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House Bill 290


Additional Games:

Allows for additional games of chance, including pools, raffle auctions, and race night games.

Provisions to require the Dept. of Revenue to establish procedures ensuring that race night games are secure, random and completely based on chance.

Explicitly states that organizations are not authorized to conduct games currently regulated by the Gaming Control Board.

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Clarifies the definition of public interest purpose to include charitable and historic objectives.

Includes non-profit youth sports activities and the activities relating to the provision of volunteer fire and rescue activities.

Clarifies that the activities conducted by a veteran’s organization, even those veteran’s organizations that also hold club licenses, are considered public interest purposes. The activities may include scholarships, services to economically or socially support veterans, and activities to honor veterans.

Provides that a veteran’s organization also include a home association, or other non-profit organization established by or in cooperation with a veteran’s organization to provide services to veterans or the community.

Adds the definition of “conservation organization.”

Adds a definition to clarify what constitutes an “auxiliary group.”

Allows club licensees who are affiliates of veteran organizations or volunteer fire companies to provide funds from games of chance proceeds to a veteran’s organization or volunteer fire company.

Clarifies that after a daily or weekly drawing is held, an organization may immediately select a number that will determine who wins the prize for the next daily or weekly drawing.

Allows for the concurrent running of daily and weekly drawings.

Liquor Control Enforcement (LCE) does not have jurisdiction to enforce games of chance violations for organizations that have a special occasion liquor permit.

The LCE would retain jurisdiction for these organizations for any violation of the Liquor Code.

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Removes the requirement that raffle tickets have the location and date of the raffle printed on each ticket. This would allow organizations to use the more commonly seen raffle ticket rolls when conducting raffles.

Provides that raffles could be sold at a discounted price, issued free of charge or as part of the sale of other tickets, issued as bonus tickets as part of the sale of other tickets, and issued as prizes, including prizes at auctions.

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Distributor Licensees:

The Department of Revenue is required to conduct and maintain criminal history record checks on all owners, officers, directors, partners and sales personnel of distributor licensees.

Distributor license fee increases from $1,000 to $2,000 per year.

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Reporting requirements/records:

Eliminates the reporting requirements for all eligible organizations that are not club licensees, regardless of how much in proceeds they collect each year.

Eligible organizations that do not have proceeds exceeding $40,000 would be exempt from the requirement to keep and maintain a separate bank account for the proceeds.

Currently, organizations are required to record the name and address of all winners of $100 or more in prizes from games of chance. This bill increases that requirement to $600 or more to align with federal tax provisions. The bill also eliminates the requirement that organizations must retain receipts for all donated prizes under the $600 threshold.

Removes the current requirement of eligible organizations to provide criminal background checks for executive officers and secretaries when applying for a games of chance license.

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Requires eligible organizations to obtain either a regular license, or a monthly license, in order to conduct games of chance. A regular license fee is increased from $100 to $125. The licensing fee for a monthly license is $25.

Clarifies that auxiliary groups of licensed eligible organizations could conduct games of chance if they are listed on the application and license of the eligible organization.

Allows eligible organizations that do not hold liquor licenses to hold their games of chance at any location within a county or municipality that has approved the operation of small games of chance.

Provides that no more than three licensees, including the licensee that owns or leases the premise, would be able to conduct games of chance simultaneously at one location.

Club licensees are still required to conduct their games of chance only at a licensed premises indicated on their license application, unless they are displace from their premises due to fire, flood or other natural disaster. Only one license would be issued per licensed premises.

Allows eligible organizations to operate games of chance at the licensed premises of another eligible organization. If a club licensee allows a limited occasion licensee to use their licensed premise, the club licensee would be allowed to continue to conduct their games of chance at the same time as a limited occasion licensee. If it is another club licensee, then they must cease their operations of games of chance.

Clarifies that any person, not just those associated with the eligible organization, could sell raffle or raffle auction tickets. Current law requires the suspension or revocation of a games of chance license if anyone other than the manager, officer, director, bar personnel or a bona fide member operates the organization’s games of chance.

Conservation groups are added to the provision of the act that allows volunteer fire, ambulance and rescue organizations without liquor licenses to receive 10 special permits per year.

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Prize limits:

The legislation increases prize limits for small games of chance as follows:

Individual prize limit increased from $1,000 to $3,000 per chance.

Weekly prize limit increased from $25,000 to $35,000 per seven day period.

Yearly prize limit increased from $100,000 to $150,000 per year.

Daily and weekly drawings may award prizes in excess of their limits if the prizes are the result of a carryover from a previous drawing.

Monthly raffle prize limit increased from $10,000 to $15,000.

Note: Provisions related to distribution of proceeds for club licensees are not included in this bill. Those were included in HB 1098 which was passed on concurrence by the Senate on 11/18/13.

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House Bill 1098


Major League Sports 50/50 raffles:

Allows for non-profit organizations affiliated with all professional sports teams, as well as racing facilities in the Commonwealth, who have a “home” field or racing stadium, grandstand or bleacher at a closed course motor facility, to hold charity 50/50 raffles at home games. The racing facilities must be a facility where spectators are directly observing motor races with NASCAR, Indy, stock or drag racing cars.

Allows for Major League Sports drawings to be conducted by the affiliated nonprofit organization during a chartable event held at the same “home” field or racing facility of the major league sports team.

Caps the expenses for affiliated non-profit associations in conducting the drawing, such as to employ sellers of the tickets, administrative expenses, etc., at 2% of the total amount collected.

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Club licensees (organizations with liquor licenses):

Changes reporting requirement for club licensees by stating that a club licensee that has proceeds under $20,000 would be exempt from submitting an annual report.

Club licensees are also exempt from submitting background checks with their Small Games of Chance application.

Provides for a 60/40 split for club licensee’s proceeds from games of chance  — where at least 60 percent of proceeds must go to public interest purposes, and no more than 40 percent of the proceeds can be used for operating expenses.

Deletes the itemized list of what constitutes “operational expenses” and removes the prohibition against using proceeds to purchase alcohol or food, or to pay the wages of employees of the club licensee.

Permits club licensees to donate proceeds to individuals, not just organizations, to satisfy their public interest purpose.

Exempts the first $20,000 of proceeds collected by club licensees with $40,000 or less in annual proceeds from the 60/40 distribution split.

Distribution of funds for public interest purposes must be paid out within one year of the end of the calendar year in which the proceeds were obtained.

Repeals the provision of the Act that requires a club licensee to maintain records relating to the printing or purchase of raffles tickets.

Requires the Department of Revenue to conduct random audits of 5% of all club licensees.

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Tavern Gaming:

Adds a new chapter in the Act to allow for-profit entities to operate tavern games — termed “restaurant licensee.”

A restaurant licensee is defined as a “for-profit hotel, restaurant, privately owned public golf course, brew pub or micro brewery licensed to sell liquor under the Liquor Code.

Allows for three types of tavern games: pull-tab games, tavern daily drawings or tavern raffles.

Exempts grocery stores, including those who have an interior connection to a restaurant, and premises where the sale of liquid fuels or oil (gas stations) is conducted from being considered as a restaurant licensee.

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Application Process for Tavern License:

Requires a restaurant licensee to submit an application to the PLCB. The Board has six months from the date the application is received to approve or disapprove the application.

The Bureau of Investigations and Enforcement (BIE) of the Gaming Control Board, in conjunction with PLCB, is responsible to conduct a background investigation during the application process. BIE would then make a recommendation to the PLCB based on the outcome of the investigation. The costs of the background check would be covered by the applicant. Applicants are also required to disclose all arrests and citations, including non-traffic summary offenses as part of background checks.

Requires an application fee of $1,000, with an additional $1,000 investigative fee and a license fee of $2,000 and yearly renewal fee of $1,000, if and when the application is approved.

Applicants are required to submit information relating to citations and conditional license agreements issued under the Liquor Code to the PLCB.

Prohibits the transfer of a tavern games license if there was a change in ownership of the premises of the restaurant license. The new owners would be required to independently apply and qualify for a license, pay the license fee and undergo and pay for a background investigation.

Allows the PLCB to disapprove the issuance or renewal of a tavern gaming license if the restaurant licensee’s liquor license is in safekeeping, subject to pending objection, pending license suspension, or on a one-year prohibition on the issuance or transfer of the license.

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Tavern Gaming Prize Limits and Bank Account:

Maximum individual prize limit for any single chance is $2,000. Also, no more than $35,000 in prizes may be awarded per week.

Requires that a licensee maintain a separate bank account to hold the net revenues of tavern games separate from all other funds. Bank account records would be required to show all expenditures and income and shall be retained for at least two years.

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Proceeds Distribution:

Except for tavern raffles, proceeds from tavern games are subject to a 60/40 split — where 60 percent of the net revenues obtained in a year would be paid to the Commonwealth and 40 percent retained by the licensee.

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Tavern Raffle:

A licensee is able to offer one “tavern raffle” per month. These raffles would be designated for a dedicated and advertised charitable purpose.

Within seven days of the raffle, at least 50 percent of the net revenues must be given to the advertised designated charity. The other 50 percent would then be subject to the 60/40 split assessed to all other “tavern games” — where 60 percent would be paid to the Commonwealth, and 40 percent retained by the licensee.

Any tavern raffle prize remaining unclaimed after 60 days would be required to be donated by the licensee to the designated charitable organization for which the raffle was held.

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Tavern Games Tax:

Provides for a “tavern games tax” — which would be 60 percent of the net revenue from tavern games sold by a licensed distributor.

Net revenue is defined as the difference between the face value, as indicated by the manufacturer, collectible by a licensee from a tavern game and the maximum amount of prizes payable, as indicated by the manufacturer, by a licensee from a tavern game.

For games not required to be purchased from a licensed distributor (examples include instant raffles and daily drawings), a tax of 60 percent would be imposed upon the net revenue and would be required to be paid to the state by the licensee.

A licensee or licensed distributor subject to the tavern game tax is required to file with the department of revenue a tavern game tax return. Payment of the tax calculated would be required to be paid when the tavern games tax return is made.

The total amount of taxes imposed by the tavern game tax would be deposited into the General Fund.

Additionally, a 5 percent host municipality tavern games tax will be applied to licensed distributors and licensees. This tax would be remitted to municipalities that host tavern gaming.

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Reports, Enforcement and Penalties:

Provides that a licensee shall submit annual reports to the Department of Revenue for the prior year on a form designated by the Department.

The PLCB may suspend or revoke a license following a notice and hearing, as well as impose a civil penalty for violation under this chapter; up to $2,000 for the first violation, $3,000 for a second violation and up to $5,000 for a third violation.

Provides for criminal penalties – 3rd degree misdemeanor for a first offense, and second degree misdemeanor for a second or subsequent violation. Also an Administrative Law Judge under the Liquor Code may impose the penalties under this proposal following the issuance of a citation by the Bureau of Liquor Control Enforcement (LCE).

Prohibits restaurant licensees who are part of a casino or part of a major league sports team facility from obtaining a tavern games license. Also, establishments that have been decreed as nuisances pursuant to the Liquor Code, would also be prohibited from receiving a tavern games license.

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State Lottery:

Requires the Legislative Budget and Finance Committee (LBFC), starting in 2016 and each year thereafter, to study the impacts of tavern gaming on the State Lottery. Pending the results of these studies, the Governor may request the General Assembly to transfer money from the General Fund to the State Lottery Fund up to the amount identified in the study.

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Effective Dates:

The provisions of this bill relating to major league sports drawings, major league sports teams and charitable events would take effect immediately.

The remainder of the act would take effect in 60 days.

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