SB 330-FN – AS INTRODUCED
2008 SESSION
08/04
SENATE BILL 330-FN
This bill:
I. Allows video lottery gaming at grand hotels in Coos county and at racetracks.
II. Establishes the gaming enforcement division in the department of safety.
III. Establishes the New Hampshire thoroughbred and standard bred horse breeding program fund.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
08-2740
08/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT relative to video lottery machines at certain pari-mutuel facilities.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Video Lottery Machines. Amend RSA by inserting after chapter 284 the following new chapter:
CHAPTER 284-A
284-A:1 Definitions. In this chapter:
I. “Applicant” means any person, officer, director, or key employee, who on his own behalf or on behalf of another, is applying for permission to engage in any act or activity which is regulated under the provisions of this chapter. In cases in which the applicant is a corporation, foundation, organization, business trust, estate, limited liability company, trust, partnership, limited partnership, association or any other form of legal business entity, the lottery commission shall determine the associated persons whose qualifications must be provided and reviewed as a precondition to the licensing of the applicant.
II. “Grand hotel” means a facility:
(a) Operated in Coos county with a minimum of 150 rooms in a single structure with restaurant facilities in common ownership, available to the public during the calendar year 2002 or before; or
(b) Historically operated as a casino in Coos county and which contributes to the state’s tourism industry by offering a minimum 18-hole golf course.
III. “Key employee” means any individual who is employed in a director or department head capacity and who is authorized to make discretionary decisions that regulate video lottery machine operations, including the general manager and assistant manager of the operator licensee or technology provider, director of operations, director of cage and/or credit operations, director of surveillance, director of marketing, director of management information systems, director of security, comptroller, and any employee who supervises the operations of these departments or to whom these department directors or department heads report and such other positions which the lottery commission shall determine based on detailed analyses of job descriptions as provided in the internal controls of the licensee. All other gaming employees shall be considered as non-key employees.
IV. “Lottery commission” means the New Hampshire lottery commission as established in RSA 284:21-a.
V. “Net machine income” means all cash or other consideration utilized to play a video lottery machine, less all cash or other consideration paid to players of video lottery machines as winnings. Non cashable promotional credits shall be excluded from the calculation.
VI. “Operator applicant” means the applicant applying for an operator’s license to operate video lottery machines at the pari-mutuel licensee location.
VII. “Operator’s license” means the license issued by the lottery commission to an operator licensee which allows the operator licensee to possess, conduct, and operate video lottery machines in accordance with this chapter.
VIII. “Operator licensee” means an operator applicant who is issued a license by the lottery commission to procure and operate video lottery machines pursuant to this chapter.
IX. “Pari-mutuel commission” means the New Hampshire pari-mutuel commission as established in RSA 284:6-a.
X. “Pari-mutuel licensee” means an entity licensed and authorized to conduct live horse racing as provided in RSA 284:16 or live dog racing as provided in RSA 284:16-a for at least the number of days as required in RSA 284:22-a, II(a)(3) at a pari-mutuel location.
XI. “Pari-mutuel licensee location” means the facility at which a pari-mutuel licensee is located and where either a grand hotel is sited in Coos county or where a pari-mutuel licensee is authorized to conduct live horse racing or live dog racing as of January 1, 2007 for at least the number of days as required in RSA 284:22-a, II(a)(3), and any real estate in which a pari-mutuel licensee has an interest as of January 1, 2007 which is adjacent to the real estate on which a pari-mutuel licensee is authorized to conduct live horse racing or live dog racing.
XII. “Progressive jackpot” means a prize that increases over time or as video lottery machines that are linked to a progressive system are played. Upon conditions established by the lottery commission, a progressive jackpot may be paid by annuity.
XIII. “Progressive system” means one or more video lottery machines linked to one or more common progressive jackpots.
XIV. “Technology provider” means any person or entity which designs, manufactures, installs, distributes, or supplies video lottery machines for sale or lease to the operator licensees, and which are for use by an operator licensee for conducting video lottery games in accordance with this chapter. The term shall also include the provider of the central computer system.
XV. “Technology provider licensee” means a technology provider that is licensed by the lottery commission.
XVI. “Token” means the coin, which is not legal tender, sold by a cashier in a face amount equal to the cash paid by a player for the sole purpose of playing a video lottery machine at a pari-mutuel licensee location or paid to a player of a video lottery machine, which can be exchanged for cash at the pari-mutuel licensee location.
XVII. “Video lottery machines” means an electronic, mechanical, or computerized machine licensed by the lottery commission, upon the insertion of bills, coins, tokens, or any representative of value is available to be played where, by chance or skill, or both, the player may receive cash, cash equivalents or tokens. Video lottery machines include, but are not limited to, slot machines, video poker machines, and other lottery machines. A machine shall be considered a video lottery machine notwithstanding the use of an electronic credit system making the deposit of bills, coins or tokens unnecessary. Video lottery machines do not include any redemption slot machines and redemption poker machines as defined in RSA 647 or video poker machines or other similar machines used for amusement purposes only.
284-A:2 Video Lottery Oversight.
I. No license shall be issued to any person under this chapter without prior approval of the lottery commission consistent with this chapter and RSA 284:21-w. The lottery commission shall only issue licenses to persons who operate video lottery machines at a pari-mutuel licensee location, and only after completion of the background reviews set forth in this chapter, or in the case of an interim license, after meeting the requirements of RSA 284-A:6, I.
II. In addition to the responsibilities in paragraph I and RSA 284:21-w, the lottery commission shall have general responsibility for the implementation of this chapter and shall adopt rules under RSA 541-A relative to:
(a) Hearing and deciding all license applications or recommendations for the suspension or revocation of any license issued under this chapter.
(b) Conducting all investigations required under this chapter with regard to the application of any applicant for any license.
(c) Conducting hearings pertaining to civil violations of this chapter or rules under the provisions of this chapter and collecting all penalties under the provisions of this chapter.
(d) Establishing standards and a reasonable fee structure for the licensing and renewal of licenses for employees and operators, technology providers, and operator licensees consistent with RSA 284-A:5, I(e) and II(e).
(e) Establishing technical standards for approval of video lottery machines, including mechanical and electrical reliability and security against tampering, as deemed necessary to protect the public from fraud or deception and to insure the integrity of the operation.
(f) Establishing standards for licensing under RSA 284-A:6.
(g) Establishing standards for reviewing any structure at a pari-mutuel licensee location.
(h) Establishing the hours of operation for video lottery machines.
(i) Ensuring that all licensees update the lottery commission with regard to any change in ownership or material change in information or data regarding the licensee that the commission determines is necessary and appropriate.
III. Pending the adoption of rules under RSA 541-A, and consistent with RSA 541-A:19, the lottery commission shall adopt interim rules after public hearing and within 90 days after enactment of RSA 284-A. Such interim rules shall implement the provisions of RSA 284-A including an approval process for selecting the provider of the central computer system. Such interim rules shall be deemed interim rules and shall expire upon the adoption of permanent rules.
IV. The lottery commission may issue subpoenas and compel the attendance of witnesses, to administer oaths, and require testimony of witnesses under oath.
V. No later than November 1 in each calendar year, the lottery commission shall submit a report to the fiscal committee of the general court, regarding the operation of video lottery machines. Such report may include recommendations for future legislation.
VI.(a) The lottery commission shall cause to be made and kept a record of all proceedings of public meetings of the commission.
(b) The lottery commission shall keep and maintain a list of all applicants for licenses it receives under this chapter together with a record of all actions taken with respect to such applicants. A file and record of the actions by lottery commission shall be open to public inspection provided, however, that the information regarding any applicant whose license or registration has been denied, revoked, or not renewed shall be removed from such list after 5 years from the date of such action.
(c) The lottery commission shall maintain such other files and records as the commission determines is necessary. All records maintained by the lottery commission may be maintained in digital or other format provided that such information can be produced in written form upon the request of the commission.
(d) All information and data required by the lottery commission to be furnished to it, or which may otherwise be obtained, shall be considered to be confidential and shall not be revealed in whole or in part except in the course of the necessary administration of this chapter, or upon the lawful order of a court of competent jurisdiction, or, with the approval of the attorney general, to a duly authorized law enforcement agency.
(e) All information and data pertaining to an applicant’s criminal record, family, and background furnished to or obtained by the lottery commission from any source shall be considered confidential and shall be withheld in whole or in part. Such information shall be released upon the lawful order of a court of competent jurisdiction or to a duly authorized law enforcement agency.
(f) Notice of the contents of any information or data released, except to a duly authorized law enforcement agency pursuant to subparagraphs (d) or (e), shall be given to any applicant, registrant, or licensee in a manner prescribed by the rules adopted by the lottery commission.
VII. The lottery commission and the attorney general shall from time to time contract for such financial, economic, or security consultants, and any other technical and professional services as the lottery commission deems necessary for the discharge of its duties.
284-A:3 Authorization for Video Lottery Machines.
I. A pari-mutuel licensee may to install, operate, and conduct video lottery machines at its pari-mutuel licensee location as an operator licensee, in accordance with the provisions of this chapter.
II. A pari-mutuel licensee may enter into one or more agreements with an operator licensee to manage or participate in the operation of video lottery machines at its pari-mutuel licensee location in accordance with the provisions of this chapter.
284-A:4 Licenses; Number of Video Lottery Machines.
I. No person shall engage in the ownership, possession, transfer, maintenance, repair, or operation of a video lottery machine unless:
(a) Such person is licensed in accordance with the provisions of this chapter; and
(b) Local approval as provided in RSA 284-A:9 has been obtained.
II. Any operator or technology provider shall be licensed by the lottery commission prior to engaging in any activity authorized by this chapter.
III. Each operator licensee operating video lottery machines at a pari-mutuel licensee location at which live dog racing is conducted shall be limited to a maximum of 1,000 video lottery machines in operation at each such pari-mutuel licensee location.
IV. Each operator licensee operating video lottery machines at a pari-mutuel licensee location at which live horse racing is conducted shall be limited to a maximum of 3,000 video lottery machines in operation at each such pari-mutuel licensee location.
V. Each operator licensee operating video lottery machines at a pari-mutuel licensee location in Coos county which is a grand hotel shall be limited to a maximum of 1,000 video lottery machines in operation at each such pari-mutuel licensee location.
284-A:5 Application and License Requirement for State License for Operators and Technology Vendors of Video Lottery Machines.
I. Licensing procedures for operators of video lottery machines shall include the following:
(a) A pari-mutuel licensee or other operator applicant shall obtain an operator’s license from the lottery commission. In the event that a pari-mutuel licensee enters into an agreement with another person or entity to manage and operate video lottery machines at its pari-mutuel licensee location, that person or entity shall apply as the operator licensee applicant. An applicant must complete and sign an application on forms prescribed by the lottery commission, and include information regarding the applicant’s criminal history background, civil judgments, and financial affairs. The application shall include the full name, address, date of birth, and other personal identifying information of the applicant and all key employees, and if a corporation or other form of business enterprise, the same information shall be provided with respect to each partner, trustee, officer, director, and any shareholder or other holder who owns more than 10 percent of the legal or beneficial interests of such entity.
(b) If the applicant or any owner has held a gaming or video lottery machine license in a jurisdiction where video lottery machine activities are permitted, the applicant shall so state and may produce either a letter of reference from the gaming or lottery enforcement or control agency which sets forth the experience of that agency with the applicant, the applicant’s associates and gaming operations, or a statement under oath that the applicant is or was during the period the activities were conducted in good standing with the agency.
(c) The attorney general shall conduct a background review of each operator applicant and any of its owners and key employees consistent with RSA 284:A-6. The background review may be conducted through any appropriate state or federal law enforcement system and the authorized reviewers may seek information as to the subject’s financial, criminal, or business background, or any other information which the attorney general, in his or her sole discretion, may find relevant to the subject’s fitness to be associated with the ownership or management of the operation of video lottery machines in New Hampshire, including, but not limited to, the subject’s character, personal associations, and the extent to which the subject is properly doing business in the manner in which it purports to operate. If the applicant is a pari-mutuel licensee and the attorney general has conducted a background investigation pursuant to RSA 284:15-b, IV within the 12 months prior to the application filing, the attorney general may rely on the results of the previous investigation to the extent the applicant’s circumstances have not materially changed. The attorney general shall also take into consideration as evidence of fitness a letter of reference or sworn statement of good standing produced pursuant to RSA 284-A:5, I(b). The attorney general shall report the results of the background review to the lottery commission within 60 days. The results of any such review shall be confidential and shall not be subject to disclosure or to public inspection, except that the attorney general, in the attorney general’s sole discretion, shall determine the extent to which and the manner in which said results may be reported to the lottery commission or other state agency or official and, if reported, whether such results are to retain their confidential character; provided, however, that whenever the attorney general conducts such an review, the attorney general shall notify the lottery commission whether or not in his or her opinion such person is fit to be associated with participation in the ownership or management of the operation of video lottery machines in this state. The attorney general may conduct such review on the attorney general’s motion into the background of the license applicant or holder, or any person or entity upon whom the license applicant or holder relies for financial support.
(d) In any review conducted pursuant to subparagraph (c), the attorney general or any duly authorized member of the attorney general’s staff may require by subpoena or otherwise the attendance of witnesses and the production of such correspondence, documents, books, and papers as he or she deems advisable, and for purposes of this section, may administer oaths and take the testimony of witnesses.
(e)(1) The lottery commission shall impose an application fee of $100,000 which shall be used to defray the cost of processing the application. If the cost of processing the application exceeds $100,000, the applicant shall pay the difference. In the event that a pari-mutuel licensee makes an agreement pursuant to RSA 284-A:3, II and the operator applicant applies for the operator’s license, then the aggregate amount of the fee shall be the greater of $100,000 or the actual costs incurred by the lottery commission.
(2) The attorney general shall impose an investigation fee of $50,000 which shall be used to defray the cost of the background investigation. If the cost of the background investigation exceeds $50,000, the applicant shall pay the difference. In the event that a pari-mutuel licensee makes an agreement pursuant to RSA 284-A:3, II and that the operator applicant applies for the operator’s license, then the aggregate amount of the fee shall be the greater of $50,000 or the actual costs incurred by the attorney general.
(3) Upon approval of a pari-mutuel licensee or operator licensee, the lottery commission shall charge an initial license fee of $15,000,000 for a pari-mutuel licensee or operator licensee where live horse racing takes place, $5,000,000 for a pari-mutuel licensee or operator licensee where live dog racing takes place and $5,000,000 for a grand hotel. The lottery commission shall charge a license fee of $1,000,000 to renew a license to a pari-mutuel licensee or an operator’s licensee where live horse racing takes place, $500,000 where live dog racing takes place, and $500,000 for a grand hotel provided, however, such person seeking renewal of its license shall pay all costs incurred by the attorney general to conduct an investigation with regard to such application to renew the operator’s license.
II.(a) A technology provider licensee applicant shall secure a technology provider license from the lottery commission. An applicant must complete and sign an application on forms prescribed by the lottery commission, and include information regarding the applicant’s criminal history background, civil judgments and financial affairs. The application shall include the full name, address, date of birth, and other personal identifying information of the applicant and all key employees, and if a corporation or other form of business enterprise, the same information shall be provided with respect to each partner, trustee, officer, director, and any shareholder or other holder who owns more than 10 percent of the legal or beneficial interests of such entity.
(b) If the applicant or any owner has held a gaming or video lottery machine license in a jurisdiction where video lottery machine activities are permitted, the applicant shall so state and may produce either a letter of reference from the gaming or lottery enforcement or control agency which sets forth the experience of that agency with the applicant, the applicant’s associates and gaming operation, or a statement under oath that the applicant is or was during the period the activities were conducted in good standing with the agency.
(c) The attorney general shall conduct a background review of each technology provider applicant and any of its owners and key employees. The review may be conducted through any appropriate state or federal law enforcement system and may seek information as to the subject’s financial, criminal, or business background, or any other information which the attorney general, in his or her sole discretion, may find relevant the subject’s fitness to be associated with the distribution of video lottery machines in New Hampshire, including, but not limited to, the subject’s character, personal associations, and the extent to which the subject is properly doing business in the manner in which it purports to operate. The attorney general shall take into consideration as evidence of fitness a letter of reference or sworn statement of good standing produced pursuant to RSA 284-A:5, II(b). The attorney general shall report the results of the review to the lottery commission within 60 days. The results of any such review shall be confidential and shall not be subject to disclosure or to public inspection, except that the attorney general, in the attorney general’s sole discretion, shall determine the extent to which and the manner in which said results may be reported to the lottery committee or other state agency or official and, if reported, whether such results are to retain their confidential character; provided, however, that whenever the attorney general conducts such a review, the attorney general shall notify the lottery commission whether or not in his or her opinion such person is fit to be associated with the distribution of video lottery machines in this state. The attorney general may conduct a background review on the attorney general’s motion into the background of the license applicant or holder, or any person or entity upon whom the license applicant or holder relies for financial support.
(d) In any review conducted pursuant to subparagraph (b), the attorney general or any duly authorized member of the attorney general’s staff may require by subpoena or otherwise the attendance of witnesses and the production of such correspondence, documents, books, and papers as he or she deems advisable, and for purposes of this section, may administer oaths and take the testimony of witnesses.
(e)(1) The lottery commission shall charge the technology provider applicant an application fee of $50,000 which shall be used to defray the cost of processing the application. If the cost of processing the application exceeds $50,000, the applicant shall pay the difference.
(2) The attorney general shall charge the technology provider applicant an investigation fee of $25,000 which shall be used to defray the cost of the background investigation. If the cost of the background investigation exceeds $25,000, the applicant shall pay the difference.
(3) Upon approval of a technology provider licensee, the lottery commission shall charge an initial license fee of $50,000 The lottery commission shall charge a fee of $50,000 to renew a license to a technology provider licensee provided, however, such person seeking renewal of its license shall pay all costs incurred by the attorney general to conduct an investigation with regard to such application to renew the operator’s license.
284-A:6 Licensure Requirements.
I. No license shall be issued by the lottery commission unless the applicant complies with the criteria set forth in this section. The lottery commission shall consider as evidence supporting these criteria any letter of reference or sworn statement of good standing submitted pursuant to RSA 284-A:5, I(b) or RSA 284-A:5, II(b):
(a) The applicant’s financial stability, integrity, and responsibility, considering, without limitation, bank references, business and personal income and disbursement schedules, tax returns, and other reports filed with governmental agencies, business and personal accounting records, check records, and ledgers.
(b) The trustworthiness of all financial backers, investors, mortgagees, bondholders, and holders of indentures, notes, and other evidences of indebtedness of the applicant.
(c) The applicant’s good character, honesty, and integrity, considering, without limitation, information pertaining to family, habits, character, reputation, criminal and arrest record, business activities, financial affairs, and business, professional and personal associates, covering at least the 10-year period immediately preceding the filing of the application.
(d) The applicant’s business ability and experience in the operation of video lottery machines, as appropriate, so as to establish the likelihood of a successful and efficient operation.
II. No license shall be issued by the lottery commission to any applicant unless the applicant proves that each director, officer or key employee and each direct or indirect owner complies with the criteria for licensure contained in this section.
III. No license shall be issued by the lottery commission to any operator or technology provider applicant if the applicant, any key employee or any individual who has an ownership or financial interest in or with the applicant is an elected official to the general court or executive, branch of state of New Hampshire. If any such applicant, key employee, or any individual who has an ownership or financial interest in the applicant becomes such an elected official, the applicant shall be subject to sanctions pursuant to RSA 284-A:14.
IV. No license shall be issued by the lottery commission to an operator applicant unless the operator applicant is a pari-mutuel licensee seeking to operate video lottery machines at a pari-mutuel licensee location, or, if not a pari-mutuel licensee, the operator applicant submits proof of an agreement to manage and operate video lottery machines at a pari-mutuel licensee location. Such agreement shall be with a pari-mutuel licensee authorized to conduct live horse racing or live dog racing at its pari-mutuel licensee location.
V. No licensee or any individual or entity that is an owner of, or has a financial interest in or with the licensee shall be permitted to make a political contribution as defined by RSA 664:2, VIII.
VI. The lottery commission shall grant or deny a license under this chapter within 180 days of receiving a completed application, notwithstanding the adoption of interim or final rules.
284-A:7 Exclusion of Minors.
I. No person under 21 years of age shall play a video lottery machine authorized by this chapter. Each violation of this section shall be punishable by a fine of no more than $20,000 and shall be payable by such person who violates this section.
II. No pari-mutuel licensee or its operator licensee shall knowingly permit any person under 21 years of age to play or participate in any aspect of the play of a video lottery machine. Each violation of this section shall be punishable by a fine of no more than $20,000 and shall be payable by the pari-mutuel licensee or its operator licensee. In the event that a pari-mutuel licensee or its operator licensee has 3 or more violations of this section within a calendar year, the license held by the pari-mutuel licensee or its operator licensee shall be subject to suspension for a period to be determined by the lottery commission.
284-A:8 Distribution of Net Machine Income.
I. Forty-two percent of the net machine income generated by video lottery machines shall be paid to the state from which the state shall pay for the costs of regulation and administration, the acquisition and operation of the central computer system, and the balance shall be deposited in the general fund of the state.
II. Two percent of the net machine income from video lottery machines shall be paid to the municipality in which the operator licensee operates video lottery machines.
III. Four percent of the net machine income generated from video lottery machines shall be paid to the pari-mutuel commission for the live racing fund established herein and shall be disbursed as follows:
(a) A sum not to exceed 5 percent of the fund shall be distributed by the pari-mutuel commission to support a New Hampshire horse-breeding fund, as established in the office of the state treasurer. The pari-mutuel commission shall adopt rules under RSA 541-A to implement this subparagraph.
(b) A sum not to exceed 7 percent of the fund shall be allocated to the alcohol and drug abuse treatment program as established in RSA 172 to treat problem gambling.
(c) A sum not to exceed 3 percent of the fund shall be allocated to the county where the pari-mutuel licensee is located.
(d) The balance of the funds shall be used by the pari-mutuel commission for the purpose of enhancing live racing purses at the pari-mutuel licensee locations. The pari-mutuel commission shall adopt rules under RSA 541-A to implement this subparagraph.
IV. Two percent of the net machine income from video lottery machines generated shall be paid to the state treasurer to be used by the department of resources and economic development for purposes of promoting tourism in the state.
V. The balance of the funds from the net machine income from video lottery machines shall be retained by the operator licensee.
VI. The operator licensee shall deliver the amounts payable to the state or municipality as provided in paragraphs I through IV in immediately available funds of the United States on a weekly basis on the first business day of each week. At the time payment is delivered, the operator licensee shall provide a written accounting of net machine income generated from the video lottery machines by the operator licensee on an aggregate basis and the calculation of amounts due to the state separately for distribution pursuant to paragraphs I, III, and IV above, the amount due the municipality pursuant to paragraph II above, and the balance of net machine income retained by the operator licensee. The operator shall pay a penalty of $1,000 for each day that payment or the accounting is not delivered in a timely basis to the state and a penalty of $1,000 for each day that payment or the accounting is not delivered to the municipality.
284-A:9 Procedures for Adoption by Local Community.
I. Any town or city in which a pari-mutuel licensee location is situated may adopt the provisions of RSA 284-A, to allow the operation of video lottery machines, in the following manner:
(a) In a town, except a town that has adopted a charter pursuant to RSA 49-D, the questions shall be placed on the warrant of an annual or special town meeting, by the governing body or by petition pursuant to RSA 39:3.
(b) In a city or town that has adopted a charter pursuant to RSA 49-C or RSA 49-D, the legislative body may consider an act upon the question in accordance with its normal procedures for passage of resolutions, ordinances, and other legislation. In the alternative, the legislative body of any such municipality may vote to place the question on the official ballot for any regular municipal election.
(c) If a majority of those voting on the question vote in the affirmative, RSA 284-A shall apply in such town or city and the operation of video lottery machines shall be permitted within such town or city in accordance with RSA 284-A. If a majority of those voting on the question vote “No” the question may be voted on at a subsequent time in accordance with RSA 284-A:9 I and II provided, however, the town may consider the question at no more than one special meeting and the annual town meeting in the same calendar year.
II. When a pari-mutuel licensee requests a town or city to act under RSA 284-A:9, I, the pari-mutuel licensee shall pay all costs associated with carrying out the actions under this subsection.
284-A:10 Inspection of Video Lottery Machines; Penalty for Tampering or Manipulating.
I. The lottery commission shall, periodically test video lottery machines installed at a pari-mutuel licensee location. In conducting such tests, the lottery commission shall use the services of an independent laboratory, the cost of such independent laboratory shall be paid by the technology provider.
II. Any person who purposely manipulates the outcome, payoff, or operation of any video lottery machine by physical, electronic, or mechanical means, shall be guilty of a felony.
284-A:11 Video Lottery Machines.
I. An operator licensee shall provide to the lottery commission and the pari-mutuel commission, by diagram, a description of:
(a) The location of each video lottery machine available for play by the public.
(b) The location of all areas for the storage, maintenance, or repair of video lottery machines.
(c) A description of all security measures to be taken for the safeguarding of video lottery machines.
(d) The location and security measures taken for the safeguarding of all moneys, tokens, or other items of value utilized in the use of video lottery machines.
(e) All procedures for the operation, maintenance, repair, and inserting or removing of moneys, tokens, or other items of value from video lottery machines.
(f) All of the above shall be approved by the lottery commission prior to commencing the operation of any video lottery machines.
II. No video lottery machine shall be possessed, maintained, exhibited, brought into or removed from a pari-mutuel licensee location, by any person unless such machine has permanently affixed to it an identification number or symbol authorized by the lottery commission and prior notice of any such movement has been given to the lottery commission.
III. Each operator licensee shall maintain secure facilities for the counting and storage of all moneys, tokens, or other items of value utilized in the conduct of video lottery machines.
IV. The drop boxes and other devices shall not be brought into the pari-mutuel licensee location or removed from an video lottery machine, locked or unlocked, except at such specific times and such places and according to such procedures as the lottery commission may require to safeguard such boxes and devices and their contents.
V. No video lottery machine shall be used to conduct gaming unless it is identical in all electrical, mechanical, and other aspects to a model which has been specifically tested by the lottery commission and licensed for use by the lottery commission.
VI. All video lottery machines in operation at a pari-mutuel licensee location shall provide a pay off of an average of at least 87 percent annually.
VII. All tickets given as prizes or winnings from video lottery machines shall be redeemed for cash within one year after the date of winning. After the expiration of that one year, all such unredeemed tickets shall become property of the state of New Hampshire.
VIII. An operator licensee who operates video lottery machines shall not be restricted in the days of operation of such machines, provided the pari-mutuel licensee has scheduled at least the number of days of racing as required by RSA 284:22-a, II(a)(3).
IX. Video lottery machines shall be operated only at times when the public is allowed access to the locations. They shall not be operated during private functions. No automatic teller machines shall be located within 150 feet of video lottery machines.
284-A:12 Term of License. Any operator’s license or technology provider’s license issued pursuant to this chapter and any renewal thereof shall be valid for 5 years unless earlier suspended or revoked by the lottery commission. The lottery commission shall adopt procedures for license renewal that take into consideration whether the applicant has been previously licensed in good standing under this chapter.
284-A:13 Presence of the Lottery Commission. The lottery commission may be present at any pari-mutuel licensee location at which video lottery machines are operated at all times when the facility is open to the public. The operator licensee may be required by the lottery commission or gaming enforcement division of the department of safety to provide such office space and equipment which the commission shall determine is reasonably necessary or proper.
284-A:14 Sanction Powers of the Lottery Commission.
I. The lottery commission, following appropriate hearings and factual determinations, may impose sanctions against any person for any violation of this chapter or any rule of the lottery commission adopted under the provisions of this chapter as follows:
(a) Revocation or suspension of a license.
(b) Civil penalties as may be necessary to punish misconduct and to deter future violations, which penalties may not exceed $50,000 for each violation.
(c) Order restitution of any moneys or property unlawfully obtained or retained by a person.
(d) Issue a cease and desist order which specifies the conduct which is to be discontinued, altered, or implemented by the person.
(e) Issue letters of reprimand or censure, which shall be made a permanent part of the file of each person so sanctioned.
(f) Impose any or all of the foregoing sanctions in combination with each other.
II. In determining appropriate sanctions in a particular case, the lottery commission shall consider:
(a) The risk to the public and to the integrity of video lottery machine operations created by the conduct of the person.
(b) The seriousness of the conduct of the person and whether the conduct was purposeful or with knowledge that it was in contravention of the provisions of this chapter or the rules of the pari-mutuel commission or the lottery commission.
(c) Any justification or excuse for such conduct.
(d) The prior history of the person involved.
(e) The corrective action taken by the person to prevent future misconduct of a like nature from occurring.
(f) In the case of a monetary penalty, the amount of the penalty in relation to the misconduct and the financial means of the person.
(g) In the event that a person receives 3 civil penalties during the term of such person’s license, the lottery commission may revoke the license for the balance of the term of the license or suspend such license for a period of time, as determined by the lottery commission.
284-A:15 Declaration of Limited Exemption from Operation of Provisions of 15 U.S.C. section 1171-1172. Pursuant to section 2 of an act of Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce,” approved January 2, 1951, being Chapter 1194, 64 Stat 1134, and also designated as 15 U.S.C. sections 1171-1177, the state of New Hampshire, acting by and through the duly elected and qualified members of its legislature, does hereby, in accordance with and in compliance with the provisions of that section 2 of that act of Congress, declare and proclaim that section 2 of that act of Congress shall not apply to any gambling device in this state where the transportation of such a device is specifically authorized by and done in compliance with the provisions of this chapter and any rules adopted pursuant to it, and that any such gambling device transported in compliance with state law and rules shall be exempt from the provisions of that act of Congress.
284-A:16 Legal Shipment of Gaming Devices into New Hampshire. All shipments into this state of gaming devices, the registering, recording, and labeling of which has been duly made by the manufacturer or dealer in accordance with sections 3 and 4 of an act of Congress of the United States entitled “An Act to Prohibit Transportation of Gambling Devices in Interstate and Foreign Commerce, approved January 2, 1951, being chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1172, shall be deemed legal shipments into this state.
2 New Section; Lottery Commission; Administration of Video Lottery. Amend RSA 284 by inserting after section 21-v the following new section:
284:21-w Video Lottery; Duties of the Lottery Commission; Administration; Video Lottery Oversight.
I. The lottery commission shall:
(a) Collect all license fees imposed upon any applicant and all taxes imposed by RSA 284-A.
(b) Certify net machine income by inspecting records, conducting audits, having its agents on site, or by any other reasonable means.
(c) Establish a central computer system located at the office of the lottery commission linking all video lottery machines to insure control over video lottery machines. The lottery commission shall establish a bid procedure for such contracts and ensure that the central computer system uses a widely adopted communications protocol approved by the Gaming Standards Association.
(d) Require all holders of an operator’s license issued by the lottery commission pursuant to RSA 284-A to submit its proposed system of internal control to the lottery commission for approval prior to the operation of video lottery machines at any pari-mutuel licensee location. At a minimum, the operator licensee’s proposed system of internal controls shall:
(1) Safeguard its assets and revenues, including, but not limited to the recording of cash and evidences of indebtedness related to the video lottery machines.
(2) Provide for reliable records, accounts and reports of any financial event that occurs in the operation of a video lottery machine.
(3) Ensure that each video lottery machine directly provides or communicates all required activities and financial details to the central computer system.
(4) Provide for accurate and reliable financial records.
(5) Ensure any financial event that occurs in the operation of a video lottery machine is performed only in accordance with the management’s general or specific authorization.
(6) Ensure that any financial event that occurs in the operation of a video lottery machine is recorded adequately to permit proper and timely reporting of net machine income and the calculation thereof and the related fees and taxes.
(7) Ensure that access to assets is permitted only in accordance with management’s specific authorization.
(8) Ensure that recorded accountability for assets is compared with actual assets at reasonable intervals and appropriate action is taken with respect to any discrepancies.
(9) Ensure that all functions, duties and responsibilities are appropriately segregated and performed in accordance with sound financial practices by qualified personnel.
II. The lottery commission may employ certain assistants to carry out the provisions of this section and RSA 284-A, and may employ such additional assistants and employees as the governor and council shall authorize. Such assistants and employees shall receive compensation at rates to be established by the division of personnel, however, such compensation shall be funded by proceeds paid to or received by the lottery commission pursuant to RSA 284-A. No employee of the lottery commission shall have any pecuniary or other interest in any supplier or agent to the commission or in any licensee licensed under RSA 284-A.
3 New Sections; Department of Safety; Gaming Enforcement Division Established. Amend RSA 21-P by inserting after section 11-a the following new sections:
21-P:11-b Gaming Enforcement Division.
I. There is established within the department of safety, a gaming enforcement division under the state police of gaming enforcement under the supervision of the commissioner of safety. The division shall:
(a) Investigate violations of RSA 284 or RSA 284-A and the rules adopted under the provisions of RSA 284 or RSA 284-A and initiate proceedings before the lottery commission for such violations.
(b) Report the results of any investigation conducted to the lottery commission.
(c) Participate in any hearing conducted by the lottery commission.
II. The commissioner of the department of safety shall organize the division into such units as the commissioner deems necessary. The commissioner of safety may employ such state police personnel as the commissioner deems necessary to fulfill the responsibilities of the division.
21-P:11-c Enforcement Expenditures. The governor and council with the prior approval of the fiscal committee of the general court, upon request from the commissioner of the department of safety may authorize the transfer of general funds to the department of safety to implement and enforce RSA 21-P:11-b, RSA 284, and RSA 284-A.
4 New Section; Pari-Mutuel Commission; Duties. Amend RSA 284 by inserting after section 6-a the following new section:
284:6-b Duties of the Pari-mutuel Commission.
I. The pari-mutuel commission shall:
(a) Provide to the lottery commission all records pertaining to the licensing of a pari-mutuel licensee under RSA 284-A within 30 days after the pari-mutuel commission receives a request.
(b) Hear and make recommendations to the lottery commission in reasonable order on all license applications for a license under RSA 284-A:6.
II. The pari-mutuel commission shall make its recommendation to the lottery commission in writing.
III. With regard to minutes and records of the pari-mutuel commission:
(a) The pari-mutuel commission shall cause to be made and kept a record of all proceedings of public meetings of the pari-mutuel commission pursuant to this chapter. A verbatim transcript of those proceedings shall be prepared by the pari-mutuel commission upon the request of any commissioner or upon the request of any other person and the payment by that person of the costs of preparation. A copy of a transcript shall be made available to any person upon request and payment of the costs of preparing the copy.
(b) The pari-mutuel commission shall keep and maintain a list of all notices it receives under RSA 284-A, together with a record of all actions taken with respect to such notices. A file and record of the pari-mutuel commission’s actions shall be open to public inspection provided, however, that the information regarding any applicant whose license or registration has been denied, revoked, or not renewed shall be removed from such list after 5 years from the date of such action.
(c) The pari-mutuel commission shall maintain such other files and records as the pari-mutuel commission determines is necessary.
(d) All information and data required by the pari-mutuel commission to be furnished to it, or which may otherwise be obtained, shall be considered to be confidential and shall not be revealed in whole or in part except in the course of the necessary administration of this chapter, or upon the lawful order of a court of competent jurisdiction, or with the approval of the attorney general, to a duly authorized law enforcement agency.
(e) All information and data pertaining to an applicant’s criminal record, family, and background furnished to or obtained by the pari-mutuel commission from any source shall be considered confidential and shall be withheld in whole or in part. Such information shall be released upon the lawful order of a court of competent jurisdiction or to a duly authorized law enforcement agency.
(f) Notice of the contents of any information or data released, except to a duly authorized law enforcement agency pursuant to subparagraphs (d) or (e), shall be given to any applicant, registrant, or licensee in a manner prescribed by the rules and regulations adopted by the pari-mutuel commission.
(g) All records, information or data maintained or kept by the pari-mutuel commission shall be maintained or kept at the office of the lottery commission.
5 License Restricted. RSA 284:16-c is repealed and reenacted to read as follows:
284:16-c License Restricted.
I. Notwithstanding any other provision of law, the pari-mutuel commission shall not issue a license to conduct live thoroughbred horse racing or live harness horse racing pursuant to RSA 284:16 to any applicant if the place where such races or race meets are to be held is within a radius of 40 miles of the place where live horse races or race meets for at least the number of days as required in RSA 284:22-a, II (a)(3) have already been licensed pursuant to RSA 284:16, provided however, that the pari-mutuel commission may issue a license to conduct live harness racing to the holder of a license to conduct live thoroughbred racing if the live harness racing is conducted at the same place where the live thoroughbred racing is being conducted.
II. Notwithstanding any other provision of law, the pari-mutuel commission shall not issue a license to conduct live dog racing pursuant to RSA 284:16-a to any applicant if the place where the races or race meets are to be held is within a radius of 40 miles of the place where such races or race meets have already been licensed pursuant to RSA 284:16-a.
6 Restriction on Gambling. RSA 284:17-c is repealed and reenacted to read as follows:
284:17-c Restriction on Gambling. Except as provided in the introductory paragraph of RSA 284:22, RSA 284:22-a, and RSA 284-A, no licensee who holds running horse races shall at the same facility hold any other kinds of races or permit any other type of gambling except harness horse races and activities licensed by the lottery commission or pari-mutuel commission.
7 New Paragraph; Pari-Mutuel Licensee; Cocktail Lounge License. Amend RSA 178:20, by inserting after paragraph V the following new paragraph:
VI. The commission may issue a special license to a person holding a pari-mutuel license or an operator’s license at a pari-mutuel licensee location under the provisions of RSA 284-A provided the pari-mutuel licensee location has an existing liquor license. Such special license shall allow the sale of liquor, wine, and beverages within the pari-mutuel licensee location, including dining room, function room, gaming room, lounge, or any other area designated by the commission, without regard to whether meals are served therein, but only during the time gaming is being conducted under RSA 284-A. A person licensed under this section shall comply with RSA 179:44.
8 New Subparagraph; Horse Breeding Fund. Amend RSA 6:12, I(b) by inserting after subparagraph (268) the following new subparagraph:
(269) Moneys received under RSA 284-A:8, III(a), which shall be credited to the New Hampshire thoroughbred and standard bred horse breeding program fund.
9 New Subparagraph; Authorized Video Lottery Machines. Amend RSA 647:2, V by inserting after subparagraph (c) the following new subparagraph:
(d) Video lottery machines authorized pursuant to RSA 284-A.
10 Rehabilitation of Gambling Addiction. Amend RSA 172:2-a to read as follows:
172:2-a Program Established. The commissioner shall provide for the scientific care, treatment, and rehabilitation of gambling, alcohol, and drug abusers, and work towards the prevention of, and assist in the control of, gambling, alcohol, and drug abuse within the state through education, treatment, community organization, and research.
11 Rehabilitation of Gambling Addiction. Amend RSA 172:8 to read as follows:
172:8 Duties of Commissioner. The commissioner shall:
I. Study the problems presented by gambling, alcohol, and drug abuse, including methods and facilities available for the care, treatment, custody, employment, and rehabilitation of persons who are inebriates, alcohol abusers, drug dependent, or drug abusers.
II. Promote meetings and programs for the discussion of gambling, alcohol, and drug dependency and abuse for the guidance and assistance of individuals, schools, courts, and other public and private agencies.
III. Conduct, promote and finance, in full or in part, studies, and other appropriate facilities dealing with the physical, psychological, and/or social aspects of gambling, alcohol, and drug abuse.
IV. Have the authority to accept or reject for examination, diagnosis, guidance, and treatment, insofar as funds and facilities permit, any resident of the state who comes to the commissioner voluntarily for advice and treatment.
V. [Repealed.]
VI. Render biennially to the governor and council a report of his activities including recommendations for improvements therein by legislation or otherwise.
VII. Coordinate community medical resources for the emergency medical care of persons suffering acute mental or physical reaction to gambling, alcohol, or drugs and of persons suffering from drug dependency.
VIII. Employ such assistants as may be necessary to carry out the purposes of this chapter, in accordance with state personnel regulations, and within available appropriations and funds.
IX. Disseminate information on the subjects of gambling, alcohol, and drug abuse for the guidance and assistance of individuals, schools, courts and other public and private agencies.
X. [Repealed.]
12 Rehabilitation of Gambling Addiction. Amend RSA 172:8-a to read as follows:
172:8-a Confidentiality of Client Records. No reports or records or the information contained therein on any client of the program or a certified gambling, alcohol, or drug abuse treatment facility or any client referred by the commissioner shall be discoverable by the state in any criminal prosecution. No such reports or records shall be used for other than rehabilitation, research, statistical or medical purpose, except upon the written consent of the person examined or treated. Confidentiality shall not be construed in such manner as to prevent recommendation by the commissioner to a referring court, nor shall it deny release of information through court order pursuant to appropriate federal regulations.
13 Rehabilitation of Gambling Addiction. Amend RSA 172:8-b to read as follows:
172:8-b Rulemaking. The commissioner shall adopt rules under RSA 541-A relative to the following:
I. The acceptance, care and treatment of gambling, alcohol, or drug dependent persons and alcohol or drug abusers who are clients of the program established under this chapter or a certified substance abuse treatment facility.
II. A fee schedule and collection of fees under RSA 172:14, IV.
III. Certification of substance abuse treatment facilities including, but not limited to:
(a) Program content;
(b) Qualifications of program staff; and
(c) Type of substance abuse treatment offered.
IV. Certification and recertification of gambling, alcohol, and drug abuse counselors including, but not limited to:
(a) Peer review of applicants.
(b) Minimum qualifications and competency.
(c) Education and continuing education.
(d) Experience required.
(e) Required knowledge of gambling, alcohol, and drug abuse counseling.
(f) Such other matters as the commissioner may deem necessary to carry out the purposes of this chapter.
V. Voluntary admissions under RSA 172:13.
14 New Section; New Hampshire Thoroughbred and Standard Bred Horse Breeding Program Fund. Amend RSA 435 by inserting after section 5 the following new section:
435:5-a New Hampshire Thoroughbred and Standard Bred Horse Breeding Program Fund. There is hereby established in the office of the treasurer the New Hampshire Thoroughbred and Standard Bred Horse Breeding Program Fund which shall be kept distinct and separate from all other funds. All moneys in such fund shall be nonlapsing and shall be continually appropriated to the state veterinarian to promote the breeding of thoroughbred and standard bred horses.
15 Effective Date. This act shall take effect July 1, 2008.
LBAO
08-2740
Revised 01/18/08
SB 330 FISCAL NOTE
AN ACT relative to video lottery machines at certain pari-mutuel facilities.
FISCAL IMPACT:
The Lottery Commission, Pari-Mutuel Commission, Department of Justice, Department of Safety, Department of Health & Human Services, Department of Agriculture, Department of Resources & Economic Development, Judicial Branch, Judicial Council, and Department of Corrections state this bill will increase state general fund and restricted revenue and expenditures by an indeterminable amount in FY 2009 and each fiscal year thereafter. The NH Municipal Association states this bill will increase local revenue and expenditures by an indeterminable amount in FY 2009 and each fiscal year thereafter. The NH Association of Counties states this bill will increase county revenue by an indeterminable amount in FY 2009 and each fiscal year therafter. There will be no fiscal impact on county expenditures.
METHODOLOGY:
The Lottery Commission states the intent of this bill is to allow video lottery gaming at grand hotels in Coos County and at existing racetracks. The Commission states it does not have any information regarding the possible locations and number of grand hotels that would satisfy requirements to hold video gaming, so the Commission assumes one grand hotel would be licensed for 1,000 video lottery machines (VLMs). The Commission states there are three dog tracks that would be licensed for 1,000 VLMs each, and one horse track that would be licensed for 3,000 VLMs, for a total of 7,000 VLMs in the state. The Commission assumes VLM operation will begin in FY 2010 since there is no provision for operation at a temporary location and it is estimated to take one year to establish operations. The Commission estimates net daily income from each VLM at $296, an amount derived from the NH Commission on Education Funding Report from August, 2000. The Commission estimates expenses for a central system vendor to be 10% of net revenue, and estimates VLM leasing costs of $4,862 per machine per year. The Commission estimates annual revenue related to the operation of VLMs in FY 2010 and each fiscal year thereafter as follows: 7,000 VLMs x $296 per day x 365 days = $756,280,000. The Commission estimates expenditures related to the operation of VLMs at $109,662,000, including $75,628,000 for the central gaming system (10% x $756,280,000), and $34,034,000 for VLM rental (7,000 VLMs x $4,862), for total net machine income of $646,618,000 ($756,280,000 - $75,628,000 - $34,034,000). The Commission states 50% of net machine income will be retained by the licensees and estimates remaining net machine income will be divided as follows:
General Fund – 42% x $646,618,000 = $271,579,560
Municipalities – 2% x $646,618,000 = $12,932,360
Dept. of Resources & Economic Dev., tourism promotion – 2% x $646,618,000 = $12,932,360
Pari-Mutuel Commission – 4% x $646,618,000 = $25,864,720, to be divided as follows:
Horse Breeding Fund – 5% x $25,864,720 = $1,293,236
Alcohol & Drug Abuse Treatment Program – 7% x $25,864,720 = $1,810,530
Counties – 3% x $25,864,720 = $775,942
Pari-Mutuel Commission live race enhancement – 85% x $25,864,720 = $21,985,012
The Commission states additional general fund revenue will be generated through application fees and licensing fees. The Commission states it will receive $35,000,000 in initial licensing fees in FY 2010 ($15,000,000 from one horse track, $5,000,000 each from one hotel and three dog tracks), and $3,000,000 in renewal license fees ($1,000,000 from one horse track, $500,000 each from one hotel and three dog tracks) in FY 2011 and each fiscal year thereafter. The Commission states it will receive $550,000 in application fees in FY 2010, including $100,000 each from three dog tracks, one horse track, and one hotel, and $50,000 from a technology provider. The Commission will also receive general fund revenue of $50,000 in FY 2010 and each fiscal year thereafter from technology provider license fees.
The Commission states it would need additional investigators, auditors, and outside contractual services to implement the requirements of this bill, but is unable to determine the number of additional employees, including salary and benefit costs, at this time.
The Pari-Mutuel Commission concurs with the Lottery Commission’s estimate of 1,000 VLMs each at three dog tracks, 3,000 VLMs at one horse track, and the estimate of $296 net daily income from each VLM. The Pari-Mutuel Commission does not assume there will be one grand hotel in Coos County licensed for 1,000 VLMs. The Commission states there are six hotels in Coos County that meet the definition of grand hotel under the proposed RSA 284-A:1, II; however, those grand hotels do not meet the definition of pari-mutuel licensee location under the proposed RA 284-A:1, XI because those locations are not licensed and authorized to conduct live horse or dog racing. The Pari-Mutuel Commission further states this bill will increase administrative costs at the Commission by an indeterminable amount to perform the responsibilities specified in the proposed RSA 284-A:8, III and RSA 284:6-b.
The Department of Justice states this bill grants oversight of video gaming at certain locations to the Lottery Commission. The Department anticipates the Commission will require assistance from an assistant attorney general in the Civil Bureau to assist with promulgation of rules and administrative enforcement of violations, as well as to provide legal counsel. The Department anticipates this will require 50% of the time of an assistant attorney general in the first year and 25% of the time of an assistant attorney general in each subsequent year. The Department anticipates the Department of Safety will require 25% of the time of an assistant attorney general in the first year and 5% of the time of an assistant attorney general in each subsequent year for assistance related to the establishment of the Division of Gaming Enforcement. The Department also states it will be necessary to hire a 20-hour-per-week support staff. The Department calculates the cost of salary, benefits, and equipment related to these positions as follows:
FY 2009 FY 2010 FY 2011 FY 2012
Attorney Salary $50,213 $15,516 $15,981 $16,461
Benefits (48.3%) $24,253 $7,494 $7,719 $7,951
Secretary Salary $14,518 $15,080 $15,673 $16,307
Benefits (48.3%) $7,012 $7,284 $7,570 $7,876
Computers (2) $2,400 - - -
Office Furniture $3,000 - - -
Software Licenses $2,000 - - -
Total $103,396 $45,374 $46,943 $48,595
The Department further states under this bill the Department is responsible for conducting a background investigation of every applicant for a video gaming license, as well as applicants for technology provider licenses. The Department expects it will hire four temporary full-time investigators and four financial analysts to complete each investigation within the required 90-day time period. This bill authorizes the Department to charge a video gaming license applicant an investigation fee of $50,000, with the applicant also responsible for paying investigation costs beyond $50,000. This bill authorizes the Department to charge a technology provider license applicant an investigation fee of $25,000, with the applicant also responsible for paying investigation costs beyond $25,000. While the bill does not specifically authorize the payment of personnel costs from the investigation fees, the Department anticipates the fees paid by applicants will cover these costs.
In addition, the Department states criminal penalties authorized by this bill would likely be prosecuted by a county attorney’s office. The Department states there may be some fiscal impact to the Department in instances when an appeal is taken to the Supreme Court; however, the fiscal impact cannot be determined.
The Department of Safety states this bill establishes a Gaming Enforcement Division at the Department, which would be required to investigate violations under this bill, initiate proceedings before the Lottery Commission, and participate in any hearing conducted by the Lottery Commission. The bill provides that the Division’s expenses will be paid through a transfer from the state general fund. The Department states it cannot estimate how many violations it would have to investigate or how many hearings the Division would participate in before the Lottery Commission, and therefore cannot estimate how many additional positions it would require to accomplish these requirements.
The Department of Health & Human Services states this bill dedicates 7% of net machine income allocated to the Pari-Mutuel Commission to the alcohol and drug abuse treatment program to treat problem gambling. The Department states it cannot determine the increase in state restricted revenue that will result from this bill. The Department assumes funds would be available beginning in FY 2009 to hire three positions to focus on gambling prevention and treatment initiatives, including a Health Promotion Advisor (LG 23), a Program Specialist III (LG 23), and an Executive Secretary (LG 11). The Department also expects to contract for media outreach, information development and dissemination, data collection and research, and outpatient gambling addiction treatment services. Anticipated Department expenditures are summarized as follows:
FY 2009 FY 2010 FY 2011 FY 2012
Staff Salaries $98,669 $102,765 $107,132 $111,793
Benefits (48.3%) $47,657 $49,635 $51,745 $53,996
Current Expense $6,000 $6,000 $6,000 $6,000
Equipment $10,500 $1,500 $1,500 $1,500
In-State Travel $2,500 $2,500 $2,500 $2,500
Out-of-State Travel $6,000 $6,000 $6,000 $6,000
Rent $13,389 $14,397 $15,453 $16,611
Contracts $590,000 $601,700 $613,750 $626,160
Total $774,715 $784,497 $804,080 $824,560
The Department of Agriculture states it is unable to determine how much restricted revenue would be deposited in the NH Thoroughbred and Standard Bred Horse Breeding Program Fund established by this bill in FY 2009 and each fiscal year thereafter. The Department states expenditures from this fund would be for various equine-oriented health and education programs.
The Department of Resources & Economic Development states it is unable to determine how much restricted revenue it will receive as a result of this bill in FY 2009 and each fiscal year thereafter.
The Judicial Branch states certain portions of this bill may increase state general fund expenditures by the Judicial Branch by an indeterminable amount. The Branch states several sections of the bill involve the same basic issue, that certain information held by the Pari-Mutuel or Lottery Commissions is confidential but can be made public by a court order. Such actions are likely to take place in the Superior Court, and would be considered a complex equity case. The Branch has no information on which to estimate how many such cases may arise as a result of this bill. According to the NH Judicial Needs Assessment done by the National Center for State Courts, the cost to the Branch of an average complex equity case is $491 in FY 2009 and $507 in FY 2010 and beyond, not including the cost of appeals.
The Judicial Branch states this bill makes it an unspecified felony to manipulate the outcome, payoff, or operation of a VLM. The Branch has no information on which to estimate how many such cases may arise as a result of this bill. According to the NH Judicial Needs Assessment done by the National Center for State Courts, the cost to the Branch of an average routine felony case is $328 in FY 2009 and $336 in FY 2010 and beyond, not including the cost of appeals.
The Judicial Branch further states this bill sets up a comprehensive regulatory scheme generally under the Pari-Mutuel and Lottery Commissions, with licensing authority and broad sanctions powers. Although the bill does not say these decisions can be appealed to the Supreme Court pursuant to RSA 541, where no appeal is provided, one may appeal to the Supreme Court on a petition for writ of certiorari. The Supreme Court has discretionary review of such appeals, meaning that the court decides whether to accept the appeal for full appellate review, accept if for a more limited review, or decline the appeal. The Branch states such appeals are too speculative to arrive at a conclusion regarding fiscal impact; however an appeal accepted for full appellate consideration could result in a fiscal impact in excess of $10,000.
The Judicial Council states this bill establishes a new felony offense, which may increase state general fund expenditures for indigent defense in FY 2009 and each fiscal year therafter. If an individual is charged with a felony under this bill and is determined to be indigent, the court must appoint the public defender in the first instance, then a contract attorney, or finally an assigned counsel if a public defender or contract attorney is not available or if there are multiple co-defendants in the case. If either a public defender or contract attorney is appointed to the case, the fixed fee is $756 per felony. If an assigned counsel is provided, the rate is $60 per hour with a cap of $4,100 for a felony, which may be waived upon motions filed in advance and approved by the court. The Council may also be required to make additional expenditures for “services other than counsel” or appeals to the Superior Court or Supreme Court.
The Department of Corrections states this bill may increase state general fund expenditures for the incarceration of persons convicted of felony offences by an indeterminable amount in FY 2009 and each fiscal year thereafter. The number of individuals that may be convicted of a felony under this bill is indeterminable; however, the average annual cost of incarcerating an individual in the general prison population in FY 2007 was $31,546, and the average annual cost of supervising an offender by the Division of Field Services in FY 2007 was $1,174.
The NH Municipal Association states this bill allows certain licensees to operate VLMs, subject to licensing by the Lottery Commission and approval of the municipality in which the licensee’s facility is located. Two percent of the net machine income for each licensee would be paid to the municipality in which the licensee operates the machines. The Association states it is not possible to predict how much revenue would be generated by the VLMs; therefore, it is not possible to predict how much a host municipality would receive from a licensed facility. The Association also states the operation of VLMs may result in additional local revenue of an indeterminable amount, primarily property tax revenue, as well as expenditures of an indeterminable amount for services such as traffic control and enforcement and crime prevention and investigation.
The Association of Counties states this bill will increase county revenue by an indeterminable amount in FY 2009 and each fiscal year thereafter in counties that host a pari-mutuel track or grand hotel licensed for VLMs.