Proposed by Barry E. Jerrels, 1500 Massachusetts Avenue, NW, #815,
Washington, DC 20005, 202-833-4701
SHORT TITLE
"VIDEO LOTTERY GAMBLING TERMINAL INITIATIVE OF 2006"
SUMMARY STATEMENT
This initiative, if passed, will:
- expand the lottery in the District of Columbia by allowing
"Video Lottery Terminals" ("VLTs"), which are very similar to slot
machines, in the District of Columbia; - establish the initial VLT facility
at the intersection of Martin Luther King, Jr. Avenue and Good Hope
Roada small sitein the historic Anacostia section of Ward Eighttargeted for.
redevelopment - limit the granting of the temporary initial license to operate
the initial VLT facility to an applicant possessing a more than
fifty percent interest in the Anacostia site; - create a procedure to permit additional VLT facilitites to be
established throughout the District of Columbia.
LEGISLATIVE TEXT
To amend the Law to Legalize Lotteries, Daily Numbers
Games, and Bingo and Raffles for Charitable Purposes in the District of
Columbia by adding new sections authorizing the licensing of video
lottery terminals and recommending that revenues accruing to the
District from the operation of video lottery terminals be distributed
equally to a District of Columbia Public Schools Fund, a District of
Columbia Senior Citizens Prescription Drug Benefits Fund, and the
General Fund of the District of Columbia.
BE IT ENACTED BY THE ELECTORS OF THE DISTRICT OF
COLUMBIA, That this act may be cited as the "Lottery Expansion
Initiative Act of 2006".
Sec. 2. Findings and Purposes.
The people of the District of Columbia recognize and
declare as follows:
(1) The District needs to create more jobs to address
unemployment and to generate additional revenue to address areas of
special concern to the residents of the District of Columbia. These
areas of special concern are (A) programs to benefit the District of
Columbia public schools by providing for the improvement of the
educational content, physical condition, vocational programs, security,
and general well-being of the District’s schools, and (B) programs to
aid District senior citizens in obtaining needed prescription
medications, especially since such medications are often not provided
under currently available Medicare or Medicaid programs. The District is
strongly urged to create special purpose funds to support programs in
these areas;
(2) The District would be best served if the needed
revenue were generated by a new, self-sustaining program rather than
through the imposition of additional taxes or fees on the incomes of
District residents and District businesses;
(3) The District of Columbia Lottery has, since its
inception, been a positive example of such a self-sustaining revenue generation program by
providing needed revenues for the District through sales and fees on
licensed lottery transactions;
(4) Based on this example, the people of the District of
Columbia have chosen to enact the "Lottery Expansion Initiative Act
of 2006" to create a new source of lottery revenue by expanding the
permissible forms of playing the District of Columbia Lottery to include the playing of lottery games, including but not
limited to "scratch-off’ cards in electronic form, through Video
Lottery Terminals ("VLTs");
(5) In order to regulate, control, and limit the
operation of VLTs, and as set forth herein, (A) only entities licensed
by the District of Columbia Lottery and Charitable Games Board (the
"Board," as defined below) will operate VLTs, (B) such
operations may only occur in facilities specifically designated for VLT
operations, (C) the location of the initial VLT Facility is specifically
restricted by this Law, (D) the Board has licensing authority to allow
additional VLT facilities, and (E) any such expansion may occur only
after such expansion is proposed by the Board and approved by the
Council of the District of Columbia;
(6) In order to ensure that the operation of VLTs
provides ample revenues to accomplish the purposes of this Law, it is
the strong recommendation of the people of the District of Columbia that
a usage fee be charged against each licensed operator of VLTs in an
amount of 25% of the Net VLT Proceeds;
(7) In order to ensure that the majority of the revenues
produced from VLT operations are used .for the pressing needs identified
by the people of the District in this Law, it is the strong
recommendation of the people of the District of Columbia that there be
established a "District of Columbia Public Schools Fund" and a
"District of Columbia Senior Citizens Prescription Drug Benefits
Fund". It is the strong recommendation of the people of the
District of Columbia that any revenue from VLT usage fees shall be
allocated in the following manner: 33 1/3% percent to a District of
Columbia Public Schools Fund, 33 1/3% percent to a District of Columbia
Senior Citizens Prescription Drug Benefits Fund; and 33 1/3% percent to
the General Fund of the District of Columbia as general purpose revenue
funds.
Sec. 3. Statement of law.
The Law to Legalize Lotteries, Daily Numbers Games, and
Bingo and Raffles for Charitable Purposes in the District of Columbia,
effective March 10, 1981 (D.C. Law 3172; D.C. Official Code .§ 3-1301
et seq.) is amended by adding, at the end, a new Title "Video
Lottery Terminals" to read as follows:
§ 1. DEFINITIONS
The following definitions apply to all provisions in this
Title.
(1) "Board" shall mean the District of Columbia
Lottery and Charitable Games Control Board, created pursuant to D.C. Official Code § 3-1301
or, pursuant to Section 207 of Public Law 104-8 and Section 2302 of
Public Law 108-11, the Chief Financial Officer of the District of
Columbia.
(2) "Certification Company" means Gaming
Laboratories, Inc., a company that performs testing and certification of
VLTs, or any similar company, which performs testing, and certification
of VLTs and which (i) is not affiliated with any Licensee or any
Principal of any Licensee and (ii) is authorized by the Board or by any
State to perform testing and certification of VLTs or similar devices.
(3) "Designated VLT Site" shall mean a site,
including the Initial Designated VLT Site, authorized for the conduct of
VLT Operations by a Licensee under a License issued by the Board
pursuant to the "Lottery Expansion Initiative Act of 2006".
(4) "Electronic cards" means cards that employ
an affixed magnetic storage medium and/or a "smart card"
and/or cards containing an integrated circuit chip, but excludes credit
cards issued by any Person other than a Licensee.
(5) "Eligible Applicant" means a Person who
meets the requirements imposed in this chapter for obtaining a License
to acquire, own, maintain, and operate VLTs within the District of
Columbia.
(6) "Executive Director" shall mean the
Executive Director of the Board, as appointed pursuant to D.C. Official
Code § 3-1303.
(7) "Initial Designated VLT Site" shall mean an
approximately 9,000 square foot area consisting of lots 5, 812, and 813
in square 5770 of Ward Eight that is targeted for redevelopment by the
Anacostia Economic Development Corporation, and any adjoining parcels
brought under common control with any Licensee under the Temporary
Initial License or Initial License issued by the Board pursuant to the
"Lottery Expansion Initiative Act of 2006".
(8) "Initial License" means the License issued
to an Eligible Applicant by the Board pursuant to section 5 of this
Title.
(9) "License" means the authorization issued to
an Eligible Applicant by the Board pursuant to the provisions of the
"Lottery Expansion Initiative Act of 2006" to: (A) acquire (by
purchase, lease or otherwise) and own VLTs certified by a Certification
Company, and (B) install, maintain and operate VLTs and conduct VLT
Operations at a Designated VLT Site.
(10) "Licensee" means an Eligible Applicant
issued a License by the Board in accordance with the "Lottery
Expansion Initiative Act of 2006".
(11) "Manufacturer" means any Person (A) who or
which manufactures, fabricates, assembles and/or programs VLTs including
parts or portions thereof (collectively "VLT Equipment"), (B) whose VLT Equipment is certified by
a Certification Company, (C) who either (i) has applied for and been
issued a Permit by the Board to sell, lease or otherwise provide VLT
Equipment to Licensees or Permittees, or (ii) has been, and is currently
licensed in any State to sell, lease or otherwise provide VLT Equipment
to Persons authorized to conduct VLT Operations in such other State, and
(D) who is not a Licensee.
(12) "Maximum Permissible Designated VLT Sites"
shall mean the maximum number of Designated VLT Sites for which the
Board may issue a License. The Maximum Permissible Designated VLT Sites
shall be set in accordance with section 6 of this Title.
(13) "Net VLT Proceeds" means the total of all
cash and property received by a Licensee from VLT Operations minus the
amount of the Payout.
(14) "Payout" means premiums, merchandise,
prizes, promotional complementaries or anything of value provided via a
voucher and/or Electronic Card, which the player of a VLT may be
entitled to receive as a result of the playing of the VLT.
(15) "Permit" means any authorization (other
than a License) issued to a Manufacturer, supplier, Service Technician
or any person (other than a Licensee) by the Board under the provisions
of the "Lottery Expansion Initiative Act of 2006" to
participate in VLT Operations and/or the provision, repair, maintenance
and servicing of VLTs and related equipment and supplies.
(16) "Permittee" means a Person (other than a
Licensee) issued a Permit by the Board under the provisions of the
"Lottery Expansion Initiative Act of 2006".
(17) "Person(s)" means individuals,
partnerships, limited liability companies, corporations and other legal
entities and associations.
(18) "Principal" means any Person who (A) holds
or controls directly or indirectly ten (10%) percent or more ownership
or economic interest in an applicant for, or holder of a License or
Permit, or (B) receives ten (10%) percent or more revenue interest in
the form of a commission, finder’s fee, loan fee or interest, or any
other compensation arising out of or relating to VLT Operations;
provided, however, that no bank, regulated mutual fund, insurance
company, or other regulated financial institution ("Financial
Institution") shall be deemed a Principal under the "Lottery
Expansion Initiative Act of 2006" so long as (A) the Financial
Institution holds its interests in an applicant for, or holder of, a
License or Permit for investment purposes only, and (B) the Financial
Institution does not own a majority of the equity of the applicant for,
or holder of, a License or Permit.
(19) "Service technician" means any Person
(other than a Licensee or Manufacturer and/or their respective
employees) who (A) is trained by a Manufacturer, Distributor, other
qualified entity, or has been certified in a training program approved
by the Board, to perform one or more of the following functions with
respect to a VLT: (i) clearing paper or money jams, (ii) changing paper
contained within the VLT, (iii) retrieving money from a VLT, or (iv) performing any repairs, parts
replacements, maintenance, cleaning, and other servicing to VLTs, and
(B) holds a Permit issued by the Board under the provisions of the
"Lottery Expansion Initiative Act of 2006 to perform those
functions for a Licensee or Permittee.
(20) "Temporary Initial License" shall mean a
License issued pursuant to section 4 of this Title.
(21) "VLT" means a lottery machine that
performs only the following functions: (A) accepts paper or coin
currency or vouchers to enable a player to participate in one or more
games; (B) dispenses, at the player’s request, (i) an amount of coins
equal to the player’s credit balance, (ii) a token, voucher and/or
Electronic Card that has physically or electronically imprinted upon it
the game identifier and the player’s credit balance, or (iii) some
combination thereof, (C) shows on a video screen, reels or other
electronic display, rather than on a paper ticket, the results of each
game played; (D) shows on a video screen or other electronic display, in
an area separate from the game results, the player’s credit balance; (E)
houses a game platform that is connected to a central system; (F)
contains within the common central system pools of lottery game tickets
and (i) such pools are defined by game type, denomination, and the
amount bet, (ii) each pool, regardless of where its electronic tickets
are assigned, has its own hold or par, and (iii) a player plays against
other players through the VLT and its designated pool; and (G) is
monitored and controlled by a central computer system which maintains
the integrity of the operations of the individual VLT.
(22) "VLT Operations" means the use, operation,
offering, or. conduct of VLT gaming by a Licensee in accordance with the
provisions of the "Lottery Expansion Initiative Act of 2006".
§ 2 MANAGEMENT OF VLT FEE REVENUE.
All funds, fees, fines, or other revenues collected by
the Board with respect to the licensing, operation, administration, or
regulation of VLTs, including but not limited to any VLT usage fees (the
"VLT Fee Revenue") shall be accounted for and managed in
accordance with the applicable laws and regulations of the District of
Columbia.
§ 3 PROHIBITION ON UNAUTHORIZED ACTIVITIES WITH RESPECT
TO VLTs
(a) No Person shall acquire, own, operate, provide,
distribute, repair or maintain VLTs and/or conduct VLT Operations unless
and until such Person shall be issued a License or Permit, including a
Temporary Initial License or Initial License, to engage in such
activity, by the Board under the provisions of the "Lottery
Expansion Initiative Act of 2006", or be exempt from permitting as
provided in the "Lottery Expansion Initiative Act of 2006".
(b) Notwithstanding subsection (a) of this section, any
natural person who is an employee of a non-natural Person that has
obtained a License or Permit may, so long as he or she is acting within the scope of his or her
employment for said non-natural Person, acquire, operate, provide,
distribute, repair or maintain VLTs and/or conduct VLT Operations to the
extent authorized in any License or Permit issued to said nonnatural
Person.
§ 4 LICENSING FOR OPERATION OF VLTs AND CONDUCT OF VLT
OPERATIONS; TEMPORARY INITIAL LICENSE
(a) Beginning forty-five (45) days following the
effective date of this section, and no earlier, the Board shall begin
accepting applications for the Temporary Initial License to conduct VLT
Operations.
(b) Any Person applying for the Temporary Initial License
under subsection (a) of this section shall complete and submit the form
of application, which is, as of the effective date of this section,
promulgated by the Board as the application for obtaining a license to
become a lottery sales agent pursuant to D.C. Official Code § 3-1315.
In addition, any Person applying for the Temporary Initial License under
subsection (a) of this section shall submit the following:
(1) A sworn affidavit that the Person and, if applicable,
all Principals are, at the time of application, not disqualified from
being a Licensee (or Principal of a Licensee) pursuant to the provisions
of section 12 of this Title; and(2) Documentation demonstrating that the Person owns and
has the right to possess more than 50% of, is the lessee of and- has
the right to possess more than 50% of, or has the contractual right to
acquire and possess more than 50% of or be the lessee of and possess
more than 50% of property that is eligible to become the Initial
Designated VLT Site.
An application for the Temporary Initial License shall be
deemed complete if it includes all of the documents required under this
section. The Board is required to accept any application that is deemed
complete under this subsection.
(c) The Board shall grant the Temporary Initial License
to the Person who, on the earliest date following the effective date of
the "Lottery Expansion Initiative Act of 2006", meets the
following criteria: (1) the Person submits an application that is deemed
complete pursuant to subsection (b) of this section, and (2) the Person
has demonstrated that the Person owns and has the right to possess more
than 50% of, is the lessee of and has the right to possess more than 50%
of, or has the contractual right to acquire and possess more than 50%
of, or be the lessee of and possess more than 50% of property that is
eligible to become the Initial Designated VLT Site. The Board shall
issue a decision granting or denying a Person’s application for the
Temporary Initial License within fourteen (14) days of the Board’s
receipt of the application.
(d) Any Person whose application has been denied pursuant
to subsection (c) of this section may, within thirty (30) days of the
denial of that application, appeal the Board’s decision to deny the application to the Superior Court of
the District of Columbia.
(f) The Person awarded a Temporary Initial License (the
"Temporary Initial Licensee") shall have all the rights of any
Licensee under this chapter; provided, however, that the Temporary
Initial License shall expire on the earliest of (1) the granting by the
Board of an Initial License to the Temporary Initial Licensee pursuant
to section 5(c) of this Title, or (2) the denial by the Board of an
application by the Temporary Initial Licensee for the Initial License
pursuant to section 5(d) or 5(e) and the expiration of all appeals of
that denial pursuant to section 5(g) of this Title.
§ 5 LICENSING FOR OPERATION OF VLTs AND CONDUCT OF VLT
OPERATIONS; INITIAL LICENSE
(a) Within 180 days of the Board’s granting of a
Temporary Initial License, the Board shall create and publish
regulations setting forth a procedure by which Persons may apply for the
Initial License (the "Initial Application Regulations"). The
content of the Initial Application Regulations are within the discretion
of the Board, except that Initial Application Regulations must require
the Person applying for the License ("Initial License
Applicant") to provide the following information:
(1) Information demonstrating that the Initial License
Applicant owns and has the right to possess more than 50% of, is the
lessee of and has the right to possess more than 50% of, or has the
contractual right to acquire and possess more than 50% of, or be the
lessee of and possess more than 50% of property that is eligible to
become the Initial Designated VLT Site;(2) Information sufficient to allow the Board to
determine whether the Initial License Applicant is "suitable"
pursuant to sections 11 and 12 of this Title; and(3) If the Initial License Applicant is a non-natural
person, a list of all employees, officers, and Principals of the Initial
License Applicant.
(b) Within (90) days following the Board’s publication of
the Initial Application Regulations, the Temporary Initial Licensee may
submit an application for the Initial License in accordance with the
Initial Application Regulations.
(c) If the Temporary Initial Licensee submits an
application for the Initial License pursuant to subsection (b) of this
section, the Board shall determine within ninety (90) days of the date
of said application whether to immediately grant the Initial License to
the Temporary Initial Licensee. The Board shall award the Initial
License to the Temporary Initial Licensee if it determines that: (1) the
Temporary Initial Licensee is an Eligible Applicant, (2) the Temporary
Initial Licensee (A) owns and has the right to possess more than 50% of
or (B) is the lessee of and has the right to posses more than 50% of
property eligible to be the Initial Designated VLT Site, and (3) the
Board has found, after investigation, that (A) the License Application
is complete, and (B) the Temporary Initial Licensee is suitable, according to the provisions of
section 11 and 12 of this Title.
(d) If, after the expiration of this ninety (90) day
period, the Board determines that the Temporary Initial Licensee does
not meet the criteria of subsection (c) of this section, but that such
criteria could be satisfied by the Temporary Initial Licensee by taking
feasible and reasonable corrective measures, including but not limited
to a transfer of interests held by one or more Principals of the
Temporary Initial Licensee, the Board shall postpone its decision on the
application of the Temporary Initial Licensee and issue a written
statement to the Temporary Initial Licensee setting forth the corrective
measures that need to be taken by the Temporary Initial Licensee in
order for the Board to grant the Initial License. Otherwise, if, after
the expiration of the ninety (90) day period, the Board determines that
the Temporary Initial Licensee does not meet the criteria of subsection
(c) of this section, the Board shall issue a decision denying the
application of the Temporary Initial Licensee.
(e) If the Board postpones its decision and requests
corrective measures pursuant to subsection (d) above, the Board shall
allow the Temporary Initial Licensee 180 days to take the measures set
forth by the Board. After the expiration of this period, the Board shall
grant the Initial License to the Temporary Initial Licensee if it
determines (1) the corrective measures required by the Board have been
taken, and (2) after completion of the corrective measures, the
Temporary Initial Licensee has met the criteria for the Initial License
under subsection (c) of this section. Otherwise, the Board shall issue a
decision denying the Temporary Initial License.
(f) If the Board denies the application of the Temporary
Initial Licensee pursuant to subsection (d) or subsection (e) of this
section and all appeals of that denial pursuant to subsection (g) of
this section have been exhausted, or if the Temporary Initial Licensee
does not apply for the Initial License within the time period set forth
is subsection (c) of this section, the Board shall then accept further
applications for the Initial License. The Board shall, on a rolling
basis, evaluate each application for the Initial License made under this
subsection and award the Initial License to the first Person who has
submitted a complete application for the Initial License and whom the
Board determines meets the criteria set forth in subsection (c) of this
section.
(g) Any Person whose application has been denied pursuant
to this section may, within thirty (30) days of the denial of that
application, appeal the Board’s decision to deny the application to the
Superior Court of the District of Columbia.
§ 6 LICENSING FOR OPERATION OF VLTs AND CONDUCT OF VLT
OPERATIONS; SUBSEQUENT LICENSES
(a) The Board may, at any time adopt and approve a
proposal to expand the Maximum Permissible Designated VLT Sites and to
accept applications for additional License(s) to conduct VLT Operations
for each newly permitted Designated VLT Area ("Expansion
Proposal"). The Board shall include in any Expansion Proposal a
specific description of the property in which the Designated VLT Site(s)
for the additional License(s) granted under the Expansion Proposal shall be located in the
event that the Expansion Proposal becomes effective under this section.
(b) Immediately after the adoption and approval of an
Expansion Proposal by the Board under subsection (a) of this section,
the Expansion Proposal shall be submitted to the Council of the District
of Columbia ("Council") for approval. If approved by the
Council, the Expansion Proposal shall take effect and the Maximum
Permissible Designated VLT Sites shall be expanded as set forth in the
Expansion Proposal.
(c) Within ninety (90) days of the approval of an
Expansion Proposal by the Council, the Board shall create and publish
regulations setting forth a procedure by which Persons may apply for a
License to conduct VLT Operations at one or more of the newly permitted
Designated VLT Sites (the "Expansion License Application
Regulations"). The content of the Expansion License Application
Regulations are within the discretion of the Board, except that the
Expansion License Application Regulations must require each Person
applying for the License ("Expansion License Applicant") to
provide the following information:
(1) Information demonstrating that the Expansion License
Applicant owns and has the right to possess more than 50% of, is the
lessee of and has the right to possess more than 50% of, or has the
contractual right to acquire and possess more than 50% of, or be the
lessee of and possess more than 50% of property that is eligible to
become a Designated VLT Site under the Expansion Proposal;(2) Information sufficient to allow the Board to
determine whether the Expansion License Applicant is
"suitable" pursuant to sections 11 and 12 of this Title; and(3) If the Expansion License Applicant is a non-natural
person, a list of all employees, officers, and Principals of the
Expansion License Applicant.
(d) Immediately following the Board’s publication of the
Expansion License Application Regulations (the "Expansion
Application Period"), the Board shall accept applications for
Licenses in accordance with the Expansion License Application
Regulations.
(e) The Board shall award the Licenses permitted under
the Expansion Proposal to the Person(s) who have submitted a complete
application for the Expansion License Application on the earliest date
and who have met the following criteria: (1) the Person is an Eligible
Applicant, (2) the Person owns and has the right to possess more than
50% of, is the lessee of and has the right to possess more than 50% of,
or has the contractual right to acquire and possess more than 50% of, or
be the lessee of and possess more than 50% of property that is eligible
to become a Designated VLT Site under the Expansion Proposal, and (3)
the Board has found, after investigation, that (i) the License
Application is complete and (ii) the Eligible Applicant is suitable,
according to the provisions of section 11 and 12 of this Title.
(f) Any Person whose application has been denied pursuant
to this section may, within thirty (30) days of the denial of that application,
appeal the Board’s decision to deny the application to the Superior
Court of the District of Columbia.
§ 7 AUTHORITY GRANTED LICENSEE; CONDITIONS
Any License (including the Temporary Initial License and
the Initial License) shall entitle the Licensee to acquire (by purchase,
lease or otherwise), own, install, operate, repair and maintain VLTs
certified by a Certification Company and to conduct VLT Operations,
subject to the requirements of this chapter and Rules and Regulations
adopted, from time to time, by the Board pursuant to the authority
granted herein, and specifically subject to the following requirements
and restrictions:
(1) The Licensee may only conduct VLT Operations at a
Designated VLT Site; provided, however, that the Licensee may conduct
auxiliary services, including but not limited to the provision of
parking facilities, food service, or lodging service, on land adjacent
to or within reasonable distance of the Designated VLT Site;
(2) The Licensee operating such Designated VLT Site
shall:
(A) Provide, at no cost or expense to the Board,
sufficient space and facilities at the Designated VLT Site for the
installation and operation of the central computer required pursuant to
section 1(21) of this Title and the staff of the Board engaged to
operate such central computer; and(B) Furnish and install the central computer and.
software; the cost of which central computer and software ("Central
Computer Cost") shall be paid by the Licensee.
(3) The Licensee shall maintain continuous suitability
for the operation of VLT Operations, under the provisions of sections 13
and 14 of this Title;
(4) The Licensee shall grant the Board the right of
inspection of all VLTs, all VLT related Equipment, and all of the
Licensee’s books and records, and shall permit the Board (including the
Director and/or any agent thereof) unrestricted access to the Designated
VLT Site; and
(5) Any facility at which VLT Operations are conducted
pursuant to the License shall be in compliance with all laws, rules, and
regulations of the District of Columbia, including, but not limited to,
zoning requirements.
§ 8 REQUIREMENTS FOR VIDEO LOTTERY TERMINALS.
No VLT shall be installed and/or operated in the District
of Columbia by a Licensee or otherwise unless such VLT shall:
(1) Be of a class of VLTs which either (A) have been
certified by a Certification Company and are in compliance with the
provisions of the "Lottery Expansion Initiative Act of 2006" and the Rules and Regulations adopted,
from time to time, by the Board under the authority granted in the
"Lottery Expansion Initiative Act of 2006", or (B) are
manufactured or assembled by a Manufacturer;
(2) Have a serial number or other identification number
permanently affixed thereto by the Manufacturer;
(3) Be connected to a central computer; which central
computer must be located on the premises of a Designated VLT Site but
shall be owned and operated by the District of Columbia, maintained as
directed by the Board, and accessible at all time by the Board or its
designee;
(4) Be capable of being continuously monitored, polled
and read by the central computer; and
(5) Contain an erasable, programmable, read-only memory
chip ("EPROM") approved by the Certification Company, which
will be paid for by the Licensee and will be owned by the District of
Columbia, containing proprietary data, software and firmware required to
operate and to secure the operation of the VLT.
§ 9 PERMITS FOR MANUFACTURE, DISTRIBUTION, SERVICE,
REPAIR, OR MAINTENANCE OF VLTs.
(a) The Board shall create and, from time to time, amend
a form which shall be completed and submitted by any Person seeking a
Permit from the Board to manufacture, distribute, service, repair, or
perform maintenance on VLTs in the District of Columbia ("Permit
Application"). The Board in its discretion shall determine the
content of the Permit Application.
(b) The Board shall issue the appropriate Permit to the
applicant upon (1) receipt by the Board of an application for a Permit
submitted by a Manufacturer or Service Technician ("Permit
Application"), as the case may be, and (2) a finding by the Board,
after investigation, that (A) the Permit Application is complete, and
(B) the applicant is suitable, according to sections 11 and 12 of this
Title. The Board must grant or deny any Permit Application within ninety
(90) days of the date the Permit Application is received by the Board.
(c) The Permit shall entitle the Permittee to engage in
the activity described in the Permit Application and the Permit subject
to the requirements of the "Lottery Expansion Initiative Act of
2006" and rules and regulations adopted, from time to time, by the
Board pursuant to the authority granted herein. Each Permit issued shall
require, as a condition to the Permittee conducting the permitted
activity, that the Permittee maintain continuous suitability.
(d) Any Person whose Permit Application has been denied
pursuant to this section may, within thirty (30) days of the denial of
that application, appeal the Board’s decision to deny the application to the Superior Court of the
District of Columbia.
§ 10 TERM OF LICENSES AND PERMITS; RENEWAL; TRANSFER
(a) All Licenses and Permits shall be issued for a period
of five years and shall be renewed for succeeding five-year periods upon
the submission by the Licensee or Permittee of a completed, sworn
application ("Renewal Application"). Provided that the Licensee or Permittee shall file a completed Renewal
Application prior to expiration of its current License or Permit, the
term of its current License or Permit shall be deemed extended until the
later of the disposition by the Board of such Renewal Application and
any judicial review of such disposition.
(b) Licenses and Permits shall not be transferable
without the prior approval of the Board upon joint application of the
transferor and transferee.
(c) Prior to the consummation of a transfer of a License
or Permit pursuant to subsection (b) of this section, the following must
occur: (1) the proposed transferee ("Proposed Transferee")
shall file a completed and sworn License Application or Permit
Application, as the case may be, and (2) the Board shall promptly
conduct a suitability investigation of the Proposed Transferee and
promptly advise the Proposed Transferee and the proposed transferor of
the results thereof. If the Board finds that the Proposed Transferee is
suitable, the Board shall promptly issue its written approval of the
proposed transfer as provided for in subsection (b) of this section. A
determination by the Board that a Proposed Transferee is not suitable
shall have no effect on the status or continuity of a License or Permit
to the suitability of a Licensee or Permittee provided the proposed
transfer is not consummated. The Proposed Transferee shall reimburse the
Board for all costs and expenses incurred by the Board in connection
with any such suitability investigation.
§ 11 SUITABILITY GENERALLY.
(a) Other than applicants for the Temporary Initial
License, no applicant shall be granted a License or Permit under the
provisions of the "Lottery Expansion Initiative Act of 2006"
unless the applicant has demonstrated to the Board that the applicant is
a "suitable" recipient of the License or Permit for which the
applicant has applied.
(b) For purposes of the "Lottery Expansion
Initiative Act of 2006", an applicant for a License or Permit is
"suitable" and/or has met "suitability" standards if
the applicant has satisfied the requirements established by the
"Lottery Expansion Initiative Act of 2006", including the
requirement that the applicant:
(1) Has satisfied the suitability standards provided in
section 12 of this Title;(2) Is capable, by virtue of training, education,
business experience and/or a combination of the same, of conducting the
activity for which the license or Permit is sought;(3) If a Licensee, has demonstrated that the applicant
has, or can acquire from others, sufficient funds to renovate and/or
construct a facility on a Designated VLT Site; acquire and install VLTs
and related VLT Equipment and commence and continue VLT Operations; and(4) If a non-natural Person, has demonstrated that the
applicant’s Principals are suitable.
(c) Except as otherwise provided herein, a Person (1)
whose application for a License or Permit has been denied, (2) whose
License or Permit has been issued subject to a condition, (3) whose
License or Permit has been suspended or revoked, (4) against whom a fine
has been levied by the Board, or (5) who has been determined by the
Board (prior to a hearing) to be "unsuitable", shall have the
right to a hearing before the Board with respect to any such denial,
condition, suspension, revocation, levy or determination; and such
findings, decision and hearing shall be conducted in accordance with the
D.C. Administrative Procedure Act, approved October 21, 1968 (82 Stat.
1204; D.C. Official Code § 2-501 et seq.), including any right to
judicial review following such hearing.
§ 12 SUITABILITY STANDARDS, DISQUALIFICATION AND
DIVESTITURE.
(a) For the purposes of the "Lottery Expansion
Initiative Act of 2006", an applicant for a License, Permit or
approval is "suitable" if the applicant:
(1) Is a Person of good character, honesty, and
integrity;(2) Has not been convicted of, or entered a plea
resulting in conviction of: (A) Any offense punishable by imprisonment
of more than one year; (B) Theft or attempted theft, or illegal
possession of stolen property; (D) Any offense involving fraud or
attempted fraud; or (D) Illegal gambling as defined by the laws or
ordinances of any municipality, any parish or county, any state, or of
the United States;(3) Is a person whose prior activities, criminal record,
if any, reputation, habits, and associations do not pose a present
threat to the public interest of the District of Columbia or to the
effective regulation and control of VLT Operations or create or enhance
the dangers of unsuitable, unfair, or illegal practices, methods, and
activities in connection with VLT Operations and the business and
financial affairs of the applicant incident thereto;(4) Is capable of conducting and likely to conduct the
activities for which the applicant has requested licensing, permitting
or approval in accordance with the provisions of this chapter and/or the
rules and regulations adopted, from time to time, by the Board; and(5) Is not disqualified pursuant to the provisions of
subsection (b) of this section and, if the applicant is a non-natural
Person, has demonstrated to the Board that it has adopted and employs
adequate hiring and screening procedures to ensure that no current of
future employee of the applicant would be disqualified under subsections
(b)(1) or (b)(2) of this section.
(b) The Board shall have the right to deny, suspend,
condition, or revoke a License or Permit of any applicant for a License
or Permit upon a specific finding by the Board that the applicant is
‘unsuitable’ on the basis of the following criteria:
(1) The applicant has been convicted of, or entered a
plea resulting in conviction of: (a) Any offense punishable by
imprisonment of more than one year; (b) Theft or attempted theft, or
illegal possession of stolen property; (c) Any offense involving fraud
or attempted fraud; or (d) Illegal gambling as defined by the laws or
ordinances of any municipality, any parish or county, any state, or of
the United States;(2) There is a current prosecution or pending criminal
charge against the applicant in any federal or state jurisdiction for an
offense described in subsection (b)(1) of this section;(3) The applicant is not current in filing all applicable
personal income tax returns and in the payment of all income taxes,
penalties and interest owed to the District of Columbia or the federal
government, excluding items currently being disputed by the applicant;
or(4) The repeated failure by the applicant to provide
information and documentation reasonably requested by the Board in order
to determine suitability as defined in this chapter; provided however
that such failure shall not be considered by the Board during the period
of any judicial challenge by the applicant with respect to the
information requested and/or the confidentiality.
to be afforded to the same by the Board.
(c) Any Person whose License or Permit has been revoked
or who has been found "unsuitable" in the District of Columbia
is not eligible to obtain any License or Permit pursuant to the
provisions of the "Lottery Expansion Initiative Act of 2006"
for a period of one (1) year from the date the revocation or finding of
unsuitability becomes final beyond right of judicial review.
(d) In the event of a current criminal prosecution of an
offense as provided in subsection (b)(2) of this section, the Board,
where applicable, shall have the discretion to defer a determination’ on
an applicant’s suitability pending the outcome of the proceedings
provided that if a decision is deferred pending such outcome the Board,
where applicable, may take such action as is necessary to protect the
public interest.
(e) If the Board finds that a Principal of a Licensee or
Permittee or its parent entity is not suitable, and if as a result, the
Licensee or Permittee is no longer entitled to engage in the activity
licensed or permitted, then and in that event the Board shall, subject
to the exercise of the Principal’s hearing and review rights under this
chapter, propose action necessary to protect the public interest. Where
possible, in-lieu of an order of revocation or suspension of a License
or Permit, the Board shall issue an order of disqualification naming the
unsuitable Principal and declaring that such Principal may not, except
as provided in subsection (f) of this section, (1) directly or
indirectly exercise significant influence over the Licensee or Permittee;
(2) directly or indirectly receive dividends or interest on securities of the Licensee or Permittee; (3)
directly or indirectly receive remuneration or other economic benefit
from the Licensee or Permittee; or (4) continue owning or holding,
directly or indirectly, securities of the Licensee or Permittee or
remain as a manager, officer, director, or partner of the Licensee or
Permittee.
(f) Commensurate with the issuance of an order of
disqualification under subsection (e) of this section, the Board shall
issue an order declaring that such disqualified Principal shall, within
thirty (30) days of the disqualifying order, transfer all securities of
the Licensee or Permittee owned by the Principal to the trustee of a
blind trust as to which the trustee shall be appointed or approved by
the Board, which approval shall not be unreasonably withheld or delayed.
The trustee of the blind trust shall have the sole and exclusive rights
to exercise any right conferred by or incidental to the securities so
transferred to and held in the blind trust, except that upon receipt of
instruction from the Principal beneficiary, the trustee shall sell so
much of the securities of the Licensee or Permittee held in the blind
trust as instructed and remit the net proceeds of the sale to the
Principal beneficiary together with any dividends, interest,
remuneration or other economic benefit associated therewith.
§ 13 PERMISSION TO AWARD LICENSES TO PERSONS TO CONDUCT
BUSINESS PRIMARILY AS VLT OPERATORS
Notwithstanding the provisions of D.C. Official Code §
3-1315, the Board may issue a License or Permit or renew a License or
Permit to persons whose primary business is to conduct VLT Operations or
to perform services related to VLT Operations. The fact that a Person’s
primary business is to conduct VLT Operations or to perform services
related to VLT Operations shall not be a valid basis for the Board to
deny any License or Permit or any renewal of a License or Permit.
§ 14 POWERS AND DUTIES OF THE BOARD RELATIVE TO VLT
OPERATIONS.
(a) In addition to those powers granted the Board
elsewhere in the "Lottery Expansion Initiative Act of 2006",
with respect to VLT Operations, the Board shall adopt all rules and
regulations (collectively "Rules and Regulations") necessary
to implement, administer, and regulate VLTs and VLT Operations as
authorized in the "Lottery Expansion Initiative Act of 2006".
(b) Such Rules and Regulations shall include:
(1) Designation of any technical qualifications (other
than suitability as provided for in the "Lottery Expansion
Initiative Act of 2006") which must be possessed by a Manufacturer,
Distributor or Service Technician in order to be eligible to receive and
retain a Permit;(2) Procedures for the counting, collection and deposit
of Net VLT Proceeds into a Licensee’s restricted bank account;(3) Methods and rules permitting VLTs to be linked for
the offering of progressive payouts;(4) Procedures for (A) the accumulation and provision by
Licensees and Permittees of specified records, data, information and
reports, including financial and income records and reports
(collectively "Financial and Operation Materials") and (B) the
retention of Financial and Operational Materials by past and present
Licensees and Permittees, necessary to enable the Board to properly
implement and enforce the provisions of this chapter;(5) Requirements establishing minimum physical security
standards to be observed in Designated VLT Sites;(6) Requirements establishing standards of maintenance of
VLTs and related VLT Equipment; and(7) Provisions for the revocation and/or suspension of
Licenses and Permits, upon post issuance findings of
"unsuitability," subject to the rights of Licensees,
Permittees and Principals under section 13 of this Title.
(c) The Board may:
(1) Conduct any reasonable investigation which the Board
determines necessary to fulfill its responsibilities under the
provisions of the "Lottery Expansion Initiative Act of 2006";(2) Inspect and examine all premises in which Designated
VLT Sites are situated and/or where VLTs are manufactured, sold, or
repaired;(3) Inspect VLTs and related VLT Equipment and supplies;
(4) Summarily seize and remove VLTs and related VLT
Equipment and supplies from any location where such VLTs and/or VLT
Equipment and supplies are not or have not been approved, operated, or
maintained pursuant to the "Lottery Expansion Initiative Act of
2006" and/or the owners or operators thereof do not hold valid
Licenses and/or Permits required by the "Lottery Expansion
Initiative Act of 2006";(5) Deny, revoke, condition, or suspend the License or
Permit of any Person who knowingly violates any provision of this
chapter or any of the Rules or Regulations adopted pursuant to the
authority granted in the "Lottery Expansion Initiative Act of
2006";(6) Take steps necessary to collect fees owed to the
Board or the Lottery Fund, including commencing and prosecuting
appropriate legal actions; and(7) Delegate to the Executive Director and/or cause the
Executive Director to perform or exercise any or all of the rights and
duties of the Board set forth in subsections (c)(1), (c)(2), (c)(3), (c)(4), and (c)(6).
§ 15 EXECUTIVE DIRECTOR; POWERS AND DUTIES. The
Executive Director shall, upon and subject to the direction of the
Board:
(1) Conduct an investigation of any applicant, Licensee,
or Permittee for "suitability" and/or violations of the Rules
and Regulations and undertake any other investigation, inspection or
enforcement action if such investigation, inspection, or action is
reasonably necessary to the thorough and efficient implementation of
this chapter;
(2) Establish, maintain, and operate the mechanism and
equipment necessary to conduct polling, monitoring or reading of VLTs
and VLT Operations;
(3) Examine VLTs and related VLT Equipment and/or records
related thereto and to VLT Gaming Operations;
(4) Report to the Board any violation of law or Rules_ or
Regulations discovered by the Director; and
(5) Engage, train, supervise and direct such staff, as
the Executive Director and the Board shall deem necessary or appropriate
to enable the Executive Director to perform his duties and obligations
under this chapter.
§ 16 GAMING DEVICE LIMITATIONS.
Except as otherwise provided by law, no gaming devices
other than VLTs shall be present and/or installed and/or operated in any
Designated VLT Site.
§ 17 PROHIBITED RELATIONSHIPS.
(a) In addition to any other relationship prohibited by
the "Lottery Expansion Initiative Act of 2006", no person
employed by or performing any function on behalf of the Board or the
Director may:
(1) Be an officer, director, owner, or employee of any
Person holding a License or Permit issued by the Board; and(2) Have or hold any interest, direct or indirect, in, or
engage in any commercial transaction or enter into any business
relationship with, any Person holding a License or Permit issued by the
Board;
(b) No elected public official shall engage in any
business activity with a Licensee or Permittee except as a patron. As
used in this subsection, the term "business activity" shall
specifically include but not be limited to contracts: (1) for the sale
or purchase of goods, merchandise, and services; (2) to provide or
receive legal services, advertising, public relations, or any other
business or personal services; (3) for the listing, purchase, or sale of immovable property or options or other rights
relating thereto; and (4) modifying ownership or possessory interests in
stocks, bonds, securities, or any financial instruments.
(c) No Person permitted by the Board as a Manufacturer or
Distributor may participate in the design, development, ownership, sale,
lease, license or operation of any computer program, firmware, software,
or any other mechanism that is or may be used for the polling or reading
of VLTs or VLT Operations.
(d) No Person may be an owner, investor, employee, or
contractor engaged in any VLT operations if such Person has been
convicted of, or entered a plea resulting in conviction of: (1) Any
offense punishable by imprisonment of more than one year; (2) Theft or
attempted theft, or illegal possession of stolen property; (3) Any
offense involving fraud or attempted fraud; or (4) Illegal gambling as
defined by the laws or ordinances of any municipality, any parish or
county, any state, or of the United States; or if there is a current
prosecution or pending criminal charge against such Person in any
federal or state jurisdiction for an offense described in this
subsection.
§ 18 PROHIBITION OF MINORS
(a) No Licensee, Permittee or any agent or employee of
either, shall allow a person under the age of twenty-one to play or
operate a VLT.
(b) Each Licensee shall report and remit to the Director
quarterly in arrears all winnings withheld from customers who are
determined to be under the age of twenty-one.
(c) The Board may fine and/or revoke and/or suspend the
License or Permit of any Person, who is found by the Board to have
willfully committed a violation of this section; provided, however, that
if the Licensee affected by a revocation or suspension made under this
section, the Licensee shall be entitled to an administrative hearing
before the Board pursuant to section 13(c) of this Title, and, if the
affected Licensee chooses to exercise that right, the revocation or
suspension shall not take effect until the conclusion of the hearing
held pursuant to that section.
§19 UNAUTHORIZED VIDEO LOTTERY TERMINALS; SKIMMING OF
VIDEO LOTTERY TERMINAL PROCEEDS; PENALTIES.
(a) Except as otherwise permitted by law, any Person who
possesses or operates a VLT without holding a current valid License or
Permit required by the "Lottery Expansion Initiative Act of
2006" or at any location other than a Designated VLT Site shall be
subject to a fine of not more than ten thousand dollars ($10,000) per
violation.
(b) Any Person who intentionally excludes, or takes any
action in an attempt to exclude anything of value from the deposit,
counting, collection, or computation of revenues derived from VLT
Operations shall be subject to a fine of not more than ten thousand
dollars ($10,000) per violation, in addition to any other criminal
penalties which may be imposed, pursuant to any other provision of the District
of Columbia Official Code.
(c) Any VLT used or offered for play in violation of the
provisions of the "Lottery Expansion Initiative Act of 2006",
except as otherwise permitted by law, shall be considered a gambling
device for purposes of D.C. Official Code § 22-1704.
Sec. 4. Effective date.
This act shall take effect after a 30-day period of
Congressional review as provided in section 602(c) of the Home Rule Act,
approved December 24, 1973 (87 Stat. 813; D.C. Official Code §
1-206(c)(1)).