This initiative will create jobs and generate revenue for
programs to improve the District’s public schools and assist District
senior citizens in obtaining prescription drugs by expanding the lottery
to include “Video Lottery Terminals” (“VLTs”). VLTs will be
restricted to designated facilities, initially limited to one. The
District will receive a usage fee of 25% of net revenue from each VLT.
The monies raised will be deposited in the District’s general revenue
fund with the advice of District voters that the monies be used to
improve District public schools and to assist District senior citizens
in obtaining prescription drugs.
To amend the Law to Legalize Lotteries, Daily Numbers
Games, and Bingo and Raffles for Charitable Purposes in the District of
Columbia by adding new sections authorizing the licensing of video
lottery terminals and designating revenues from the operation of video
lottery terminals for recommended distribution equally to the District
of Columbia Public Schools Fund, the District of Columbia Senior
Citizens Prescription Drug Benefits Fund, and the General Fund of the
District of Columbia.
BE IT ENACTED BY THE ELECTORS OF THE DISTRICT OF
COLUMBIA, That this act may be cited as the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004”.
Sec. 2. Findings and Purposes.
The people of the District of Columbia recognize and
declare as follows:
(1) The District needs to create more jobs to address
unemployment and to generate additional revenue to address areas of
special concern to the residents of the District of Columbia. These
areas of special concern are (A) programs to benefit the District of
Columbia public schools by providing for the improvement of the
educational content, physical condition, vocational programs, security,
and general well-being of the District’s schools, and (B) programs to
aid District senior citizens in obtaining needed prescription
medications, especially since such medications are often not provided
under currently available Medicare or Medicaid programs. The District is
strongly urged to create special purpose funds to support programs in
these areas;
(2) The District would be best served if the needed
revenue were generated by a new, self-sustaining program rather than
through the imposition of additional taxes or fees on the incomes of
District residents and District businesses;
(3) The District of Columbia Lottery has, since its
inception, been a positive example of such a self-sustaining revenue
generation program by providing needed revenues for the District through
sales and fees on licensed lottery transactions;
(4) Based on this example, the people of the District of
Columbia have chosen to enact the “Jobs, Education, and Healthcare
Expansion Initiative Act of 2004” to create a new source of lottery
revenue by expanding the permissible forms of playing the District of
Columbia Lottery to include the playing of lottery games, including but
not limited to “scratch-off” cards in electronic form, through Video
Lottery Terminals (“VLTs”);
(5) In order to regulate, control, and limit the
operation of VLTs, and as set forth herein, (A) only entities licensed
by the District of Columbia Lottery and Charitable Games Board (the
“Board,” as defined below) will operate VLTs, (B) such operations may only occur in facilities specifically designated for
VLT operations, (C) the location of the initial VLT Facility is
specifically restricted by this Law, (D) the Board’s licensing
authority shall not be expanded to allow additional VLT facilities until
ten years after the granting of the first license to operate VLTs, and
(E) any such expansion may occur only after such expansion is proposed
by the Board and approved by a two-thirds majority of the District of
Columbia City Council;
(6) In order to ensure that the operation of VLTs
provides ample revenues to accomplish the purposes of this Law, and as
set forth herein, a usage fee will be charged against each licensed
operator of VLTs in an amount of 25% of the Net VLT Proceeds (defined
below), as set forth herein;
(7) In order to ensure that the majority of the revenues
produced from VLT operations are used for the pressing needs identified
by the people of the District in this Law, and as set forth herein, the
VLT Fee Revenue (defined below) received by the District from this Law
shall be distributed into general revenue fund of the District of
Columbia with the strong urging of the people of the District of
Columbia that it be used for programs which benefit the District of
Columbia public schools and which assist senior citizens of the District
of Columbia in obtaining prescription drug benefits.
Sec. 3. Statement of law.
The Law to Legalize Lotteries, Daily Numbers Games, and
Bingo and Raffles for Charitable Purposes in the District of Columbia,
effective March 10, 1981 (D.C. Law 3172; D.C. Official Code § 3-1301 et
seq.) is amended by adding, at the end, the following new sections to be
codified as D.C. Official Code §§ 3-1350 through 3-1371:
§ 3-1350. DEFINITIONS
The following definitions apply to all provisions in
Sections § 3-1351 through § 3-1371 of this act.
(1) “Board” shall mean the District of Columbia Lottery
and Charitable Games Control Board, created pursuant to D.C. Official
Code § 3-1301 or, pursuant to Section 207 of Public Law 104-8 and
Section 2302 of Public Law 108-11, the Chief Financial Officer of the
District of Columbia.
(2) “Certification Company” means Gaming
Laboratories, Inc., a company that performs testing and certification of
VLTs, or any similar company, which performs testing, and certification
of VLTs and which has been authorized by the Board or by any State to
perform testing and certification of VLTs or similar devices.
(3) “Designated VLT Site” shall mean
a site, including the Initial Designated VLT Site, authorized for the
conduct of VLT Operations by a Licensee under a License issued by the Board pursuant to the
“Jobs, Education, and Healthcare Expansion Initiative Act of 2004”.
(4) “Electronic cards” means cards
that employ an affixed magnetic storage medium and/or a “smart card”
and/or cards containing an integrated circuit chip, but excludes credit
cards issued by any Person other than a Licensee.
(5) “Eligible Applicant” means a Person who meets the
requirements imposed in this chapter for obtaining a License to acquire,
own, maintain, and operate VLTs within the District of Columbia.
(6) “Executive Director” shall mean
the Executive Director of the Board, as appointed pursuant to D.C.
Official Code § 3-1303.
(7) “Initial Designated VLT Site” shall mean an
approximately 14-acre parcel of property, including all property owned
as of April 21, 2004 by 1830 Bladensburg Road LLC, 1900 Bladensburg Road
Limited Partnership, 1908 Bladensburg Road LLC, 1910 Bladensburg Road
General Partnership, 1940 Montana Avenue Limited Partnership, Liberty
Cab Limited Partnership, 33 New York Avenue LLC and 1943 New York Avenue
Limited Partnership (A) which is bounded by New York Avenue, NE, Montana
Avenue, NE, and Bladensburg Road, NE and (B) authorized for the conduct
of VLT Operations by a Licensee under the Temporary Initial License or
Initial License issued by the Board pursuant to the “Jobs, Education,
and Healthcare Expansion Initiative Act of 2004”.
(8) “Initial License” means the License issued to an
Eligible Applicant by the Board pursuant to section 1356 of the “Jobs,
Education, and Healthcare Expansion Initiative Act of 2004”.
(9) “License” means the authorization issued to an
Eligible Applicant by the Board pursuant to the provisions of the
“Jobs, Education, and Healthcare Expansion Initiative Act of 2004”
to: (A) acquire (by purchase, lease or otherwise) and own VLTs certified
by a Certification Company, and (B) install, maintain and operate VLTs
and conduct VLT Operations at a Designated VLT Site.
(10) "Licensee" means an Eligible Applicant
issued a License by the Board in accordance with the “Jobs, Education,
and Healthcare Expansion Initiative Act of 2004”.
(11) "Manufacturer" means any Person (A) who or
which manufactures, fabricates, assembles and/or programs VLTs including
parts or portions thereof (collectively "VLT Equipment"), (B)
whose VLT Equipment is certified by a Certification Company and (C) who
either (i) has applied for and been issued a Permit by the Board to
sell, lease or otherwise provide VLT Equipment to Licensees or Permitees, or (ii) has
been, and is currently licensed in any State to sell, lease or otherwise
provide VLT Equipment to Persons authorized to conduct VLT Operations in
such other State.
(12) “Maximum Permissible Designated VLT Sites” shall
mean the maximum number of Designated VLT Sites for which the Board may
issue a License. The Maximum Permissible Designated VLT Sites shall, as
of the effective date of this legislation, be equal to one (1), but such
number may be increased in accordance with section 1357 of the Jobs,
Education, and Healthcare Expansion Initiative Act of 2004”.
(13) “Net VLT Proceeds” means the total of all cash
and property received by a Licensee from VLT Operations minus the amount
of the Payout.
(14) “Payout” means premiums, merchandise, prizes,
promotional complementaries or anything of value provided via a voucher
and/or Electronic Card, which the player of a VLT may be entitled to
receive as a result of the playing of the VLT.
(15) “Permit" means any authorization (other than
a License) issued to a Manufacturer, supplier, Service Technician or any
person (other than a Licensee) by the Board under the provisions of the
“Jobs, Education, and Healthcare Expansion Initiative Act of 2004”
to participate in VLT Operations and/or the provision, repair,
maintenance and servicing of VLTs and related equipment and supplies.
(16) “Permittee” means a Person (other than a
Licensee) issued a Permit by the Board under the provisions of the
“Jobs, Education, and Healthcare Expansion Initiative Act of 2004”.
(17) “Person(s)” means individuals, partnerships,
limited liability companies, corporations and other legal entities and
associations.
(18) “Principal” means any Person who (A) holds or
controls directly or indirectly ten (10%) percent or more ownership or
economic interest in an applicant for, or holder of a License or Permit,
or (B) receives ten (10%) percent or more revenue interest in the form
of a commission, finder's fee, loan fee or interest, or any other
compensation arising out of or relating to VLT Operations; provided,
however, that no bank, regulated mutual fund, insurance company, or
other regulated financial institution (“Financial Institution”)
shall be deemed a Principal under the “Jobs, Education, and Healthcare
Expansion Initiative Act of 2004”. so long as (A) the Financial
Institution holds its interests in an applicant for, or holder of, a
License or Permit for investment purposes only, and (B) the Financial
Institution owns less than a majority of the voting securities or
voting rights of the applicant for, or holder of, a License or Permit.
(19) “Service technician” means any Person (other
than a Licensee or Manufacturer and/or their respective employees) who
(A) is trained by a Manufacturer, Distributor, other qualified entity,
or has been certified in a training program approved by the Board, to
perform one or more of the following functions with respect to a VLT: (i)
clearing paper or money jams, (ii) changing paper contained within the
VLT, (iii) retrieving money from a VLT, or (iv) performing any repairs,
parts replacements, maintenance, cleaning, and other servicing to VLTs,
and (B) holds a Permit issued by the Board under the provisions of the
“Jobs, Education, and Healthcare Expansion Initiative Act of 2004”
to perform those functions for a Licensee or Permittee.
(20) “Temporary Initial License” shall mean a License
issued pursuant to section 1355 of the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004”.
(21) “VLT” means a lottery machine that performs only
the following functions: (A) accepts paper or coin currency or vouchers
to enable a player to participate in one or more games; (B) dispenses,
at the player's request, (i) an amount of coins equal to the player’s
credit balance, (ii) a token, voucher and/or Electronic Card that has
physically or electronically imprinted upon it the game identifier and
the player's credit balance, or (iii) some combination thereof; (C)
shows on a video screen, reels or other electronic display, rather than
on a paper ticket, the results of each game played; (D) shows on a video
screen or other electronic display, in an area separate from the game
results, the player's credit balance; (E) houses a game platform that is
connected to a central system; (F) contains within the common central
system pools of lottery game tickets and (i) such pools are defined by
game type, denomination, and the amount bet, (ii) each pool, regardless
of where its electronic tickets are assigned, has its own hold or par,
and (iii) a player plays against other players through the VLT and its
designated pool; and (G) is monitored and controlled by a central
computer system which maintains the integrity of the operations of the
individual VLT.
(22) "VLT Operations" means the use, operation,
offering, or conduct of VLT gaming by a Licensee in accordance with the
provisions of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004”.
(23) “VLT Usage Fees” means those fees owed by
Licensees under section 1360 of the “Jobs, Education, and Healthcare
Expansion Initiative Act of 2004”.
§ 3-1351 DEPOSIT TO LOTTERY AND
CHARITABLE GAMES FUND
(a) All funds, fees, fines, or other revenues collected
by the Board with respect to the licensing, operation, administration,
or regulation of VLTs, including but not limited to all VLT Usage Fees
collected pursuant to section 1360 of the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004” (collectively, “Gross
VLT Fees”) shall be deposited in the District of Columbia Lottery and
Charitable Games Fund (the “Lottery Fund”).
(b) Gross VLT Fees shall be disbursed from the Lottery
Fund according to the terms of this section. Said disbursements from the
Fund in amounts up to $500 shall be paid out in checks signed by the
Executive Director or his designee. Disbursements in excess of $500
shall be paid out in checks signed by the Executive Director and the
Chief Financial Officer of the District of Columbia. All deposits of
such monies shall be secured in a manner consistent with deposits made
by the government of the District of Columbia with respect to the
deposit of revenue.
§ 3-1352 CREATION OF DISTRICT OF COLUMBIA PUBLIC SCHOOLS
FUND; DISTRICT OF COLUMBIA SENIOR CITIZENS PRESCRIPTION DRUG BENEFITS
FUND
It is the strong recommendation of the people of the
District of Columbia that there be established a “District of Columbia
Public Schools Fund” and a “District of Columbia Senior Citizens
Prescription Drug Benefits Fund” for the receipt of distributions from
the Lottery Fund of amounts attributable to the VLT Fee Revenue (defined
below).
§ 3-1353 DISBURSEMENTS FROM LOTTERY
FUND
(a) From the Gross VLT Fees deposited into the Lottery
Fund, the Board shall first pay for the all administrative and capital
expenses of the Board in conducting activities under Sections 1350
through 1371 of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004”, including but not limited to all expenses of
the Board arising from its activities in licensing, operating,
administrating, or regulating VLTs.
(b) On a monthly basis promptly after the 1st of the
month for the preceding month, the remainder (the “VLT Fee Revenue”)
of the proceeds of the Gross VLT Fees in the Lottery Fund after payment
of the expenditures authorized under subsection (a) of this section
shall be paid into the General Fund of the District of Columbia as
general purpose revenue funds of the District of Columbia. It is the
strong recommendation of the people of the District of Columbia,
however, that the VLT Fee Revenue be allocated in the following manner:
(1) 33 1/3% percent to a District of
Columbia Public Schools Fund;
(2) 33 1/3% percent to a District of Columbia Senior
Citizens Prescription Drug Benefits Fund; and
(3) 33 1/3% percent to the General Fund of the District
of Columbia as general purpose revenue funds.
§ 3-1354 PROHIBITION ON UNAUTHORIZED ACTIVITIES WITH RESPECT TO VLTs
(a) No Person shall acquire, own, operate, provide,
distribute, repair or maintain VLTs and/or conduct VLT Operations unless
and until such Person shall be issued a License or Permit, including a
Temporary Initial License or Initial License, to engage in such
activity, by the Board under the provisions of the “Jobs, Education,
and Healthcare Expansion Initiative Act of 2004”, or be exempt from
permitting as provided in the “Jobs, Education, and Healthcare
Expansion Initiative Act of 2004”.
(b) Notwithstanding subsection (a) of this section, any
natural person who is an employee of a non-natural Person that has
obtained a License or Permit may, so long as he or she is acting within
the scope of his or her employment for said non-natural Person, acquire,
operate, provide, distribute, repair or maintain VLTs and/or conduct VLT
Operations to the extent authorized in any License or Permit issued to
said nonnatural Person.
§ 3-1355 LICENSING FOR OPERATION OF
VLTs AND CONDUCT OF VLT OPERATIONS; TEMPORARY INITIAL LICENSE
(a) Beginning forty-five (45) days following the
effective date of this section, and no earlier, the Board shall begin
accepting applications for the Temporary Initial License to conduct VLT
Operations.
(b) Any Person applying for the Temporary Initial License
under subsection (a) of this section shall complete and submit the form
of application, which is, as of the effective date of this section,
promulgated by the Board as the application for obtaining a license to
become a lottery sales agent pursuant to D.C. Official Code § 3-1315.
In addition, any Person applying for the Temporary Initial License under
subsection (a) of this section shall submit the following:
(1) A sworn affidavit that the Person and, if applicable, all
Principals are, at the time of application, not “unsuitable” for a
License pursuant to section 1364(b) of the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004”.; and
(2) Documentation demonstrating that the Person owns
and has the right to possess more than 50% of, is the lessee of and has
the right to possess more than 50% of, or has the contractual right to
acquire and possess more than 50% of or be the lessee of and possess more than 50% of property that is eligible to
become the Initial Designated VLT Site.
An application for the Temporary Initial License shall be
deemed complete if it includes all of the documents required under this
section. The Board is required to accept any application that is deemed
complete under this subsection.
(c) The Board shall grant the Temporary Initial License
to the Person who, on the earliest date following the effective date of
the “Jobs, Education, and Healthcare Expansion Initiative Act of
2004”, meets the following criteria: (1) the Person submits an
application that is deemed complete pursuant to subsection (b) of this
section, and (2) the Person has demonstrated that the Person and has the
right to possess more than 50% of, is the lessee of and has the right to
possess more than 50% of, or has the contractual right to acquire and
possess more than 50% of, or be the lessee of and possess more than 50%
of property that is eligible to become the Initial Designated VLT Site.
The Board shall issue a decision granting or denying a Person’s
application for the Temporary Initial License within fourteen (14) days
of the Board’s receipt of the application.
(d) Any Person whose application has been denied pursuant
to subsection (c) of this section may, within thirty (30) days of the
denial of that application, appeal the Board’s decision to deny the
application to the Superior Court of the District of Columbia.
(e) No more than one (1) Temporary Initial License shall
be awarded under this section. Upon granting a Temporary Initial
License, the Board shall cease accepting applications for the Temporary
Initial License and shall deny any applications which were (1) submitted
after the application of the person awarded the Temporary Initial
License, or (2) not previously denied by the Board pursuant to
subsection (c) of this section as of the date on which the Temporary
Initial License was granted.
(f) The Person awarded a Temporary Initial License (the
“Temporary Initial Licensee”) shall have all the rights of any
Licensee under this chapter; provided, however, that the Temporary
Initial License shall expire on the earliest of (1) the granting by the
Board of an Initial License to the Temporary Initial Licensee pursuant
to section 1356(c) of this chapter, or (2) the denial by the Board of an
application by the Temporary Initial Licensee for the Initial License
pursuant to section 1356(d) or 1356(e) and the expiration of all appeals
of that denial pursuant to section 1356(g) of the “Jobs, Education,
and Healthcare Expansion Initiative Act of 2004”.
§ 3-1356 LICENSING FOR OPERATION OF
VLTs AND CONDUCT OF VLT OPERATIONS; INITIAL LICENSE
(a) Within 180 days of the Board’s granting of a
Temporary Initial License, the Board shall create and publish
regulations setting forth a procedure by which Persons may apply for the
Initial License (the “Initial Application Regulations”). The content
of the Initial Application Regulations are within the
discretion of the Board, except that Initial Application Regulations
must require the Person applying for the License (“Initial License
Applicant”) to provide the following information:
(1) Information demonstrating that the Initial License
Applicant owns and has the right to possess more than 50% of, is the
lessee of and has the right to possess more than 50% of, or has the
contractual right to acquire and possess more than 50% of, or be the
lessee of and possess more than 50% of property that is eligible to
become the Initial Designated VLT Site;
(2) Information sufficient to allow the Board to
determine whether the Initial License Applicant is “suitable”
pursuant to sections 1363 and 1364 of the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004”; and
(3) If the Initial License Applicant is a non-natural person,
a list of all employees, officers, and Principals of the Initial License
Applicant.
(b) Within (90) days following the Board’s publication
of the Initial Application Regulations, the Temporary Initial Licensee
may submit an application for the Initial License in accordance with the
Initial Application Regulations. During this time period, the Board
shall not accept and shall not consider any other application for the
Temporary Initial License.
(c) If the Temporary Initial Licensee submits an
application for the Initial License pursuant to subsection (b) of this
section, the Board shall determine within ninety (90) days of the date
of said application whether to immediately grant the Initial License to
the Temporary Initial Licensee. The Board shall award the Initial
License to the Temporary Initial Licensee if it determines that: (1) the
Temporary Initial Licensee is an Eligible Applicant, (2) the Temporary
Initial Licensee (A) owns and has the right to possess more than 50% of
or (B) is the lessee of and has the right to posses more than 50% of
property eligible to be the Initial Designated VLT Site, and (3) the
Board has found, after investigation, that (A) the License Application
is complete, and (B) the Temporary Initial Licensee is suitable,
according to the provisions of section 1365 and 1366 of the “Jobs,
Education, and Healthcare Expansion Initiative Act of 2004”.
(d) If, after the expiration of this ninety (90) day
period, the Board determines that the Temporary Initial Licensee does
not meet the criteria of subsection (c) of this section, but that such
criteria could be satisfied by the Temporary Initial Licensee by taking
feasible and reasonable corrective measures, including but not limited
to a transfer of interests held by one or more Principals of the
Temporary Initial Licensee, the Board shall postpone its decision on the
application of the Temporary Initial Licensee and issue a written
statement to the Temporary Initial Licensee setting forth the corrective
measures that need to be taken by the Temporary Initial Licensee in
order for the Board to grant the Initial License. Otherwise, if, after the
expiration of the ninety (90) day period, the Board determines that the
Temporary Initial Licensee does not meet the criteria of subsection (c)
of this section, the Board shall issue a decision denying the
application of the Temporary Initial Licensee
(e) If the Board postpones its decision and requests
corrective measures pursuant to subsection (d) above, the Board shall
allow the Temporary Initial Licensee 180 days to take the measures set
forth by the Board. After the expiration of this period, the Board shall
grant the Initial License to the Temporary Initial Licensee if it
determines (1) the corrective measures required by the Board have been
taken, and (2) after completion of the corrective measures, the
Temporary Initial Licensee has met the criteria for the Initial License
under subsection (c) of this section. Otherwise, the Board shall issue a
decision denying the Temporary Initial License.
(f) If the Board denies the application of the Temporary
Initial Licensee pursuant to subsection (d) or subsection (e) of this
section and all appeals of that denial pursuant to subsection (g) of
this section have been exhausted, or if the Temporary Initial Licensee
does not apply for the Initial License within the time period set forth
is subsection (c) of this section, the Board shall then accept further
applications for the Initial License. The Board shall, on a rolling
basis, evaluate each application for the Initial License made under this
subsection and award the Initial License to the first Person who has
submitted a complete application for the Initial License and whom the
Board determines meets the criteria set forth in subsection (c) of this
section.
(g) Any Person whose application has been denied pursuant
to this section may, within thirty (30) days of the denial of that
application, appeal the Board’s decision to deny the application to
the Superior Court of the District of Columbia.
(h) Only one (1) Initial License may be
awarded under this section.
§ 3-1357 LICENSING FOR OPERATION OF
VLTs AND CONDUCT OF VLT OPERATIONS; SUBSEQUENT LICENSES
(a) The Board may, at any time more than ten (10) years
after the issuance of the Initial License, adopt and approve a proposal
to expand the Maximum Permissible Designated VLT Sites and to accept
applications for additional License(s) to conduct VLT Operations for
each newly permitted Designated VLT Area (“Expansion Proposal”). The
Board shall include in any Expansion Proposal a specific description of
the property in which the Designated VLT Site(s) for the additional
License(s) granted under the Expansion Proposal shall be located in the
event that the Expansion Proposal becomes effective under this section.
(b) Immediately after the adoption and approval of an
Expansion Proposal by the Board under subsection (a) of this section,
the Expansion Proposal shall be submitted to the Council of the District
of Columbia (“Council”) for approval. If a two-thirds majority of
the Council votes in favor of the proposal, the Expansion Proposal shall
take effect and the Maximum Permissible Designated VLT Sites
shall be expanded as set forth in the Expansion Proposal.
(c) Within ninety (90) days of the approval of an
Expansion Proposal by the Council, the Board shall create and publish
regulations setting forth a procedure by which Persons may apply for a
License to conduct VLT Operations at one or more of the newly permitted
Designated VLT Sites (the “Expansion License Application
Regulations”). The content of the Expansion License Application
Regulations are within the discretion of the Board, except that the
Expansion License Application Regulations must require each Person
applying for the License (“Expansion License Applicant”) to provide
the following information:
(1) Information demonstrating that the Expansion License
Applicant owns and has the right to possess more than 50% of, is the
lessee of and has the right to possess more than 50% of, or has the
contractual right to acquire and possess more than 50% of, or be the
lessee of and possess more than 50% of property that is eligible to
become a Designated VLT Site under the Expansion Proposal;
(2) Information sufficient to allow the Board to
determine whether the Expansion License Applicant is “suitable”
pursuant to sections 1363 and 1364 of the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004”; and
(3) If the Expansion License Applicant is a non-natural
person, a list of all employees, officers, and Principals of the
Expansion License Applicant.
(d) Immediately following the Board’s publication of
the Expansion License Application Regulations (the “Expansion
Application Period”), the Board shall accept applications for Licenses
in accordance with the Expansion License Application Regulations.
(e) The Board shall award the Licenses permitted under
the Expansion Proposal to the Person(s) who have submitted a complete
application for the Expansion License Application on the earliest date
and who have met the following criteria: (1) the Person is an Eligible
Applicant, (2) the Person owns and has the right to possess more than
50% of, is the lessee of and has the right to possess more than 50% of,
or has the contractual right to acquire and possess more than 50% of, or
be the lessee of and possess more than 50% of property that is eligible
to become a Designated VLT Site under the Expansion Proposal, and (3)
the Board has found, after investigation, that (i) the License
Application is complete and (ii) the Eligible Applicant is suitable,
according to the provisions of section 1363 and 1364 of the “Jobs,
Education, and Healthcare Expansion Initiative Act of 2004”.
(f) Any Person whose application has been denied pursuant
to this section may, within thirty (30) days of the denial of that
application, appeal the Board’s decision to deny the application to
the Superior Court of the District of Columbia.
§ 3-1358 AUTHORITY GRANTED LICENSEE;
CONDITIONS
Any License (including the Temporary Initial License and
the Initial License) shall entitle the Licensee to acquire (by purchase,
lease or otherwise), own, install, operate, repair and maintain VLTs
certified by a Certification Company and to conduct VLT Operations,
subject to the requirements of this chapter and Rules and Regulations
adopted, from time to time, by the Board pursuant to the authority
granted herein, and specifically subject to the following requirements
and restrictions:
(1) The Licensee shall be authorized to operate no more than
3500 VLTs at any one Designated VLT Site;
(2) The Licensee may only conduct VLT Operations at a
Designated VLT Site; provided, however, that the Licensee may conduct
auxiliary services, including but not limited to the provision of
parking facilities, food service, or lodging service, on land adjacent
to or within reasonable distance of the Designated VLT Site;
(3) The Licensee operating such Designated VLT Site shall:
(A) Provide, at no cost or expense to the Board,
sufficient space and facilities at the Designated VLT Site for the
installation and operation of the central computer required pursuant to
section 1360 of this Chapter and the staff of the Board engaged to
operate such central computer;
(B) Furnish and install the central computer and
software; the cost of which central computer and software (“Central
Computer Cost”) shall, subject to subsection (3)(c) of this section,
be advanced by the Licensee; and
(C) Recover the Central Computer Cost in three equal
annual installments during each of the first three consecutive years of
VLT Operations at such VLT Designated Site solely and exclusively out of
the VLT Usage Fee payments required to be made by the Licensee under
section 1360 of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004”.
(4) The Licensee shall maintain
continuous suitability for the operation of VLT Operations, under the
provisions of sections 1363 and 1364 of the “Jobs, Education, and Healthcare
Expansion Initiative Act of 2004”;
(5) The Licensee shall permit the Board (including the
Director and/or any agent thereof) unrestricted access to the Designated
VLT Site and the right of inspection of all VLTs and related VLT
Equipment therein situated;
(6) The Licensee shall pay all VLT Usage Fees owed to the
Board as required pursuant to section 1360 of the “Jobs, Education,
and Healthcare Expansion Initiative Act of 2004”, less any recovery of
Central Computer Cost to which the Licensee is entitled under paragraph
(3)(C) of this subsection; and
(7) Any facility at which VLT Operations are conducted
pursuant to the License shall be in compliance with all laws, rules, and
regulations of the District of Columbia concerning the permissible
signage for commercial facilities at the location of the facility.
§ 3-1359 REQUIREMENTS FOR VIDEO LOTTERY
TERMINALS.
No VLT shall be installed and/or operated in the District
of Columbia by a Licensee or otherwise unless such VLT shall:
(1) Be of a class of VLTs which either (A) have been
certified by a Certification Company and are in compliance with the
provisions of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004” and the Rules and Regulations adopted, from
time to time, by the Board under the authority granted in the “Jobs,
Education, and Healthcare Expansion Initiative Act of 2004”, or (B)
are manufactured or assembled by a Manufacturer;
(2) Have a serial number or other
identification number permanently affixed thereto by the Manufacturer;
(3) Be connected to a central computer; which central
computer must be located on the premises of a Designated VLT Site but
shall be owned and operated by the District of Columbia, maintained as
directed by the Board, and accessible at all time by the Board or its
designee;
(4) Be capable of being continuously
monitored, polled and read by the central computer; and
(5) Contain an erasable, programmable, read-only memory
chip ("EPROM") approved by the Certification Company and owned
by the District of Columbia containing proprietary data, software and
firmware required to operate and to secure the operation of the VLT.
§ 3-1360 VLT USAGE FEE
The Board shall collect an annual VLT Usage Fee from each
Licensee of twentyfive (25%) percent of the Net VLT Proceeds received by
that Licensee from VLT Operations. The VLT Usage Fee shall be: (1) paid
daily in arrears; (2) paid into the Lottery Fund; and (3) disbursed from
the Lottery Fund pursuant to section 1350 of the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004” There shall be no other
license tax, fee, levy or other charge assessed against VLT Operations
and/or Net VLT Proceeds by the District of Columbia for licensure.
§ 3-1361 PERMITS FOR MANUFACTURE,
DISTRIBUTION, SERVICE, REPAIR, OR MAINTENANCE OF VLTs.
(a) The Board shall create and, from time to time, amend
a form which shall be completed and submitted by any Person seeking a
Permit from the Board to manufacture, distribute, service, repair, or
perform maintenance on VLTs in the District of Columbia (”Permit
Application”). The Board in its discretion shall determine the content
of the Permit Application.
(b) The Board shall issue the appropriate Permit to the
applicant upon (1) receipt by the Board of an application for a Permit
submitted by a Manufacturer or Service Technician ("Permit
Application"), as the case may be, and (2) a finding by the Board,
after investigation, that (A) the Permit Application is complete, and
(B) the applicant is suitable, according to sections 1363 and 1364 of
the “Jobs, Education, and Healthcare Expansion Initiative Act of
2004”. The Board must grant or deny any Permit Application within
ninety (90) days of the date the Permit Application is received by the
Board.
(c) The Permit shall entitle the Permittee to engage in
the activity described in the Permit Application and the Permit subject
to the requirements of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004” and rules and regulations adopted, from time
to time, by the Board pursuant to the authority granted herein. Each
Permit issued shall require, as a condition to the Permittee conducting
the permitted activity, that the Permittee maintain continuous
suitability.
(d) Any Person whose Permit Application has been denied
pursuant to this section may, within thirty (30) days of the denial of
that application, appeal the Board’s decision to deny the application
to the Superior Court of the District of Columbia.
§ 3-1362 TERM OF LICENSES AND PERMITS;
RENEWAL; TRANSFER
(a) All Licenses and Permits shall be issued for a period
of five years and shall be renewed for succeeding five-year periods upon
the submission by the Licensee or Permittee of a completed, sworn
application (“Renewal Application”). Provided that the Licensee or Permittee shall file a completed Renewal
Application prior to expiration of its current License or Permit, the
term of its current License or Permit shall be deemed extended until the
later of the disposition by the Board of such Renewal Application and
any judicial review of such disposition.
(b) Licenses and Permits shall not be
transferable without the prior approval of the Board upon joint
application of the transferor and transferee.
(c) Prior to the consummation of a transfer of a License
or Permit pursuant to subsection (b) of this section, the following must
occur: (1) the proposed transferee (“Proposed Transferee”) shall
file a completed and sworn License Application or Permit Application, as
the case may be, and (2) the Board shall promptly conduct a suitability
investigation of the Proposed Transferee and promptly advise the
Proposed Transferee and the proposed transferor of the results thereof.
If the Board finds that the Proposed Transferee is suitable, the Board
shall promptly issue its written approval of the proposed transfer as
provided for in subsection (b) of this section. A determination by the
Board that a Proposed Transferee is not suitable shall have no effect on
the status or continuity of a License or Permit to the suitability of a
Licensee or Permittee provided the proposed transfer is not consummated.
The Proposed Transferee shall reimburse the Board for all costs and
expenses incurred by the Board in connection with any such suitability
investigation.
§ 3-1363 SUITABILITY GENERALLY.
(a) Other than applicants for the Temporary Initial
License, no applicant shall be granted a License or Permit under the
provisions of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004” unless the applicant has demonstrated to the
Board that the applicant is a “suitable” recipient of the License or
Permit for which the applicant has applied.
(b) For purposes of the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004”, an applicant for a
License or Permit is “suitable” and/or has met “suitability”
standards if the applicant has satisfied the requirements established by
the “Jobs, Education, and Healthcare Expansion Initiative Act of
2004”, including the requirement that the applicant:
(1) Has satisfied the suitability standards provided in
section 1365 of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004”;
(2) Is capable, by virtue of training, education,
business experience and/or a combination of the same, of conducting the
activity for which the License or Permit is sought;
(3) If a Licensee, has demonstrated that the applicant has,
or can acquire from others, sufficient funds to renovate and/or
construct a facility on a Designated VLT Site; acquire and install
VLTs and related VLT Equipment and commence and continue VLT Operations;
and
(4) If a non-natural Person, has
demonstrated that the applicant’s Principals are suitable.
(c) Except as otherwise provided herein, a Person (1)
whose application for a License or Permit has been denied, (2) whose
License or Permit has been issued subject to a condition, (3) whose
License or Permit has been suspended or revoked, (4) against whom a fine
has been levied by the Board, or (5) who has been determined by the
Board (prior to a hearing) to be “unsuitable”, shall have the right
to a hearing before the Board with respect to any such denial,
condition, suspension, revocation, levy or determination; and such
findings, decision and hearing shall be conducted in accordance with the
D.C. Administrative Procedure Act, approved October 21, 1968 (82 Stat.
1204; D.C. Official Code § 2-501 et seq.), including any right to
judicial review following such hearing.
§ 3-1364 SUITABILITY STANDARDS,
DISQUALIFICATION AND DIVESTITURE.
(a) For the purposes of the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004”, an applicant for a
License, Permit or approval is "suitable" if the applicant:
(1) Is a Person of good character, honesty, and integrity;
(2) Has not been convicted of, or entered a plea resulting in
conviction of: (A) Any offense punishable by imprisonment of more than
one year; (B) Theft or attempted theft, or illegal possession of stolen
property; (D) Any offense involving fraud or attempted fraud; or (D)
Illegal gambling as defined by the laws or ordinances of any
municipality, any parish or county, any state, or of the United States;
(3) Is a person whose prior activities, criminal record, if
any, reputation, habits, and associations do not pose a present threat
to the public interest of the District of Columbia or to the effective
regulation and control of VLT Operations or create or enhance the
dangers of unsuitable, unfair, or illegal practices, methods, and
activities in connection with VLT Operations and the business and
financial affairs of the applicant incident thereto;
(4) Is capable of conducting and likely to conduct the
activities for which the applicant has requested licensing, permitting
or approval in accordance with the provisions of this chapter and/or the
rules and regulations adopted, from time to time, by the Board; and
(5) Is not disqualified pursuant to the provisions of
subsection (b) of this section and, if the applicant is a non-natural
Person, has demonstrated to the Board that it has adopted and employs
adequate hiring and screening procedures to ensure that no current of
future employee of the applicant would be disqualified under subsections
(b)(1) or (b)(2) of this section.
(b) The Board shall have the right to deny, suspend,
condition, or revoke a License or Permit of any applicant for a License
or Permit upon a specific finding by the Board that the applicant is
‘unsuitable’ on the basis of the following criteria:
(1) The applicant has been convicted of, or entered a plea
resulting in conviction of: (a) Any offense punishable by imprisonment
of more than one year; (b) Theft or attempted theft, or illegal
possession of stolen property; (c) Any offense involving fraud or
attempted fraud; or (d) Illegal gambling as defined by the laws or
ordinances of any municipality, any parish or county, any state, or of
the United States;
(2) There is a current prosecution or pending criminal
charge against the applicant in any federal or state jurisdiction for an
offense described in subsection (b)(1) of this section;
(3) The applicant is not current in filing all applicable
personal income tax returns and in the payment of all income taxes,
penalties and interest owed to the District of Columbia or the federal
government, excluding items currently being disputed by the applicant;
or
(4) The repeated failure by the applicant to provide
information and documentation reasonably requested by the Board in order
to determine suitability as defined in this chapter; provided however
that such failure shall not be considered by the Board during the period
of any judicial challenge by the applicant with respect to the
information requested and/or the confidentiality to be afforded to the
same by the Board.
(c) Any Person whose License or Permit has been revoked
or who has been found "unsuitable" in the District of Columbia
is not eligible to obtain any License or Permit pursuant to the
provisions of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004” for a period of one (1) year from the date the
revocation or finding of unsuitability becomes final beyond right of
judicial review.
(d) In the event of a current criminal
prosecution of an offense as provided in subsection (b)(2) of this
section, the Board, where applicable, shall have the discretion to defer a determination on an applicant's suitability
pending the outcome of the proceedings provided that if a decision is
deferred pending such outcome the Board, where applicable, may take such
action as is necessary to protect the public interest.
(e) If the Board finds that a Principal of a Licensee or
Permittee or its parent entity is not suitable, and if as a result, the
Licensee or Permittee is no longer entitled to engage in the activity
licensed or permitted, then and in that event the Board shall, subject
to the exercise of the Principal’s hearing and review rights under
this chapter, propose action necessary to protect the public interest.
Where possible, in lieu of an order of revocation or suspension of a
License or Permit, the Board shall issue an order of disqualification
naming the unsuitable Principal and declaring that such Principal may
not, except as provided in subsection (g) of this section, (1) directly
or indirectly exercise significant influence over the Licensee or
Permittee; (2) directly or indirectly receive dividends or interest on
securities of the Licensee or Permittee; (3) directly or indirectly
receive remuneration or other economic benefit from the Licensee or
Permittee; or (4) continue owning or holding, directly or indirectly,
securities of the Licensee or Permittee or remain as a manager, officer,
director, or partner of the Licensee or Permittee.
(f) Commensurate with the issuance of an order of
disqualification under subsection (e) of this section, the Board shall
issue an order declaring that such disqualified Principal shall, within
thirty (30) days of the disqualifying order, transfer all securities of
the Licensee or Permittee owned by the Principal to the trustee of a
blind trust as to which the trustee shall be appointed or approved by
the Board, which approval shall not be unreasonably withheld or delayed.
The trustee of the blind trust shall have the sole and exclusive rights
to exercise any right conferred by or incidental to the securities so
transferred to and held in the blind trust, except that upon receipt of
instruction from the Principal beneficiary, the trustee shall sell so
much of the securities of the Licensee or Permittee held in the blind
trust as instructed and remit the net proceeds of the sale to the
Principal beneficiary together with any dividends, interest,
remuneration or other economic benefit associated therewith.
§ 3-1365 PERMISSION TO AWARD LICENSES
TO PERSONS TO CONDUCT BUSINESS PRIMARILY AS VLT OPERATORS
Notwithstanding the provisions of D.C. Official Code §
3-1315, the Board may issue a License or Permit or renew a License or
Permit to persons whose primary business is to conduct VLT Operations or
to perform services related to VLT Operations. The fact that a
Person’s primary business is to conduct VLT Operations or to perform
services related to VLT Operations shall not be a valid basis for the
Board to deny any License or Permit or any renewal of a License or
Permit.
§ 3-1366 POWERS AND DUTIES OF THE BOARD
RELATIVE TO VLT OPERATIONS.
(a) In addition to those powers granted
the Board elsewhere in the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004”, with respect to VLT Operations, the Board shall adopt all rules and
regulations (collectively "Rules and Regulations") necessary
to implement, administer, and regulate VLTs and VLT Operations as
authorized in the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004”.
(b) Such Rules and Regulations shall
include:
(1) Designation of any technical qualifications (other than
suitability as provided for in the “Jobs, Education, and Healthcare
Expansion Initiative Act of 2004”) which must be possessed by a
Manufacturer, Distributor or Service Technician in order to be eligible
to receive and retain a Permit;
(2) Procedures for the counting, collection and deposit
of Net VLT Proceeds into a Licensee's restricted bank account subject to
a sweep by the Board for the VLT Usage Fee;
(3) Methods and rules permitting VLTs to be linked for the
offering of progressive payouts;
(4) Procedures for (A) the accumulation and provision by
Licensees and Permittees of specified records, data, information and
reports, including financial and income records and reports
(collectively "Financial and Operation Materials") and (B) the
retention of Financial and Operational Materials by past and present
Licensees and Permittees, necessary to enable the Board to properly
implement and enforce the provisions of this chapter;
(5) Requirements establishing minimum physical security
standards to be observed in Designated VLT Sites;
(6) Requirements establishing standards
of maintenance of VLTs and related VLT Equipment; and
(7) Provisions for the revocation and/or suspension of
Licenses and Permits, upon post issuance findings of
“unsuitability,” subject to the rights of Licensees, Permittees and
Principals under section 1363 of the “Jobs, Education, and Healthcare
Expansion Initiative Act of 2004”.
(c) The Board may:
(1) Conduct any reasonable investigation which the Board
determines necessary to fulfill its responsibilities under the
provisions of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004”;
(2) Inspect and examine all premises in which Designated
VLT Sites are situated and/or where VLTs are manufactured, sold, or
repaired;
(3) Inspect VLTs and related VLT Equipment and supplies;
(4) Summarily seize and remove VLTs and related VLT Equipment
and supplies from any location where such VLTs and/or VLT Equipment and
supplies are not or have not been approved, operated, or maintained
pursuant to the “Jobs, Education, and Healthcare Expansion Initiative
Act of 2004” and/or the owners or operators thereof do not hold valid
Licenses and/or Permits required by the “Jobs, Education, and
Healthcare Expansion Initiative Act of 2004”;
(5) Deny, revoke, condition, or suspend the License or Permit
of any Person who knowingly violates any provision of this chapter or
any of the Rules or Regulations adopted pursuant to the authority
granted in the “Jobs, Education, and Healthcare Expansion Initiative
Act of 2004”;
(6) Take steps necessary to collect fees owed to the
Board or the Lottery Fund, including commencing and prosecuting
appropriate legal actions; and
(7) Delegate to the Executive Director and/or cause the
Executive Director to perform or exercise any or all of the rights and
duties of the Board set forth in subsections (c)(1), (c)(2), (c)(3),
(c)(4), and (c)(6).
§ 3-1367 EXECUTIVE DIRECTOR; POWERS AND
DUTIES. The Executive Director shall, upon and subject to the direction
of the Board:
(1) Conduct an investigation of any applicant, Licensee,
or Permittee for "suitability" and/or violations of the Rules
and Regulations and undertake any other investigation, inspection or
enforcement action if such investigation, inspection, or action is
reasonably necessary to the thorough and efficient implementation of
this chapter;
(2) Establish, maintain, and operate the
mechanism and equipment necessary to conduct polling, monitoring or
reading of VLTs and VLT Operations;
(3) Examine VLTs and related VLT
Equipment and/or records related thereto and to VLT Gaming Operations;
(4) Report to the Board any violation of
law or Rules or Regulations discovered by the Director; and
(5) Engage, train, supervise and direct such staff, as
the Executive Director and the Board shall deem necessary or appropriate
to enable the Executive Director to perform his duties and obligations
under this chapter.
§ 3-1368 GAMING DEVICE LIMITATIONS.
Except as otherwise provided by law, no gaming devices
other than VLTs shall be present and/or installed and/or operated in any
Designated VLT Site.
§ 3-1369 PROHIBITED RELATIONSHIPS.
(a) In addition to any other relationship prohibited by
the “Jobs, Education, and Healthcare Expansion Initiative Act of
2004”, no person employed by or performing any function on behalf of
the Board or the Director may:
(1) Be an officer, director, owner, or
employee of any Person holding a License or Permit issued by the Board;
and
(2) Have or hold any interest, direct or indirect, in, or
engage in any commercial transaction or enter into any business
relationship with, any Person holding a License or Permit issued by the
Board;
(b) No elected public official shall engage in any
business activity with a Licensee or Permittee except as a patron. As
used in this subsection, the term "business activity" shall
specifically include but not be limited to contracts: (1) for the sale
or purchase of goods, merchandise, and services; (2) to provide or
receive legal services, advertising, public relations, or any other
business or personal services; (3) for the listing, purchase, or sale of
immovable property or options or other rights relating thereto; and (4)
modifying ownership or possessory interests in stocks, bonds,
securities, or any financial instruments.
(c) No Person permitted by the Board as a Manufacturer or
Distributor may participate in the design, development, ownership, sale,
lease, license or operation of any computer program, firmware, software,
or any other mechanism that is or may be used for the polling or reading
of VLTs or VLT Operations.
(d) No Person may be an owner, investor, employee, or
contractor engaged in any VLT operations if such Person has been
convicted of, or entered a plea resulting in conviction of: (1) Any
offense punishable by imprisonment of more than one year; (2) Theft or
attempted theft, or illegal possession of stolen property; (3) Any
offense involving fraud or attempted fraud; or (4) Illegal gambling as
defined by the laws or ordinances of any municipality, any parish or
county, any state, or of the United States; or if there is a current prosecution or pending criminal
charge against such Person in any federal or state jurisdiction for an
offense described in this subsection.
§ 3-1370 PROHIBITION OF MINORS
(a) No Licensee, Permittee or any agent
or employee of either, shall allow a person under the age of twenty-one
to play or operate a VLT.
(b) Each Licensee shall report and remit to the Director
quarterly in arrears all winnings withheld from customers who are
determined to be under the age of twenty-one.
(c) The Board may fine and/or revoke and/or suspend the
License or Permit of any Person, who is found by the Board to have
willfully committed a violation of this section, provided, however, that
if the Licensee affected by a revocation or suspension made under this
section, the Licensee shall be entitled to an administrative hearing
before the Board pursuant to section 1363(c) of the “Jobs, Education,
and Healthcare Expansion Initiative Act of 2004”, and, if the affected
Licensee chooses to exercise that right, the revocation or suspension
shall not take effect until the conclusion of the hearing held pursuant
to section 1363(c).
§3-1371 UNAUTHORIZED VIDEO LOTTERY TERMINALS; SKIMMING
OF VIDEO LOTTERY TERMINAL PROCEEDS; PENALTIES.
(a) Except as otherwise permitted by law, any Person who
possesses or operates a VLT without holding a current valid License or
Permit required by the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004” or at any location other than a Designated VLT
Site shall be subject to a fine of not more than ten thousand dollars
($10,000) per violation.
(b) Any Person who intentionally excludes, or takes any
action in an attempt to exclude anything of value from the deposit,
counting, collection, or computation of revenues derived from VLT
Operations shall be subject to a fine of not more than ten thousand
dollars ($10,000) per violation, in addition to any other criminal
penalties which may be imposed pursuant to any other provision of the
District of Columbia Official Code.
(c) Any VLT used or offered for play in violation of the
provisions of the “Jobs, Education, and Healthcare Expansion
Initiative Act of 2004”, except as otherwise permitted by law, shall
be considered a gambling device for purposes of D.C. Official Code §
22-1704.
Sec. 4. Effective date.
This act shall take effect after a 30-day period of
Congressional review as provided in section 602(c) of the Home Rule Act,
approved December 24, 1973 (87 Stat. 813; D.C. Official Code §
1-206(c)(1)).