2018 -- S 2045 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO VIDEO LOTTERY GAMES, TABLE GAMES AND SPORTS WAGERING

     Introduced By: Senators Ruggerio, Goodwin, McCaffrey, Algiere, and Ciccone

     Date Introduced: January 18, 2018

     Referred To: Senate Special Legislation and Veterans Affairs

     It is enacted by the General Assembly as follows:

     SECTION 1. Purpose.

     (a) Article VI, Section 22 of the Rhode Island Constitution provides that "[n]o act

expanding the types or locations of gambling permitted within the state or within any city or town

. . . shall take effect until it has been approved by the majority of those electors voting in a

statewide referendum and by the majority of those electors voting in said referendum in the

municipality in which the proposed gambling would be allowed . . ."

     (b) In the 2012 general election, a majority of Rhode Island voters statewide and in the

Town of Lincoln approved the following referendum question (among others):

     "Shall an act be approved which would authorize the facility known as "Twin River" in

the town of Lincoln to add state-operated casino gaming, such as table games, to the types of

gambling it offers?"

     (c) Similarly, in the 2016 general election, a majority of Rhode Island voters statewide

and in the Town of Tiverton approved the following referendum question (among others):

     "Shall an act be approved which would authorize a facility owned by Twin River-

Tiverton, LLC, located in the Town of Tiverton at the intersection of William S. Canning

Boulevard and Stafford Road, to be licensed as a pari-mutuel facility and offer state-operated

video-lottery games and state-operated casino gaming, such as table games?"

     (d) In the voter information handbooks setting forth and explaining the question in each

instance, "casino gaming" was defined to include games "within the definition of Class III

gaming as that term is defined in section 2703(8) of Title 25 of the United States Code and which

is approved by the State of Rhode Island through the Lottery Division." "Casino gaming" is also

defined to include games within the definition of class III gaming in section 42-61.2-1 of the

general laws.

     (e) Section 2703(8) of Title 25 US Code (part of the Indian Gaming Regulatory Act, or

"IGRA") provides that the term "class III gaming" means "all forms of gaming that are not class I

gaming or class II gaming." The regulations promulgated under IGRA (25 CFR 502.4) expressly

state that Class III gaming includes sports wagering.

     (f) Thus, voters state-wide and locally approved state-operated sports wagering to be

offered by the Twin River and Tiverton gaming facilities. Voter approval of sports wagering shall

be implemented by providing an infrastructure for state-operated sports wagering offered by the

Twin River gaming facilities in Lincoln and Tiverton, by authorizing necessary amendments to

certain contracts and by authorizing the division of lotteries to promulgate regulations to direct

and control state-operated sports wagering.

     (g) State operated sports wagering shall be operated by the state through the division of

lotteries. Sports wagering may be conducted at (i) the Twin River Gaming Facility, located in

Lincoln at 100 Twin River Road and owned by UTGR, Inc., a licensed video lottery and table

game retailer, and at (ii) the Tiverton Gaming Facility, located in Tiverton at the intersection of

William S. Canning Boulevard and Stafford Road, and owned by Twin River-Tiverton, once

Twin River-Tiverton is licensed as a video lottery and table game retailer.

     (h) The state through the division of lotteries shall exercise its existing authority to

implement, operate, conduct and control sports wagering at the Twin River gaming facility and

the Twin River-Tiverton gaming facility in accordance with the provisions of this chapter and the

rules and regulations of the division of lotteries.

     (i) Notwithstanding the provisions of this section, sports wagering shall be prohibited in

connection with any collegiate sports or athletic event that takes place in Rhode Island or a sports

contest or athletic event in which any Rhode Island college team participates, regardless of where

the event takes place.

     (j) No other law providing any penalty or disability for conducting, hosting, maintaining,

supporting or participating in sports wagering, or any acts done in connection with sports

wagering, shall apply to the conduct, hosting, maintenance, support or participation in sports

wagering pursuant to this chapter.

     SECTION 2. The title of Chapter 42-61.2 of the General Laws entitled "Video-Lottery

Terminal" is hereby amended to read as follows:

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CHAPTER 42-61.2

Video-Lottery Terminal

CHAPTER 42-61.2

VIDEO-LOTTERY GAMES, TABLE GAMES AND SPORTS WAGERING

     SECTION 3. Section 42-61.2-1, 42-61.2-3.2, 42-61.2-4, 42-61.2-6, 42-61.2-10, 42-61.2-

11, 42-61.2-13, 42-61.2-14 and 42-61.2-15 of the General Laws in Chapter 42-61.2 entitled

"Video-Lottery Terminal" are hereby amended to read as follows:

     42-61.2-1. Definitions.

     For the purpose of this chapter, the following words shall mean:

     (1) "Central communication system" means a system approved by the lottery division,

linking all video-lottery machines at a licensee location to provide auditing program information

and any other information determined by the lottery. In addition, the central communications

system must provide all computer hardware and related software necessary for the establishment

and implementation of a comprehensive system as required by the division. The central

communications licensee may provide a maximum of fifty percent (50%) of the video-lottery

terminals.

     (2) "Licensed, video-lottery retailer" means a pari-mutuel licensee specifically licensed

by the director subject to the approval of the division to become a licensed, video-lottery retailer.

     (3) "Net terminal income" means currency placed into a video-lottery terminal less

credits redeemed for cash by players.

     (4) "Pari-mutuel licensee" means:

     (i) An entity licensed pursuant to § 41-3.1-3; and/or

     (ii) An entity licensed pursuant to § 41-7-3.

     (5) "Technology provider" means any individual, partnership, corporation, or association

that designs, manufactures, installs, maintains, distributes, or supplies video-lottery machines or

associated equipment for the sale or use in this state.

     (6) "Video-lottery games" means lottery games played on video-lottery terminals

controlled by the lottery division.

     (7) "Video-lottery terminal" means any electronic computerized video game machine

that, upon the insertion of cash or any other representation of value that has been approved by the

division of lotteries, is available to play a video game authorized by the lottery division, and that

uses a video display and microprocessors in which, by chance, the player may receive free games

or credits that can be redeemed for cash. The term does not include a machine that directly

dispenses coins, cash, or tokens.

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     (8) "Casino gaming" means any and all table and casino-style games played with cards,

dice, or equipment, for money, credit, or any representative of value; including, but not limited to,

roulette, blackjack, big six, craps, poker, baccarat, paigow, any banking or percentage game, or

any other game of device included within the definition of Class III gaming as that term is

defined in Section 2703(8) of Title 25 of the United States Code and that is approved by the state

through the division of state lottery.

     (9) "Net, table-game revenue" means win from table games minus counterfeit currency.

     (10) "Rake" means a set fee or percentage of cash and chips representing cash wagered in

the playing of a nonbanking table game assessed by a table games retailer for providing the

services of a dealer, gaming table or location, to allow the play of any nonbanking table game.

     (11) "Table game" or "Table gaming" means that type of casino gaming in which table

games are played for cash or chips representing cash, or any other representation of value that has

been approved by the division of lotteries, using cards, dice, or equipment and conducted by one

or more live persons.

     (12) "Table-game retailer" means a retailer authorized to conduct table gaming pursuant

to §§ 42-61.2-2.1 or 42-61.2-2.3.

     (13) "Credit facilitator" means any employee of a licensed, video-lottery retailer

approved in writing by the division whose responsibility is to, among other things, review

applications for credit by players, verify information on credit applications, grant, deny, and

suspend credit, establish credit limits, increase and decrease credit limits, and maintain credit

files, all in accordance with this chapter and rules and regulations approved by the division.

     (14) "Newport Grand" means Newport Grand, LLC, a Rhode Island limited-liability

company, successor to Newport Grand Jai Alai, LLC, and each permitted successor to and

assignee of Newport Grand, LLC under the Newport Grand Master Contract, including, but not

limited to, Premier Entertainment II, LLC and/or Twin River-Tiverton, LLC, provided it is a pari-

mutuel licensee as defined in § 42-61.2-1 et seq.; provided, further, however, where the context

indicates that the term is referring to the physical facility, then it shall mean the gaming and

entertainment facility located at 150 Admiral Kalbfus Road, Newport, Rhode Island.

     (15) "Newport Grand Marketing Year" means each fiscal year of the state or a portion

thereof between November 23, 2010, and the termination date of the Newport Grand Master

Contract.

     (16) "Newport Grand Master Contract" means that certain master video-lottery terminal

contract made as of November 23, 2005, by and between the Division of Lotteries of the Rhode

Island department of administration and Newport Grand, as amended and extended from time to

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time as authorized therein and/or as such Newport Grand Master Contract may be assigned as

permitted therein.

     (17) "Premier" means Premier Entertainment II, LLC and/or its successor in interest by

reason of the acquisition of the stock, membership interests, or substantially all of the assets of

such entity.

     (18) "Twin River-Tiverton" means Twin River-Tiverton, LLC and/or its successor in

interest by reason of the acquisition of the stock, membership interests, or substantially all of the

assets of such entity.

     (19) "Sports wagering revenue" means:

     (1) The total of cash or cash equivalents received from sports wagering minus the total

of:

     (i) Cash or cash equivalents paid to players as a result of sports wagering;

     (ii) The annual flat fee to the host communities as defined by § 42-61.2-2.4(c) of the

general laws;

     (iii) Marketing expenses related to sports wagering as agreed to by the division, the sports

wagering vendor, and the host facilities, as approved by the division of the lottery; and

     (iv) Any federal excise taxes (if applicable).

      (2) The term does not include any of the following:

     (i) Counterfeit cash.

     (ii) Coins or currency of other countries received as a result of sports wagering, except to

the extent that the coins or currency are readily convertible to cash.

     (iii) Cash taken in a fraudulent act perpetrated against a hosting facility or sports

wagering vendor for which the hosting facility or sports wagering vendor is not reimbursed.

     (iv) Free play provided by the hosting facility or sports wagering vendor as authorized by

the division of lottery to a patron and subsequently "won back" by the hosting facility or sports

wagering vendor, for which the hosting facility or sports wagering vendor can demonstrate that it

or its affiliate has not been reimbursed in cash.

     (20) "Sporting event" means any professional sport or athletic event, any Olympic or

international sports competition event and any collegiate sport or athletic event, or any portion

thereof, including, but not limited to, the individual performance statistics of athletes in a sports

event or combination of sports events, except "sports event" shall not include a prohibited sports

event.

      (21) "Collegiate sports or athletic event" shall not include a collegiate sports contest or

collegiate athletic event that takes place in Rhode Island or a sports contest or athletic event in

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which any Rhode Island college team participates regardless of where the event takes place.

     (22) "Sports wagering" means the business of accepting wagers on sporting events or a

combination of sporting events, or on the individual performance statistics of athletes in a

sporting event or combination of sporting events, by any system or method of wagering. The term

includes, but is not limited to, exchange wagering, parlays, over-under, moneyline, pools and

straight bets, and the term includes the placement of such bets and wagers. However, the term

does not include, without limitation, the following:

     (1) Lotteries, including video lottery games and other types of casino gaming operated by

the state, through the division, on the date this act is enacted.

     (2) Pari-mutuel betting on the outcome of thoroughbred or harness horse racing, or

greyhound dog racing, including but not limited to pari-mutuel wagering on a race that is

"simulcast" (as defined in section 41-11-1 of the general laws), as regulated elsewhere pursuant to

the general laws, including in chapters 41-3, 41-3.1, 41-4 and 41-11 of the general laws.

     (3) Off-track betting on racing events, as regulated elsewhere pursuant to the general

laws, including in chapter 41-10 of the general laws.

     (4) Wagering on the respective scores or points of the game of jai alai or pelota and the

sale of pari-mutuel pools related to such games, as regulated elsewhere pursuant to the general

laws, including in chapter 41-7 of the general laws.

     (5) Lotteries, charitable gaming, games of chance, bingo games, raffles and pull-tab

lottery tickets, to the extent permitted and regulated pursuant to chapter 11-19 of the general laws.

     (23) "Sports wagering device" means any mechanical, electrical or computerized

contrivance, terminal, machine or other device, apparatus, equipment or supplies approved by the

division and used to conduct sports wagering.

     (24) "Sports wagering vendor" means any entity authorized by the division of lottery to

operate sports betting on the division’s behalf in accordance with this chapter.

     (25) "Payoff" when used in connection with sports wagering, means cash or cash

equivalents paid to a player as a result of the player’s winning a sports wager. A "payoff" is a

type of "prize," as the term "prize" is used in chapter 42-61, chapter 42-61.2 and in chapter 42-

61.3.

     (26) "Tiverton gaming facility" (sometimes referred to as "Twin River–Tiverton") means

the gaming and entertainment facility located in the Town of Tiverton at the intersection of

William S. Canning Boulevard and Stafford Road.

     (27) "Twin River" (sometimes referred to as "UTGR") means UTGR, Inc., a Delaware

corporation, and each permitted successor to and assignee of UTGR, Inc.; provided further,

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however, where the context indicates that the term is referring to a physical facility, then "Twin

River" or "Twin River gaming facility" shall mean the gaming and entertainment facility located

at 100 Twin River Road in Lincoln, Rhode Island.

     (28) "Hosting facility" refers to Twin River and the Tiverton gaming facility.

     (29) "DBR" means the department of business regulation, division of licensing and

gaming and athletics, and/or any successor in interest thereto.

     (30) "Division," "division of lottery," "division of lotteries" or "lottery division" means

the division of lotteries within the department of revenue and/or any successor in interest thereto.

     (31) "Director" means the director of the division.

     42-61.2-3.2. Gaming credit authorized.

     (a) Authority. In addition to the powers and duties of the state lottery director under §§

42-61-4, 42-61.2-3, 42-61.2-3.1 and 42-61.2-4, the division shall authorize each licensed, video-

lottery retailer to extend credit to players pursuant to the terms and conditions of this chapter.

     (b) Credit. Notwithstanding any provision of the general laws to the contrary, including,

without limitation, § 11-19-17, except for applicable licensing laws and regulations, each

licensed, video-lottery retailer may extend interest-free, unsecured credit to its patrons for the sole

purpose of such patrons making wagers at table games and/or video-lottery terminals and/or for

the purpose of making sports wagering bets, at the licensed, video-lottery retailer's facility subject

to the terms and conditions of this chapter.

     (c) Regulations. Each licensed, video-lottery retailer shall be subject to rules and

regulations submitted by licensed, video-lottery retailers and subject to the approval of the

division of lotteries regarding procedures governing the extension of credit and requirements with

respect to a credit applicant's financial fitness, including, without limitation: annual income; debt-

to-income ratio; prior credit history; average monthly bank balance; and/or level of play. The

division of lotteries may approve, approve with modification, or disapprove any portion of the

policies and procedures submitted for review and approval.

     (d) Credit applications. Each applicant for credit shall submit a written application to the

licensed, video-lottery retailer that shall be maintained by the licensed, video-lottery retailer for

three (3) years in a confidential credit file. The application shall include the patron's name;

address; telephone number; social security number; comprehensive bank account information; the

requested credit limit; the patron's approximate amount of current indebtedness; the amount and

source of income in support of the application; the patron's signature on the application; a

certification of truthfulness; and any other information deemed relevant by the licensed, video-

lottery retailer or the division of lotteries.

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     (e) Credit application verification. As part of the review of a credit application and before

an application for credit is approved, the licensed, video-lottery retailer shall verify:

     (1) The identity, creditworthiness, and indebtedness information of the applicant by

conducting a comprehensive review of:

     (i) The information submitted with the application;

     (ii) Indebtedness information regarding the applicant received from a credit bureau;

and/or

     (iii) Information regarding the applicant's credit activity at other licensed facilities that

the licensed, video-lottery retailer may obtain through a casino credit bureau and, if appropriate,

through direct contact with other casinos.

     (2) That the applicant's name is not included on an exclusion or self-exclusion list

maintained by the licensed, video-lottery retailer and/or the division of lotteries.

     (3) As part of the credit application, the licensed, video-lottery retailer shall notify each

applicant in advance that the licensed, video-lottery retailer will verify the information in

subsections (e)(1) and (e)(2) and may verify any other information provided by the applicant as

part of the credit application. The applicant is required to acknowledge in writing that he or she

understands that the verification process will be conducted as part of the application process and

that he or she consents to having said verification process conducted.

     (f) Establishment of credit. After a review of the credit application, and upon completion

of the verification required under subsection (e), and subject to the rules and regulations approved

by the division of lotteries, a credit facilitator may approve or deny an application for credit to a

player. The credit facilitator shall establish a credit limit for each patron to whom credit is

granted. The approval or denial of credit shall be recorded in the applicant's credit file that shall

also include the information that was verified as part of the review process, and the reasons and

information relied on by the credit facilitator in approving or denying the extension of credit and

determining the credit limit. Subject to the rules and regulations approved by the division of

lotteries, increases to an individual's credit limit may be approved by a credit facilitator upon

receipt of written request from the player after a review of updated financial information

requested by the credit facilitator and re-verification of the player's credit information.

     (g) Recordkeeping. Detailed information pertaining to all transactions affecting an

individual's outstanding indebtedness to the licensed, video-lottery retailer shall be recorded in

chronological order in the individual's credit file. The financial information in an application for

credit and documents related thereto shall be confidential. All credit application files shall be

maintained by the licensed, video-lottery retailer in a secure manner and shall not be accessible to

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anyone not a credit facilitator or a manager or officer of a licensed, video-lottery retailer

responsible for the oversight of the extension of credit program.

     (h) Reduction or suspension of credit. A credit facilitator may reduce a player's credit

limit or suspend his or her credit to the extent permitted by the rules and regulations approved by

the division of lotteries and shall reduce a player's credit limit or suspend a player's credit limit as

required by said rules and regulations.

     (i) Voluntary credit suspension. A player may request that the licensed, video-lottery

retailer suspend or reduce his or her credit. Upon receipt of a written request to do so, the player's

credit shall be reduced or suspended as requested. A copy of the request and the action taken by

the credit facilitator shall be placed in the player's credit application file.

     (j) Liability. In the event that a player fails to repay a debt owed to a licensed, video-

lottery retailer resulting from the extension of credit by that licensed, video-lottery retailer,

neither the state of Rhode Island nor the division of lotteries shall be responsible for the loss and

said loss shall not affect net, table-game revenue or net terminal income. A licensed, video-lottery

retailer, the state of Rhode Island, the division of lotteries, and/or any employee of a licensed,

video-lottery retailer, shall not be liable in any judicial or administrative proceeding to any player,

any individual, or any other party, including table game players or individuals on the voluntary

suspension list, for any harm, monetary or otherwise, that may arise as a result of:

     (1) Granting or denial of credit to a player;

     (2) Increasing the credit limit of a player;

     (3) Allowing a player to exercise his or her right to use credit as otherwise authorized;

     (4) Failure of the licensed, video-lottery retailer to increase a credit limit;

     (5) Failure of the licensed, video-lottery retailer to restore credit privileges that have been

suspended, whether involuntarily or at the request of the table game patron; or

     (6) Permitting or prohibiting an individual whose credit privileges have been suspended,

whether involuntarily or at the request of the player, to engage in gaming activity in a licensed

facility while on the voluntary credit suspension list.

     (k) Limitations. Notwithstanding any other provision of this chapter, for any extensions

of credit, the maximum amount of outstanding credit per player shall be fifty thousand dollars

($50,000).

     42-61.2-4. Additional powers and duties of director and lottery division.

     In addition to the powers and duties set forth in §§ 42-61-4 and 42-61.2-3, the director

shall have the power to:

     (1) Supervise and administer the operation of video lottery games and sports wagering in

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accordance with this chapter and with the rules and regulations of the division;

     (2) Suspend or revoke upon a hearing any license issued pursuant to this chapter or the

rules and regulations promulgated under this chapter; and

     (3) In compliance with the provisions of chapter 2 of title 37, enter into contracts for the

operation of a central communications system and technology providers, or any part thereof. ;

     (4) In compliance with the provisions of chapter 2 of title 37, enter into contracts for the

provision of sports wagering systems, facilities and related technology necessary and/or desirable

for the state-operated sports wagering to be hosted at Twin River and the Tiverton gaming

facilities, including technology related to the operation of on-premises remote sports wagering, or

any part thereof; and

     (4)(5) Certify monthly to the budget officer, the auditor general, the permanent joint

committee on state lottery, and to the governor a full and complete statement of lottery revenues,

prize disbursements and other expenses for the preceding month; ensure that monthly financial

reports are prepared providing gross monthly revenues, prize disbursements, other expenses, and

net income for keno and for all other lottery operations; submit this report to the state budget

officer, the auditor general, the permanent joint committee on state lottery, the legislative fiscal

advisors, and the governor no later than the twentieth business day following the close of the

month; at the end of each fiscal year the director shall submit an annual report based upon an

accrual system of accounting which shall include a full and complete statement of lottery

revenues, prize disbursements and expenses, to the governor and the general assembly, which

report shall be a public document and shall be filed with the secretary of state. The monthly report

shall be prepared in a manner prescribed by the members of the revenue estimating conference.

     42-61.2-6. When games may be played.

     (a) Video-lottery games authorized by this chapter may be played at the licensed, video-

lottery retailer's facilities with the approval of the lottery commission division, even if that facility

is not conducting a pari-mutuel event.

     (b) Sports wagering authorized by this chapter, including accepting sports wagers and

administering payoffs of winning sports wagers, may be conducted at the Twin River and the

Tiverton gaming facilities, with the approval of the division, even if that facility is not conducting

a pari-mutuel event.

     42-61.2-10. Prizes exempt from taxation.

     The prizes received pursuant to this chapter shall be exempt from the state sales or use

tax. The prizes, including payoffs, received pursuant to this chapter shall be exempt from the state

sales or use tax but shall be applicable to personal income tax laws.

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     42-61.2-11. Effect of other laws and local ordinances.

     (a) No other law providing any penalty or disability for operating, hosting, maintaining,

supporting or playing video lottery games, or any acts done in connection with video lottery

games, shall apply to operating, hosting, maintaining, supporting or playing video lottery games

pursuant to this chapter.

     (b) No other law providing any penalty or disability for conducting, hosting, maintaining,

supporting or participating in sports wagering, or any acts done in connection with sports

wagering, shall apply to conducting, hosting, maintaining, supporting or participating in sports

wagering pursuant to this chapter.

     (c) The provisions of §§ 41-9-4 and 41-9-6 shall not apply to this chapter, and the

provisions of this chapter shall take precedence over any local ordinances to the contrary. It is

specifically acknowledged that the installation, operation and use of video-lottery terminals by a

pari-mutuel licensee, as authorized in this chapter, shall for all purposes be deemed a permitted

use as defined in § 45-24-31. No city or town where video-lottery terminals are authorized may

seek to prevent the installation and use of said video-lottery terminals by defining such as a

prohibited use.

     42-61.2-13. Table-game enforcement. [See Applicability notes.] Enforcement.

     (a) Whoever violates § 42-61.2-2.1 or § 42-61.2-3.1, or any rule or regulation, policy or

procedure, duly promulgated thereunder, or any administrative order issued pursuant to § 42-

61.2-2.1 or § 42-61.2-3.1, shall be punishable as follows:

     (1) In the Division director's discretion, the Division director may impose an

administrative penalty of not more than one thousand dollars ($1,000) for each violation. Each

day of continued violation shall be considered as a separate violation if the violator has

knowledge of the facts constituting the violation and knows or should know that such facts

constitute or may constitute a violation. Lack of knowledge regarding such facts or violation shall

not be a defense to a continued violation with respect to the first day of its occurrence. Written

notice detailing the nature of the violation, the penalty amount, and effective date of the penalty

will be provided by the Division director. Penalties shall take effect upon notification. A written

request for a hearing must be submitted in writing to the Division director within thirty (30) days

of notification of violation.

     (2) In the Division director's discretion, the Division director may endeavor to obtain

compliance with requirements of this chapter by written administrative order. Such order shall be

provided to the responsible party, shall specify the complaint, and propose a time for correction

of the violation.

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     (b) The Division director shall enforce this chapter. Such enforcement shall include, but

not be limited to, referral of suspected criminal activity to the Rhode Island state police for

investigation.

     (c) Any interest, costs or expense collected under this section shall be appropriated to the

Division for administrative purposes.

     (d) Any penalty imposed by the Division pursuant to this § 42-61.2-13 shall be

appealable to Superior Court.

     42-61.2-14. Compulsive and problem gambling program. [See Applicability notes.].

     The Division and the State acknowledge that the vast majority of gaming patrons can

enjoy gambling games responsibly, but that there are certain societal costs associated with

gaming by some individuals who have problems handling the product or services provided. The

Division and the State further understand that it is their duty to act responsibly toward those who

cannot participate conscientiously in gaming. Pursuant to the foregoing, Twin River and Newport

Grand, in cooperation with the State, shall offer compulsive and problem gambling programs that

include, but are not limited to (a) problem gambling awareness programs for employees; (b)

player self-exclusion program; and (c) promotion of a problem gambling hotline. Twin River and

Newport Grand (and its successor in interest, Twin River-Tiverton) shall modify their existing

compulsive and problem-gambling programs to include table games and sports wagering to the

extent such games are authorized at such facilities. Twin River and Newport Grand (and its

successor in interest, Twin River-Tiverton) shall reimburse and pay to the Division no less than

one hundred thousand dollars ($100,000) one hundred twenty-five thousand dollars ($125,000) in

aggregate annually for compulsive and problem gambling programs established by the Division.

The contribution from each facility shall be determined by the Division.

     42-61.2-15. Table-game hours of operation Table game and sports wagering hours

of operation.

     (a) To the extent table games are authorized at the premises of a table-game retailer, such

table games may be offered at the premises of a table-game retailer for all or a portion of the days

and times that video-lottery games are offered.

     (b) To the extent sports wagering is authorized at the premises of a table-game retailer,

such sports wagering may be offered at the premises of such table-game retailer for all or a

portion of the days and times that video-lottery games are offered.

     SECTION 4. Chapter 42-61.2 of the General Laws entitled "Video-Lottery Terminal" is

hereby amended by adding thereto the following sections:

     42-61.2-2.4. State to conduct sports wagering hosted by Twin River and the Tiverton

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Gaming Facility.

     (a) The state, through the division of lotteries, shall implement, operate, conduct and

control sports wagering at the Twin River gaming facility and the Twin River-Tiverton gaming

facility, once Twin River-Tiverton is licensed as a video lottery and table game retailer. In

furtherance thereof, the state, through the division, shall have full operational control to operate

such sports wagering, including, without limitation, the power and authority to:

     (1) Establish with respect to sports wagering one or more systems for linking, tracking,

depositing and reporting of receipts, audits, annual reports, prohibited conduct and other such

matters determined by the division from time to time;

     (2) Collect all sports wagering revenue indirectly through Twin River and Tiverton

gaming facilities, require that the Twin River and Tiverton gaming facilities collect all sports

wagering revenue in trust for the state (through the division), deposit such sports wagering

revenue into an account or accounts of the division’s choice, allocate such sports wagering

revenue according to law, and otherwise maintain custody and control over all sports wagering

revenue;

     (3) Hold and exercise sufficient powers over the Twin River and Tiverton gaming

facilities’ accounting and finances to allow for adequate oversight and verification of the financial

aspects of sports wagering hosted at their respective facilities in Lincoln and Tiverton, including,

without limitation:

     (i) The right to require the Twin River and Tiverton gaming facilities to maintain an

annual balance sheet, profit and loss statement, and any other necessary information or reports;

     (ii) The authority and power to conduct periodic compliance or special or focused audits

of the information or reports provided, as well as the premises within the facilities containing

records of sports wagering or in which the sports wagering activities are conducted; and

     (4) Monitor the sports wagering operations hosted by the Twin River and Tiverton

gaming facilities and have the power to terminate or suspend any sports wagering activities in the

event of an integrity concern or other threat to the public trust, and in furtherance thereof, require

Twin River and Tiverton, respectively, to provide a specified area or areas from which to conduct

such monitoring activities;

     (5) Through the use of a sports wagering vendor, define and limit the rules of play and

odds of authorized sports wagering games, including, without limitation, the minimum and

maximum wagers for each sports wagering game. Sports wagering payoffs shall not be subject to

any limitation or restriction related to sports wagering revenue or lottery revenue.

     (6) Establish compulsive gambling treatment programs;

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     (7) Promulgate, or propose for promulgation, any legislative, interpretive and procedural

rules necessary for the successful implementation, administration and enforcement of this

chapter; and

     (8) Hold all other powers necessary and proper to fully effectively execute and administer

the provisions of this chapter for the purpose of allowing the state to operate sports wagering

hosted by the Twin River and Tiverton gaming facilities.

     (b) The state, through the division and/or the DBR, shall have approval rights over

matters relating to the employment of individuals to be involved, directly or indirectly, with the

operation of sports wagering at the Twin River and Tiverton gaming facilities.

     (c) Nothing in this chapter 42-61.2 or elsewhere in the general laws shall be construed to

create a separate license governing the hosting of sports wagering in Rhode Island by licensed

video lottery and table game retailers.

     (d) The state, through the division, shall have authority to issue such regulations as it

deems appropriate pertaining to the control, operation and management of sports wagering. The

state, through DBR shall have authority to issue such regulations as it deems appropriate

pertaining to the employment of individuals to be involved, directly or indirectly, with the

operations of sports wagering as set forth in subsection (b) of this section.

     (e) Any list or other identifiable data of sports wagering players generated or maintained

by the sports wagering vendor or the hosting facility as a result of sports wagering shall be the

exclusive property of the division, provided that the hosting facilities shall be permitted to use

any such list or other identifiable data for marketing purposes to the extent it currently uses

similar data as approved by the division and for marketing purposes to directly or indirectly

generate additional gaming revenue, as approved by the division.

     42-61.2-3.3. Sports wagering regulation.

     (a) In addition to the powers and duties of the division director under §§ 42-61-4, 42-

61.2-3, 42-61.2-4 and 42-61.2-3.1, and pursuant to § 42-61.2-2.4, the division director shall

promulgate rules and regulations relating to sports wagering and set policy therefor. These rules

and regulations shall establish standards and procedures for sports waging and associated devices,

equipment and accessories, and shall include, but not be limited to:

     (1) Approve standards, rules and regulations to govern the conduct of sports wagering

and the system of wagering associated with sports wagering, including without limitation:

     (i) The objects of the sports wagering (i.e., the sporting events upon which sports

wagering bets may be accepted) and methods of play, including what constitutes win, loss or tie

bets;

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     (ii) The manner in which sports wagering bets are received, payoffs are remitted and

point spreads, lines and odds are determined for each type of available sports wagering bet;

     (iii) Physical characteristics of any devices, equipment and accessories related to sports

wagering;

     (iv) The applicable inspection procedures for any devices, equipment and accessories

related to sports wagering;

     (v) Procedures for the collection of bets and payoffs, including but not limited to

requirements for internal revenue service purposes;

     (vi) Procedures for handling suspected cheating and sports wagering irregularities; and

     (vii) Procedures for handling any defective or malfunctioning devices, equipment and

accessories related to sports wagering.

     (2) Establishing the method for calculating sports wagering revenue and standards for the

daily counting and recording of cash and cash equivalents received in the conduct of sports

wagering, and ensuring that internal controls are followed and financial books and records are

maintained and audits are conducted;

     (3) Establishing the number and type of sports wagering bets authorized at the hosting

facility, including any new sports wagering bets or variations or composites of approved sports

wagering bets, and all rules related thereto;

     (4) Establishing any sports wagering rule changes, sports wagering minimum and

maximum bet changes, and changes to the types of sports wagering products offered at a

particular hosting facility, including but not limited to any new sports wagering bets or variations

or composites of approved sports wagering bets, and including all rules related thereto;

     (5) Requiring the hosting facility and/or sports wagering vendor to:

     (i) Provide written information at each sports wagering location within the hosting

facility about wagering rules, payoffs on winning sports wagers and other information as the

division may require.

     (ii) Provide specifications approved by the division to integrate and update the hosting

facility’s surveillance system to cover all areas within the hosting facility where sports wagering

is conducted and other areas as required by the division. The specifications shall include

provisions providing the division and other persons authorized by the division with onsite access

to the system.

     (iii) Designate one or more locations within the hosting facility where sports wagering

bets are received.

     (iv) Ensure that visibility in a hosting facility is not obstructed in any way that could

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interfere with the ability of the division, the sports wagering vendor or other persons authorized

under this section or by the division to oversee the surveillance of the conduct of sports wagering.

     (v) Ensure that the count rooms for sports wagering has appropriate security for the

counting and storage of cash.

     (vi) Ensure that drop boxes are brought into or removed from an area where sports

wagering is conducted or locked or unlocked in accordance with procedures established by the

division.

     (vii) Designate secure locations for the inspection, service, repair or storage of sports

wagering equipment and for employee training and instruction to be approved by the division.

     (vii) Establish standards prohibiting persons under eighteen (18) of age from participating

in sports wagering.

     (ix) Establish compulsive and problem gambling standards and/or programs pertaining to

sports wagering consistent with general laws chapter 42-61.2.

     (6) Establishing the minimal proficiency requirements for those individuals accepting

sports wagers and administering payoffs on winning sports wagers. The foregoing requirements

of this subsection may be in addition to any rules or regulations of the DBR requiring licensing of

personnel of state-operated gaming facilities;

     (7) Establish appropriate eligibility requirements and standards for traditional sports

wagering equipment suppliers; and

     (8) Any other matters necessary for conducting sports wagering.

     (b) The hosting facility shall provide secure, segregated facilities as required by the

division on the premises for the exclusive use of the division staff and the gaming enforcement

unit of the state police. Such space shall be located proximate to the gaming floor and shall

include surveillance equipment, monitors with full camera control capability, as well as other

office equipment that may be deemed necessary by the division. The location and size of the

space and necessary equipment shall be subject to the approval of the division.

     42-61.2-5. Allocation of sports wagering revenue.

     (a) Notwithstanding the provisions of § 42-61-15, the division of lottery is authorized to

enter into an agreement, limited to in-person on-site sports wagering, to allocate sports wagering

revenue derived from sports wagering at the Twin River and Tiverton gaming facilities, (the

hosting facilities) between the state, the state's authorized sports wagering vendor, and the host

facilities. The allocation of sports wagering revenue shall be:

     (1) To the state, fifty-one percent (51%) of sports wagering revenue;

     (2) To the state's authorized sports wagering vendor, thirty-two percent (32%) of sports

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wagering revenue; and

     (3) To the host facilities, seventeen percent (17%) of sports wagering revenue.

     (b) Sports wagering revenue allocated to the state shall be deposited into the state lottery

fund for administrative purposes and then the balance remaining into the general fund.

     (c) The town of Lincoln shall be paid an annual flat fee of one hundred thousand dollars

($100,000) and the town of Tiverton shall be paid an annual flat fee of one hundred thousand

dollars ($100,000) in compensation for serving as the host communities for sports wagering.

     42-61.2-9. Unclaimed prize money, including unclaimed sports wagering payoffs.

     Unclaimed prize money for prizes in connection with the play of a video lottery game

and an unclaimed payoff in connection with a sports wager shall be retained by the director for

the person entitled thereto for one year after, respectively, the completion of the applicable video

lottery game or the determination of the result of the sporting event that was the subject of the

applicable sports wager. If no claim is made for the prize money or payoff within that year, the

prize money or payoff shall automatically revert to the lottery fund and the winner shall have no

claim thereto.

     SECTION 5. Section 42-61.3-2 of the General Laws in Chapter 42-61.3 entitled "Casino

Gaming" is hereby amended to read as follows:

     42-61.3-2. Casino gaming crimes.

     (a) Definitions as used in this chapter:

     (1) "Casino gaming" shall have the meaning set forth in the Rhode Island general laws

subdivision 42-61.2-1(8).

     (2) "Cheat" means to alter the element of chance, method of selection, or criteria which

determines:

     (i) The result of the game;

     (ii) The amount or frequency of payment in a game, including intentionally taking

advantage of a malfunctioning machine;

     (iii) The value of a wagering instrument; or

     (iv) The value of a wagering credit.

     (3) "Cheating device" means any physical, mechanical, electromechanical, electronic,

photographic, or computerized device used in such a manner as to cheat, deceive or defraud a

casino game. This includes, but is not limited to:

     (i) Plastic, tape, string or dental floss, or any other item placed inside a coin or bill

acceptor or any other opening in a video-lottery terminal in a manner to simulate coin or currency

acceptance;

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     (ii) Forged or stolen keys used to gain access to a casino game to remove its contents; and

     (iii) Game cards or dice that have been tampered with, marked or loaded.

     (4) "Gaming facility" means any facility authorized to conduct casino gaming as defined

in the Rhode Island general laws subdivision 42-61.2-1(8), including its parking areas and/or

adjacent buildings and structures.

     (5) "Paraphernalia for the manufacturing of cheating devices" means the equipment,

products or materials that are intended for use in manufacturing, producing, fabricating,

preparing, testing, analyzing, packaging, storing or concealing a counterfeit facsimile of the

chips, tokens, debit instruments or other wagering devices approved by the division of state

lottery or lawful coin or currency of the United States of America. This term includes, but is not

limited to:

     (i) Lead or lead alloy molds, forms, or similar equipment capable of producing a likeness

of a gaming token or United States coin or currency;

     (ii) Melting pots or other receptacles;

     (iii) Torches, tongs, trimming tools or other similar equipment; and

     (iv) Equipment that can be used to manufacture facsimiles of debit instruments or

wagering instruments approved by the division of state lottery.

     (6) "Table game" shall have the meaning set forth in Rhode Island general laws

subdivision 42-61.2-1(11).

     (7) "Wager" means a sum of money or representative of value that is risked on an

occurrence for which the outcome is uncertain.

     (b) Prohibited acts and penalties. It shall be unlawful for any person to:

     (1) Use, or attempt to use, a cheating device in a casino game or to have possession of

such a device in a gaming facility. Any person convicted of violating this section shall be guilty

of a felony punishable by imprisonment for not more than ten (10) years or a fine of not more

than one hundred thousand dollars ($100,000), or both;

     (2) Use, acquire, or possess paraphernalia with intent to cheat, or attempt to use, acquire

or possess, paraphernalia with the intent to manufacture cheating devices. Any person convicted

of violating this section shall be guilty of a felony punishable by imprisonment for not more than

ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or both;

     (3) Cheat, or attempt to cheat, in order to take or collect money or anything of value,

whether for one's self or another, in or from a casino game in a gaming facility. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

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both;

     (4) Conduct, carry on, operate, deal, or attempt to conduct, carry on, operate or deal, or

allow to be conducted, carried on, operated, or dealt, any cheating game or device. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

     (5) Manipulate or alter or attempt to manipulate or alter, with the intent to cheat, any

physical, mechanical, electromechanical, electronic, or computerized component of a casino

game, contrary to the designed and normal operational purpose for the component. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

     (6) Use, sell or possess, or attempt to use, sell or possess, counterfeit: coins, slugs, tokens,

gaming chips, debit instruments, player rewards cards or any counterfeit wagering instruments

and/or devices resembling tokens, gaming chips, debit or other wagering instruments approved by

the division of state lottery for use in a casino game in a gaming facility. Any person convicted of

violating this section shall be guilty of a felony punishable by imprisonment for not more than ten

(10) years or a fine of not more than one hundred thousand dollars ($100,000), or both;

     (7) (i) Place, increase, decrease, cancel or remove a wager or determine the course of play

of a table game, or attempt to place, increase, decrease, cancel or remove a wager or determine

the course of play of a table game, with knowledge of the outcome of the table game where such

knowledge is not available to all players; or

     (ii) Aid, or attempt to aid anyone in acquiring such knowledge for the purpose of placing,

increasing, decreasing, cancelling or removing a wager or determining the course of play of the

table game. Any person convicted of violating this section shall be guilty of a felony punishable

by imprisonment for not more than ten (10) years or a fine of not more than one hundred

thousand dollars ($100,000), or both;

     (8) Claim, collect or take, or attempt to claim, collect or take, money or anything of value

in or from a casino game or gaming facility, with intent to defraud, or to claim, collect or take an

amount greater than the amount won. Any person convicted of violating this section shall be

guilty of a felony punishable by imprisonment for not more than ten (10) years or a fine of not

more than one hundred thousand dollars ($100,000), or both;

     (9) For any employee of a gaming facility or anyone acting on behalf of or at the

direction of an employee of a gaming facility, to knowingly fail to collect, or attempt to fail to

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collect, a losing wager or pay, or attempt to pay, an amount greater on any wager than required

under the rules of a casino game. Any person convicted of violating this section shall be guilty of

a felony punishable by imprisonment for not more than ten (10) years or a fine of not more than

one hundred thousand dollars ($100,000), or both;

     (10) Directly or indirectly offer, or attempt to offer, to conspire with another, or solicit, or

attempt to solicit, from another, anything of value, for the purpose of influencing the outcome of

a casino game. Any person convicted of violating this section shall be guilty of a felony

punishable by imprisonment for not more than ten (10) years or a fine of not more than one

hundred thousand dollars ($100,000), or both;

     (11) Use or possess, or attempt to use or possess, at a gaming facility, without the written

consent of the director of the division of state lottery, any electronic, electrical or mechanical

device designed, constructed or programmed to assist the user or another person with the intent

to:

     (i) Predict the outcome of a casino game;

     (ii) Keep track of the cards played;

     (iii) Analyze and/or predict the probability of an occurrence relating to the casino game;

and/or

     (iv) Analyze and/or predict the strategy for playing or wagering to be used in the casino

game. Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

     (12) Skim, or attempt to skim, casino gaming proceeds by excluding anything of value

from the deposit, counting, collection, or computation of:

     (i) Gross revenues from gaming operations or activities;

     (ii) Net gaming proceeds; and/or

     (iii) Amounts due the state pursuant to applicable casino gaming-related laws. Any

person convicted of violating this section shall be guilty of a felony punishable by imprisonment

for not more than ten (10) years or a fine of not more than one hundred thousand dollars

($100,000), or both;

     (13) Cheat, or attempt to cheat, in the performance of his/her duties as a dealer or other

casino employee by conducting one's self in a manner that is deceptive to the public or alters the

normal random selection of characteristics or the normal chance or result of the game, including,

but not limited to, using cards, dice or any cheating device(s) which have been marked, tampered

with or altered. Any person convicted of violating this section shall be guilty of a felony

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punishable by imprisonment for not more than ten (10) years or a fine of not more than one

hundred thousand dollars ($100,000), or both;

     (14) Possess or use, or attempt to use, without proper authorization from the state lottery

division, while in the gaming facility any key or device designed for the purpose of or suitable for

opening or entering any self-redemption unit (kiosk), vault, video-lottery terminal, drop box or

any secured area in the gaming facility that contains casino gaming and/or surveillance

equipment, computers, electrical systems, currency, cards, chips, dice, or any other thing of value.

Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

     (15) Tamper and/or interfere, or attempt to tamper and/or interfere, with any casino

gaming and/or surveillance equipment, including, but not limited to, related computers and

electrical systems. Any person convicted of violating this section shall be guilty of a felony

punishable by imprisonment for not more than ten (10) years or a fine of not more than one

hundred thousand dollars ($100,000), or both;

     (16) Access, interfere with, infiltrate, hack into or infect, or attempt to access, interfere

with, infiltrate, hack into or infect, any casino gaming-related computer, network, hardware

and/or software or other equipment. Any person convicted of violating this section shall be guilty

of a felony punishable by imprisonment for not more than ten (10) years or a fine of not more

than one hundred thousand dollars ($100,000), or both;

     (17) Sell, trade, barter, profit from or otherwise use to one's financial advantage, or

attempt to sell, trade, barter, profit from or otherwise use to one's financial advantage, any

confidential information related to casino-gaming operations, including, but not limited to, data

(whether stored on a computer's software, hardware, network or elsewhere), passwords, codes,

surveillance and security characteristics and/or vulnerabilities, and/or non-public internal

controls, policies and procedures related thereto. Any person convicted of violating this section

shall be guilty of a felony punishable by imprisonment for not more than ten (10) years or a fine

of not more than one hundred thousand dollars ($100,000), or both;

     (18) Conduct a gaming operation, or attempt to conduct a gaming operation, where

wagering is used or to be used without a license issued by or authorization from the division of

state lottery. Any person convicted of violating this section shall be guilty of a felony punishable

by imprisonment for not more than ten (10) years or a fine of not more than one hundred

thousand dollars ($100,000), or both;

     (19) Provide false information and/or testimony to the division of state lottery,

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department of business regulation, or their authorized representatives and/or the state police while

under oath. Any person convicted of violating this section shall be guilty of a felony punishable

by imprisonment for not more than ten (10) years or a fine of not more than one hundred

thousand dollars ($100,000), or both;

     (20) Play a casino game and/or make a wager, or attempting to play a casino game and/or

make a wager, if under the age eighteen (18) years. Any person charged under this section shall

be referred to family court; or

     (21) Permit, or attempt to permit, a person to play a casino game and/or accept, or

attempt to accept, a wager from a person, if he/she is under the age of eighteen (18) years. Any

person convicted of violating this section be guilty of a misdemeanor punishable by

imprisonment for not more than one year or a fine of not more than one thousand dollars

($1,000), or both.

     SECTION 6. Section 11-19-14 of the General Laws in Chapter 11-19 entitled "Gambling

and Lotteries" is hereby amended to read as follows:

     11-19-14. Bookmaking.

     Except as provided in chapter 4 of title 41 and excluding activities authorized by the

division of lottery under chapters 61 and 61.2 of title 42, any person who shall engage in pool

selling or bookmaking, or shall occupy or keep any room, shed, tenement, tent, or building, or

any part of them, or shall occupy any place upon any public or private grounds within this state,

with books, apparatus, or paraphernalia for the purpose of recording or registering bets or wagers

or of buying or selling pools, or who shall record or register bets or wagers or sell pools upon the

result of any trial or contest of skill, speed or power of endurance of man or beast, or upon the

result of any political nomination, appointment, or election, or, being the owner or lessee or

occupant of any room, tent, tenement, shed, booth, or building, or part of them, knowingly shall

permit it to be used or occupied for any of these purposes, or shall keep, exhibit or employ any

device or apparatus for the purpose of recording or registering bets or wagers, or the selling of

pools, or shall become the custodian or depositary for gain, hire, or reward of any money,

property, or thing of value staked, wagered, or pledged or to be wagered or pledged upon the

result, or who shall receive, register, record, forward, or purport or pretend to forward to or for

any race course, or person, within or outside this state, any money, thing, or consideration of

value bet or wagered, or money, thing, or consideration of value offered for the purpose of being

bet or wagered upon the speed or endurance of any man or beast; or who shall occupy any place

or building or part of it with books, papers, apparatus, or paraphernalia for the purpose of

receiving or pretending to receive, or for recording or registering, or for forwarding or pretending

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or attempting to forward in any manner whatsoever, any money, thing, or consideration of value

bet or wagered or to be bet or wagered for any other person, or who shall receive or offer to

receive any money, thing, or consideration of value bet or to be bet at any race track within or

without this state, or who shall aid, assist or abet in any manner in any of the acts forbidden by

this section, shall upon conviction be punished by a fine not exceeding five hundred dollars

($500) or imprisonment not exceeding one year, and upon a second conviction of a violation of

this section shall be imprisoned for a period not less than one nor more than five (5) years.

     SECTION 7. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO VIDEO LOTTERY GAMES, TABLE GAMES AND SPORTS WAGERING

***

     This act would authorize the implementation and operation of sports wagering at the

Twin River and Tiverton gaming facilities.

     This act would take effect upon passage.

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