2012 -- S 2703

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LC02006

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO SPORTS, RACING, AND ATHLETICS

     Introduced By: Senator Maryellen Goodwin

     Date Introduced: March 01, 2012

     Referred To: Senate Special Legislation and Veterans Affairs

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 41-3 of the General Laws entitled "HORSE RACING" is hereby

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repealed in its entirety.

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     CHAPTER 41-3

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Horse Racing

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     41-3-1. License required for racing. -- No person, association, or corporation shall hold

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or conduct any meeting within the state where horse racing shall be permitted for any stake,

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purse, or reward, except such person, association, or corporation as shall be licensed by the

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division of racing and athletics as provided in this chapter, and after an affirmative vote of the

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qualified electors as provided in chapter 9 of this title.

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     41-3-2. Town or city election on establishment of track. -- Before a horse racing track

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shall be established in any town or city, the approval of the question as is required by chapter 9 of

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this title shall be necessary, and if consent be thus given, all further regulations shall rest with the

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division of racing and athletics.

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     41-3-3. Classes of licenses. -- The division of racing and athletics shall be empowered to

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license race meets under the following classes:

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      (1) Class A. Horse running races, so-called.

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      (2) Class B. Competitive harness horse races, which are run in connection with the grand

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circuit, so-called.

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      (3) Class C. Competitive harness horse races, which are not run in connection with the

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grand circuit, so-called.

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      (4) Class D. Competitive horse races where there is no wagering.

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      (5) Class E. Harness racing by any incorporated association duly authorized to maintain

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agricultural exhibits.

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     41-3-4. Application for license -- Action by division. -- (a) Any person, association, or

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corporation desiring to conduct horse racing within this state shall apply to the division of racing

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and athletics for a license on forms provided by the division. The application shall specify the

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days on which horse racing is to be conducted, the location of the horse racing, and such other

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information as may be required by the division.

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      (b) The division may also require any person, association, or corporation to give

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information as to financial standing and credit. The division shall have the right to reject any

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applications for a license for any cause, which it may deem sufficient, and the action of the

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division both as to the license and the date or award shall be final, subject to the right of appeal

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provided by chapter 2 of this title.

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      (c) The division shall, as far as practicable, avoid conflicts in the dates assigned or

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awarded for horse racing in the state.

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     41-3-5. Award of dates for Class A racing. -- The application for a Class A license shall

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be filed on or before the fifteenth day of February in any year and the division of racing and

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athletics having considered the applications, shall on or before the first day of April in any year,

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assign or award all dates for racing within the state for the current year; provided, however, that

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the division in its discretion, may receive applications at a later date and may change the

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assignment or award if in its judgment the change is found necessary, but prior to making the

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change it shall print a public notice in the newspapers and shall give the party aggrieved by the

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change an opportunity to be heard.

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     41-3-6. Renewal of Class A licenses. -- Class A licenses when granted shall be

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renewable at the option of the licensee for a period of ten (10) years, provided the licensee

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complies with the provisions of this chapter and chapter 4 of this title.

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     41-3-7. Rebate of license fees. -- If by any reason or cause beyond the control of and

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through no fault or neglect of any licensee and while the licensee is not in default, it should

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become impossible or impracticable to conduct horse racing upon any day or days licensed by the

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division of racing and athletics, at the request of the licensee and upon sworn statements,

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submitted in writing by the licensee, the division may rebate all or part of the license fee.

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     41-3-8. Licensing of owners, trainers, jockeys, and other personnel. -- The division at

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its discretion shall license owners, trainers, jockeys, starters, exercise boys, hotwalkers, grooms,

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and all other stable personnel as well as pari-mutuel employees, concessioners and vendors,

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security personnel, licensees, employees, pari-mutuel totalizator companies and its employees,

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and all employees of race track management.

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     41-3-8.1. Licensing of concessioners, vendors, pari-mutuel totalizator companies,

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and employees. -- (a) All persons, firms, partnerships, associations, or corporations desiring to

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operate any concession allied to any horse racing track, shall apply for a license to the division of

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racing and athletics, on such forms and in such a manner as prescribed by regulations of the

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division. The division, by regulation, shall establish other occupational licensing for all

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employees of the concessions, all pari-mutuel employees, and all persons employed in any other

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capacity by the race track management, and for other persons engaged in racing activities at any

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horse racing track. (b) All persons, firms, associations, or corporations employed by the

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management of a horse racing track in providing pari-mutuel totalizator computer services for

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pari-mutuel computations, shall apply for a license to the division of racing and athletics upon

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such forms and in such manner as prescribed by regulations of the division. All employees of the

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pari-mutuel totalizator computer companies shall be licensed by the division on forms prescribed

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by regulations of the division. (c) In determining whether to grant a license pursuant to this

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section, the division may require the applicant to submit information as to: financial standing and

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credit; moral character; criminal record, if any; previous employment; corporate, partnership or

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association affiliations; ownership of personal assets; and such other information as it deems

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pertinent to the issuance of the license. The division may reject for good cause an application for

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a license, and it may suspend or revoke for good cause any license issued by it after a hearing

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held in accordance with chapter 35 of title 42, and subject to further appeal procedures provided

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by section 41-2-3. (d) The issuance of a license and the payment of annual fees shall be in

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accordance with the following schedule:

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      (1) Concessionaire and vendors
$100

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      (2) Occupational license:

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     Owners
5.00

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     Trainers
5.00

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     Jockeys
5.00

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     Apprentice jockeys
5.00

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     Authorized agents
5.00

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     Starters
5.00

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     Stable employees
5.00

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     Assumed names
10.00

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     Colors
5.00

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     (3) Vendors and concessionaries' employees
5.00

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     (4) Pari-mutuel employees
5.00

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     (5) Employees of race track management
5.00

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     (6) Pari-mutuel totalizator company
100

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     (7) Pari-mutuel totalizator company employees
5.00

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     (e) All individual applicants for licensing under this section shall be fingerprinted, and

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upon obtaining the license, shall wear upon his or her outer apparel a photo identification badge,

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issued or authorized by the division of racing and athletics under rules and regulations

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promulgated by the division.

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     41-3-9. Rules as to betting and track operation -- Deputies. -- The division of racing

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and athletics may make rules and regulations governing the operation of the tracks and stables.

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The division may make rules regulating betting at the horse racing events. The division may, at its

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discretion, appoint deputies, not exceeding twenty-two (22), to perform such duties as the rules

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and regulations of the division may require.

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     41-3-9.1. Admittance in stable enclosure. -- (a) No person shall enter the stable

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enclosure of a licensee of thoroughbred horses kept for a racing meeting without first obtaining

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the proper photo identification or permission in writing from the designated track security

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authority.

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      (b) Any person violating this section shall be guilty of a misdemeanor punishable by a

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fine up to one hundred dollars ($100) or a jail sentence of up to thirty (30) days or both for the

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first offense, and the second and subsequent offense shall be punishable by a fine up to two

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hundred ($200) dollars or up to ninety (90) days in jail or both.

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      (c) This section shall not apply to any police officer or firefighter in the exercise of his or

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her lawful duty.

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     41-3-10. Accounting methods. -- The division of racing and athletics shall have the

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power to require that the books and financial or other statements of any person, corporation, or

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association licensed under the provisions of this chapter shall be kept in any manner which to the

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division may seem best, and the division shall also be authorized to visit, to investigate, and to

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place expert accountants and such other persons as it may deem necessary, in the offices, tracks,

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or places of business of any person, corporation, or association, for the purpose of satisfying itself

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that the division's rules and regulations are strictly complied with.

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     41-3-11. Employees of licensees. -- The division of racing and athletics may at any time

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for cause require the removal of any employee or official employed by any licensee hereunder.

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     41-3-12. Compelling production of records. -- The division of racing and athletics shall

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have power to compel the production of any and all books, memoranda, or documents showing

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the receipts and disbursements of any person, corporation, or association licensed under the

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provisions of this chapter to conduct race meetings.

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     41-3-13. Witnesses before division. -- The division of racing and athletics shall have

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power to summon witnesses before it and to administer oaths or affirmations to the witnesses

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whenever, in the judgment of the division, it may be necessary for the effectual discharge of its

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duties; and any person failing to appear before the division at the time and place specified in

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answer to the summons, or refusing to testify, shall be guilty of a misdemeanor and, upon

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conviction in a court of competent jurisdiction, shall be punished by a fine of not more than five

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hundred dollars ($500) or by a sentence to the adult correctional institutions for not more than six

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(6) months, or by a sentence to both a fine and imprisonment, in the judgment of the court. False

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swearing on the part of any witnesses shall be deemed perjury, and shall be punished as perjury.

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     41-3-14. Suspension or revocation of license. -- Any license granted under the

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provisions of this chapter shall be subject to the rules and regulations set forth by the division of

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racing and athletics, and shall be subject to suspension or revocation for any cause which the

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division shall deem sufficient, after giving the licensee a reasonable opportunity for a hearing at

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which he or she shall have the right to be represented by counsel. If any license is suspended or

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revoked, the division shall state the reasons for the suspension or revocation and cause an entry of

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the reasons to be made on the record books of the division.

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     41-3-15. Penalty for unauthorized racing. -- Any person aiding or abetting in the

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conduct of any meeting within this state at which racing of horses shall be permitted for any

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stake, purse, or reward, except in accordance with a license duly issued and unsuspended or un-

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revoked by the division of racing and athletics, shall be guilty of a misdemeanor, and upon

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conviction, shall be punished by a fine of not more than five hundred dollars ($500) for each day

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of the unauthorized meeting or by imprisonment for not exceeding six (6) months, or both a fine

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and imprisonment, in the discretion of the court.

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     41-3-16. Municipal taxation of tracks. -- No fee, tax, or other emolument shall be

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exacted by any city or town for the use of track or events conducted thereon under the provisions

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of this chapter, and the right to establish any fees, taxes, or other emoluments shall rest with the

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division of racing and athletics in accordance with law; provided, however, that nothing in this

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chapter or chapter 4 of this title contained shall be construed to prevent any city or town from

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assessing and collecting taxes upon the real and personal property used by or in connection with

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any racing track.

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     41-3-17. Ejection of undesirable persons -- Rights of licensee. -- Any licensee under

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this chapter shall have the right to refuse admission to and to eject from the enclosure of any pari-

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mutuel facility where a pari-mutuel meeting licensed under the provisions of this chapter, is being

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held, any person or persons whose presence within the enclosure is, in the sole judgment of the

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licensee, its agents, or servants, undesirable.

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     41-3-18. Penalty for refusing to leave. -- Any person or persons within the enclosure

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deemed undesirable by the licensee, its agents, or servants or who has been ordered to leave or

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who has been previously ejected, shall, upon refusal to leave, be guilty of a misdemeanor, and

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upon conviction thereof, be punished by a fine of not more than one hundred dollars ($100) or

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imprisoned not more than one year or both.

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     41-3-19. Severability. -- The invalidity of any sections or parts of any section or sections

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of this chapter or chapter 4 of this title shall not affect the validity of the remainder of the

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chapters.

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     41-3-20. Majority of directors of licensee to be residents. -- The majority of the

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membership of the board of directors of any corporation licensed to hold or conduct any meeting

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within the state where horse racing shall be permitted for any stake, purse, or reward, shall be

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residents of the state.

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     41-3-21. Chemical test. -- There shall be administered to the first three (3) finishers and

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to the last finisher of every horse race, the appropriate chemical test authorized by the division of

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racing and athletics.

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     SECTION 2. Chapter 41-3.1 of the General Laws entitled "DOG RACING IN

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BURRILLVILLE, LINCOLN, AND WEST GREENWICH" is hereby repealed in its entirety.

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     CHAPTER 41-3.1

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Dog Racing in Burrillville, Lincoln, and West Greenwich

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     41-3.1-1. Operation of dog racing facilities. -- Any person desiring to operate a facility

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for the exhibition of the sport called dog racing in the towns of Burrillville, Lincoln, and West

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Greenwich, may do so upon the compliance with the terms and provisions of this chapter and

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pursuant to the provisions of chapter 9 of this title.

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     41-3.1-2. "Sports facilities" defined. -- The words "sports facilities" as used in this

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chapter, means a building or enclosure in which dog racing is conducted.

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     41-3.1-3. Regulation of operations. -- (a) The division of racing and athletics is hereby

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authorized to license dog racing in the towns of Burrillville, Lincoln, and West Greenwich. The

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operation of a dog track shall be under the division's supervision. The division is hereby

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authorized to issue rules and regulations for the supervision of the operations, and the regulations

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are to be issued prior to commencement of licensing hearings.

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      (b) Any license granted under the provisions of this chapter shall be subject to the rules

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and regulations promulgated by the division and shall be subject to suspension or revocation for

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any cause which the division shall deem sufficient after giving the licensee a reasonable

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opportunity for a hearing at which he or she shall have the right to be represented by counsel. If

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any license is suspended or revoked, the division shall state the reasons for the suspension or

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revocation and cause an entry of the reasons to be made on the record books of the division.

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      (c) The division of commercial licensing and racing and athletics in the department of

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business regulation shall be prohibited from licensing dog racing and/or the operation of a dog

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track upon which dog racing occurs in the town of Lincoln. Any license having been issued and

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in effect as of the effective date of this section shall be null and void and any licensee shall be

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prohibited form operating thereunder; provided, however, that the following entities shall be

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deemed pari-mutuel licensees as defined in section 42-61.2-1 et seq. and licensees as defined in

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section 41-11-1 et seq.: (1) Any entity having been issued a license to operate a dog track prior to

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December 31, 2008; and (2) Any entity having been issued a license to operate a dog track prior

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to December 31, 2008 that after such date is reorganized under a confirmed plan of reorganization

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pursuant to chapter 11 of title 11 of the United States Bankruptcy Code (11 U.S.C. sections 101 --

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1532); and provided, further, that in the case of a reorganized licensee under clause (2) above, its

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application for a Facility Permit license is approved and issued by the department of business

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regulation in the event of a proposed change in control of the entity. Nothing herein shall limit the

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ability of the department of business regulation, in connection with a proposed change in control,

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to investigate and subject to the regulatory due diligence process, any holder of an ownership

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interest regardless of percentage of ownership held.

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     41-3.1-4. Powers and duties of racing and athletics division. -- In addition to the other

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powers conferred upon the division, the division of racing and athletics shall carry out the

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provisions of this chapter, and to that end, the division may:

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      (1) Personally or by agent, supervise and check the making of pari-mutuel pools and

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wages and the distribution therefrom;

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      (2) Fix and set the dates within which any dog track may be operated; provided,

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however, there shall be at least one hundred twenty-five (125) days annually of the operation; and

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      (3) Require any applicant for a permit to operate a dog track to file an application under

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oath setting forth:

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      (i) The full name of the person, firm, corporation, or association, and if a corporation, the

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name of the state under which it is incorporated, as well as the names of the officers and directors

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of the corporation, and their places of residence, or if an association, the name and residence of

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the members of the association;

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      (ii) The exact location where it is desired to operate a dog track;

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      (iii) Whether or not the dog track is owned or leased, and if leased, the name, residence,

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and address of the owners or lessees, or if the owner or lessee be a corporation, the name and

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address of the officers and directors thereof;

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      (iv) A statement of the assets and liabilities of the person, firm, corporation, or

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association making application for the permit; and

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      (v) Such other information as the division may require.

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     41-3.1-5. Wages and pari-mutuel pools permitted within enclosure of dog track. --

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The pari-mutuel system, so called, or other form of betting system authorized by this chapter,

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shall not be used or permitted at any location other than the race track at which the dog racing

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event is licensed to be conducted.

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     41-3.1-5.1. Sale or purchase of twin-double tickets. -- The sale or purchase of twin-

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double tickets or attempting to aid or abet in the sale or purchase of twin-double tickets through

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solicitation of patrons attending, other than through pari-mutuel machines, is prohibited. Any

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person violating the provisions of this section shall be denied admission to all dog tracks in the

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state and may be prosecuted. Persons convicted of violating the provisions of this chapter shall be

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punishable by a fine of not more than five hundred dollars ($500) or by imprisonment for up to

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one year or both.

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     41-3.1-6. Tax on betting and licensee's commission. -- (a) (1) The commission of a

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licensee on pari-mutuel pools and wagers shall be eighteen percent (18%) of the amount

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contributed thereto.

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      (2) After deducting the commission and the "breaks," hereafter defined, a pari-mutuel

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pool shall be redistributed to the contributors. The licensee conducting such events pursuant to

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this chapter shall pay a tax to the state of five and one half percent (5.5%) of the amounts

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contributed to the pari-mutuel pool. The licensee shall pay a tax of one half of one percent (.5%)

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of the pool to each city or town in which any portion of the racing facility, including parking

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areas, storage areas, buildings, and entrances or exits to or from property being used in

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conjunction with the operation of dog racing, is located.

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      (b) Redistribution of funds otherwise distributable to the contributors to the pari-mutuel

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pools shall be a sum equal to the next lowest multiple of ten (10).

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      (c) No distribution of a pari-mutuel pool shall be made of the odd cents of any sum

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otherwise distributable, which odd cents shall be known as the "breaks".

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      (d) The "breaks" shall be known as the difference between the amount contributed to a

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pari-mutuel pool and the total of the commission of the licensee and the sums actually

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redistributed to the contributors.

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      (e) No person or corporation shall directly or indirectly purchase pari-mutuel tickets or

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participate in the purchase of any part of a pari-mutuel pool for another for hire or for any

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gratuity, and no person shall purchase any part of a pari-mutuel pool, through another, wherein he

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or she gives or pays directly or indirectly the other person anything of value, and any person

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violating this section shall be fined the sum of five hundred dollars ($500) for each violation.

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     41-3.1-7. Distribution of funds. -- All money mentioned in this chapter derived from

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taxes on wagers and pari-mutuel pools shall be disbursed by the state treasurer pursuant to

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chapter 4 of this title. Except as is inconsistent therewith, the provisions of chapters 3 and 4 of

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this title shall apply to the sport of dog racing.

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     41-3.1-8. Tax on breaks -- Distribution. -- (a) A tax is hereby levied upon every pari-

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mutuel pool conducted at the dog track, equal to fifty percent (50%) of the "breaks" as defined in

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section 41-3.1-6(d).

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      (b) It shall be the duty of every dog track licensee to pay unto the state treasurer the tax

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hereby levied and the licensee shall be liable therefor.

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     41-3.1-9. Severability. -- If any provision of this chapter or the application thereof to any

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person or circumstances is held invalid, the invalidity shall not effect other provisions or

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applications, and to this end the provisions of this chapter are severable.

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     41-3.1-10. Chemical test. -- There shall be administered to one randomly selected

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finisher, of every dog race, the appropriate chemical test authorized by the division of racing

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athletics. The department of business regulation is authorized to establish by rule and regulation

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procedures required for the chemical testing.

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     41-3.1-11. Applications -- Disclosure requirements. -- Upon filing of an application(s)

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to the department of business regulation or the division of lotteries with respect to a parimutuel or

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video lottery license, the department of business regulation and/or the division of lotteries, as the

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case may be, shall, upon a proper request made pursuant to chapter 2 of title 38 of the Rhode

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Island general laws entitled "access to public records", disclose the name, business address and

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contact person of the person or entity filing such an application in accordance with said chapter 2

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of title 38. Any and all other personal or financial information contained in such application(s) is

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expressly exempted from provisions of said chapter 2 of title 38 and is hereby deemed not to be a

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public record as defined therein.

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     SECTION 3. Chapter 41-4 of the General Laws entitled "MUTUEL BETTING AND

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LICENSE FEES" is hereby repealed in its entirety.

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     CHAPTER 41-4

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Mutuel Betting and License Fees

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     41-4-1. Meets at which betting authorized -- Types of mutuels. -- (a) The division of

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racing and athletics may permit at racing events, licensed under the provisions of chapter 3 of this

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title betting under pari-mutuel system, so-called, or auction mutuel system, so-called, except as

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otherwise provided in this chapter.

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      (b) Events run under Class A shall be conducted under the pari-mutuel system only.

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      (c) Events run under Classes B, C, and E shall be conducted under the pari-mutuel or

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auction mutuel system as the division may determine.

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     41-4-2. Betting only at track -- Minors prohibited. -- The pari-mutuel system, so-

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called, or other form of betting system authorized by this chapter, shall not be used or permitted

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at any location other than the race track at which the horse racing event is licensed to be

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conducted. No licensee shall knowingly permit any minor to be a patron of the pari-mutuel

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system or other betting system authorized by this chapter.

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     41-4-3. Tax on pari-mutuel betting. -- (a) Each licensee conducting racing events under

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the pari-mutuel system shall pay to the state, and there is hereby imposed:

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      (1) A tax at the rate of three percent (3%) of the total money wagered on so-called

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straight (win, place, or show) wagering on the events; and

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      (2) A tax at the rate of six percent (6%) of the total money wagered on so-called exotic

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or multiple forms of wagering on the events; and

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      (3) A tax equal to one-half (1/2) of the breakage to the dime resulting from the wagering.

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      (b) Each licensee conducting harness horse racing events under the pari-mutuel system

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shall pay to the state, and there is hereby imposed:

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      (1) A tax at the rate of five and one half percent (5.5%) of so much of the total amount of

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money wagered daily on such events as does not exceed four hundred thousand dollars

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($400,000); six and three quarters percent (6.75%) of so much thereof as exceeds four hundred

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thousand dollars ($400,000), but does not exceed four hundred and fifty thousand dollars

10-28

($450,000); seven and one quarter percent (7.25%) of so much thereof as exceeds four hundred

10-29

and fifty thousand dollars ($450,000), but does not exceed five hundred thousand dollars

10-30

($500,000); and ten percent (10%) of so much of the total amount of money wagered on such

10-31

events as exceeds five hundred thousand dollars ($500,000);

10-32

      (2) A tax equal to one half (1/2) of the breakage to the dime resulting from the wagering.

10-33

      (c) Each licensee conducting dog racing events under the pari-mutuel system shall pay to

10-34

the state, and there is hereby imposed, a tax on such events at the rate of:

11-1

      (1) Five and one half percent (5.5%) of the first one hundred and fifty thousand dollars

11-2

($150,000) of money wagered daily; plus nine percent (9%) on amounts wagered from one

11-3

hundred and fifty thousand dollars ($150,000) to two hundred and fifty thousand dollars

11-4

($250,000); plus ten and one quarter percent (10.25%) on amounts wagered from two hundred

11-5

and fifty thousand dollars ($250,000) to three hundred and seventy-five thousand dollars

11-6

($375,000); plus ten and three quarters percent (10.75%) on amounts wagered over three hundred

11-7

and seventy-five thousand dollars ($375,000); and

11-8

      (2) One half (1/2) of the breakage to the dime resulting from the wagering.

11-9

     41-4-4. Licensee's commission under pari-mutuel system. -- (a) Each licensee under

11-10

the pari-mutuel system may retain as the licensee's commission:

11-11

      (1) Not to exceed sixteen percent (16%) of the total amount of money wagered on so

11-12

called straight (win, place, or show) wagering on events; and

11-13

      (2) Not to exceed eighteen percent (18%) of the total amount of money wagered on so

11-14

called exotic or multiple forms of wagering on such events, and one half (1/2) of the breakage to

11-15

the dime resulting from the wagering.

11-16

      (b) Each licensee conducting a harness horse racing meeting under the pari mutuel

11-17

system may retain as the licensee's commission:

11-18

      (1) Not to exceed eleven and one half percent (11.5%) of so much of the total amount of

11-19

money wagered daily on such events as does not exceed four hundred thousand dollars

11-20

($400,000); ten and one quarter percent (10.25%) of so much thereof as exceeds four hundred

11-21

thousand dollars ($400,000), but does not exceed four hundred and fifty thousand dollars

11-22

($450,000); nine and three quarters percent (9.75%) of so much thereof as exceeds four hundred

11-23

and fifty thousand dollars ($450,000), but does not exceed five hundred thousand dollars

11-24

($500,000); and seven percent (7%) of so much of the total amount of money wagered on such

11-25

events as exceeds five hundred thousand dollars ($500,000); and

11-26

      (2) One half (1/2) of the breakage to the dime resulting from the wagering.

11-27

      (c) Each licensee conducting dog racing events under the pari-mutuel system may retain

11-28

as the licensee's commission an amount not to exceed:

11-29

      (1) Eleven and one-half percent (11.5%) of the first one hundred and fifty thousand

11-30

dollars ($150,000) of money wagered daily; plus eight percent (8%) on amounts wagered from

11-31

one hundred and fifty thousand dollars ($150,000) to two hundred and fifty thousand dollars

11-32

($250,000); plus six and three quarters percent (6.75%) on amounts wagered from two hundred

11-33

and fifty thousand dollars ($250,000) to three hundred and seventy-five thousand dollars

11-34

($375,000); plus six and one quarter percent (6.25%) on amounts wagered over three hundred and

12-1

seventy-five thousand dollars ($375,000); and

12-2

      (2) One half (1/2) of the breakage to the dime resulting from the wagering.

12-3

     41-4-4.1. Support of racing division activities -- Tax. -- (a) Notwithstanding the

12-4

provisions of section41-4-3 or section41-3.1-6 each licensee conducting racing events under the

12-5

pari-mutuel system shall collect an additional five percent (5%) of all money wagered on the

12-6

multiple pools at racing tracks. "Multiple pools" shall be defined as all forms of wagering other

12-7

than win, place, and show. This five percent (5%) tax shall be over and above the schedule of

12-8

taxes as set forth in section41-4-3, and shall be distributed as follows:

12-9

      (1) One and one half percent (1.5%) shall be paid to the department of business

12-10

regulation and these proceeds shall be deposited as general revenue.

12-11

      (2) One half of one percent (.5%) shall be paid to owners of dog kennels who are under

12-12

contract with a licensee who shall distribute funds to the owners of dog kennels in a manner

12-13

consistent with the generally accepted distribution of dog kennel owners' purses subject to an

12-14

annual audit by the auditor general or his or her designee.

12-15

      (3) One and one half percent (1.5%) shall be paid to the licensee provided that there is at

12-16

least three hundred forty (340) scheduled performances during the calendar year.

12-17

      (4) One and one half percent (1.5%) shall be paid to the state and revert to the general

12-18

fund.

12-19

      (b) Notwithstanding the provisions of section41-3.1-6 each licensee conducting racing

12-20

events under the pari-mutuel system shall collect an additional four percent (4%) of all moneys

12-21

wagered on so called straight (win, place, or show) wagering. This four percent (4%) tax shall be

12-22

over and above the schedule of taxes as set forth in section41-3.1-6, and shall be distributed as

12-23

follows:

12-24

      (1) One percent (1%) shall be paid to the town of Lincoln; and

12-25

      (2) One percent (1%) shall be paid to owners of dog kennels who are under contract with

12-26

a licensee who shall distribute funds to the owners of dog kennels in a manner consistent with the

12-27

generally accepted distribution of dog kennel owners' purses subject to an annual audit by the

12-28

auditor general or his or her designee.

12-29

      (3) Two percent (2%) shall be paid to the state and revert to the general fund.

12-30

     41-4-5. Taxes and license fees under auction mutuel system. -- If events are conducted

12-31

under the auction mutuel system the following taxes and license fees are hereby imposed:

12-32

      (1) As to Class B events, a tax of two percent (2%) of the total amount of money

12-33

wagered and also a license fee of two hundred dollars ($200) per day;

13-34

      (2) As to Class C events, a tax of one and one half percent (1.5%) of the total amount of

13-35

money wagered and also a license fee of fifty dollars ($50.00) per day;

13-36

      (3) As to Class E events, a tax of one percent (1%) of the total amount of money

13-37

wagered and also a license fee of twenty dollars ($20.00) per day.

13-38

     41-4-6. Licensee's commission under auction mutuel system. -- Each licensee under

13-39

the auction mutuel system may retain, as the licensee's commission, not to exceed five percent

13-40

(5%) of the total amount of money wagered.

13-41

     41-4-7. Class D license fee. -- Events run under Class D shall pay a fee not exceeding ten

13-42

dollars ($10.00) per day; provided, however, that no wagering of any sort shall be allowed at the

13-43

events.

13-44

     41-4-8. Collection of taxes -- Interest on delinquencies -- Failure to pay on demand. -

13-45

- The tax administrator shall assess and collect the taxes imposed by this chapter under such rules

13-46

and regulations as he or she may prescribe. All taxes hereby imposed shall be due and payable at

13-47

the close of each day's racing and any tax not paid upon demand of the tax administrator shall

13-48

bear interest at the rate of six percent (6%) per annum from the time of the demand. Failure to pay

13-49

any tax upon demand shall be cause for revocation of a license.

13-50

     41-4-9. Accounting system -- Supervision of betting. -- The division of racing and

13-51

athletics shall devise a system of accounting and shall supervise betting at a track in a manner so

13-52

that the rights of the state are protected, and shall collect all fees and licenses under such rules

13-53

and regulations as it shall prescribe.

13-54

     41-4-9.1. Licensing of concessioners, vendors, and pari-mutuel totalizator

13-55

companies. -- (a) All persons, firms, partnerships, associations, or corporations desiring to

13-56

operate any concession allied to any dog racing track, shall apply for a license to the division of

13-57

racing and athletics, on such forms and in such a manner as prescribed by regulations of the

13-58

division. The division by regulations shall establish other occupational licensing for all

13-59

employees of the concessions, all pari-mutuel employees, and all persons employed in any other

13-60

capacity by the race track management, and for other persons engaged in racing activities at any

13-61

dog racing track. (b) All persons, firms, associations, or corporations employed by the

13-62

management of a dog racing track in providing pari-mutuel totalizator computer services for pari-

13-63

mutuel computations, shall apply for a license to the division of racing and athletics upon such

13-64

forms and in such manner prescribed by regulations of the division. All employees of the pari-

13-65

mutuel totalizator computer companies shall be licensed by the division on forms prescribed by

13-66

regulations of the division. (c) In determining whether to grant a license pursuant to this section

13-67

the division may require the applicant to submit information as to: financial standing and credit;

13-68

moral character; criminal record, if any; previous employment; corporate, partnership or

14-1

association affiliations; ownership of personal assets; and such other information as it deems

14-2

pertinent to the issuance of the license. The division may reject for good cause an application for

14-3

a license, and it may suspend or revoke for good cause any license issued by it after a hearing

14-4

held in accordance with chapter 35 of title 42 and subject to further appeal procedures provided

14-5

by section 41-2-3. (d) The division shall issue a three (3) year license commencing with license

14-6

year 2007. The division shall implement a graduated system in 2007 where one third of licenses

14-7

due to expire shall be renewed for one year, a second third of licenses due to expire shall be

14-8

renewed for two (2) years, and the final third of licenses due to expire shall be renewed for three

14-9

(3) years, with licensing fees prorated accordingly. As said licenses become due for renewal,

14-10

licenses shall be renewed for a three (3) year period of time. All licenses issued shall be in

14-11

accordance with regulations and the following schedule:

14-12

     (1) For gaming facility employees:

14-13

     (A) Key employees
$300.00

14-14

     (B) Operation employees
$150.00

14-15

     (C) Service employees
$75.00

14-16

     (2) For gaming facility non-employees: (A) Concessionaires and vendors: $750.00

14-17

     (B) Occupational licenses:

14-18

     Owners
450.00

14-19

     Trainers
150.00

14-20

     Assumed names
150.00

14-21

     Kennel people
7 5.00

14-22

     (C) Concessionaire and vendor's employees
75.00

14-23

     (D) Pari-mutuel totalizator companies
750.00

14-24

     (E) Pari-mutuel totalizator company employees
150.00

14-25

     (e) All individual applicants for licensing under this section shall be fingerprinted, and,

14-26

upon obtaining the license, shall wear upon his or her outer apparel a photo identification badge,

14-27

issued or authorized by the division of racing and athletics under rules and regulations

14-28

promulgated by the division.

14-29

     (f) The cost of the licensing pursuant to this section shall be paid by the employer of the

14-30

licensee, and shall include one hundred and fifty percent (150%) of the total salaries and benefits

14-31

for the state employees engaged in the licensing at each facility. The fund shall be deposited as

14-32

restricted receipts for the use of the state and shall be in addition to any taxes and fees otherwise

14-33

payable to the state.

15-34

     41-4-10. Unclaimed winnings. -- The amount of unclaimed money, as determined by the

15-35

division of racing and athletics, now held or which shall hereafter be held by any licensee, on

15-36

account of outstanding and un-cashed winning tickets shall, at the expiration of one year after the

15-37

close of the meeting during which the tickets were issued, be collected forthwith from the

15-38

licensee by the division and shall be paid over to the general treasurer for the use of the state and

15-39

all unclaimed money shall be held in an escrow account by the licensee until collected by the

15-40

division.

15-41

     41-4-11. Entry of premises for inspection of operations. -- The division of racing and

15-42

athletics may authorize members of the division or duly authorized deputies to enter upon the

15-43

premises at any racing event for the purpose of inspecting books and records, supervising and

15-44

examining cashiers, ticket sellers, pool sellers, and other persons handling money at the event and

15-45

such other supervision as may be necessary for the maintenance of order at the event.

15-46

     41-4-12. Monthly statement of receipts -- Payments to treasurer. -- The division of

15-47

racing and athletics shall, on or before the tenth day of each month, prepare and file with the

15-48

general treasurer a full and complete statement of its receipts from all sources, and shall turn over

15-49

to the general treasurer all moneys in its possession.

15-50

     41-4-13. Repealed.. --

15-51

     41-4-14. Dog racing -- Distribution of pari-mutuel pool to communities where tracks

15-52

located. -- After deducting the commission and the "breaks," as required by law, a pari-mutuel

15-53

pool shall be redistributed to the contributors. The licensee of a dog track shall pay a tax to the

15-54

state of five and one half percent (5.5%) of the amounts contributed to the mutuel pool. The

15-55

licensee shall pay a tax of one half of one percent (.5%) of such pool to each city or town within

15-56

whose borders the racing facility or any portion thereof, including parking areas, storage areas,

15-57

buildings, and entrances or exits to or from the property being used in conjunction with the

15-58

operation of dog racing, is located.

15-59

     41-4-14.1. Local approval. -- Section 41-4-14 shall take effect upon the approval of the

15-60

voters of any city or town voting on the question allowing the sport of dog racing, subject,

15-61

however, to an affirmative vote as provided in chapter 9 of title 41.

15-62

     SECTION 4. Chapter 41-7 of the General Laws entitled "JAI ALAI" is hereby repealed

15-63

in its entirety.

15-64

     CHAPTER 41-7

15-65

Jai Alai

15-66

     41-7-1. Operation of jai alai sports facilities. -- Any person desiring to operate a facility

15-67

for the exhibition of the Spanish sport called jai alai in the city of Newport may do so upon the

15-68

compliance with the terms and provisions of this chapter.

16-1

     41-7-2. "Sports facilities" and "frontons" defined. -- The words "sports facilities" and

16-2

"fronton" as used in this chapter mean a building or enclosure in which is provided a playing

16-3

court with three (3) walls so designed and constructed for the playing of that sports game of ball

16-4

as played in Spanish speaking countries, called jai alai or pelota.

16-5

     41-7-3. Regulation of operations -- Licensing. -- (a) The division of racing and athletics

16-6

is hereby authorized to license jai alai in the city of Newport. The operation of a fronton shall be

16-7

under the division's supervision. The division is hereby authorized to issue rules and regulations

16-8

for the supervision of the operations.

16-9

      (b) Any license granted under the provisions of this chapter shall be subject to the rules

16-10

and regulations promulgated by the division and shall be subject to suspension or revocation for

16-11

any cause which the division shall deem sufficient after giving the licensee a reasonable

16-12

opportunity for a hearing at which he or she shall have the right to be represented by counsel. If

16-13

any license is suspended or revoked, the division shall state the reasons for the suspension or

16-14

revocation and cause an entry of the reasons to be made on the record books of the division.

16-15

      (c) Commencing July 1, 2003, the division of racing and athletics shall be prohibited to

16-16

license jai alai in the city of Newport. Any license having been issued and in effect as of that date

16-17

shall be null and void and any licensee shall be prohibited from operating thereunder; provided,

16-18

however, that any entity having been issued a license to operate a jai alai fronton prior to July 1,

16-19

2003 shall be deemed a pari-mutuel licensee as defined in section 42-61.2-1 et seq., and a

16-20

licensee as defined in section 41-11-1 et seq.

16-21

     41-7-4. Power and duties of the division of racing and athletics. -- In addition to the

16-22

other powers conferred upon the division of racing and athletics, the division shall carry out the

16-23

provisions of this chapter, and to that end, the division may:

16-24

      (1) Personally or by agent, supervise and check the making of pari-mutuel pools and

16-25

wagers and the distribution therefrom;

16-26

      (2) Fix and set the dates within which any fronton may be operated; provided, however,

16-27

there shall be at least one hundred (100) days annually of the operation; and

16-28

      (3) Require any applicant for a permit to operate a fronton to file an application under

16-29

oath setting forth:

16-30

      (i) The full name of the person, firm, corporation, or association, and if a corporation, the

16-31

name of the state under which it is incorporated, as well as the names of the officers, directors,

16-32

and stockholders of the corporation, and their places of residence, or if an association, the name

16-33

and residence of the members of the association;

17-34

      (ii) The exact location where it is desired to operate a fronton exhibiting the Spanish

17-35

sport jai alai or pelota;

17-36

      (iii) Whether or not the fronton is owned or leased, and if leased, the name, residence,

17-37

and address of the owners or lessees, or if the owner or lessee be a corporation, the name and

17-38

address of the officers, directors, and stockholders thereof;

17-39

      (iv) A statement of the assets and liabilities of the person, firm, corporation, or

17-40

association making application for the division permit;

17-41

      (v) Such other information as the division may require.

17-42

     41-7-5. Wagers and pari-mutuel pools permitted within enclosure of fronton. --

17-43

Within the enclosure of any fronton licensed and conducted under this chapter but not elsewhere,

17-44

wagering on the respective scores or points of the game of jai alai or pelota and the sale of pari-

17-45

mutuel pools under such regulation as the division of racing and athletics shall prescribe, are

17-46

hereby authorized and permitted, including, but not limited to, those forms of wagering known as

17-47

daily double, perfecta, quinella, and trifecta.

17-48

     41-7-5.1. Sale or purchase of twin-double tickets. -- The sale or purchase of twin

17-49

double tickets or attempting to aid or abet in the sale or purchase of twin-double tickets through

17-50

solicitation of patrons attending, other than through pari-mutuel machines, is prohibited. Any

17-51

person violating the provisions of this section shall be denied admission to the fronton and may

17-52

be prosecuted. Persons convicted of violating the provisions of this section shall be punished by a

17-53

fine of not more than five hundred dollars ($500) or by imprisonment for up to one year or both.

17-54

     41-7-6. Tax on betting and licensee's commission. -- (a) The commission of a licensee

17-55

on pari-mutuel pools and wagers shall be twenty and one half percent (201/2%) of the amount

17-56

contributed thereto. After deducting the commission and the "breaks," hereafter defined, a pari-

17-57

mutuel pool shall be redistributed to the contributors. The licensee conducting events pursuant to

17-58

this chapter shall pay a tax to the state of three percent (3%) of annual amounts contributed to

17-59

mutuel pools up to eighteen million dollars ($18,000,000) of total handle. The Rhode Island tax

17-60

shall increase one half of one percent (.5%) for the next incremental increase of two million

17-61

dollars ($2,000,000), and one half of one percent (.5%) for each incremental increase of one

17-62

million dollars ($1,000,000), thereafter, in the total annual pool up to a maximum of five percent

17-63

(5%). The licensee shall pay a tax of one percent (1%) of the pool to the city of Newport and the

17-64

tax administrator/collector or equivalent for the city of Newport shall assess and collect the taxes

17-65

imposed by this section with respect to the city of Newport under such rules and regulations as he

17-66

or she may prescribe. All taxes hereby imposed shall be due and payable at the close of each day's

17-67

activities, and any tax not paid upon demand of the tax administrator/collector shall bear interest

17-68

at the rate of six percent (6%) per annum for the time of the demand. Failure to pay any tax upon

18-1

demand shall be cause for revocation of a license.

18-2

      (b) Redistributions of funds otherwise distributable to the contributors to the pari-mutuel

18-3

pools shall be a sum equal to the next lowest multiple of ten (10).

18-4

      (c) No distribution of a pari-mutuel pool shall be made of the odd cents of any sum

18-5

otherwise distributable, which odd cents shall be known as the "breaks."

18-6

      (d) The "breaks" shall be known as the difference between the amount contributed to a

18-7

pari-mutuel pool and the total of the commission of the licensee and the sums actually

18-8

redistributed to the contributors.

18-9

      (e) No person or corporation shall directly or indirectly purchase pari-mutuel tickets or

18-10

participate in the purchase of any part of a pari-mutuel pool for another for hire or for any gratuity

18-11

and no person shall purchase any part of a pari-mutuel pool through another, wherein he or she

18-12

gives or pays directly or indirectly the other person anything of value, and any person violating

18-13

this section shall be fined the sum of five hundred dollars ($500) for each violation.

18-14

     41-7-7. Distribution of funds -- Applicability of chapters 3 and 4 of this title. -- All

18-15

money mentioned in this chapter derived from taxes on wagers and pari-mutuel pools shall be

18-16

disbursed by the state treasurer pursuant to chapter 4 of this title. Except as is inconsistent with

18-17

this chapter the provisions of chapters 3 and 4 of this title shall apply to the sport of jai alai.

18-18

     41-7-8. Tax on breaks -- Distribution. -- (a) A tax is hereby levied upon every pari-

18-19

mutuel pool conducted at the fronton for the exhibition of the Spanish ball game known as jai alai

18-20

in Newport authorized by law so to do, equal to fifty percent (50%) of the "breaks" as defined in

18-21

the above.

18-22

      (b) It shall be the duty of every fronton licensee to pay unto the state treasurer the tax

18-23

hereby levied and the licensee shall be liable therefor.

18-24

     41-7-9. Leases of city properties. -- The city of Newport is hereby authorized to enter

18-25

into a lease of city property for a period not to exceed thirty-five (35) years with an application to

18-26

the division of racing and athletics for a license to conduct jai alai.

18-27

     41-7-10. Licensing of concessionaires, vendors, pari-mutuel totalizator companies. --

18-28

(a) All persons, firms, partnerships, associations, or corporations desiring to operate any

18-29

concession allied to any fronton, shall apply for a license to the division of racing and athletics,

18-30

on such forms and in such a manner as prescribed by regulations. The division by regulations

18-31

shall establish other occupational licensing for all employees of the concessions, all pari-mutuel

18-32

employees, and all persons employed in any other capacity by the fronton management. (b) All

18-33

persons, firms, partnerships, associations, or corporations employed by the fronton management

18-34

in providing pari-mutuel totalizator computer services for pari-mutuel computations, shall apply

19-1

for a license to the division upon such forms and in such manner as prescribed by regulations of

19-2

the division. All employees of the pari-mutuel totalizator computer companies shall be licensed

19-3

by the division on forms prescribed by regulations of the division. (c) In determining whether to

19-4

grant a license pursuant to this section the division may require the applicant to submit

19-5

information as to: financial standing and credit; moral character; criminal record, if any; previous

19-6

employment; corporate, partnership, or association affiliations; ownership of personal assets; and

19-7

such other information as it deems pertinent to the issuance of the license. The division may

19-8

reject for good cause an application for a license, and it may suspend or revoke for good cause

19-9

any license issued by it after a hearing held in accordance with chapter 35 of title 42; subject to

19-10

further appeal procedures provided by section 41-2-3. (d) Issuance of license and the payment of

19-11

annual fees shall be the same in accordance with the following schedule:

19-12

      (1) Concessionaires and vendors
$200

19-13

     (2) Occupational license

19-14

     Player license
10.00

19-15

     Ball maker
10.00

19-16

     Player/manager
10.00

19-17

     Jai alai judge
10.00

19-18

     (3) Vendor or concessionaire employee
10.00

19-19

     (4) Pari-mutuel employees
10.00

19-20

     (5) Employees of fronton management
10.00

19-21

     (6) Pari-mutuel totalizator companies
200

19-22

     (7) Pari-mutuel totalizator company employees
10.00

19-23

     (8) Security employees
10.00

19-24

     (e) All individual applicants for licensing under this section shall be fingerprinted, and,

19-25

upon obtaining a license, shall wear upon his or her outer apparel a photo identification badge,

19-26

issued or authorized by the division of racing and athletics under rules and regulations

19-27

promulgated by the division.

19-28

     41-7-11. Conclusion of Saturday performances. -- Notwithstanding the provisions of

19-29

chapter 6 of this title, any jai alai game played within the enclosure of any fronton licensed and

19-30

conducted pursuant to this chapter, commencing on a Saturday evening and not concluded before

19-31

twelve (12) o'clock midnight, shall not be permitted to be played beyond one o'clock in the

19-32

morning of the first day of the week.

19-33

     41-7-12. Repealed.. --

20-34

     SECTION 5. Chapter 41-9 of the General Laws entitled "ESTABLISHMENT AND

20-35

EXTENSION OF GAMBLING ACTIVITIES AND OTHER FACILITIES" is hereby repealed in

20-36

its entirety.

20-37

     CHAPTER 41-9

20-38

Establishment and Extension of Gambling Activities and Other Facilities

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     41-9-1. "Gambling" and "gambling facilities" defined. -- (a) As used in this chapter,

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the term "gambling" shall include, but not be limited to, horseracing, dog racing, and jai alai;

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however, casino gaming shall be governed by the provisions of chapter 9.1 of title 41. The term

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"gambling facility" as used in this chapter means a building or enclosure in which any gambling

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activity including, but not limited to, the foregoing is played or conducted.

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      (b) The term "gambling facility" shall also include any building, enclosure or other

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improvement designed, constructed, or used in connection with an overall plan or project

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involving the establishment of any gambling activity; provided, however, that this sentence shall

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not apply to any gambling facility licensed prior to July 3, 1998.

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     41-9-2. Financial disclosure by promoter. -- (a) By the first Monday in August prior to

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the general election at which the question of the establishment or extension of any gambling

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activity or facility is presented to the electorate, all persons and/or corporations promoting or

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having an interest of five percent (5%) or greater in the activity or facility shall file with the ethics

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commission the financial statement provided by the commission which shall conform with the

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requirements of section36-14-16. If the person and/or corporation acquire an interest of five

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percent (5%) or greater after the first Monday in August, that person and/or corporation shall file

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the financial statement within seven (7) days after acquiring such interest.

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      (b) The duty to file the financial statement shall be a continuing duty and shall be

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required of any and all persons and/or corporations who have or will have an interest of five

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percent (5%) or greater in an activity and/or facility.

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     41-9-3. Disclosure of regulated business interests. -- Every person who is required to

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file a financial statement pursuant to this chapter and who has, or within the preceding three (3)

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years divests himself or herself of, five percent (5%) or greater equity interest in a business entity

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which is subject to regulation by this chapter, by a state or municipal agency, shall file with the

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ethics commission annually an affidavit:

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      (1) Identifying himself or herself and stating the capacity in which he or she serves or is

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about to serve which occasions the filing of the affidavit;

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      (2) Identifying the business entity (or each business entity) and all the principals thereof

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known to him or her;

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      (3) Stating the nature of his or her interest in the business entity and that of all the

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principals thereof known to him or her;

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      (4) Identifying all those persons and/or corporations known to him or her providing any

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financing for the business entity.

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     41-9-4. Town and state election on establishment of facility. -- (a) Before a gambling

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facility shall be established in any town or city, the town council of the town or the city council of

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the city shall comply with the following procedure:

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      (1) Upon receipt of a resolution from the town council of the town or the city council of

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the city, for a referendum to establish a gambling facility and/or activity, the general assembly

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shall determine, by passage of an act, whether to allow a referendum on the establishment of the

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gambling facility and/or activity.

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      (2) Upon passage of an act to allow a referendum for the establishment of the gambling

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facility and/or activity, the town council of the town or the city council of the city shall pose, by

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adopting a resolution to be placed on the ballot at the next general election to be submitted to the

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qualified electors of the town or city and to the qualified electors of the state, the following

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question: "Shall a gambling facility and/or activity be established in the town (or city) of

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__________________?"

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      (b) The question shall be submitted by the local board of canvassers to the electors of the

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town or city where the facility or activity is to be located, and the results of the election shall be

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certified to the secretary of state.

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      (c) The question shall be submitted by the secretary of state to the qualified electors of

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the state at the same general election and the secretary of state shall certify the election results.

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      (d) The affirmative vote of the subject town or city and the electors of the state shall be

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necessary for the approval of the question, and if consent be thus given, all rules and regulations

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shall be promulgated in accordance with the authority conferred upon the general assembly in R.I.

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Const., Art. VI, Sec. XV.

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     41-9-5. Penalties. -- Any person who knowingly and willfully violates the provisions of

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this chapter shall be guilty of a felony herein and punished by a fine of not more than five

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thousand dollars ($5,000) and/or imprisonment for no longer than five (5) years for each

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violation.

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     41-9-6. Applicability. -- The provisions of this chapter shall specifically apply to any

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facility licensed pursuant to chapter 7 of this title prior to any casino gambling activity being

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licensed on the premises of the facility.

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     SECTION 6. Chapter 41-9.1 of the General Laws entitled "THE RHODE ISLAND

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GAMING CONTROL AND REVENUE ACT" is hereby repealed in its entirety.

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     CHAPTER 41-9.1

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The Rhode Island Gaming Control and Revenue Act

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     41-9.1-1. Title. -- This chapter shall be known as the "Rhode Island Gaming Control and

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Revenue Act."

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     41-9.1-2. Legislative findings. -- The general assembly makes the following findings:

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      (1) In accord with R.I. Const. Art. VI, section 22, only the people of the State of Rhode

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Island can determine whether the state should pursue casino gaming as a source of revenue;

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      (2) The people should be able to make this determination in a manner that is consistent

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with the Rhode Island Constitution;

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      (3) The people should be able to exercise their right and their elected representatives

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should be able to implement the people's determination based upon clear and objective criteria;

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      (4) A potential casino licensee should be provided with clear and objective criteria;

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      (5) Casino states have diverse regulatory schemes, but all have strong legislative and

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regulatory oversight to ensure integrity of casino operations and to maintain public confidence;

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      (6) To ensure the integrity of the commercial casino gaming industry and its reputation

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in Rhode Island, commercial casino gaming needs the strictest possible regulation with law

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enforcement oversight;

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      (7) There are socio-economic costs that expanded gaming may impose on communities

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and the state;

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      (8) Problem gambling already exists in Rhode Island and may increase with the

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introduction of casino gaming;

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      (9) The state of Rhode Island should follow the lead of other casino jurisdictions and

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take measures designed to detect the extent of problem gambling, educate the public, and assure

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availability of resources for treatment.

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     41-9.1-3. Definitions. -- As used in this chapter, the following terms are defined as

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follows:

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      (1) "Adjusted gross receipts" means the gross receipts less winnings paid to wagerers.

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      (2) "Affiliate" means a person who, directly or indirectly, through one or more

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intermediaries, controls, is controlled by, or is under common control with; is in a partnership

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(general or limited) or joint venture relationship with; or is a co-shareholder of a corporation, a

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co-member of a limited liability company, or co-partner in a limited liability partnership with a

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person who holds or applies for a casino license under this chapter.

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      (3) "Affiliated company" means any form of business organization which controls, is

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controlled by or is under common control with, is in a partnership (general or limited) or joint

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venture relationship with, or is a co-shareholder of a corporation, a co-member of a limited

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liability company, or co-partner in a limited liability partnership with a person who holds or

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applies for a casino license under this chapter.

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      (4) "Agent" means any person who is employed by any agency of the state other than the

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state lottery division, the state police, or attorney general who is assigned to perform full-time

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services on behalf of or for the benefit of the state lottery division regardless of the title or

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position held by that person.

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      (5) "Applicant" means any person who applies for any right, license or registration under

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this chapter:

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      (6) "Casino" means a building in which gaming is conducted.

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      (7) "Casino licensee" or "casino operator" means any person licensed to conduct gaming

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operations according to the provisions of this chapter.

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      (8) "Chairperson" means the chairperson of the state lottery division.

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      (9) "Commission" means the state lottery division as created by chapter 61 of title 42.

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      (10) "Company" means a sole proprietorship, corporation partnership (general or

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limited), limited liability partnership, limited liability company, trust, association, joint stock

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company, joint venture tribal corporation or other form of business organization.

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      (11) "Compensation" means any money, thing of value or financial benefit conferred on

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or received by a person in return for services rendered or to be rendered, whether by that person

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or another.

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      (12) "Conflict of interest" means a situation in which the private interest of a member,

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employee, or agent of the state lottery division may influence the judgment of the member,

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employee, or agent in the performance of his or her public duty under this chapter. A conflict of

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interest includes, but is not limited to, the following:

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      (i) Any conduct that would lead a reasonable person knowing all of the circumstances, to

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conclude that the member, employee, or agent of the state lottery division is biased against or in

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favor of an applicant.

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      (ii) Acceptance of any form of compensation other than from the state lottery division,

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for any services rendered as part of or related to the official duties of the member, employee, or

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agent for the state lottery division.

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      (iii) Participation in any business being transacted with or before the state lottery

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division, in which the member, employee, or agent of the state lottery division, or his or her

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parent, spouse or child, has a financial interest.

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      (iv) Use of the position, title, or any related authority of the member, employee, or agent

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of the state lottery division in a manner designed for personal gain or benefit.

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      (v) Demonstration through work or other action in the performance of the official duties

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of the member, employee, or agent of the state lottery division of any preferential attitude or

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treatment of any person.

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      (13) "Control" means having a greater than twenty percent (20%) direct or indirect

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pecuniary interest in the gaming operation with respect to which the license is sought.

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      (14) "Development agreement" means a written agreement between an applicant for a

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casino license and the Town of West Warwick pertaining to the casino including, but not limited

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to, approval of the location of the site and the process for addressing and approving zoning, land

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use, utility and other essential services, on-site and off-site improvements, local impacts and

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construction and operational issues.

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      (15) "Disciplinary action" is an action by the state lottery division suspending or

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revoking a license, fining, excluding, reprimanding or otherwise penalizing a person for violating

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this chapter or rules promulgated by the state lottery division.

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      (16) "Financial interest" or "financially interested" means any interest in investments,

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awarding of contracts, grants, loans, purchases, leases, sales, or similar matters under

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consideration or consummated by the state lottery division. A member, employee, or agent of the

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state lottery division will be considered to have a financial interest in a matter under consideration

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if any of the following circumstances exist:

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      (i) He or she owns a five percent (5%) or greater direct or indirect pecuniary interest in

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any party to the matter under consideration or consummated by the state lottery division; or

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      (ii) He or she is employed by or is an independent contractor for a party to the matter

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under consideration or consummated by the state lottery division.

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      (17) "Gambling game" means any game played with cards, dice, equipment or a

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machine, including any mechanical, electromechanical or electronic device which shall include

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computers and cashless wagering systems, for money, credit, or any representative of value;

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including, but not limited to faro, monte, roulette, keno, bingo fan tan, twenty-one, blackjack,

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seven and a half, klondike, craps, poker, chuck a luck, Chinese chuck a luck (dai shu), wheel of

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fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingui, slot machine, any banking

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or percentage game, or any other game or device approved by the state lottery division, but does

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not include games played with cards in private homes or residences in which no person makes

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money for operating the game.

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      (18) "Game" means any banking or percentage game located exclusively within a

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licensed casino, which is played with cards, dice, or any electronic, electrical, or mechanical

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device or machine for money, property, or any thing of value.

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      (19) "Gaming" means to deal, operate, carry on, conduct, maintain or expose or offer for

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play any gambling game or gaming operation.

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      (20) "Gaming device" means any equipment or mechanical, electromechanical, or

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electronic contrivance component or machine used directly or indirectly in connection with

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gaming or any game which affects the result of a wager by determining win or loss. The term

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includes a system for processing information, which can alter the normal criteria of random

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selection which affects the operation of any game or which determines the outcome of a game.

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The term does not include a system or device, which affects a game solely by stopping its

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operation so that the outcome remains undetermined.

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      (21) "Gaming operation" means the conduct of authorized gambling games in a casino

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pursuant to this chapter but does not include those operations governed by chapters 61 and 61.2

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of Title 42.

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      (22) "Gaming supplier" means any person who supplies, sells or leases or contracts to

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sell or lease gaming devices, equipment, or supplies to a holder of a license or a casino gaming

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operator.

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      (23) "Gaming supplier permit" means the permit of a gaming supplier.

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      (24) "Gaming supplies" means all materials and supplies other than gaming devices

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which the state lottery division finds or determines to be used or expended in gaming operations

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or activities and that can impact the outcome of game.

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      (25) "Gross receipts" means the total of all sums including valid or invalid checks,

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currency, tokens, coupons, vouchers, or instruments of monetary value whether collected or

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uncollected, received by a casino licensee from gaming, including all entry fees assessed for

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tournaments or other contests less a deduction for uncollectible gaming receivables not to exceed

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the uncollectible amounts owed as a result of wagers placed at or through a gambling game or

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four percent (4%) of the total gross receipts, whichever is less. The licensee shall not receive the

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deduction unless the licensee provides written proof to the state treasurer of the uncollected

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gaming receivable and has complied with all rules promulgated by the state lottery division

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regarding the issuance of credit and the collection of amounts due under a credit extension.

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      (26) "Institutional investor" means a person that is:

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      (a) A plan or trust established and maintained by the United States government, a state,

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or a political subdivision of a state for the benefit of its respective employees.

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      (b) An investment company that is registered under the Investment Company Act of

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1940.

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      (c) A Collective Investment Trust organized by a bank under Part Nine of the rules of the

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Comptroller of the Currency.

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      (d) A closed end investment trust registered with the United States Securities and

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Exchange Board.

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      (e) A mutual fund.

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      (f) A life insurance company or property and casualty insurance company.

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      (g) A federal or state bank.

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      (h) An investment advisor registered under the Investment Advisors Act of 1940.

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      (i) Such other similar regulated entities as may be approved by the state lottery division

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for good cause.

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      (27) "Institutional lender" means a person that is:

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      (a) An insurance company regulated by any state of the United States.

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      (b) Any investment company registered under the Investment Company Act of 1940.

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      (c) Any plan established and maintained by a state, its political subdivision or any

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agency or instrumentality of a state or its political subdivisions for the benefit of its employees.

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      (d) Any trust fund, the trustee of which is a bank or trust.

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      (e) Any investment adviser registered with the United States Securities and Exchange

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Board.

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      (f) Any real estate investment trust registered with the United States Securities and

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Exchange Board.

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      (g) Any dealer registered pursuant to section 15 of the Securities and Exchange Act of

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1934.

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      (h) Any qualified institutional buyer, as defined in Rule 144A under the Securities Act of

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1933 and any entity, all of the equity owners of which are qualified institutional buyers, as

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defined in rule 144A under the Securities Act of 1933, acting for its own account or the accounts

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of other qualified institutional buyers.

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      (i) Any bank as defined in section 3(a)(2) of the Securities Act of 1933, any savings and

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loan association or other institution as referenced in section 3(a)(5)(A) of the Securities Act of

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1933, or any foreign bank or savings and loan association or equivalent institution or any

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investment fund that participates in a bank syndication, and any purchaser that takes an

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assignment or other participation interest in the bank syndication.

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      (j) Any investor or group of investors purchasing debt securities of a licensee, permittee,

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or casino gaming operator, or a subsidiary of a licensee, permittee or casino gaming operator, in

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any public offering registered pursuant to the Securities Act of 1933 or through any private

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placement, and any investor purchasing such securities in a subsequent sale; however, such

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securities are widely held and freely traded, and the investor holds no more than twenty percent

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(20%) of a licensee, permittee or casino gaming operator's total debt or fifty percent (50%) of a

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material debt issue unless otherwise approved by the state lottery division, so as not to give such

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investor the ability to control a licensee, permittee, or casino gaming operator.

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      (k) Any business development company as defined in section 2(a)(48) of the Investment

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Company Act of 1940.

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      (l) Any business development company as defined in section 202(a)(22) of the

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Investment Advisers Act of 1940.

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      (m) Any other regulated lender as the state lottery division may determine in its sole

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discretion consistent with the provisions of this chapter.

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      (n) Such other similar regulated entities as may be approved by the state lottery division

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for good cause.

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      (28) "Key gaming employee" means any natural person employed in the operation of a

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licensed casino facility in a supervisory managerial capacity or empowered to make discretionary

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decisions, which regulate casino facility operations, as determined by the state lottery division.

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      (29) "Key gaming employee permit" means the permit of a key gaming employee.

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      (30) "License" means an authorization issued to a person or entity by or in the name of

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the state lottery division to engage in or assist gaming operations or activities regulated by this

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chapter.

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      (31) "Licensee" means any employee, agent, person or entity that is required to be issued

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a license under this chapter or under the rules and regulations of the state lottery division.

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      (32) "Managerial employee" means a person who by virtue of the level of their

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remuneration or otherwise holds a management supervisory, or policy-making position with any

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authorized licensee pursuant to this chapter, vendor, or the state lottery division.

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      (33) "Manufacturer" means any person or entity that manufactures or assembles

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programs or slot machines or other gaming devices for sale or use in this state.

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      (34) "Master contract" means that contract entered into among the Narragansett Indian

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Tribe, Harrah's Entertainment, Inc. or an Affiliate thereof ("Harrah's") and the state lottery

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division, which contract would have a term commencing on the date of execution and expiring

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ten (10) years from the date that Harrah's opens the casino for business.

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      (35) "Member" means a member appointed to the state lottery division's board.

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      (36) "Municipality" means any city or town within the state.

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      (37) "Non-gaming supplier" means any person or entity that sells, leases, or otherwise

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distributes directly or indirectly, goods or services other than gaming devices and supplies to the

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holder of a license.

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      (38) "Permit" means any permit or authorization, or application therefore, issued

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pursuant to the provisions of this chapter.

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      (39) "Permittee" means any person or entity that is issued or applying for a permit

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pursuant to the provisions of this chapter.

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      (40) "Person" means an individual, corporation, limited liability company, association,

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partnership (general or limited), limited liability partnership, trust, entity, or other legal entity.

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      (41) "Security" means the protection of information that would or could provide an

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unfair advantage to any individual involved in the operation of the casino gaming; protection and

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preservation of the integrity of casino gaming games and operations; as well as measures taken to

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prevent crimes against a gaming operator or the state lottery division.

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      (42) "Slot machine" means any mechanical, electrical, or other device, contrivance, or

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machine which, upon insertion of a coin, token, card or similar object therein or upon payment of

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any consideration whatsoever, is available to play or operate the play or operation of which,

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whether by reason of the skill of the operator or application of the element of change, or both,

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may deliver or entitle the person playing or operating the machine to receive cash, premiums,

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merchandise, tokens, or any thing of value, whether the payoff is made automatically from the

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machine or in any other manner.

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      (43) "Suitable" "suitability" or "suitability requirements" means the criteria provided for

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in section 41-9.1-22.

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      (44) "Vendor" means a person who supplies any goods or services to a casino licensee.

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      (45) "Video Lottery Terminal revenue" means net terminal income derived from video

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lottery games and deposited in the general fund and to the state lottery division for administrative

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purposes pursuant to section 42-61.2-7(a)(1).

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      (46) "Wagerer" means a person who plays a gambling game authorized under this

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chapter.

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      (47) "Wagering tax revenue" means the tax revenue to the state derived from the taxes

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imposed on the adjusted gross receipts of the casino licensee in accordance with section 41-9.1-

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12(b).

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      (48) "Winnings" means the total cash value of all property or sums including currency,

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tokens, or instruments of monetary value paid to wagerers as a direct result of wagers placed at or

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through a gambling game.

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     41-9.1-4. State lottery division -- Members, employees, agents -- Powers and duties. -

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- (a) In addition to its powers and duties set forth in chapter 61 of title 42, the state lottery

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division shall have the powers and duties specified within this chapter and all other powers

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necessary and proper to fully and effectively execute and administer the provisions of this chapter

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for its purpose of licensing, regulating and enforcing the system of casino gaming.

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      (b) By January 31st of each year, each member of the state lottery division shall prepare

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and file with the office of the state lottery division, a member disclosure form in which the

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member does all of the following:

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      (1) Affirms that the member or the member's spouse, parent, child, or child's spouse is

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not a member of the board of directors, or financially interested in, or employed by a licensee or

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applicant.

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      (2) Affirms that the member continues to meet any other criteria for state lottery division

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membership under this chapter or the rules promulgated by the state lottery division.

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      (3) Discloses any other information as may be required to ensure that the integrity of the

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state lottery division and its work is maintained.

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      (c) By January 31st of each year, each employee of the state lottery division shall

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prepare and file with the office of the state lottery division an employee disclosure form in which

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the employee does all of the following:

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      (1) Affirms the absence of financial interests prohibited by this chapter.

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      (2) Discloses any legal or beneficial interests in any real property that is or that may be

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directly or indirectly involved with gaming or gaming operations authorized by this chapter.

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      (3) Discloses whether the employee or the employee's spouse, parent, child, or child's

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spouse is financially interested in or employed by licensee or applicant.

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      (4) Discloses such other matters as may be required to ensure that the integrity of the

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state lottery division and its work is maintained.

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      (d) A member, employee, or agent of the state lottery division who becomes aware that

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the member, employee or agent of the state lottery division or his or her spouse, parent, or child is

29-95

a member of the board of directors; or financially interested in, or employed by, a licensee or an

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applicant shall immediately provide detailed written notice thereon to the chairperson.

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      (e) A member, employee or agent of the state lottery division who has been indicted,

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charged with, convicted of, pled guilty or nolo contendere to or forfeited bail concerning a

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misdemeanor or felony involving gaming, dishonesty, theft, or fraud in this state or any state or of

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the United States shall immediately provide detailed written notice of the conviction or charge to

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the chairperson.

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      (f) Any member, employee, or agent of the state lottery division who is negotiating for,

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or acquires by any means any interest in any person who is a licensee or an applicant, or any

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person affiliated with such a person, shall immediately provide written notice of the details of the

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interest to the chairperson. The member, employee, or agent of the state lottery division shall not

30-106

act on behalf of the state lottery division with respect to that person.

30-107

      (g) A member, employee, or agent of the state lottery division may not enter into any

30-108

negotiations for employment with any person or affiliate of any person who is a licensee or an

30-109

applicant, and shall immediately provide written notice of the details of any such negotiations or

30-110

discussions to the chairperson. The member, employee, or agent of the state lottery division shall

30-111

not take any action on behalf of the state lottery division with respect to that person.

30-112

      (h) Any member, employee, or agent of the state lottery division who receives an

30-113

invitation, written or oral, to initiate a discussion concerning employment or the possibility of

30-114

employment with a person or affiliate of a person who is a licensee or an applicant shall

30-115

immediately report that he or she received the invitation to the chairperson. The member,

30-116

employee, or agent of the state lottery division shall not take action on behalf of the state lottery

30-117

division with respect to the person.

30-118

      (i) A licensee or applicant shall not knowingly initiate a negotiation for or discussion of

30-119

employment with a member, employee, or agent of the state lottery division. A licensee or

30-120

applicant who initiates a negotiation or discussion about employment shall immediately provide

30-121

written notice of the details of the negotiation or discussion to the chairperson as soon as he or

30-122

she becomes aware that the negotiation or discussion has been initiated with a member,

30-123

employee, or agent of the state lottery division.

30-124

      (j) A member, employee, or agent of the state lottery division, or former member,

30-125

employee, or agent of the state lottery division, shall not disseminate or otherwise disclose any

30-126

material or information in the possession of the state lottery division that the state lottery division

30-127

considers confidential unless specifically authorized to do so by the chairperson of the state

30-128

lottery division.

30-129

      (k) A member, employee or agent of the state lottery division shall not engage in any

30-130

conduct that constitutes a conflict of interest and shall immediately advise the chairperson, in

30-131

writing, of the details of any incident or circumstances that would present the existence of a

30-132

conflict of interest with respect to the performance of the state lottery division -related work or

30-133

duty of the member, employee, or agent of the state lottery division.

30-134

      (l) A member, employee, or agent of the state lottery division who is approached and

30-135

offered a bribe shall immediately provide written account of the details of the incident to the

30-136

chairperson and to a law enforcement officer of a law enforcement agency having jurisdiction.

31-1

      (m) A member, employee, or agent of the state lottery division shall disclose his or her

31-2

past involvement with any casino interest in the past five (5) years.

31-3

      (n) A member, employee, or agent of the state lottery division or a parent, spouse,

31-4

sibling, spouse of a sibling, child, or spouse of a child of a member, employee, or agent of the

31-5

state lottery division may not accept, other than that which they may be able to receive as a

31-6

legislator in compliance with campaign contribution, disclosure and other rules, regulations and

31-7

general laws in existence, any gift, gratuity, compensation, travel, lodging, or anything of value,

31-8

directly or indirectly, from any licensee or any applicant or affiliate or representative of an

31-9

applicant or licensee. Any member, employee, or agent of the state lottery division who is offered

31-10

or receives any gift, gratuity, compensation, travel, lodging, or anything of value, directly or

31-11

indirectly, from any licensee or any applicant or affiliate or representative of an applicant or

31-12

licensee shall immediately provide written notification of the details to the chairperson.

31-13

      (o) A licensee or applicant, or affiliate or representative of an applicant or licensee, may

31-14

not, directly or indirectly, give or offer to give any gift, gratuity, compensation, travel, lodging, or

31-15

anything of value to any member, employee, or agent of the state lottery division which the

31-16

member, employee, or agent of the state lottery division is prohibited from accepting under

31-17

subsection (j).

31-18

      (p) Except as follows, no member, employee, or agent of the state lottery division may

31-19

participate in or wager on any gambling game conducted by any licensee or applicant or any

31-20

affiliate of an applicant or licensee in Rhode Island or in any other jurisdiction. A member,

31-21

employee, or agent of the state lottery division may participate in and wager on a gambling game

31-22

conducted by a licensee under this chapter, to the extent authorized by the chairperson or board of

31-23

the state lottery division as part of the person's surveillance, security, or other official duties for

31-24

the state lottery division.

31-25

      (q) A former member, employee or agent of the state lottery division may appear before

31-26

the state lottery division as a fact witness about matters or actions handled by the member,

31-27

employee, or agent during his or her tenure as a member, employee, or agent of the state lottery

31-28

division. The member, employee, or agent of the state lottery division shall not receive

31-29

compensation for such an appearance other than standard witness fee for reimbursement for travel

31-30

expenses as established by statute or court rule.

31-31

      (r) A new or current employee or agent of the state lottery division shall obtain written

31-32

permission from the executive director before continuing outside employment held at the time the

31-33

employee begins to work for the state lottery division. Permission shall be denied, or permission

31-34

previously granted will be revoked, if the nature of the work is considered to or does create a

32-1

possible conflict of interest or otherwise interferes with the duties of the employee or agent for

32-2

the state lottery division.

32-3

      (s) An employee or agent of the state lottery division granted permission for outside

32-4

employment shall not conduct any business or perform any activities, including solicitation,

32-5

related to outside employment on premises used by the state lottery division or during the

32-6

employee's working hours for the state lottery division.

32-7

      (t) Whenever the chairperson, as an employee of the state lottery division, is required to

32-8

file disclosure forms or report, in writing, the details of any incident or circumstance pursuant to

32-9

this section, he or she shall make such filings or written reports to the state lottery division.

32-10

      (u) The chairperson shall report any action he or she has taken or contemplates taking

32-11

under this section with respect to an employee or agent or former employee or former agent to the

32-12

state lottery division at the next meeting of the state lottery division. The state lottery division

32-13

may direct the executive director to take additional or different action.

32-14

      (v) Violation of this section by a licensee or applicant, or affiliate of a licensee or

32-15

applicant, may result in denial of the application of licensure or revocation or suspension of

32-16

license or other disciplinary action by the state lottery division.

32-17

      (w) Violation of this section by a member of the state lottery division may result in

32-18

disqualification or constitute cause for removal pursuant to the provisions of this chapter or other

32-19

disciplinary action as determined by the state lottery division.

32-20

      (x) A violation of this section by an employee or agent of the state lottery division will

32-21

not result in termination of employment if the state lottery division determines that the conduct

32-22

involved does not violate the purpose of this chapter. However, employment will be terminated as

32-23

follows:

32-24

      (1) If, after being offered employment or beginning employment with the state lottery

32-25

division, the employee or agent intentionally acquires a financial interest in a licensee or an

32-26

applicant, or affiliate of a licensee or applicant, employment with the state lottery division shall

32-27

be terminated.

32-28

      (2) If a financial interest in a licensee or an applicant, or affiliate of a licensee or

32-29

applicant, is acquired by an employee or agent that has been offered employment with the state

32-30

lottery division, an employee of the state lottery division, or the employee's or agent's spouse,

32-31

parent, or child, through no intentional action of the employee or agent, the individual shall have

32-32

up to thirty (30) days to divest or terminate the financial interest. Employment may be terminated

32-33

if the interest has not been divested after thirty (30) days.

33-34

      (3) Employment shall be terminated if the employee or agent is a spouse, parent, child,

33-35

or spouse of a child of a state lottery division member.

33-36

      (y) Violation of this section does not create a civil cause of action.

33-37

      (z) As used in this section, "Outside employment" includes, but is not limited to, the

33-38

following:

33-39

      (1) Operation of a proprietorship.

33-40

      (2) Participation in a partnership or group business enterprise.

33-41

      (3) Performance as a director or corporate officer of any for-profit corporation or

33-42

banking or credit institution.

33-43

     41-9.1-5. State lottery division -- Jurisdiction -- Powers. -- (a) In addition to its

33-44

jurisdiction and powers set forth in chapter 61 of title 42, the state lottery division shall also have

33-45

such jurisdiction and powers as provided for in this title. The state lottery division shall have

33-46

jurisdiction over and shall supervise all gaming operations governed by this chapter. The state

33-47

lottery division shall have all powers necessary and proper to fully and effectively execute this

33-48

chapter; including, but not limited to, the authority to do all of the following:

33-49

      (1) Investigate applicants and determine the eligibility of applicants for licenses or

33-50

registration and to grant licenses to applicants in accordance with this chapter and the rules

33-51

promulgated under this chapter.

33-52

      (2) Have jurisdiction over and supervise casino gaming authorized by this chapter and all

33-53

persons in casinos where gaming is conducted under this chapter.

33-54

      (3) Enter, to the extent permissible under the Constitutions of the State of Rhode Island

33-55

and of the United States of America, through its investigators agents, auditors, and the state police

33-56

at any time without a warrant and without notice to the licensee, the premises, offices, casinos,

33-57

facilities or other places of business of a casino licensee or gaming supplier permittee where

33-58

evidence of the compliance or noncompliance with this chapter or the rules promulgated by the

33-59

state lottery division is likely to be found, for the following purposes:

33-60

      (i) To inspect and examine all premises wherein casino gaming or the business of

33-61

gaming or the business of a gaming supplier is conducted, or where any records of the activities

33-62

are prepared.

33-63

      (ii) To inspect, examine, audit, impound, seize or assume physical control of, or

33-64

summarily remove from the premises all books, ledgers, documents, writings, photocopies,

33-65

correspondence, records, videotapes, including electronically stored records, money receptacles,

33-66

other containers and their contents, equipment in which the records are stored, or other gaming

33-67

related equipment and supplies on or around the premises including counting rooms.

34-68

      (iii) To inspect the person, and inspect, examine and seize personal effects present in a

34-69

casino facility licensed under this chapter, of any holder of a license or registration issued

34-70

pursuant to this chapter while that person is present in a licensed casino facility.

34-71

      (iv) To investigate and deter alleged violations of this chapter or the rules promulgated

34-72

by the state lottery division.

34-73

      (4) Investigate alleged violations of this chapter or rules promulgated by the state lottery

34-74

division and to take appropriate disciplinary action against a licensee, permittee or any other

34-75

person or holder of an occupational license or permit for a violation, or institute appropriate legal

34-76

action for enforcement, or both.

34-77

      (5) Adopt standards for the licensing or permitting of all persons pursuant to this chapter,

34-78

as well as for electronic or mechanical gambling games, and to establish fees for such licenses

34-79

and permits.

34-80

      (6) Adopt appropriate standards for all casino gaming facilities and equipment.

34-81

      (7) Require that all records of casino licensees and gaming supplier permittees, including

34-82

financial or other statements, be kept on the premises of the casino licensee or gaming supplier

34-83

permittee in the manner prescribed by the state lottery division.

34-84

      (8) Require that the casino licensee submit to the state lottery division an annual balance

34-85

sheet, profit and loss statement, and any other information the state lottery division considers

34-86

necessary in order to effectively administer this chapter, all rules promulgated by the state lottery

34-87

division, and orders and final decisions made under this chapter.

34-88

      (9) Prescribe a form to be used by any licensee involved in the ownership or

34-89

management of gambling operations as an application for employment for prospective

34-90

employees.

34-91

      (10) Revoke or suspend licenses or permits, impose fines and penalties as the state

34-92

lottery division considers necessary and in compliance with this chapter and applicable laws of

34-93

the state regarding administrative procedure, and review and decide the renewal of licenses.

34-94

      (11) In addition to a disassociated person, eject or exclude or authorize the ejection or

34-95

exclusion of a person from a casino if the person violates the provisions of this chapter, rules

34-96

promulgated by the state lottery division or final orders of the state lottery division or when the

34-97

state lottery division determines that the person's conduct or reputation is such that his or her

34-98

presence within the casino gaming facilities may compromise the honesty and integrity of the

34-99

gambling operations or interfere with the orderly conduct of the gaming operations. However, the

34-100

propriety of the election or exclusion is subject to a subsequent hearing by the state lottery

34-101

division.

35-102

      (12) Suspend, revoke or restrict licenses and permits, and require the removal of a

35-103

licensee or permittee or an employee of a licensee or permittee, for a violation of this chapter or a

35-104

rule promulgated by the state lottery division or for engaging in a fraudulent practice, and impose

35-105

civil penalties pursuant to the provisions of this chapter.

35-106

      (13) Disqualify a person in accordance with the applicable provisions of this chapter.

35-107

      (14) In addition to the authority provided under subsection (a)(12), revoke or suspend a

35-108

casino license or impose any other disciplinary action for any of the following reasons:

35-109

      (i) The casino licensee has violated the provisions of chapter 2 of title 3 or rules

35-110

promulgated pursuant to this chapter.

35-111

      (ii) At any time the licensee no longer meets the eligibility requirements or suitability

35-112

determination by the state lottery division for a casino license under this chapter.

35-113

      (iii) The failure to revoke or suspend the license would undermine the public's

35-114

confidence in the Rhode Island gaming industry.

35-115

      (15) Conduct periodic compliance or special or focused audits of casinos authorized

35-116

under this chapter. Said audits may be conducted by state agency personnel or private sector audit

35-117

firms and shall be in addition to annual financial audits conducted by certified public accountant

35-118

firms.

35-119

      (16) Establish minimum levels of insurance to be maintained by licensees.

35-120

      (17) Perform a background check, at the vendor's expense, of any vendor using the same

35-121

standards that the state lottery division uses in determining whether to grant a gaming or non-

35-122

gaming supplier's permit.

35-123

      (18) Review the business practices of a casino licensee including, but not limited to, the

35-124

price and quality of goods and services offered to patrons, and take disciplinary action as the state

35-125

lottery division considers appropriate to prevent practices that undermine the public's confidence

35-126

in the Rhode Island gaming industry.

35-127

      (19) Review a holder of a license, permit or registration if that holder is under review or

35-128

is otherwise subject to discipline by a regulatory body in any other jurisdiction for a violation of a

35-129

gaming law or regulation in that jurisdiction.

35-130

      (20) Take any other action as may be reasonable or appropriate to enforce this chapter

35-131

and rules promulgated by the state lottery division.

35-132

      (b) The state lottery division may seek and shall receive the cooperation and assistance

35-133

of the department of state police and department of attorney general in conducting background

35-134

investigations of applicants and in fulfilling its responsibilities under this chapter.

35-135

      (c) The state lottery division shall establish, issue and promulgate rules and regulations

35-136

pertaining to any or all matters within the state lottery division's jurisdiction, in accordance with

36-1

the provisions of the state administrative procedures act, chapter 35 of title 42, including, but not

36-2

limited to:

36-3

      (1) The issuance of any license, registration, or permit authorized by this chapter or other

36-4

law providing for gaming operations and activities subject to regulation of the state lottery

36-5

division.

36-6

      (2) The methods and procedures for making an application for a license, registration, or

36-7

permit to be considered by the state lottery division.

36-8

      (3) The methods for providing to the state lottery division information concerning a

36-9

person's family, habits, character, associates, criminal record, business activities, and financial

36-10

affairs.

36-11

      (4) Enforcement of this chapter, gaming laws administered by the state lottery division,

36-12

and rules of the state lottery division including imposition and collection of fines, penalties, and

36-13

other sanctions which may be imposed by the state lottery division against a casino operator or

36-14

any other licensee or permittee of the state lottery division.

36-15

      (5) The operation and management of the facility, the hiring of employees thereof, the

36-16

establishment of prevention, education and other services related to pathological gambling, the

36-17

conduct of gaming, electronic funds transfer terminals, audits, annual reports, prohibited conduct,

36-18

and such other matters as the state lottery division shall determine.

36-19

      (d) The state lottery division may conduct hearings or may designate a hearing officer or

36-20

hearing panel to conduct hearings and in connection therewith may:

36-21

      (1) Issue subpoenas and compel the attendance of witnesses or the production of

36-22

documents.

36-23

      (2) Administer oath.

36-24

      (3) Require testimony under oath before the hearing officer or hearing panel in the

36-25

course of a hearing being held for any reason.

36-26

      (4) Issue written interrogatories.

36-27

      (e) Notwithstanding any other provisions of the general laws or regulations adopted

36-28

thereunder to the contrary, including, but not limited to, the provisions of chapter 2 of title 37,

36-29

and chapter 61 of title 42, the state lottery division is hereby authorized, empowered and directed

36-30

to enter into a Master Contract with the Narragansett Indian Tribe and Harrah's Entertainment,

36-31

Inc. or an Affiliate thereof ("Harrah's") which contract will have a term commencing on the date

36-32

of execution and expiring ten (10) years from the date that the casino opens for business, and to

36-33

fix in the Master Contract for the duration of such term the following: the casino license fee; the

36-34

rate of taxation on the adjusted gross receipts from gaming authorized under this chapter; the two

37-1

(2) year tax revenue insurance policy; the hotel occupancy tax which shall be in lieu of all other

37-2

parking, admission and other related patron taxes and fees; the project investment requirement of

37-3

the casino licensee; the annual funding covenant of the casino licensee in favor of the Rhode

37-4

Island Council on Problem Gambling; and the annual funding covenant of the casino licensee in

37-5

connection with a joint marketing budget in favor of the Rhode Island Hospitality and Tourism

37-6

Association and Rhode Island Convention Center and Visitors Bureau, all as set forth and

37-7

described in section 41-9.1-12. Insofar as the provisions of this act are inconsistent with the

37-8

provisions of any other general or special law, the provisions of this act shall be controlling. The

37-9

state does hereby pledge and agree under this act that the state will not limit, alter, diminish, or

37-10

adversely impact the rights or economic benefits which vest in the casino licensee under the terms

37-11

of the Master Contract authorized hereby, unless authorized by this act, and the state lottery

37-12

division is hereby authorized, empowered and directed to memorialize this pledge and agreement

37-13

on behalf of the state in the Master Contract.

37-14

      (f) After the expiration of the ten (10) year period of the Master Contract described

37-15

above, the parties thereto shall renegotiate the wagering tax rates set forth in section 41-9.1-12(b)

37-16

and the casino license renewal fee set forth in section 41-9.1-11.

37-17

     41-9.1-6. Division of state police -- Jurisdiction -- Powers. -- The division of state

37-18

police shall:

37-19

      (a) Conduct investigations and audits regarding the qualifications of applicants for

37-20

licenses, permits or registrations requiring suitability determinations as required by law or rule or

37-21

determined necessary by the state lottery division.

37-22

      (b) Submit all investigative reports to the state lottery division by and through the

37-23

executive director for analysis, review, and action pursuant to the provisions of this chapter.

37-24

      (c) Conduct audits to assist the state lottery division in determining compliance with all

37-25

gaming laws, rules and regulations on gaming activities and operations under the state lottery

37-26

division's jurisdiction.

37-27

      (d) Perform all other duties and functions necessary for the efficient, efficacious, and

37-28

thorough regulation and control of gaming activities and operations under the state lottery

37-29

division's jurisdiction.

37-30

     41-9.1-7. Appropriation -- Reimbursement. -- Operations of the state lottery division

37-31

during fiscal years shall be funded by the fees paid by licensees and suppliers pursuant to the

37-32

provisions of this chapter, including without limitation section 41-9.1-11.

37-33

     41-9.1-8. Casino gaming authorized. -- (a) Notwithstanding any other section of Rhode

37-34

Island General Laws, gaming is authorized at a single casino in the state of Rhode Island to the

38-1

extent that it is conducted in accordance with this chapter.

38-2

      (b) This chapter does not apply to any of the following:

38-3

      (1) The pari-mutuel system of wagering used or intended to be used in connection with

38-4

race meetings as authorized under chapters 3.1 and 4 of this title.

38-5

      (2) Lottery games authorized under chapters 61 and 61.2 of title 42; including, without

38-6

limitation, video lottery terminals located at Newport Grand and Lincoln Greyhound Park.

38-7

      (3) Bingo.

38-8

      (4) The pari-mutuel system of wagering used or intended to be used in connection with

38-9

jai alai as authorized under chapter 7 of this title.

38-10

      (5) The pari-mutuel system of wagering used or intended to be used in connection with

38-11

Simulcast programs from licensed betting facilities as authorized under chapter 11 of this title.

38-12

     41-9.1-9. State and local referendum election. -- (a) Pursuant to the terms of R.I.

38-13

Const., Art. VI, section 22 and chapter 5 of title 17, the general assembly hereby authorizes

38-14

submission to all of the electors of the state, at the general election to take place on November 2,

38-15

2004, the following question: "Shall there be a casino in the Town of West Warwick operated by

38-16

an Affiliate of Harrah's Entertainment in association with the Narragansett Indian Tribe?"

38-17

      (b) Prior to the general election question being submitted to the electors of the state and

38-18

prior to any casino being established in the Town of West Warwick, and in order for such town to

38-19

be eligible as the host community for such casino, the casino license applicant shall, within

38-20

seventy-five (75) days of the passage of this act, file a statement of intent with the state lottery

38-21

division that demonstrates the following:

38-22

      (1) Evidence that the West Warwick Town Council has agreed to pose, by adopting

38-23

subsequent to July 1, 2004, a resolution to be placed on the ballot at the next general election to