UNOFFICIAL COPY AS OF 10/05/1802 REG. SESS.02 RS BR 2290
AN ACT relating to charitable gaming.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
Page 1 of 66
BR229000.100-2290
UNOFFICIAL COPY AS OF 10/05/1802 REG. SESS.02 RS BR 2290
SECTION 1. A NEW SECTION OF KRS CHAPTER 238 IS CREATED TO READ AS FOLLOWS:
To promote the effective oversight, study and monitoring of the charitable gaming industry in Kentucky, the commission shall have the authority to establish and implement pilot programs regarding the conduct of charitable gaming. The commission may authorize individual licensees or groups of licensees to participate in pilot programs designed to evaluate the effectiveness and productivity of innovations in technology, in the conduct of authorized charitable games, in the frequency and duration of charitable gaming activities, in reporting, accounting and recordkeeping techniques, and in licensing procedures, training and education. Pilot programs shall be designed and implemented upon agreement by the executive director and a majority of the board of commissioners. Pilot programs shall be temporary in duration and shall not exceed one hundred eighty (180) days in length, or, in the case of programs related to charitable gaming reporting, two (2) complete calendar quarters. To be eligible for participation in a pilot program, a licensee shall not be the subject of a pending administrative disciplinary action and shall be current on all fees or fines owed the commission. Licensees participating in any pilot program shall have satisfied the requirements of Section 10 of this Act for the most recent calendar year and shall demonstrate current compliance with that section at the time of participation, unless the pilot program is specifically designed to address the deficiencies of licensees having violated Section 10 of this Act. Upon completion of a pilot program, the executive director shall issue to the board a report explaining the results of the program.
Section 2. KRS 238.500 is amended to read as follows:
The General Assembly of the Commonwealth of Kentucky hereby declares that charitable gaming conducted by charitable organizations is an important method of raising funds for legitimate charitable purposes and is in the public interest. The purpose of this chapter is to comply with constitutional requirements by establishing an effective and efficient mechanism for regulating charitable gaming which includes defining the scope of charitable gaming activities, setting standards for the conduct of charitable gaming which insure honesty and integrity, providing for means of secure, electronic accounting for all moneys generated through the conduct of charitable gaming, and providing for suitable penalties for violations of laws and administrative regulations. The intent of this chapter is to prevent the commercialization of charitable gaming, to prevent participation in charitable gaming by criminal and other undesirable elements, and to prevent the diversion of funds from legitimate charitable purposes. In order to carry out the purpose and intent, the provisions of this chapter, and any administrative regulations promulgated in accordance with this chapter, shall be construed in the public interest and strictly enforced.
Section 3. KRS 238.505 is amended to read as follows:
As used in this chapter, unless the context requires otherwise:
(1)"Commission[Department]" means the Charitable Gaming Regulatory Commission[Department of Charitable Gaming] within the Public Protection and Regulation Cabinet;
(2)"Charitable gaming" means bingo, charity game tickets, raffles, and charity fundraising events conducted for fundraising purposes by charitable organizations licensed and regulated under the provisions of this chapter. Charitable gaming shall not include gambling devices as defined in KRS 528.010(4), electronic or electromechanical facsimiles of gambling devices as defined in subsection (28) of this section, video slot machines, video poker machines[electronic video gaming devices], wagering on live sporting events, or simulcast broadcasts of horse races;
(3)"Charitable organization" means a nonprofit entity organized for charitable, religious, educational, literary, civic, fraternal, or patriotic purposes;
(4)"Bingo" means a specific game of chance in which participants use cards or paper sheets, or card-minding device representations thereof, divided into horizontal and vertical spaces, each of which is designated by a letter and a number, and prizes are awarded on the basis of the letters and numbers on the card conforming to a predetermined and preannounced configuration of letters and numbers selected at random. Bingo may include the use of electronic, computer or other technologic aids as that term is defined in subsection (29) of this section;
(5)"Charity game ticket" means a game of chance using a folded or banded paper ticket, or a paper card with perforated break-open tabs, the face of which is covered or otherwise hidden from view to conceal a number, letter, symbol, or set of numbers, letters, or symbols, some of which have been designated in advance as prize winners and shall include charity game tickets that utilize a seal card. Charity game ticket shall include pulltabs. The play of charity game tickets may include the use of electronic, computer or other technologic aids as that term is defined in subsection (29) of this section;
(6)"Seal card" means a board or placard used in conjunction with charity game tickets, that contains a seal or seals which, when removed or opened, reveal predesignated winning numbers, letters, or symbols;
(7)"Raffle" means a game of chance in which a participant is required to purchase a ticket for a chance to win a prize, with the winner to be determined by a random drawing;
(8)"Charity fundraising event" means a fundraising activity of limited duration at which games of chance approved by the commission[department] are conducted, including bingo, raffles, charity game tickets, special limited charitable games, and wagering on prerecorded horse races, KRS Chapter 230 notwithstanding. Examples of such activities include events that attract patrons for community, social, and entertainment purposes apart from charitable gaming, such as fairs, festivals, carnivals, and bazaars;
(9)"Manufacturer" means a person who assembles from raw materials or subparts any charitable gaming equipment or supplies used in the conduct of charitable gaming, including a person who converts, modifies, and adds to or removes parts from, charitable gaming equipment and supplies. The term shall not include:
(a)Any person who services or repairs charitable gaming supplies and equipment, so long as that person replaces or repairs an incidental, malfunctioning, or nonfunctioning part with a similar or identical part; and
(b)Any distributor who cuts, collates, and packages for distribution any gaming supplies and equipment purchased in bulk;
(10)"Distributor" means a person who sells, markets, leases, or otherwise furnishes to a charitable organization charitable gaming equipment or supplies, or both, used in the conduct of charitable gaming. "Distributor" shall not include:
(a)A resident printer who prints raffle tickets at the request of a licensed charitable organization; and
(b)A licensed charitable organization that affects a one-time donation of charitable gaming supplies or equipment to another licensed charitable organization if the donation is first approved by the commission[department].
(11)"Charitable gaming facility" means a person, including a licensed charitable organization, that owns or is a lessee of premises which are leased or otherwise made available to two (2) or more licensed charitable organizations during a one (1) year period for the conduct of charitable gaming;
(12)"Gross receipts" means all moneys collected or received from the conduct of charitable gaming;
(13)"Adjusted gross receipts" means gross receipts less all cash prizes and the amount paid for merchandise prizes purchased;
(14)"Net receipts" means adjusted gross receipts less all expenses, charges, fees, and deductions authorized under this chapter;
(15)"Charitable gaming supplies and equipment" means any material, device, apparatus, or paraphernalia customarily used in the conduct of charitable gaming, including bingo cards and paper, charity game tickets, electronic, computer or other technologic aids as that term is defined in subsection (29) of this section and used in the conduct of charitable gaming, and other apparatus or paraphernalia used in conducting games of chance at charity fundraising events subject to regulation under this chapter. The term shall not include any material, device, apparatus, or paraphernalia incidental to the game, such as pencils, daubers, playing cards, or other supplies that may be purchased from normal sources of supply;
(16)"Door prize" means a prize awarded to a person based solely upon the person's attendance at an event or the purchase of a ticket to attend an event;
(17)"Special limited charitable game" means roulette; blackjack; poker; keno; money wheel; baccarat; pusher-type games; any dice game where the player competes against the house; and any other game of chance as identified, defined, and approved by administrative regulation of the commission[department];
(18)"Special limited charity fundraising event" means any type of charity fundraising event, commonly known as and operated as a "casino night," "Las Vegas night," or "Monte Carlo night," at which the predominant number or types of games offered for play are special limited charitable games;
(19)"Session or bingo session" means a single gathering at which a bingo game or series of successive bingo games are played, excluding bingo played at a charity fundraising event;
(20)"Immediate family" means:
(a)Spouse and parents-in-law;
(b)Parents and grandparents;
(c)Children and their spouses; and
(d)Siblings and their spouses;
(21)"Affiliate" means any corporation, partnership, association, or other business or professional entity or any natural person that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with a licensed manufacturer, distributor, or charitable gaming facility;
(22)"Secretary" means the secretary of the Public Protection and Regulation Cabinet;
(23)"Commissioner" means a member of the board of commissioners of the Charitable Gaming Regulatory Commission[the commissioner of the Department of Charitable Gaming] within the Public Protection and Regulation Cabinet;
(24)"Chairperson" means the chief executive officer and any officer, member, or employee of a licensed charitable organization who will be involved in the management and supervision of charitable gaming as designated in the organization's charitable gaming license application under KRS 238.535(9)(g);
(25)"Year" means calendar year except as used in KRS 238.545(4), 238.547(1), and 238.555(7), when "year" means the licensee's license year;[ and]
(26)"Card-minding device" means any mechanical, electronic, electromechanical, or computerized device that is interfaced with or connected to equipment used to conduct a game of bingo and that allows a player to store, display, and mark a bingo card face[. A card-minding device shall not be designed and manufactured to resemble any electronic gaming device that utilizes a video display monitor, such as a video lottery terminal, video slot machine, video poker machine, or any similar video gaming device.];
(27)“Executive Director” means the executive director of the Charitable Gaming Regulatory Commission within the Public Protection and Regulation Cabinet;
(28)“Electronic or electromechanical facsimile of a gambling device” means an electronic or electromechanical duplicate of a gambling device as defined in KRS 528.010(4), including but not limited to video slot machines and video poker machines;
(29)“Electronic, computer or other technologic aid” means a device such as a computer, telephone, cable, television, satellite or selection device that, when used in the conduct of charitable gaming:
(a)Is not a game of chance but assists a player or the playing of a game;
(b)Is operated to broaden participation in a game where individual players play with or against other players rather than against a machine or device; and
(d)Is not an electronic or electromechanical facsimile of a gambling device; and
(30)“Board of commissioners” or “board” means the seven (7) commissioners that comprise the Charitable Gaming Regulatory Commission.
Section 4. KRS 238.510 is amended to read as follows:
(1)The Charitable Gaming Regulatory Commission[Department of Charitable Gaming] is created as an independent agency of state government established [a department] within the Public Protection and Regulation Cabinet. The commission shall consist of the board of commissioners, executive director and any staff employed to administer the provisions of this chapter. The commission[department] shall license and regulate the conduct of charitable gaming and license and regulate charitable organizations that desire to engage in charitable gaming, charitable gaming facilities, manufacturers, and distributors in the Commonwealth of Kentucky in accordance with the provisions of this chapter.
(2)The board of commissioners shall be composed of seven (7) members who shall be appointed by the Governor. Recommendations for appointments to the board may be sought from any entity representative of the charitable gaming industry, including representatives of the various classes of charitable organizations qualified to possess charitable gaming licenses. These classes of licensees shall include, but not be limited to, religious and veterans organizations, volunteer fire departments, public and private schools and school booster groups, and fraternal societies. Each commissioner shall have demonstrated experience, expertise, interest or participation in some facet of the charitable gaming industry as a condition of appointment. Any entity making recommendations for appointment to the board shall submit to the Governor a list of three (3) names for consideration, and the Governor may choose commissioners from these lists or may reject all nominees and request the submission of new nominees. At least one (1) commissioner shall be a certified public accountant, and at least one (1) commissioner shall be a member of the Kentucky Bar Association. All commissioners shall be residents of the Commonwealth of Kentucky. For initial appointments two (2) commissioners shall be appointed for one (1) year terms, two (2) for two (2) year terms and three (3) for three (3) year terms. Thereafter, all commissioners appointed by the Governor shall serve a term of four (4) years or until their successors are appointed and duly qualified. No commissioner shall serve more than two (2) terms of four (4) years. The Governor shall annually designate one (1) of the commissioners as chairman of the board, and the board shall annually elect one (1) other commissioner as a vice chair. No commissioner shall serve as chairman or vice chair for more than two (2) consecutive years. Commissioners shall be paid fifty dollars ($50) for each meeting attended, in addition to travel expenses and other expenses incurred in the attendance of meetings and the performance of official functions[The department shall be headed by a commissioner who shall be appointed by the Governor upon recommendation of the secretary. The commissioner shall employ staff as may be necessary to administer and enforce the provisions of this chapter].
(3)The Governor shall appoint an executive director for the commission. The executive director shall be responsible for the day-to-day management of the commission's affairs and shall employ staff as may be necessary to administer and enforce the provisions of this chapter. All commission[department] staff shall be[ classified and] employed in accordance with applicable personnel requirements of the Personnel Cabinet in accordance with KRS Chapter 18A. The commission shall establish and maintain in Frankfort an office for the conduct of its business.
(4)No employee of the commission[department] during his or her term of employment shall be an officer in a charitable organization that is licensed to conduct charitable gaming or be involved in the conduct of charitable gaming as a member of a licensed charitable organization. No employee of the commission[department] during his or her term of employment shall be licensed as a manufacturer, distributor, or charitable gaming facility, or have a financial interest in any business that is licensed as a manufacturer, distributor, or charitable gaming facility.
(5)The executive director[commissioner] shall employ[appoint] charitable gaming investigators who shall have the powers of peace officers throughout the Commonwealth; however, those powers shall be limited to:
(a)Enforcement of the provisions of KRS Chapter 238, relating to charitable gaming;
(b)Violations of KRS Chapter 528[,] relating to illegal gambling[:
1.Unlicensed and illegal charitable gaming;
2.Gambling offenses committed on licensed charitable gaming premises; and
3.Gambling offenses committed in conjunction with charitable gaming];
(c)Violations of KRS Chapter 514, relating to theft, embezzlement, or other illegal diversions of charitable gaming proceeds;
(d)Violations of KRS Chapters 516 and 517, relating to forgery and fraud in the conduct of charitable gaming;
(e)Violations relating to the damage or destruction of real or personal property owned or leased by a charitable gaming licensee; and
(f)Violation of any criminal[ felony] offense committed:
1.On licensed charitable gaming premises; or[and]
2.In the presence of a charitable gaming investigator when the offense committed is a felony.
(6)Charitable gaming investigators shall satisfy the certification standards established by the Department of Criminal Justice Training pursuant to KRS Chapter 15. Any commission employee with direct supervisory responsibility over charitable gaming investigators shall be qualified to possess, and shall possess, peace officer powers granted under subsection (5) of this section as a condition of employment. The executive director and any other person employed in a policy-making position with the commission[commissioner] may possess peace officer powers granted under subsection (5) of this section, if he or she is duly qualified. Charitable gaming investigators and other commission employees possessing peace officer powers shall not qualify for hazardous duty coverage under the Kentucky Employees Retirement System.
(7)Charitable gaming investigators[ so appointed] shall not possess peace officer powers other than those provided in subsection (5) of this section.
Section 5. KRS 238.515 is amended to read as follows:
The commission[department] shall license and regulate the conduct of charitable gaming in the Commonwealth of Kentucky. In discharging this responsibility, the commission[department] shall have the following powers and duties:
(1)Licensing charitable organizations, charitable gaming facilities, manufacturers, and distributors that desire to engage in charitable gaming;
(2)Establishing and enforcing reasonable standards for the conduct of charitable gaming and the operation of charitable gaming facilities;
(3)Prescribing reasonable fees for licenses;
(4)Establishing and implementing reasonable standards and secure electronic systems of accounting, recordkeeping, and reporting to insure charitable gaming receipts are properly accounted for;
(5)Establishing a process for reviewing complaints and allegations of wrongdoing, and for investigating complaints with merit. In furtherance of this duty, the commission[department] shall have the authority to issue administrative subpoenas and summonses for the purpose of compelling the attendance of witnesses and the production of documents, records or other evidence. If a person to whom a subpoena is issued refuses to appear or to produce documents, records or other evidence, the commission may compel compliance with the subpoena by obtaining an appropriate order from the Franklin Circuit Court. The commission[department] shall also establish toll-free telephone service for receiving complaints and inquiries;