemplated hereunder,
the Legislature restates and reaffirms the findings and
declarations set forth in section two, article twenty-two-a of
this chapter.
§29-25-2. Definitions.
As used in this article unless the context otherwise
requires, the following words and phrases have meanings
indicated:
(a) "Applicant" means any person applying for a license.
(b) "Authorized game of chance" includes baccarat, twenty-one (blackjack), poker, craps, roulette, wheel of fortune,
video lottery games and any other Monte Carlo style table game
expressly authorized by rule of the commission, but expressly
excludes punchboard, faro, keno, numbers ticket, push card, jar
ticket, pull tab or similar games.
(c) "Controlling interest" means:
(1) For a partnership, an interest as a general or limited
partner holding more than fifty percent interest in the entity;
(2) For a corporation, an interest of more than fifty
percent of the stock in the corporation; and
(3) For any other entity, an ownership interest of more than
fifty percent in the entity.
(d) "Controlling person" means, with respect to another
person, any person directly or indirectly owning or holding a
controlling interest in that other person.
(e) "Commission" means the state lottery commission created
in section four, article twenty-two, chapter twenty-nine of this
code.
(f) "Gaming devices and supplies" mean gaming tables for all
authorized games of chance, roulette wheels, wheels of fortune,
video lottery terminals, cards, dice, chips, tokens, markers or any other mechanical, electronic or other device, mechanism or
equipment or related supplies utilized in the operation of an
authorized game of chance.
(g) "Gaming facility" means a designated area on the
premises of an historic resort hotel in which authorized games of
chance are conducted by a gaming licensee.
(h) "Gaming licensee" means the licensed operator of a
gaming facility.
(i) "Gross receipts" means the total amount of money
exchanged for the purchase of chips, tokens, or electronic cards
by patrons of a gaming facility reduced by gross terminal income
to the extent gross terminal income is included therein.
(j) "Gross terminal income" has the same meaning ascribed
to the term as set forth in article twenty-two-a of this
chapter.
(k) "Historic resort hotel" means a resort hotel registered
by the United States department of the interior as a national
historic landmark in its national registry of historic places
having not fewer than five hundred guest rooms under common
ownership and having substantial recreational guest amenities in
addition to the gaming facility.
(l) "License" means a license issued by the commission,
including:
(1) A license to operate a gaming facility;
(2) A license to supply gaming devices and supplies to a
gaming facility; or
(3) A license to be employed in connection with the
operation of a gaming facility.
(m) "Licensed gaming facility employee" means any individual
licensed to be employed by a gaming licensee in connection with
the operation of a gaming facility.
(n) "Licensed gaming facility supplier" means a person who
is licensed by the commission to engage in the business of
supplying gaming devices and supplies to a gaming facility.
(o) "Licensee" means a gaming licensee, a licensed gaming
facility supplier or a licensed gaming facility employee.
(p) "Net profits from gaming" of the licensed gaming
facility means net income from operating the licensed gaming
facility determined by gross receipts less allowances for all
taxes (other than income taxes imposed by articles twenty-one and
twenty-four, chapter eleven of this code), all winnings paid to
patrons, all direct and indirect expenditures allocable to or incurred respecting the operating of the licensed gaming facility
and all cost recovery items directly or indirectly allocable to
or incurred respecting the operation of the licensed to gaming
facility. In computing costs recovery attributable to
depreciation or amortization for this purpose, the allowance
shall be determined by reference to federal income tax rules
applicable with respect to such property.
(q) "Person" means any natural person, corporation,
association, partnership, limited partnership, limited liability
company or other entity, regardless of its form, structure or
nature.
(r) "State gaming fund" means the special fund in the state
treasury created in section twenty-five of this article to which
deposits and disbursements are made and from which the operating
costs of the commission will be disbursed and for other
activities as specified pursuant to this article.
(s) "Video lottery games" and "video lottery terminals" has
the same meaning ascribed the terms as set forth in article
twenty-two-a of this chapter.
§29-25-3. Commission duties and powers.
(a)
Duties.
-- In addition to the duties set forth elsewhere in this article, the commission shall:
(1) Establish standards for gaming devices and supplies,
including electronic or mechanical gaming devices;
(2) Approve rules for all authorized games of chance
proposed to be operated by a gaming licensee;
(3) Establish standards governing gaming facilities
generally, including the maintenance of financial books and
records;
(4) Provide staff to supervise, inspect and monitor the
operation of any gaming facility, including inspection of gaming
devices and supplies used in the operation to assure continuous
compliance with all rules of the commission and provisions of
this article;
(5) Establish minimum levels of insurance to be maintained
with respect to a gaming facility;
(6) Investigate applicants to determine eligibility for any
license and, where appropriate, select among competing
applicants;
(7) Designate appropriate classifications of personnel to be
employed in the operation of a gaming facility and establish
appropriate licensing standards within the classifications;
(8) Issue all licenses;
(9) Charge and collect the taxes and fees authorized,
required or specified in this article and receive, accept and pay
all taxes and fees collected under this article into the state
gaming fund;
(10) Maintain a record of all licenses issued;
(11) Keep a public record of all commission actions and
proceedings; and
(12) File a written annual report to the governor, the
president of the Senate and the speaker of the House of Delegates
on or before the thirtieth day of January of each year and such
additional reports as the governor or Legislature may request.
(b)
Powers.
-- In addition to the powers set forth elsewhere
in this article, the commission has the following powers:
(1) To sue to enforce any provision of this article by
injunction;
(2) To hold hearings, administer oaths and issue subpoenas
for the attendance of a witness to testify and to produce
evidence;
(3) To enter a gaming facility at any time and without
notice to ensure that the rules of the commission are strictly complied with;
(4) For cause, bar any person from entering or participating
in any capacity in the operation of a gaming facility; and
(5) To exercise such other powers as may be necessary to
effectuate the provisions of this article.
(c)
Video lottery games.
-- The commission is authorized to
implement and operate video lottery games at the gaming facility
licensed pursuant to this article consistent with the gaming
licensee's operation of the gaming facility. With respect to
video lottery games the provisions of article twenty-two-a of
this chapter apply to this article, except in the event of a
conflict or inconsistency between any of the provisions of this
article and the provisions of article twenty-two-a of this
chapter. In that event, the provisions of this article shall
supercede any conflicting or inconsistent provisions contained in
article twenty-two-a of this chapter. In carrying out its
authority hereunder, the commission may: (1) Specify by rule
additional licensure and fee requirements consistent with the
provisions of article twenty-two-a respecting video lottery
manufacturers, service technicians and validation managers; and
(2) adopt and specify any reasonable procedures, protocols and requirements necessary or convenient to enable video lottery
terminals to communicate with the commission's central computer
system used in administering article twenty-two-a of this
chapter.
§29-25-4. Appointment of commission staff; conditions of
employment.
The lottery director, under the provisions of section six,
article twenty-two, chapter twenty-nine of this code, with the
approval of the commission, shall appoint such professional,
clerical, technical and administrative personnel, who shall be
state employees hired in accordance with article six, chapter
twenty-nine of the code, as may be necessary to carry out the
provisions of this article. Prior to his or her appointment,
each staff person shall undergo a thorough background
investigation, including fingerprinting and a check of criminal
records. An employee may not either directly or indirectly hold
any financial interest in any person licensed under this article.
§29-25-5. Rules.
The commission shall propose legislative rules in accordance
with the provisions of article three, chapter twenty-nine-a of
this code as are necessary to provide for implementation and enforcement of the provisions of this article. Any such rules
proposed by the commission before the first day of September, one
thousand nine hundred ninety-nine, may be by emergency rule.
§29-25-6. Law enforcement.
(a) Generally. -- At the request of the lottery director,
the law-enforcement officers of the state, any municipality
located near the gaming facility and of the county shall provide
assistance to the commission to enforce the provisions of this
article.
(b) Costs. -- The actual cost of services provided by
law-enforcement officers of the state in connection with
enforcement of the provisions of this article shall be paid from
the state gaming fund, which cost shall include all costs of
required training and equipment as well as salary, benefits and
other direct costs of additional required personnel. These
payments shall be made in accordance with established procedures
for the transfer of funds to the appropriate fund of the state
police.
The costs of services related to a gaming facility provided
by law-enforcement officers of the county in which such gaming
facility is located shall be paid from that portion of the state gaming fund allocated to such county. The costs shall include
all costs of required training and equipment as well as salary,
benefits and other direct costs of additional personnel.
§29-25-7. Local option.
(a) A gaming facility may not be licensed to operate in a
county unless the county commission of the county holds an
election on the question of whether a gaming facility may be
operated within the county. The election shall be determined by
a vote of the resident voters of the county in which the facility
is proposed to be located.
Any local option election to approve or disapprove of the
proposed authorization of a gaming facility within a county shall
be in accordance with procedures adopted by the commission. The
local option election may be held in conjunction with a primary
or general election, or at a special election. Approval shall be
by a majority of the voters casting votes on the question or
approval or disapproval of gaming facility operations at the
election.
If a majority has voted "no", another election on the issue
may not be held for a period of one hundred four weeks. If a
majority has voted "yes" another local option election may not be held for a period of five years. A local option election may
thereafter be held if a written petition of qualified voters
residing within the county equal to at least five percent of the
number of persons who were registered to vote in the next
preceding general election is received by the county commission
of the county in which the gaming facility is to be located. The
petition may be in any number of counterparts. The election
shall take place at the next primary or general election which is
scheduled to take place at least ninety days following receipt by
the county commission of the petition required by this
subsection: Provided, That no such issue may be placed on the
ballot until all statutory notice requirements have been met:
Provided, however, That no such subsequent disapproval may take
effect until after the expiration of the five year licensing
period in effect at the time of the referendum.
(b) A local law or regulation providing any penalty,
disability, restriction, regulation or prohibition for operating
a gaming facility or supplying a gaming facility may not be
enacted, and the provisions of this article preempt all
regulations, rules, ordinances and laws of any county or
municipality in conflict herewith.
(c) Except as specifically provided in this article, no
other fees or taxes may be imposed by a local governing body.
§29-25-8. Licenses required.
(a) A person may not engage in any activity in connection
with a gaming facility in this state for which a license is
required by subsection (b) of this section unless that person has
been licensed by the commission in accordance with this article.
(b) Licenses are required for the following purposes:
(1) For any person engaging in the business of operating a
gaming facility in the state;
(2) For any person engaging in the business of supplying a
gaming facility in the state if the business generates in excess
of fifty thousand dollars annually;
(3) For any individual employed by a gaming licensee in
connection with the operation of a gaming facility in the state.
(c) Any license required under this article shall be in
addition to all other licenses or permits otherwise required by
applicable law.
§29-25-9. License to operate a gaming facility.
(a) Single license. -- The commission may issue only one
license to operate a gaming facility in the state.
(b) Applicant qualifications. -- An applicant must be the
owner or be wholly owned by the owner of an existing historic
resort hotel in which the gaming facility is to be located, and
the resort hotel must be located within the jurisdiction of a
county approving the operation of a gaming facility in accordance
with section ten of this article. Each applicant must meet the
qualifications and requirements set forth in this article and in
rules adopted by the commission. In determining whether to grant
a license to operate a gaming facility to an applicant, the
commission shall consider:
(1) The character, reputation, experience and financial
integrity of the applicant and any controlling person of the
applicant;
(2) Whether the applicant has adequate capital to construct
and maintain the proposed gaming facility for the duration of a
license;
(3) The extent to which the applicant meets standards
contained in rules adopted by the commission relating to public
safety or other standards; and
(4) The plan submitted by the applicant regarding employment
levels and the extent to which the submitted plan demonstrates an ability on the part of the applicant to create at least one
hundred full-time equivalent jobs with a salary and benefit
package commensurate with existing employees at the historic
resort hotel.
(c) Conditions attached to license. -- A license to operate
a gaming facility may only be granted to an applicant upon the
express condition that:
(1) The licensee may not enter into any management contract,
understanding or arrangement of any kind which would act to
permit any person other than the licensee to operate a licensed
gaming facility unless the management contract, understanding or
arrangement is in writing and has been approved by the division,
which approval may be conditioned upon successful completion of
a thorough background investigation at the expense of the
licensee; and
(2) The licensee may not in any manner permit a person other
than the licensee to have a share, percentage or proportion of
the net profits generated from the operation of a gaming
facility.
(d) License application requirements. -- An applicant for a
license to operate a gaming facility shall:
(1) Submit an application to the commission on a form
prescribed by the commission, which form must include:
(A) Information concerning the applicant and of any
controlling person of the applicant sufficient to serve as a
basis for a thorough background check;
(B) Subject to the provisions of subsection (e) of this
section with respect to publicly traded corporations, the
identity of all stockholders or other persons having a financial
interest in either the applicant or any controlling person of the
applicant and the identity of each director or executive officer
of the applicant and of any controlling person of the applicant;
(C) The identity of the historic resort hotel at which the
gaming facility is to be located, including identification of the
county in which the historic resort hotel is located; and
(D) Any other information designated by the commission as
appropriate to assist it in determining whether a license should
be issued;
(2) Pay to the commission a nonrefundable application fee
for deposit into the state gaming fund in the amount of fifty
thousand dollars;
(3) Pay to the commission an investigative fee for deposit in the state gaming fund in the amount of twenty thousand
dollars.
(e) Publicly traded corporations. -- In the event that an
applicant or any controlling person of an applicant is a publicly
traded corporation, then information otherwise required to be
furnished by an applicant with respect to stockholders, directors
and executive officers of the publicly traded corporation shall
be limited to information concerning only those executive
officers of the publicly traded corporation whose ongoing and
regular responsibilities relate or are expected to relate
directly to the operation or oversight of the gaming facility.
"Publicly traded corporation" as used herein means any
corporation or other legal entity except a natural person which
has one or more classes of securities registered pursuant to
section twelve of the Securities Exchange Act of 1934, as amended
(15 U.S.C. §78), or is an issuer subject to section fifteen-d of
that act.
(f) Gaming facility qualifications. -- An applicant for a
license to operate a gaming facility must demonstrate that the
gaming facility will: (1) Be accessible to disabled individuals;
(2) not constitute the main entrance to the historic resort hotel; (3) be licensed in accordance with all other applicable
federal, state and local laws; and (4) meet any other
qualifications specified by rules adopted by the commission.
(g) Investigative fee. -- The investigative fee paid by an
applicant at the time of submitting an application shall be
applied to the cost of any investigation relating to the
applicant required under this article.
(1) If the cost of the investigation is greater than twenty
thousand dollars, the investigative agency shall show cause for
the additional cost. The applicant must pay the additional costs
to the extent approved by the commission, but not to exceed a
total investigative fee of eighty thousand dollars;
(2) If the cost of the investigation is less than the
aggregate investigative fee paid by an applicant, the commission
shall refund the difference.
(h) Surety bond requirement. -- The licensed operator of a
gaming facility shall execute a surety bond to be given to the
state to guarantee the licensee faithfully makes the payments,
keeps books and records, makes reports and conducts gaming in the
licensee's gaming facility in accordance with this article and
pursuant to rules adopted by the commission. The surety bond shall be:
(1) In the amount of five million dollars;
(2) In a form approved by the commission; and
(3) With a surety approved by the commission.
The bond must remain in effect during the term of the
license, and may not be canceled by a surety on less than thirty
days notice in writing to the division. The total and aggregate
liability of the surety on the bond is limited to the amount
specified in the bond.
(i) Authorization of license. -- A license to operate a
gaming facility authorizes the licensee to engage in the business
of operating a gaming facility while the license is effective.
Without prior authorization by the commission, a license to
operate a gaming facility is not transferable or assignable and
cannot be sold or pledged as collateral.
(j) Audits. -- A licensed gaming facility operator must
submit to the commission an annual audit, by a certified public
accountant licensed in the state of West Virginia, of the
financial transactions and condition of the licensee's total
operations. The audit must be in accordance with generally
accepted auditing principles.
(k) Annual license maintenance fee. -- The licensed gaming
facility operator must pay to the commission an annual license
maintenance fee of five thousand dollars.
§29-25-10. Reports by licensee.
(a) A gaming licensee must file with the commission an
annual balance sheet and profit and loss statement pertaining to
the licensee's operation of a gaming facility in this state. A
gaming licensee also must file with the commission an annual
statement identifying each controlling person of the licensee and
all stockholders, partners, officers or directors for the
licensee and any controlling person: Provided, That if a gaming
licensee or controlling person is a publicly traded corporation,
then as to the publicly traded corporation the annual report is
required to identify only executive officers whose ongoing
regular duties relate directly to the operation of the gaming
facility. A gaming licensee shall file further reports with the
commission as the commission may require by rule.
(b) A gaming licensee must maintain daily records showing
the following:
(1) The total number of patrons of the gaming facility; and
(2) The gross receipts and the adjusted gross receipts.
§29-25-11. License to supply gaming facility.
(a) Licenses. -- The commission shall issue a license to
each applicant for a license to supply a gaming facility who
meets the requirements of this section.
(b) License qualifications. -- To qualify for a license, an
applicant must meet the requirements of this section. Each
applicant who is an individual and each individual who is a
controlling person of an applicant that is not an individual must
be of good moral character and reputation, and must have the
necessary experience and financial ability to successfully carry
out the functions of a gaming facility supplier. The commission
may adopt rules establishing additional requirements for a gaming
facility supplier.
(c) Supplier specifications. -- An applicant for a license
to supply gaming devices, equipment and supplies to a gaming
facility must demonstrate that the gaming devices, equipment and
supplies that the applicant plans to sell or lease to the
licensed operator of the gaming facility, conform or will conform
to standards established by rules of the commission and
applicable state law.
(d) License application requirements. -- An applicant for a license must:
(1) Submit an application to the commission on the form that
the commission requires;
(2) Pay to the commission a nonrefundable application fee
for deposit into the state gaming fund in the amount of five
thousand dollars; and
(3) Pay to the commission an investigative fee for deposit
into the state gaming fund in the amount of ten thousand dollars,
or a lesser amount as the Commission upon application may
conditionally approve in a particular case.
(e) Investigative fee. -- The investigative fee paid by an
applicant for a license to supply a gaming facility must be
applied to the cost of any investigation of the applicant
required under this article.
(1) If the costs of the investigation of an applicant are
greater than ten thousand dollars, or the lesser investigative
fee as may have been conditionally approved by the commission,
the investigative agency must show cause for the additional cost.
If the commission approves, the applicant shall pay the
additional costs as required by the commission, but not to exceed
a total investigative fee of fifty thousand dollars.
(2) If the costs of the investigation of an applicant are
less than the aggregate investigative fee paid to the commission,
the commission shall refund the difference.
(f) Authorization of licensee. -- A license to supply a
gaming facility authorizes the licensee to engage in the business
of selling gaming devices and supplies to a gaming facility while
the license is effective.
(g) Inventory. -- A licensed gaming facility supplier must
submit a list of all equipment, gaming devices and supplies sold
or delivered to a gaming facility in this state.
(h) Annual license maintenance fee. -- A licensed gaming
facility supplier must pay to the division an annual license
maintenance fee of five thousand dollars.
§29-25-12. License to be employed by operator of gaming
facility
.
(a) Licenses. -- The commission shall issue a license to
each applicant for a license to be employed in the operation of
a gaming facility who meets the requirements of this section.
(b) License qualifications. -- To qualify for a license to
be employed in a gaming facility, the applicant must be an
individual of good moral character and reputation. The commission by rule may specify additional requirements to be met
by applicants based on the specific job classifications in which
the applicant is to be employed.
(c) License application requirements. -- An applicant for a
license to be employed in the operation of a gaming facility
must:
(1) Submit an application to the commission on the form that
the commission requires, including adequate information to serve
as a basis for a thorough background check;
(2) Pay to the commission a nonrefundable application fee
for deposit into the state gaming fund in the amount of three
hundred dollars, which fee may be paid on behalf of the applicant
by the employer; and
(3) Pay to the commission a nonrefundable investigative fee
for deposit into the state gaming division in an amount to be
fixed by the division by rule, which fee may be paid on behalf of
the applicant by the employer.
(d) Authorization of licensee. -- A license to be employed
by a gaming facility authorizes the licensee to be so employed in
the capacity designated by the commission with respect to the
license while the license is effective.
(e) Annual license maintenance fee. -- Each licensed
employee shall pay to the commission an annual license
maintenance fee set by the division, which maintenance fee may
vary based on the capacity designated with respect to the
licensee but in no event to exceed three hundred dollars and
which fee may be paid on behalf of the licensed employee by the
employer.
§29-25-13. False statements on applications; other license
requirements and prohibitions
.
(a) Any person who knowingly makes a false statement on an
application is guilty of a misdemeanor and, upon conviction
thereof, shall be fined not less than one hundred nor more than
five hundred dollars, or confined in the county or regional jail
not less than six months, or both fined and confined.
(b) A license may not be granted if there is substantial
evidence that the applicant for a license:
(1) Has knowingly made a false statement of a material fact
to the commission;
(2) Has been suspended from operating a gambling game,
gaming device or gambling operation in another jurisdiction by a
division, board or other governmental authority of that jurisdiction having responsibility for the regulation of gambling
or gaming activities;
(3) Has been convicted of a felony or other crime involving
moral turpitude or has otherwise demonstrated either by a police
record or other satisfactory evidence a lack of respect for law
and order;
(4) Has failed to meet any monetary obligation in connection
with a gaming facility or any other form of gaming; or
(5) In the case of an applicant for a license to operate a
gaming facility or to supply a gaming facility:
(A) Has not demonstrated financial responsibility sufficient
to meet adequately the requirements of the enterprise proposed;
(B) Is not the true owner of the enterprise or is not the
sole owner and has not disclosed the existence or identity of
other persons who have an ownership interest in such enterprise;
or
(C) Is a corporation and five percent or more of the stock
of the corporation is subject to a contract or option to purchase
at any time during the period for which the license is issued
unless the contract or option was disclosed to and approved by
the division.
(c) In addition to any other grounds specified in this
article, and subject to the hearing provisions of section twenty
of this article, in the case of a license to operate a gaming
facility the commission may deny a license to any applicant,
reprimand any licensee, or suspend or revoke a license if the
applicant or licensee or any controlling person of the applicant
or licensee knowingly employs an individual in a senior
management position who has been convicted of a felony under the
laws of this state, another state, a territory of the United
States, or the United States or employs any individual in a
senior management position who has had a license relating to the
operation of a gaming facility revoked by this state or any other
state.
(d) Character references may be required of persons
licensed, but the character references may not be obtained from
persons in the same or similar occupations or professions in
other states.
§29-25-14. Licenses; availability for inspection; change of
address
.
(a) The commission shall include on each license that the
Commission issues:
(1) The type of license;
(2) The identity and address of the licensee;
(3) The effective date of the license; and
(4) Any other information the commission deems appropriate.
(b) Each gaming licensee or licensed supplier of a gaming
facility must display the license conspicuously in its place of
business or have the license readily available for inspection at
the request of any agent of the commission or of the state
police. Each holder of a license to be employed by a gaming
facility must carry the license on his or her person at all times
when present in a gaming facility and, if required by rules
adopted by the commission with respect to the particular capacity
in which the licensee is employed, have some indicia of licensure
prominently displayed on his or her person.
(c) Each licensee must give the commission written notice of
any change of address, and any other relevant information
necessary for the maintenance of accurate records by the
commission.
§29-25-15. Expiration date and renewal.
(a) A license expires on the fifth anniversary of its
effective date, unless the license is renewed for additional five-year terms as provided in this section.
(b) At least two months before a license expires, the
commission shall send to the licensee, by mail to the last known
address, a renewal application form and notice that states:
(1) The date on which the current license expires;
(2) The date by which the commission must receive the
renewal application for the renewal to be issued and mailed
before the existing license expires; and
(3) The amount of the renewal fee.
(c) Before the license expires the licensee may renew it for
successive additional five-year terms if the licensee:
(1) Otherwise is entitled to be licensed;
(2) Pays to the commission the following renewal fee:
(A) The sum of twenty-five thousand dollars for a license to
operate a gaming facility;
(B) The sum of five thousand dollars for a license to supply
a gaming facility; and
(C) As set by the commission by rule in the case of a
license to be employed by an operator of a gaming facility, not
to exceed three hundred dollars, which renewal fee may be paid on
behalf of the licensee by the employer; and
(3) Submits to the commission a renewal application in the
form that the commission requires accompanied by satisfactory
evidence of compliance with any additional requirements set by
rules of the commission for license renewal.
(d) The commission shall renew the license of each licensee
who meets the requirements of this section.
§29-25-16. License denial, revocation and reprimand.
(a) The commission may deny a license to any applicant,
reprimand any licensee, or suspend or revoke a license if the
applicant or licensee, or any controlling person of the applicant
or license:
(1) Fraudulently or deceptively obtains or attempts to
obtain a license for the applicant or licensee or for another;
(2) Fraudulently or deceptively uses a license; or
(3) Is convicted of a felony under the laws of this state,
another state, a territory of the United States or the United
States.
(b) Instead of or in addition to reprimanding a licensee or
suspending or revoking a license, the commission may impose a
civil penalty under section twenty-nine of this article.
§29-25-17. Hearing procedures.
Except as otherwise provided by law, before the commission
takes any action under the provisions of section nineteen of this
article, it must give the persons against whom the action is
contemplated an opportunity for a hearing before the commission.
The commission shall give notice and hold the hearing in
accordance with state law, the notice must be given to the
person by certified mail to the last known address of the person
at least thirty days before the hearing. The person may be
represented at the hearing by counsel.
If a person fails to comply with a subpoena issued under
this section, on petition of the commission, the circuit court
may compel obedience to the subpoena. If after due notice the
person against whom the action is contemplated fails or refuses
to appear, the commission may hear and determine the matter.
Any person aggrieved by a final decision of the commission
in a contested case, as defined in chapter twenty-nine-a of this
code, may take an appeal as allowed in that chapter.
§29-25-18. Consent to warrantless search.
As a condition of licensure and notwithstanding the separate
licensure of the facility as a private club pursuant to article
seven, chapter sixty of this code, any licensee must consent to any search without a warrant by agents of the commission or of
the state police designated by the commission of the licensee's
person, personal property and effects, and premises which are
located in the gaming facility or adjacent facilities under the
control of the licensee, to inspect or investigate for criminal
violations of this article or violations of rules adopted by the
commission.
§29-25-19. Consent to presence of law-enforcement officers;
wagering limits
.
(a) Consent to presence of law-enforcement officers. -- Any
individual entering a gaming facility must be advised by the
posting of a notice or other suitable means of the possible
presence of state, county or municipal law-enforcement officers,
and by entering the gaming facility impliedly consents to the
presence of the law-enforcement officers.
(b) Setting of wagering limits. -- The operator of a gaming
facility may set minimum and maximum wagers for any authorized
game of chance.
§29-25-20. Accounting and reporting of gross terminal income;
distribution of net terminal income.
(a) The gross terminal income from video lottery games at the licensed gaming facility shall be remitted to the commission
through electronic funds transfer. The gaming licensee must
furnish to the commission all information and bank authorizations
required to facilitate the timely transfer of moneys to the
commission. The gaming licensee must provide the commission
thirty days' advance notice of any proposed account changes in
order to assure the uninterrupted electronic transfer of funds.
From the gross terminal income remitted by the gaming licensee to
the commission, the commission shall deduct an amount sufficient
to reimburse the commission for its actual costs and expenses
incurred in administering video lottery at the licensed gaming
facility, and the resulting amount after the deduction shall be
the net terminal income.
(b) Net terminal income shall be divided as set out in this
subsection. The gaming licensee's share shall be in lieu of all
lottery agent commissions and is considered to cover all costs
and expenses required to be expended by the gaming licensee in
connection with video lottery operation. The division must be
made as follows:
(1) The commission shall receive fifty-one percent of net
terminal income which shall be paid into the state gaming fund created by section twenty-two of this article;
(2) The county where the video lottery terminals are located
shall receive two percent of the net terminal income; and
(3) The gaming licensee shall receive forty-seven percent of
net terminal income.
§29-25-21. Taxes.
(a) Imposition and rate of limited gaming profits tax. --
There is hereby levied and shall be collected an annual privilege
tax against the gaming licensee in an amount to be determined by
application of the rate against the net profits from gaming of
the licensed gaming facility. The rate of tax is fifty percent.
This tax is in addition to all other taxes and fees imposed:
Provided, That the consumers sales and services tax imposed
pursuant to article fifteen, chapter eleven of this code may not
apply to the proceeds from any wagering with respect to an
authorized game of chance pursuant to this article.
(b) Computation and payment of tax. -- The taxes levied
under the provisions of this section are due and payable in
monthly installments on or before the twenty-first day of the
month following the month in which the tax is accrued. The
taxpayer shall, on or before the twenty-first day of each month make out and mail to the commission a return for the preceding
month, in the form prescribed by the tax commissioner, showing:
(1) The total gross receipts from the gaming facility for that
month and the adjusted gross receipts; (2) The amount of tax for
which the taxpayer is liable; and (3) Any further information
necessary in the computation and collection of the tax which the
tax commissioner or the commission may require. Payment of the
amount of tax due must accompany the return. All payments made
pursuant to this section shall be deposited in the state gaming
fund.
(c) Tax procedures. -- The provisions of the "West Virginia
Tax Procedure and Administration Act" set forth in article ten,
chapter eleven of this code shall apply to the tax imposed by
this section with like effect as if the act were applicable only
to the tax imposed by this section and were set forth in extenso
in this section.
(d) Prohibition on credits. -- Notwithstanding any other
provision of this code to the contrary, no credits may be allowed
against any tax imposed on any taxpayer by this code for an
investment in gaming devices and supplies, for an investment in
real property which would be directly utilized for the operation of a gaming facility or for any jobs created at a gaming
facility. Notwithstanding any other provision of this code to
the contrary, the tax imposed by this section may not be added to
federal taxable income in determining West Virginia taxable
income of a taxpayer for purposes of article twenty-four, chapter
eleven of this code.
§29-25-22. State gaming fund; allocation of adjusted gross
receipts
.
(a) There is hereby created a special fund in the state
treasury which shall be designated and known as the "state gaming
fund." All revenues received from licenses and applicants under
this article, all net terminal income received by the commission
under section twenty of this article and all tax revenues from
the tax imposed under section twenty-one of this article shall be
deposited with the state treasurer and placed in the state gaming
fund. After payments are made pursuant to subsection (b) of this
section, expenditures from the fund may only be authorized upon
appropriation by the Legislature. The revenue shall be disbursed
in the manner herein provided for the purpose stated herein and
may not be treated by the auditor and treasurer as part of the
general revenue of the state. The fund shall be an interest bearing account with interest to be credited to and deposited in
the state gaming fund.
(b) An amount equal to two and one-half percent of the
adjusted gross receipts of the gaming facility must be paid to
the county wherein the gaming facility is located, to be
allocated by the county commission of the county. At least fifty
percent of this amount must be used for improvement to county
infrastructure.
(c) All expenses of the division shall be paid from the
state gaming fund, including reimbursement of the state police
for activities performed at the request of the commission in
connection with background investigations or enforcement
activities pursuant to this article. At no time may the
commission's expenses under this article exceed fifteen percent
of the total of the annual revenue received from the licensee
under this article, including all license fees, taxes or other
amounts required to be deposited in the state gaming fund.
(d) The balance of the state gaming fund shall be allocated
in a manner as may be determined from time to time by the
Legislature for the following purposes: (1) Payment of the
unfunded liability in the teachers retirement system created pursuant to article seven-a, chapter eighteen of this code; (2)
payment of the unfunded liability in the West Virginia state
police death, disability and retirement fund created by article
two, chapter fifteen of this code; and (3) payment of the
unfunded liability in the judges retirement system created
pursuant to article nine, chapter fifty-one of this code. No
amounts paid from the state gaming fund for the reduction of any
unfunded liability as provided in this subsection may reduce any
amount which is otherwise statutorily dedicated for the repayment
of any unfunded liability in the programs set forth in
subdivisions one through three of this subsection.
§29-25-23. Prohibition on unauthorized wagering.
(a) A gaming licensee may not permit any form of wagering
except as authorized under this article.
(b) A gaming licensee may receive wagers only from an
individual present in a licensed gaming facility.
(c) All gaming facility operations must utilize a cashless
wagering system whereby all players' money is converted to
tokens, electronic cards or chips at the request of the wagerer
which can only be used for wagering in a licensed gaming
facility, and wagering may not be conducted with money or other negotiable currency.
§29-25-24. Individual gaming restrictions.
An individual may not enter a gaming facility or remain in
a gaming facility to participate in authorized games of chance:
(a) If the individual is not a registered overnight guest in
the historic resort hotel on whose premises the gaming facility
is located;
(b) If the individual is under the age of twenty-one years;
(c) If the individual is intoxicated;
(d) If the individual is determined by the gaming facility
operator or the commission to be unruly, disruptive or otherwise
interfering with operation of the gaming facility; or to be
likely to commit, or to attempt to commit, a violation of this
article; or
(e) The individual has been barred by the commission from
entering a gaming facility.
§29-25-25. Offenses and penalties.
(a) A gaming licensee is guilty of unlawful operation of a
game of chance when:
(1) The licensee operates a game of chance in any location
other than a gaming facility;
(2) The licensee acts, or employs another person to act, as
a shill or decoy to encourage participation in a game of chance
in a gaming facility;
(3) The licensee knowingly permits an individual under the
age of twenty-one years of age to enter or remain in a gaming
facility for the purpose of making a wager; or
(4) The licensee exchanges tokens, chips or other forms of
credit to be used for wagering in a gaming facility for anything
of value except in exchange for money.
(b) A person is guilty of felonious wager when:
(1) The person offers, promises or gives anything of value
or benefit to a person who is connected with a gaming facility
pursuant to an agreement or arrangement or with intent that the
promise or thing of value or benefit will influence the actions
of the person to whom the offer, promise, or gift was made in
order to affect or attempt to affect the outcome of an authorized
game of chance, or to influence official action of the
commission. For the purposes of this subdivision and subdivision
(2) of this subsection, the term "person who is connected with a
gaming facility" includes, but is not limited to, an officer or
employee of a licensee;
(2) The person solicits or knowingly accepts or receives a
promise of anything of value or benefit while the person is
connected with a gaming facility, pursuant to an understanding or
arrangement or with the intent that the promise or thing of value
or benefit will influence the actions of the person to affect or
attempt to affect the outcome of an authorized game of chance, or
to influence official action of the commission;
(3) The person uses or possesses with the intent to use a
device to assist:
(A) In projecting the outcome of an authorized game of
chance;
(B) In keeping track of cards played or in play;
(C) In analyzing the probability of the occurrence of an
event relating to an authorized game of chance; or
(D) In analyzing the strategy for playing or betting to be
used in an authorized game of chance, except as permitted by the
division;
(4) The person cheats at an authorized game of chance in a
gaming facility;
(5) The person manufactures, sells, or distributes any
cards, chips, dice, game or device which is intended to be used to violate any provision of this article;
(6) The person instructs a person in cheating or in the use
of a device for that purpose with the knowledge or intent that
the information or use conveyed may be employed to violate any
provision of the article;
(7) The person places a bet after acquiring knowledge, not
available to all players, of the outcome of the game of chance
which is the subject of the bet, or aids a person in acquiring
the knowledge for the purpose of placing a bet contingent on that
outcome;
(8) The person claims, collects, takes, or attempts to
claim, collect, or take, money or anything of value into or from
a gaming facility, with intent to defraud, without having made a
wager contingent on winning a game of chance, or claims,
collects, or takes an amount of money or thing of value of
greater value than the amount won;
(9) The person uses counterfeit chips or tokens to place a
wager in a gaming facility;
(10) The person knowingly uses any medium other than chips,
tokens or other methods of credit approved by the division to
place a wager in a gaming facility;
(11) The person, not a gaming licensee or employee or agent
of a gaming licensee acting in furtherance of the gaming
licensee's interests, has in his or her possession any device
intended to be used to violate a provision of this article; or
(12) The person, not a gaming licensee or agent of a gaming
licensee acting in furtherance of the gaming licensee's
interests, has in his or her possession any key or device
designed for the purpose of opening, entering, or affecting the
operation of an authorized game of chance, drop box, or an
electronic or mechanical device connected with or used in
connection with an authorized game of chance in a gaming facility
or for removing coins, tokens, chips or other contents therefrom.
(c) Any person who violates the provisions of subsection (a)
of this section is guilty of a misdemeanor and, upon conviction
thereof, shall be fined not more than one thousand dollars or
confined in a county or regional jail for not more than six
months.
(d) Any person who violates the provisions of subsection (b)
of this section is guilty of a felony and, upon conviction
thereof, shall be fined not less than five thousand dollars nor
more than ten thousand dollars and committed to the department of corrections of a definite term of imprisonment of not less than
one year nor more than five years.
§29-25-26. Forfeiture of property.
(a) Anything of value, including all traceable proceeds
including, but not limited to, real and personal property,
moneys, negotiable instruments, securities and conveyances, is
subject to forfeiture to the state of West Virginia if the item
was used for any of the following:
(1) As a bribe intended to affect the outcome of an
authorized game of chance in a gaming facility; or
(2) In exchange for or to facilitate a violation of this
article.
(b) Subsection (a) of this section does not apply if the act
or omission which would give rise to the forfeiture was committed
or omitted without knowledge or consent of the owner of the
property to be forfeited.
§29-25-27. Civil penalties.
The commission may impose on a person who violates a
provision of this article a civil penalty not to exceed five
thousand dollars for each violation, whether or not the person is
licensed under this article.
§29-25-28. Severability.
If any provision of this article or application thereof to
any person or circumstance is held invalid, the invalidity may
not affect other provisions or applications of this article, and
to this end the provisions of this article are declared to be
severable.
NOTE: The purpose of this bill is to allow a local
referendum in a county with an historic resort hotel with at
least 500 rooms regarding the issue of limited gaming at the
hotel. The bill authorizes limited gaming at one licensed
facility meeting various qualifications in such a county and
establishes an administrative, licensing regulatory and tax
regime regarding the limited gaming activities. The bill
provides criminal penalties for certain violations.
This article is new; therefore, strike-throughs and
underscoring have been omitted.