Revision: March 8, 2012, midnight
HB 1698-FN-A – AS INTRODUCED
HOUSE BILL 1698-FN-A
I. Allows the operation and playing of keno games.
II. Provides for licensing of keno game operators by the lottery commission.
III. Establishes the keno scholarship trust fund.
IV. Directs revenues from keno to the keno scholarship trust fund and the national guard scholarship 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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twelve
AN ACT establishing keno and providing scholarship money to New Hampshire students.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Subdivision; Keno. Amend RSA 284 by inserting after section 40 the following new subdivision:
284:41 Definition. In this subdivision, “keno” means any game where a player purchases a ticket of 80 numbers and selects 1-20 numbers by marking selections on the purchased ticket. The game operator chooses 20 numbers at random and the player is paid out against his or her original wager based on how many numbers match the numbers he or she has marked on his or her ticket.
284:42 Administration and Enforcement. The lottery commission shall administer and enforce this subdivision relative to keno.
284:43 Rulemaking. The commission shall adopt rules, pursuant to RSA 541-A, relative to:
I. The application procedure for keno licenses.
II. Information to be required on license applications.
III. The application procedure for distributor and manufacturer licenses under RSA 284:51.
IV. Procedures for a hearing following the revocation of a license.
V. The operation of keno games.
VI. The price for a single card or play in keno games.
VII. The rental of facilities and the leasing of equipment for use in keno games.
VIII. Accountability controls to ensure game integrity, including, but not limited to, cash, attendance, prizes, income, expense and financial reporting, and record-keeping to be implemented by licensed charitable organizations in addition to the requirements set forth in RSA 284:47.
284:44 Copies of Records. The commission shall forward copies of all records relating to keno licensing, taxes, and financial reports to the commissioner of the department of safety.
284:45 License Fees.
I. The license fee for a commercial premises keno license under RSA 284:46 shall be $3,000 per year. Such fee shall be submitted to the commission at the time the application is made and shall be refunded if the application is denied.
II. Such fee shall be submitted to the commission at the time the application for a keno license is filed and shall be refunded if the application is denied.
284:46 License Applications.
I. Applications shall be submitted to the commission by the licensee. Proof of authority to submit the application on behalf of the licensee may be required.
II. Applications shall be made only on the forms supplied to the licensee by the commission.
III. The application form shall be fully completed by the licensee.
IV. Applicants for commercial premises keno licenses shall be submitted at least 30 days before the first game date.
V. The applicant shall certify under oath that:
(a) The information provided on the application is accurate.
(b) Neither the applicant nor any employee may operate the keno games has been convicted of a felony within the previous 10 years which has not been annulled by a court, or a misdemeanor involving falsehood or dishonesty within the previous 5 years which has not been annulled by a court, or has violated the statutes or rules governing charitable gambling.
(c) The applicant and any employee who will be participating in the operation of the keno games is aware of all statutes and rules applicable to the operation of keno games.
VI. To be eligible for licensure under this subdivision a charitable organization shall:
(b) Maintain a current list of employees.
VII. Upon the reception of an application for keno, the commission shall send notification by certified mail to the local governing body of the municipality in which the licensee is located and shall publish in a newspaper of general circulation in the area where the licensee will operate that an application for a license for keno has been filed with the commission. The notice shall include the name and business address of the licensee and the address where keno will be played. The local governing body shall hold a public hearing, within 21 days of receiving notification for the commission. After the public hearing the local governing body shall vote on whether or not to object to the granting of a keno license to the licensee. The local governing body shall submit its decision to allow or object to the granting of a keno license to the licensee to the commission within 7 days of holding the public hearing. The commission shall not issue a keno license to a licensee where the local governing body of the municipality where the licensee is located has objected in writing to the commission.
284:47 Operation of Keno Games.
I. A licensee may operate keno games at his or her business between the hours of 11 a.m. and 11 p.m.
II. A licensee may keep 10 percent of the proceeds from keno games. The remainder shall be deposited in the keno scholarship fund established under RSA 188-D:44.
III. No person who has been convicted of a felony or class A misdemeanor within the previous 10 years which has not been annulled by a court, or a class B misdemeanor within the past 5 years which has not been annulled by a court, or who has violated any of the statutes or rules governing charitable gambling in the past in this or any other state shall operate a keno game licensed under this subdivision, or rent, lease, sublease, or otherwise provide any hall or keno paraphernalia for the conduct of keno licensed under this subdivision.
IV. The price to be paid for a single keno play shall be established by rules adopted by the commission.
V. No fee shall be charged for admission to keno games.
VII. All prizes, tokens, or awards used, given, offered or awarded in connection with any game or series of games on any single date shall not exceed the total value of $3,500.
VIII. All keno game paraphernalia or related equipment used in conducting keno games shall be subject to inspection, approval, and confiscation by the commission.
284:48 Financial Reports and Inspection Required.
I. Any person or organization which has been licensed to conduct keno games shall submit a complete financial report to the commission for each license issued under RSA 284:46 within 15 days after the expiration of each license, provided, however, a complete monthly financial report shall be submitted in a timely fashion to the commission for each month covered by a license issued under RSA 284:46.
II. The financial report shall be completed by the licensee who shall certify such accounting under oath.
III. The financial report shall include:
(a) A complete statement of revenues and expenses.
(b) A record of the amount of prizes awarded.
(c) The name and address of any person, partnership, corporation or other entity from whom equipment used at the licensed games was rented or leased.
(d) The name and address of any person, partnership, corporation or other entity from whom premises were leased or rented to conduct the licensed games.
(e) The name and address of, and the fee paid to, any person, or business entity, who provided consulting, accounting, management, or other similar services to the organization for the operation of keno.
IV. All licensees shall maintain a separate checking account for the deposit and disbursement of all income relating to keno, except cash prizes awarded at the games. All expenses shall be paid by check, and all prizes of $500 or more shall be paid by check. No keno funds shall be commingled with other funds of the licensee. The licensee shall retain all cancelled checks for the payment of expenses and prizes for at least 2 years from the date of the check. The licensee shall not cash checks which it issues.
V. All financial reports filed by the licensee shall be maintained by the commission for a period of one year from the date of filing and shall be open to public inspection.
VI. All financial records pertaining to the operation of keno games shall be maintained by the licensee and shall be made available to representatives of the commission or of the commissioner of the department of safety upon request.
VII. A licensee which has been licensed to conduct keno games shall maintain complete and accurate documentation of all revenues and expenses contained in the financial reports for at least 2 years from the date the financial report is filed.
284:49 Suspension; Revocation. The commission may suspend or revoke the license of any licensee who violates any provision of this subdivision. Any licensee whose license is revoked shall not be eligible for licensure for a period of up to one year from the date of revocation.
284:50 Rehearing and Appeal. Any person aggrieved by a decision of the commission to deny or revoke a keno license may apply to the commission for a rehearing within 15 business days of the decision. Rehearings and appeals shall be governed by RSA 541.
284:51 Distributors and Manufacturers of Keno Supplies and Equipment. The commission shall license distributors and manufacturers of keno paper supplies and electronic keno player systems sold, leased, or rented in this state. A distributor with a current New Hampshire license for distribution of lucky 7 tickets shall be authorized to distribute keno paper supplies and electronic keno player systems, and shall not be required to file for licensing under this section. All keno paper supplies and electronic keno player systems shall be purchased, leased, or rented from a licensed distributor and manufactured by a licensed manufacturer. All keno paper sold to charitable organizations by New Hampshire licensed distributors shall be recorded by serial numbers and listed on the charitable organization’s invoices. A license shall be issued to a distributor or manufacturer under the following conditions, provided that the commission may, by rule, establish the following additional qualifications for licenses:
I. The applicant for a distributor’s license shall pay to the commission an annual license or license renewal fee of $10,000. Such fee shall authorize the distribution of keno paper supplies and electronic keno player systems within the state of New Hampshire and the warehousing of keno supplies, and electronic keno player systems for subsequent sale out of state. A distributor with a current New Hampshire license for distribution of lucky 7 tickets shall not be required to pay the additional licensing fee under this section.
II. The applicant shall certify that neither the applicant nor any partner, officer, or director has been convicted of a felony, which has not been annulled by any court, within 10 years from the date of application.
III. Each licensee shall post a bond in the amount of $50,000, conditioned upon the licensee’s compliance with the rules of the commission. A distributor with a current New Hampshire license for distribution of lucky 7 tickets shall not be required to post the bond under this section.
IV. An applicant for a license as a distributor shall have a principal place of business located within this state.
V.(a) The commission shall issue a special license to manufacturers of keno paper supplies and electronic keno player systems leased, rented, or sold in the state. A manufacturer with a current New Hampshire license to manufacture lucky 7 tickets shall not be required to pay the licensing fee under this paragraph.
(b) The fee for such special license shall be $5,000 per year or for any part of a year.
2 New Subdivision; Keno Scholarship Trust Fund. Amend RSA 188-D by inserting after section 43 the following new subdivision:
188-D:44 Keno Scholarship Trust Fund. There is hereby established the New Hampshire keno scholarship trust fund which shall be kept distinct and separate from all other funds. All moneys in the trust fund shall be nonlapsing and shall be continually appropriated to the commission for purposes of providing education scholarships under this subdivision. The fund shall provide scholarships for the benefit of residents of the state pursuing degrees at state-funded colleges and universities in this state. Residents shall be eligible for a scholarship from the fund if they resided in the state of New Hampshire for at least 2 years prior to applying and maintained a cumulative academic average of at least 75 percent, or its equivalent on a non-numeric scale, in high school. Scholarship money shall be available only for the payment of tuition at a state-funded college or university within New Hampshire.
188-D:45 Board of Trustees.
I. The governor, with the approval of the executive council, shall appoint a board of trustees consisting of a representative from each of New Hampshire’s 4-year state colleges, 2-year state colleges, and the adjutant general of the national guard or his or her designee. Appointees shall serve for 5 years and may be renewed by the governor with the approval of the executive council.
II. Trustees may borrow money in anticipation of keno revenue with payments of any loan made from money by the trust.
III. Revenue received under RSA 284:45 and RSA 284:49 shall be placed in the keno scholarship trust fund and held for one year. Money shall be available for distribution of scholarships on July 1, 2013.
IV. Twenty-five percent of the revenue received shall be applied to the national guard scholarship fund established in RSA 110-B:60.
188-D:46 Administration of Scholarships.
I. Trustees shall develop a standardized application form and distribute it to participating state institutions for purposes of record keeping and administering scholarships.
II. The offices or departments of participating institutions that administer financial aid shall review the eligibility of college applicants for a keno scholarship. The keno scholarship shall be part of an accepted applicant’s financial aid package. Applicants receiving a keno scholarship shall be notified by the participating institution when notified of the decision on their financial aid applications.
III. Proceeds from the keno scholarship trust fund shall be applied only to a student’s tuition, excluding fees, room and board, books, and other incidental expenses.
IV. No student shall receive more than the cost of tuition per year.
V. Upon the acceptance of a financial aid package and enrollment by the student, the participating institution shall request that funds from the keno scholarship trust fund be transferred and credited to the qualifying student’s account to be applied against tuition charges.
VI. If a student withdraws from a participating institution, the participating institution shall prorate the tuition paid for the time remaining in the school year and shall refund such money to the keno scholarship trust fund.
3 New Subparagraph; Keno Scholarship Trust Fund. Amend RSA 6:12, I(b) by inserting after subparagraph (307) the following new subparagraph:
(308) Moneys deposited in the keno scholarship trust fund under 188-D:43.
4 Effective Date. This act shall take effect July 1, 2012.
HB 1698 FISCAL NOTE
AN ACT establishing keno and providing scholarship money to New Hampshire students.
The Lottery Commission and Department of Safety state this bill will increase state restricted revenue by $4,530,000 in FY 2013, and by $8,280,000 in FY 2014 and each year thereafter, and will increase state expenditures by an indeterminable amount in FY 2013 and each year thereafter. The Community College System of New Hampshire states this bill will increase state revenue by an indeterminable amount in FY 2013 and each year thereafter, and may increase state expenditures by an indeterminable amount in FY 2013 and each year thereafter. This bill will have no impact on county and local revenue or expenditures.
The Lottery Commission states this bill establishes keno in the state via licensed operators with the Commission responsible for the administration and enforcement of the program. The Commission states the bill directs keno revenue to be deposited into a newly created keno scholarship trust fund and the existing national guard scholarship fund to provide scholarships for New Hampshire students. The Commission estimates in the state there would be 250 locations operating keno games and 3 entities distributing keno paper supplies and electronic player systems, with both categories requiring annual licensure through the Commission. The Commission states annual license fees for operators would be $3,000 each and for distributors would be $10,000 each, for a total increase in revenue deposited into the keno scholarship trust fund per year of $750,000 for operator licenses and $30,000 for distributor licenses. The Commission also states this bill establishes an annual license fee of $5,000 for manufacturers of keno paper supplies and electronic player systems, however it assumes there will be no entities seeking that type of license. The Commission assumes operation of the keno games will commence on January 1, 2013 and it estimates each operator location will generate $150,000 worth of keno sales in a full year, so it projects there will be $18,750,000 ($150,000 per site x 250 sites x ½ year) of total keno sales in FY 2013, and $37,500,000 ($150,000 per site x 250 sites) of total keno sales in FY 2014 and each year thereafter. The Commission states the remaining revenues after accounting for the various associated costs will be deposited in the keno scholarship trust fund (75%), established in this act, and in the national guard scholarship fund (25%), established in RSA 110-B:60. The Commission states operator licensees will keep 10% of total keno sales, estimates the prizes to be awarded to players at 70% of sales, and the cost of the central computer system and keno supplies used in the administration of the program at 1.44% of sales. The Commission states there will also be additional costs of an indeterminable amount related to the administration and enforcement of the program, which would further reduce the amount deposited in the two scholarship funds. The Commission estimates keno revenue and expenses as follows:
FY 2013 FY 2014 & after
Operator License Fees $750,000 $750,000
Distributor License Fees $30,000 $30,000
Keno Sales $18,750,000 $37,500,000
Total Revenue $19,530,000 $38,280,000
Prizes (70% of Keno Sales) ($13,125,000) ($26,250,000)
Operator Licensee Proceeds (10% of Keno Sales) ($1,875,000) ($3,750,000)
Subtotal Non-State Recipients ($15,000,000) ($30,000,000)
Gross Amount to State as Revenue $4,530,000 $8,280,000
Central Computer & Supplies (1.44% of Keno Sales) ($270,000) ($540,000)
Remaining for Scholarships, Before Indeterminable Costs $4,260,000 $7,740,000
The Department of Safety states this bill requires the commissioner of safety to “receive copies of all records relating to keno licensing, taxes, and financial reports” from the Lottery Commission and requires the keno licensees to maintain all financial records pertaining to the operation of keno games and to make those records available to the Lottery Commission or the commissioner of safety upon request. The Department states it would set up an office to handle its duties under this bill. Specifically, the Department would hire a data control clerk (LG 7), to maintain records and answer phones, and an auditor (LG 9), to review various records and ensure compliance with laws and regulations. The Department also states it would incur costs for one-time computer programming changes; additional office space; office supplies and equipment; and funds for keno-specific training for the auditor. The Department also states to the extent keno-related fraud and other criminal cases occur, it may also be required to hire a state police detective (Trooper 1, LG 19) to handle such investigations. The Department assumes these costs would be funded with keno proceeds and estimates them to be, if the detective were necessary, as follows:
FY 2013 FY 2014 & after
Data Control Clerk Salary $22,016 $22,016
Data Control Clerk Benefits $10,678 $10,678
Auditor Salary $23,712 $23,712
Auditor Benefits $11,500 $11,500
Detective Salary $45,928 $45,928
Detective Benefits $22,275 $22,275
Office Rent/Utilities/Training $15,000 $15,000
Office Equipment $2,500 $0
Computer Programming Changes $25,000 $0
Total $178,609 $151,109
The Community College System of New Hampshire assumes this bill will provide scholarships to students in NH, which will encourage new students to take classes and existing students to take more classes, so the System estimates state revenue from tuition will increase. The System also states this increase in demand for classes may require it to offer more classes, which would also increase state expenditures. The System cannot predict the amount of either increase.
The University System of New Hampshire states it cannot determine this bill’s fiscal impact.
The Department of Education, the Adjutant General, and the Racing and Charitable Gaming Commission state they do not possess the information necessary to predict the fiscal impact of this bill.
The New Hampshire Municipal Association states it cannot identify a local fiscal impact of this bill.