Gaming regulation.

WORKING DRAFT
2006
STATE OF
WYOMING
06LSO-0137

HOUSE BILL
NO.
HB0096

Gaming regulation.

Sponsored by:
Joint Travel, Recreation, Wildlife and Cultural Resources Interim Committee

A BILL

for

AN ACT relating to gaming; authorizing games of chance subject to licensure requirements; creating a state gaming commission; establishing cities, towns and counties as local licensing authorities; amending and creating definitions; imposing duties and responsibilities on a state gaming commission and on local licensing authorities; delegating enforcement and granting rulemaking authority; imposing penalties; repealing definitions; and providing for effective date
s
.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.

W.S. 6
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7
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201 through 6
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7
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216 are created to read:

ARTICLE 2
GAMING COMMISSION

6
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7
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201.

Wyoming gaming commission created; appointment, terms of office and political affiliation of members; vacancies; appointment districts; officers; director; meetings; quorum; records; licenses generally.

(a)

The
Wyoming
gaming commission is created to be composed of seven (7) persons who reside in the state and are qualified electors of
Wyoming
.

(b)

The governor with the consent of the senate shall appoint the seven (7) members of the commission in accordance with W.S. 28
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12
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101 through 28
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12
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103. One (1) member shall be appointed from each appointment district under W.S. 9
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1
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218. No more than four (4) members shall be registered in the same political party. Members shall be appointed for terms of four (4) years and until their successor is appointed and qualified, provided that of the initial commission, three (3) members shall be appointed for a two (2) year term and four (4) members for a four (4) year term. Vacancies on the commission shall be filled by appointment of the governor for the unexpired term. A member of the commission may succeed himself for one (1) full four (4) year term. The governor may remove any member as provided in W.S. 9
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1
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202.

(c)

The commission shall annually elect from its membership a president and vice-president and may employ a director. Salary for the director shall be determined by the commission with the consent of the personnel division. The commission may also employ other personnel required to carry out this act.

(d)

The commission shall hold an annual meeting in
Wyoming
and shall hold other meetings at such times and places within
Wyoming
as the majority of the members determine. A majority of the commission constitutes a quorum and a majority vote of a quorum may act for the commission. The commission shall keep a record of the proceedings of the commission which is open at all times for public inspection.

(e)

The members of the commission shall receive as compensation one hundred fifty dollars ($150.00) for each day necessarily employed in attending the meetings of the commission, and shall also receive per diem and mileage allowance as allowed to state employees for attending the meetings and performing the duties incumbent upon them as members of the commission.

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202.

State gaming commission; duties; authority to issue subpoenas; refusal to comply.

(a)

The state gaming commission shall:

(i)

Investigate the qualifications of applicants for local licenses authorized under this chapter and review the merits of applications;

(ii)

Regulate and license manufacturers, distributors and operators of equipment, devices and supplies for use in licensed games of chance authorized under this chapter;

(iii)

Monitor the conduct or business of licensees under this chapter to the extent necessary to ensure compliance with this chapter and commission rules and regulations;

(iv)

Regulate games of chance conducted under any license issued under this chapter to assure the games are fairly held, operated and conducted in accordance with the requirements of the appropriate license and this chapter;

(v)

Enforce this chapter and state gaming commission rules and regulations and assist local law enforcement in enforcing this chapter;

(vi)

Promulgate rules and regulations necessary to carry out the provisions and responsibilities imposed by this chapter, including the establishment of application or renewal fees. Any funds collected by the commission shall be deposited in the general fund;

(vii)

Conduct necessary examinations, inspections and investigations for the enforcement of this chapter, applicable state law and state gaming commission rules and regulations;

(viii)

Require that license applicants be fingerprinted for identification purposes as a condition of licensing;

(ix)

Receive reports from the pari-mutuel commission as provided in W.S. 11
‑
25
‑
105(d).

(b)

In any examination, inspection or investigation conducted pursuant to this chapter, the state gaming commission may by subpoena require the papers, records, files, correspondence, documents and other evidence relevant to the inquiry.

(c)

Upon refusal of any person to comply with any subpoena and upon application by the state gaming commission, the district court of the county in which the examination, inspection or investigation is conducted or in which the person resides or may be found, may issue an order requiring the person to comply with the subpoena and produce evidence. Failure to obey a court order is grounds for immediate license suspension and may be punished by the court as contempt.

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203.

Investigation and review of applications for local licensure; determination; submission to local licensing authority; effect; conditions; investigation costs; appeal.

(a)

The state gaming commission shall upon receipt of any application for any local gaming license submitted by a local licensing authority under this chapter, investigate the qualifications of the applicant and the merits of the application including requiring fingerprints from persons enumerated under paragraph (a)(i) of this section. In its investigation, the state gaming commission shall determine:

(i)

The existence of a prior criminal record
showing a conviction for violation of federal or state law by any of the following persons:

(A)

If applicable, any individual or member of the applicant organization designated within the application to be responsible for the conduct of the authorized games of chance;

(B)

If applicable, the person under whose name the games of chance will be conducted.

(ii)

If the applicant is duly qualified to hold, operate and conduct games of chance under this chapter;

(iii)

If the authorized games of chance are to be held, operated and conducted in accordance with provisions of this chapter governing the holding, operation and conduct of the games of chance and if applicable, that the proceeds are to be disposed of as required under this chapter.

(b)

Within a reasonable period of time not to exceed one hundred twenty (120) days following receipt of any application for a new license under W.S. 6
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7
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207 or within thirty (30) days following receipt of any applica
­
tion for license renewal, the state gaming commission shall submit to the appropriate local licensing authority in writing its approval or denial of the application for licensure under this chapter together with its findings. The local licensing authority shall not issue or renew a local license authorized under this chapter unless the state gaming commission has approved the application.

(c)

The state gaming commission shall not approve any application submitted by a local licensing authority if based upon the investigation conducted under paragraph (a)(i) of this section, it determines the prior activity or criminal record of the applicant and persons enumerated under paragraph (a)(i) of this section:

(i)

Poses a threat to the public interest of the state or the effective regulation and control of authorized games of chance; or

(ii)

Creates a danger of unlawful practices, methods or activities in the conduct of authorized games of chance or in the conduct of business and financial arrangements incidental to games of chance.

(d)

The cost of any necessary background investigation of any applicant for a local license or license renewal under this section shall be paid by the applicant. The state gaming commission shall by rule and regulation establish the conditions and procedures for payment and may require payment in advance.

(e)

Any determination by the state gaming commission under this chapter is subject to appeal in accordance with the Wyoming Administrative Procedure Act, however final agency action shall not be deemed to have occurred until an application is approved or denied by the local licensing authority.

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204.

Inspections and examinations; audits; failure to permit entry; concurrent authority.

(a)

In enforcing this chapter, the state gaming commission through its employees or agents may:

(i)

Enter and inspect at any time the premises upon which games of chance are conducted or from which supplies, devices and equipment for games of chance are manufactured, maintained or supplied;

(ii)

Examine the records, books of account and equipment, supplies or devices of any license applicant or licensee, as necessary to conduct examinations, inspec
­
tions and investigations under this chapter;

(iii)

Seize, remove and impound from the premises of any licensee, equipment, supplies and devices for the purpose of examination and inspection;

(iv)

When warranted, conduct detailed investiga
­
tions and through the department of audit, conduct detailed audits.

(b)

Upon request of the state gaming commission, the department of audit shall conduct an audit of any license applicant or licensee as necessary to assist the commission in enforcing this chapter.

(c)

Entry for purposes of inspection is authorized only during open business hours unless it is in the presence of the licensee or a duly authorized representative of the licensee, or unless the officer making entry does so under court order, under search warrant issued by a court of competent jurisdiction or has probable cause to believe that evidence of any violation of this chapter is within the place to be entered. Refusal to permit the entry of an agent of the state gaming commission to the licensed premises or place of business for the purpose of inspection in accordance with this subsection is grounds for immediate license suspension.

(d)

The state gaming commission shall have concurrent authority and powers with the district and county attorneys in this state in the investigation of any criminal violation under this chapter. Upon refusal of any district or county attorney to act on any criminal violation of this chapter, the state gaming commission may request the attorney general act on behalf of the county, state or any agency thereof.

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205.

Conflict of interests p
rohibited.

(a)

Members of the state gaming commission and any employee of the commission shall not:

(i)

Have any financial interest with or involving any person licensed under this chapter;

(ii)

Hold a license issued under this chapter;

(iii)

Conduct or operate any authorized game of chance;

(iv)

Receive any gift, gratuity or anything of value from any licensee;

(v)

Participate in any authorized game of chance or be eligible to receive prizes awarded in any authorized game of chance.

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206.

Authority of cities, towns and counties; limitations; assessment and payment of fees.

(a)

Nothing in this chapter prohibits a local licensing authority of an incorporated city, town or county from refusing to issue any license or to renew any license authorized under this chapter.

(b)

The state preempts the field of games of chance authorized under this chapter and no city, town or county shall authorize, regulate or prohibit authorized games of chance except as provided by this chapter. This subsection shall not prohibit any city, town or county by local ordinance or resolution from regulating the general health, safety and welfare within the local jurisdiction or from imposing other requirements not in conflict with this chapter.

(c)

Unless otherwise provided, the local licensing authority shall uniformly assess local license fees annually for each particular license. Applicants for a local license shall pay the required fee as provided in W.S. 6
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7
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211(b) in advance by cash or certified check.

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207.

Games of chance authorized; application for licenses and license
renewals; contents; submission to state gaming commission; notification of change in application information; penalty.

(a)

Games of chance shall be conducted only as follows:

(i)

Bingo games and pull tab games shall only be conducted by charitable or nonprofit organizations, licensed under this act, where the tickets for the bingo are sold only in this state and the pull tabs are sold only on the premises owned or occupied by the charitable or nonprofit organization, subject to the following:

(A)

Bingo games and pull tab games shall only be conducted by charitable or nonprofit organizations which have been in operation in this state for at least three (3) years and have been issued a license by the local licensing authority in accordance with this chapter;

(B)

In conducting bingo games and pull tab games the licensee shall use only volunteers who are bona fide members of the charitable or nonprofit organization or employees who are paid by the organization to assist in the operation of the game of chance;

(C)

Any licensee conducting a bingo game or pull tab game shall report to the state gaming commission no later than fifteen (15) days after the last day of the month, the amounts paid to the licensee by persons playing the game of chance and the amounts redeemed to players as winnings;

(D)

At least sixty-five percent (65%) of all gambling proceeds collected shall be redeemed as winnings each month;

(E)

Players of bingo games or pull tab games shall be eighteen (18) years or older to play;

(F)

Licensees may purchase or lease supplies or equipment necessary to conduct bingo games and pull tab games from a distributor or manufacturer at a price based on a per card, raffle ticket or pull tab basis and a minimum of sixty percent (60%) of the gross sales less the prizes paid shall be retained by the licensee after payment to the distributor or manufacturer
;

(G)

Of the amount retained by the licensee after payment of winnings and costs, at least seventy-five percent (75%) shall be donated within one (1) year by the licensee to a bona fide charitable or benevolent purpose.

(ii)

Calcutta wagering on contests or events may be conducted by a bona fide nationally chartered veterans', religious, charitable, educational or fraternal organization or nonprofit local civic or service club organized or incorporated under the laws of this state, provided that:

(A)

The contest or event is conducted solely in this state;

(B)

Any rules affecting the contest or requirements for participants are clearly posted;

(C)

The total prizes or prize money paid out in any one (1) contest or event does not exceed ninety percent (90%) of the total wagers;

(D)

A minimum of ten percent (10%) of the total wagers on each contest or event is donated within one (1) year by the sponsoring organization to a bona fide charitable or benevolent purpose;

(E)

No separate organization or professional person is employed to conduct the contest or event or assist therein;

(F)

The sponsoring organization has complied with the relevant sections of the
I
nternal
R
evenue
C
ode of 1986, as amended, relating to taxes on wagering.

(b)

To conduct any authorized game of chance, an applicant for any local license or local license renewal under this chapter shall file written application with the appropriate local licensing authority. The application shall be made under oath upon a form prepared by the state gaming commission and furnished to the local licensing authority. The application shall contain information required by this chapter for granting or renewing any local license authorizing the conduct of a specified and authorized game of chance and shall be filed in the office of the clerk of the appropriate local licensing authority.

(c)

Upon receipt of an application for any local license or license renewal containing all information required under this chapter, the local licensing authority shall immediately transmit a copy of the completed application to the state gaming commission for investigation and review pursuant to W.S. 6
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7
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202. No local licensing authority shall approve the application unless the state gaming commission first approves the application in accordance with this chapter. The local licensing authority shall approve or disapprove the application within thirty (30) days after the hearing required under W.S. 6
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7
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209(b) or denial of the application by the state gamin
g
commission.

(d)

An applicant shall during pendency of the application, immediately notify the local licensing authority of any change in the information stated in the application. If any substantial change occurs after local license issuance or renewal, the change shall be reported to the local licensing authority within ten (10) days after the date of the change. The local licensing authority shall immediately notify the state gaming commission of any change reported by an applicant or licensee. Failure to report any change in the information stated in the initial application or any substantial change after issuance or renewal of a local license shall be grounds for denial of an application or revocation of an existing license.

(e)

Any person knowingly submitting an application containing false information in violation of this chapter is guilty of a felony punishable by a fine of not more than ten thousand dollars ($10,000.00), imprisonment for not more than three (3) years, or both.

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208.

Combination of interests prohibited; license limitation per person.

(a)

Any local license authorized by this chapter shall not be held by, issued or transferred to:

(i)

Any person or organization in which any officer, director, manager, employee or agent has a direct or indirect interest in any manufacturer or distributor of equipment, devices or supplies used in a game of chance, or who serves as an officer, director, proprietor or employee or is a stockholder holding more than two percent (2%) of the outstanding shares of the manufacturer or distributor;

(ii)

Any mayor, member of a town council or county commissioner within their respective jurisdiction;

(iii)

Any person employed by the local licensing authority or to any organization in which the employed person has an ownership interest;

(iv)

Any person employed by the state gaming commission or to any organization in which the employed person has an ownership interest;

(v)

Any peace officer employed by the state or any city, town or county.

(b)

No licensing authority shall issue more than one (1) local license to any one (1) applicant.

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209.

Publication of notice; grant or denial; copy of application and notice to state gaming commission; judicial review.

(a)

Upon receipt of an application for any local license or license renewal and following approval by the state gaming commission, the local licensing authority shall promptly prepare a notice of application, place the notice conspicuously upon the premises shown by the application as the proposed location upon which the games are to be conducted and publish the notice in a newspaper of local circulation once a week for a period of four (4) consecutive weeks. The notice shall state that a named applicant has applied for a local license or license renewal, the proposed location upon which the games are to be conducted and that protests against the issuance or renewal of the license will be heard at a designated meeting of the local licensing authority. Each applicant shall at the time of filing his application, pay the clerk an amount sufficient to cover the costs of publishing the notice.

(b)

Any local license authorized under this chapter
shall not be issued or renewed until on or after the date set in the notice for public hearing. If a hearing is for license renewal, the hearing shall be held no later than thirty (30) days preceding the expiration date of the license and no later than forty-five (45) days following approval of the license renewal by the state gaming commission.

(c)

Any local license shall not be issued or renewed by the local licensing authority until:

(i)

The state gaming commission approves the qualifications of the applicant and the merits of the application;

(ii)

The state gaming commission has executed and transmitted the proposed license or license renewal to the local licensing authority;

(iii)

The applicant complies with the criteria, standards and regulations imposed by this chapter.

(d)

Upon approval or denial of a local license or a license renewal, the local licensing authority shall promptly notify the state gaming commission.

(e)

An applicant for license renewal may appeal to
the district court from an adverse decision by the local licensing authority or the state gaming commission. In an appeal pursuant to this subsection, the person applying for license renewal shall be named as plaintiff and the local licensing authority as defendant. Upon notice of an appeal, the local licensing authority shall transmit to the clerk of district court a certified copy of the application, of any protests and of the minutes recording the decision appealed. The appeal shall be heard pursuant to the Wyoming Administrative Procedure Act.

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210.

Proof of financial responsibility required.

Before issuing or renewing any local license and in addition to payment of license fees, the local licensing authority shall require the license applicant to furnish the local licensing authority a bond or other form of financial responsibility approved by the local licensing authority, in an amount established by the state gaming commission for the appropriate game of chance. Proof of financial responsibility shall be immediately forwarded to and recorded by the state gaming commission.

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211.

Disposition of license fees; refunds prohibited.

Fees authorized by this section shall be established by the state gaming commission in amounts sufficient to ensure that the total revenue generated by the collection of such fees approximates the direct and indirect costs incurred by the local licensing authority in carrying out its duties under this chapter. The amounts of all fees shall be reviewed annually by the state gaming commission. The local licensing authority shall furnish to the commission an annual accounting of all fee and fine revenues received and expenditures made pursuant to this chapter, together with a list of all fees in effect.

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212.

Term of license and permit; exception.

(a)

Any local license issued or renewed under this chapter by a local licensing authority is considered a privilege to the holder and the term of the license is for two (2) years unless sooner revoked or for a lesser term as provided in subsection (b) of this section.

(b)

The term of a local license may be less than two (2) years if specified by the local licensing authority to coincide with the date set by the authority for consideration of license issuance and license renewals. A local licensing authority issuing a license for a term less than two (2) years shall prorate the fee accordingly.

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213.

Transfer of license location or ownership prohibited; ownership transfer specified.

(a)

No local license issued under this chapter shall be
transferred or sold.

(b)

A transfer or sale of a cumulative fifty percent (50%) or more of the ownership of a local license is a transfer or sale for purposes of this section.

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214.

Duty to prepare and furnish license forms; signature and attestation; contents; display required.

(a)

The state gaming commission shall prepare and furnish to each city, town and county a form for local licenses issued under this chapter. A license on a form other than as prescribed by the state gaming commission is invalid.

(b)

Each local license issued by a city or town shall be signed by the mayor and attested by the clerk. Each local license issued by a county shall be signed by the chairman of the board of county commissioners and attested by the county clerk.

(c)

The following shall be shown on each local license:

(i)

The name of the licensee;

(ii)

A description of the premises on which specific authorized games of chance may be conducted;

(iii)

The date of issuance;

(iv)

The amount of the fee;

(v)

That the fee has been paid; and

(vi)

The written signature of the state gaming commission and the local licensing authority.

(d)

Each licensee shall display his local license in a conspicuous place on the licensed premises.

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215.

Suspension and revocation; judicial review.

(a)

A local licensing authority may suspend or revoke any local license issued under this chapter for any violation of this chapter or rule or regulation of the state gaming commission. A licensee may appeal license suspension or revocation by a local licensing authority to the district court in the manner specified under W.S. 6
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7
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209(e) and the appeal proceedings shall be in accordance with the Wyoming Rules of Appellate Procedure. The suspension or revocation shall remain in effect pending a decision by the district court.

(b)

The state gaming commission may suspend or revoke
any local license issued under this chapter for any violation of this chapter or rule or regulation of the commission. Suspension or revocation by the state gaming commission is subject to appeal in accordance with the Wyoming Administrative Procedure Act.

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216.

Penalties for violation.

(a)

Any person violating any provision of this chapter for which no specific penalty is provided is guilty of a felony punishable by a fine of not more than one thousand dollars ($1,000.00), imprisonment for not more than five (5) years, or both. Each violation is a separate offense.

(b)

Any person conducting games of chance authorized by this chapter without holding a local license authorizing the conduct is guilty of professional gambling as prohibited and penalized under W.S. 6
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7
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102(b).

Section 2.

W.S. 6
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7
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101(a)(intro), (iii) by creating new subparagraphs (H) and (J), (vi), (viii)
(A)
, (ix) and by creating new paragraphs (xi) through (xv), 6
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7
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104 and 7
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19
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201(a) by creating a new paragraph (vi) are amended to read:

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101.

Definitions.

(a)

As used in this
article
chapter
:

(iii)

"Gambling" means risking any property for gain contingent in whole or in part upon lot, chance, the operation of a gambling device or the happening or outcome of an event, including a sporting event, over which the person taking a risk has no control, but does not include:

(H)

Games of chance authorized and licensed under W.S. 6
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7
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207;

(J)

Raffles conducted for charitable purposes.

(vi)

"Gambling proceed" means all money or property at stake or displayed in or in connection with professional gambling
or games of chance
;

(viii)

"Professional gambling" means:

(A)

Aiding or inducing another to engage in gambling
other than an authorized game of chance licensed under W.S. 6
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7
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201 through 6
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7
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216
, with the intent to derive a profit therefrom; or

(ix)

"Profit" means benefit other than a gain, which is realized or unrealized and direct
,

or indirect
,
including benefits from
proprietorship, management or
unequal advantage in a series of transactions
but does not include benefits of proprietorship or management of a business wherein a game, wager or transaction described in W.S. 6
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7
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101(a)(iii)(E) occurs
;

(xi)

"Games of chance" means the specific kinds of games of chance authorized under W.S. 6
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7
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207(a);

(xii)

"Local licensing authority" means the governing body of an incorporated city, town or county in
Wyoming
with the responsibility to issue and administer a particular local gaming license;

(xiii)

"State gaming commission" means the state gaming commission created pursuant to W.S. 6
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7
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201;

(xiv)

"
Charitable or nonprofit organization" means an organization recognized as a charitable or nonprofit organization under Wyoming statutes and which possesses a valid exemption from federal income tax issued by the Internal Revenue Service under the provisions of 26 U.S.C. § 501(c)
;

(xv)

"Bingo game" means a game of chance in which a prize or prizes are awarded to a player or players who obtain a designated pattern or sequence of numbers or symbols on a card that is the same pattern or sequence of numbers or symbols selected at random by a mechanical blower or a computer generated random generator subject to the following:

(A)

The bingo card shall be a paper, hard card or electronically generated card, but an electronically generated card shall be played only in conjunction with a paper or hard card unless the player has a disability that prevents the use of a paper or hard card. The licensee conducting the bingo game shall keep a paper copy of all electronically generated cards offered, used or sold on the premises;

(B)

All players during the course of a bingo game shall compete for the same prizes utilizing the same set of numbers or symbols and shall share the same deck or series of bingo cards for each game wherein no two (2) cards distributed to the players are identical in the same game and at least one (1) player shall win the prize in each game played;

(C)

There shall be a minimum of two (2) players participating in each game before a game can begin.

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104.

Advertising of allowable gambling activities or events.

Nothing in this chapter prohibits the advertising of any gambling activity or event excluded from gambling under W.S. 6
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7
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101(a)(iii)
,

and
conducted by or for any charitable or nonprofit organization or conducted as a promotional activity by a private business entity which is clearly occasional and ancillary to the primary business of that entity
unless otherwise regulated under W.S. 6
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7
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201 through 6
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7
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216
.

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19
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201.

State or national criminal history record information.

(a)

The following persons shall be required to submit to fingerprinting in order to obtain state and national criminal history record information:

(vi)

Persons applying to the state gaming commission for a license to provide games of chance under W.S. 6
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7
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201 through 6
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7
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216 or those referenced in W.S. 6
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7
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203(a)(i).

Section 3.

W.S. 6
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7
‑
101(a)(iii)(D) and (F)
is
repealed.

Section 4.

There is appropriated three hundred thousand dollars ($300,000.00) from the general fund to the state gaming commission for purposes of this act.

Section 5
.

Initial appointments to the state gaming commission shall be made not later than July 15, 2006. The governor shall submit the names for senate approval during the 2007 legislative session.

Section 6.

The state gaming commission shall adopt final rules to implement this act not later than May 1, 2007. The commission and local licensing authorities shall accept applications for gaming licenses after May 1, 2007.

Section 7.

(a)

Except as provided in subsection (b) of this section, this act is effective January 1, 2008.

(b)

Sections 5 and 6 of this act are effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)

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HB0096