2023 -- H 6348 SUBSTITUTE A

========

LC002864/SUB A/2

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

____________

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- VIDEO LOTTERY GAMES,

TABLE GAMES AND SPORTS WAGERING

     Introduced By: Representatives Costantino, Shallcross Smith, Edwards, Ackerman,
Cardillo, and O'Brien

     Date Introduced: April 28, 2023

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. The state, through the State Lottery Division of the Department of Revenue

(the "Division"), shall implement, operate, conduct, and control iGaming, at the Twin River and

the Twin River-Tiverton gaming facilities. In furtherance thereof, the Division is authorized to

enter into agreements with the Rhode Island Affiliates of Bally's Corporation, a Delaware

corporation ("Bally's"), in connection with iGaming. This act shall be liberally construed to

effectuate its purposes.

     SECTION 2. Definitions.

     (a) In this act, capitalized terms not otherwise defined shall have the meanings given them

in § 42-61.2-1 of the General Laws as of the effective date of this act after giving effect to the

amendments thereto pursuant to Section 4 of this act.

     (b) In this act:

     (1) "Affiliate" means a Person who or that directly, or indirectly through one or more

intermediaries, controls, is controlled by or is under common control with a Person.

     (2) "Bally's" means Bally's Corporation, a Delaware corporation.

     (3) "Control" means the possession, directly or indirectly, of the power to direct or cause

the direction of the management and policies of a Person, whether through the ownership of voting

securities, by contract or otherwise.

     (4) "iGaming Joint Venture" means a Delaware limited liability company to be owned in

part by IGT Global Solutions Corporation, a Delaware corporation ("IGT") or Affiliates of IGT

and by Bally's or Affiliates of Bally's and controlled by Bally's or Affiliates of Bally's.

     (5) "Person" means a natural person, corporation, limited liability company, partnership

(general or limited), joint venture, estate, trust or unincorporated association; any federal, state,

county, or municipal government or any bureau, department or agency thereof; any fiduciary acting

in such capacity, on behalf of any of the foregoing; or any other legal or business entity or

organization.

     SECTION 3. Authorization and Empowerment of State Lottery Division with respect to

the Rhode Island Affiliates of Bally's. Notwithstanding any provisions of the general laws of the

state or regulations adopted thereunder to the contrary, including, without limitation, the provisions

of chapter 2 of title 37, chapter 61 of title 42, and chapter 64 of title 42, the Division is hereby

authorized and empowered:

     (a) To enter into a contract with the Rhode Island Affiliates of Bally's to be the exclusive

iGaming game vendor ("iGaming Game Agreement") under the terms and conditions set forth in

this act, which shall, among other matters:

     (1) Provide for a term that is coterminous with the UTGR Master Contract or Twin River-

Tiverton Master Contract, whichever agreement ends first;

     (2) Provide that the state's maximum obligation of the payment service provider

transactions fees associated with the Division's operation of Gaming shall be thirty-three percent

(33%);

     (3) Obligate the Rhode Island Affiliates of Bally's to regularly update online slot games

offered to players in connection with the Division's operation of iGaming on schedules agreed to

by the Division;

     (4) Provide the Division with the right to assess liquidated damages against Bally's or its

Rhode Island Affiliates if any iGaming games are not available to players in accordance with this

act as determined by the Division;

     (5) Require the Rhode Island Affiliates of Bally's to an enter into an assignment and

assumption agreement between the Rhode Island Affiliates of Bally's and the iGaming Joint

Venture (the "iGaming Assignment and Assumption Agreement"), the terms of which shall be

subject to the review and approval of the Division;

     (6) Contain such other terms and conditions as the Division and the Rhode Island Affiliates

of Bally's may agree.

     (b) To consent to:

     (1) The irrevocable assignment by the Rhode Island Affiliates of Bally's to the iGaming

LC002864/SUB A/2 - Page 2 of 20

Joint Venture of:

     (i) The right to be the exclusive iGaming game vendor providing online slot games and

online table games to the Division, such online slot games and online table games being games

owned or licensed by an owner or an Affiliate of an owner of the iGaming game vendor or games

owned or licensed by a third party, that (in either case) are licensed to the iGaming game vendor

for sublicense to the Division as authorized by the Division.

     (2) The assumption by the iGaming Joint Venture of the obligations of the Rhode Island

Affiliates of Bally's under the iGaming Game Agreement pursuant to the iGaming Assignment and

Assumption Agreement, the terms of which shall be subject to the review and approval of the

Division.

     (c) To enter into a contract with the Rhode Island Affiliates of Bally's to be the exclusive

iGaming platform vendor ("iGaming Platform Agreement") under the terms and conditions set

forth in this act, which shall, among other matters:

     (1) Provide for a term that is coterminous with the UTGR Master Contract and Twin River

Tiverton Master Contract;

     (2) Obligate Bally's to regularly update and replace the server-based gaming system for

iGaming on schedules agreed to by the Division;

     (3) Provide the Division with the right to assess liquidated damages against Bally's or its

Rhode Island Affiliates if iGaming wagers are not being accepted by the iGaming server-based

gaming system in accordance with this act as determined by the Division;

     (4) Obligate the Rhode Island Affiliates of Bally's to fund the Division's responsible

gambling programs to include prevention and educations services in addition to those funds

provided under § 42-61.2-14, as amended by this act;

     (5) Require the Rhode Island Affiliates of Bally's to host server-based gaming systems in

connection with online sports wagering as determined by the Division in the Division's sole

discretion;

     (6) Require the Rhode Island Affiliates of Bally's to pay for the costs, including, but not

limited to, professional and project management fees, incurred by the Division in connection with

implementation of the Division's operation of iGaming;

     (7) Provide financial protection to the state related to the impact on traditional lottery

products as a result of iGaming whereby Bally's or the Rhode Island Affiliates of Bally's make an

annual payment to the Division in an amount equal to one hundred percent (100%) of the first one

million dollars ($1,000,000) of any shortfall and fifty percent (50%) of any shortfall between one

million dollars ($1,000,000) and two million dollars ($2,000,000) in net revenue received by the

LC002864/SUB A/2 - Page 3 of 20

Division from traditional lottery products, including online games and instant ticket games. For

purposes of this subdivision, a shortfall in net revenue from traditional lottery products shall mean

the difference between the net revenue in traditional lottery products in any given fiscal year and

the net revenue in traditional lottery products in the most recent full fiscal year before the start of

iGaming.

     (8) Contain such other terms and conditions as the Division and Bally's may agree.

     (d) Nothing in this act shall be deemed to affect the authority of the Division to regulate

Bally's, Affiliates of Bally's, or the iGaming Joint Venture in connection with state-operated casino

gaming (including iGaming).

     SECTION 4. Sections 42-61.2-1, 42-61.2-4, 42-61.2-6, 42-61.2-9, 42-61.2-11, 42-61.2-14

and 42-61.2-15 of the General Laws in Chapter 42-61.2 entitled "Video Lottery Games, Table

Games and Sports Wagering" are hereby amended to read as follows:

     42-61.2-1. Definitions.

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

     (1) "2017 Budget Act" means 2017 — H 5175 Substitute A, as amended, entitled "An Act

Relating to Making Appropriations for the Support of the State for the Fiscal Year ending June 30,

2018," which Act was signed into law by the Governor of Rhode Island on August 3, 2017.

     (2) "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 or 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.

     (3) "Central communication system" means a system approved by the Division, linking all

Video Lottery Terminals at a licensed video lottery retailer location to provide auditing program

information and any other information determined by the Division. 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.

     (4) "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

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

     (5) "Consolidated promotional points program" means, collectively, the "Initial

Promotional Points Program" and the "Supplementary Promotional Points Program" applicable to

the Lincoln gaming facility and the "Initial Promotional Points Program" and the "Supplementary

LC002864/SUB A/2 - Page 4 of 20

Promotional Points Program" applicable to the Tiverton gaming facility, with each of the terms

"Initial Promotional Points Program" and "Supplementary Promotional Points Program" having the

meanings given such terms in the 2017 Budget Act.

     (6) "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.

     (7) "DBR" means the department of business regulation, division of gaming and athletics

licensing, and/or and any successor in interest thereto.

     (8) "Director" means the director of the Division.

     (9) "Division" means the state lottery division of the department of revenue and/or any

successor in interest thereto.

     (10) "Hosting facility" refers to the Lincoln gaming facility and the Tiverton gaming

facility.

     (11)(a) "iGaming" means casino gaming, inclusive of online slot games and online table

games as defined herein, and made available to players who have reached twenty-one (21) years of

age through the use of the Internet through computers, mobile applications on mobile devices, or

other interactive devices approved by the Division, which wagers are accepted by a server-based

gaming system located at the premises of a hosting facility.

     (b) All wagers on iGaming games shall be deemed to be placed and accepted, and iGaming

games shall be deemed to be operated on the Division's behalf, at the premises of a hosting facility.

     (c) Notwithstanding the foregoing, the term "iGaming" does not include the following:

     (i) Sports wagering conducted under § 42-61.2-2.4;

     (ii) Online sports wagering conducted under § 42-61.2-2.4 and regulated elsewhere

pursuant to the general laws, including in § 42-61.2-16;

     (iii) 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 § 41-11-1), as regulated elsewhere pursuant to the general laws, including

in chapters 3, 3.1, 4, and 11 of title 41;

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

including in chapter 10 of title 41;

     (v) 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

LC002864/SUB A/2 - Page 5 of 20

laws, including in chapter 7 of title 41; and

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

lottery tickets, to the extent permitted and regulated pursuant to chapter 19 of title 11.

     (12) "iGaming game vendor" means any entity authorized to provide online slot games and

online table games, as approved by the Division in connection with iGaming, on the Division's

behalf in accordance with this chapter, such online slot games and online table games being games

owned or licensed by the iGaming game vendor (or by an entity controlling, controlled by or under

common control with such entity) or games owned or licensed by a third party, that (in either case)

are licensed to the iGaming game vendor for sublicense to the Division as authorized by the

Division.

     (13) "iGaming platform vendor" means an entity that operates a hosting facility (or by an

entity controlling, controlled by or under common control with such an entity) and that is authorized

by the Division to conduct iGaming on the Division's behalf in accordance with this chapter.

     (11)(14) "IGT" means IGT Global Solutions Corporation, a Delaware corporation.

     (12)(15) "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.

     (13)(16) "Lincoln gaming facility" means the gaming and entertainment facility located at

100 Twin River Road in the town of Lincoln, Rhode Island (sometimes referred to as "Twin River"

or the "Twin River gaming facility").

     (14)(17) "Marketing Year" means the fiscal year of the state.

     (15)(18) "Net table-game revenue" means win from table games minus counterfeit

currency.

     (16)(19) "Net terminal income" means currency placed into a Video Lottery Terminal less

credits redeemed for cash by players.

     (17)(20) "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, without limitation,

Premier (as defined in subsection (25) of this section) and/or Twin River-Tiverton (as defined in

subsection (40) of this section) provided it is a pari-mutuel licensee (as defined in this section);

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.

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

LC002864/SUB A/2 - Page 6 of 20

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

Contract.

     (19)(22) "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 time as authorized therein and/or as such Newport Grand Master Contract may be assigned

as permitted therein.

     (20)(23) "Online gaming account" means an account opened by a patron that such patron

shall use for the deposit and withdrawal of funds used for online sports wagering, iGaming, or both.

An online gaming account may be used for both online sports wagering conducted under § 42-61.2-

2.4 and iGaming, only if the patron is over twenty-one (21) years of age. A patron under the age of

twenty-one (21) is prohibited from having or using an online gaming account for iGaming.

     (24) "Online slot game" means an online slot-machine-like game authorized by the

Division within the scope of the term iGaming. Online slot games include, but are not limited to,

online games involving digital versions of spinning reels or pay lines, and may include:

     (i) An auto play feature;

     (ii) An adjustable bet feature;

     (iii) A random number generator to determine the game outcome; and

     (iv) Games that can be played infinitely, using a nondepleting prize pool, offer prizes that

are all available with every play, and have odds that remain the same with every play.

     (25) "Online slot gaming revenue" means:

     (i) The total of cash or cash equivalents received from the operation of online slot games

minus the total of:

     (A) Cash or cash equivalents paid to players as a result of the operation of online slot

games;

     (B) Marketing expenses related to online slot games as agreed to by the Division, the

iGaming game vendor, and the iGaming platform vendor, as approved by the Division; and

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

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

     (A) Counterfeit cash;

     (B) Coins or currency of other countries received as a result of the operation of online slot

games, except to the extent that the coins or currency are readily convertible to cash;

     (C) Cash taken in a fraudulent act perpetrated against the iGaming platform vendor or

iGaming game vendor, for which the iGaming platform vendor or iGaming game vendor is not

LC002864/SUB A/2 - Page 7 of 20

reimbursed;

     (D) Free play provided by the iGaming platform vendor or iGaming game vendor as

authorized by the Division to a player and subsequently "won back" by the iGaming platform

vendor or iGaming game vendor, for which the iGaming platform vendor or iGaming game vendor

can demonstrate that it or its affiliate has not been reimbursed in cash.

     (21)(26) "Online sports wagering" means engaging in the act of sports wagering by the

placing of wagers on sporting events or a combination of sporting events, or on the individual

performance statistics of athletes in a sporting event or a combination of sporting events, over the

internet through computers, mobile applications on mobile devices or other interactive devices

approved by the Division, which wagers are accepted by a server-based gaming system located at

the premises of a hosting facility authorized to accept sports wagers and administer payoffs of

winning sports wagers; all such wagers shall be deemed to be placed and accepted at the premises

of a such hosting facility.

     (22)(27) "Online sports-wagering revenue" means:

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

total of:

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

     (II) Marketing expenses related to online sports wagering as agreed to by the Division, the

sports-wagering vendor, and the host facilities, as approved by the Division; and

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

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

     (I) Counterfeit cash.

     (II) Coins or currency of other countries received as a result of online 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 to a player 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.

     (28) "Online table game" means a casino-style table game authorized by the Division

within the scope of the term iGaming, where such games are conducted by one or more live persons

and made available to players through use of the Internet through computers, mobile applications

on mobile devices, or other interactive devices approved by the Division, which wagers are

LC002864/SUB A/2 - Page 8 of 20

accepted by a server-based gaming system located at the premises of a hosting facility and played

with the digital representation of cards, dice or equipment

     (29) "Online table gaming revenue" means:

     (i) The total of cash or cash equivalents received from the operation of online table games

minus the total of:

     (A) Cash or cash equivalents paid to players as a result of the operation of online table

games;

     (B) Marketing expenses related to online table games as agreed to by the Division and the

iGaming platform vendor, as approved by the Division; and

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

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

     (A) Counterfeit cash;

     (B) Coins or currency of other countries received as a result of the operation of online table

games, except to the extent that the coins or currency are readily convertible to cash;

     (C) Cash taken in a fraudulent act perpetrated against the iGaming platform vendor or

iGaming game vendor for which the iGaming platform vendor or iGaming game vendor is not

reimbursed;

     (D) Free play provided by the iGaming platform vendor or iGaming game vendor as

authorized by the Division to a player and subsequently "won back" by the iGaming platform

vendor or iGaming game vendor, for which the iGaming platform vendor or iGaming game vendor

can demonstrate that it or its affiliate has not been reimbursed in cash.

     (23)(30) "Pari-mutuel licensee" means:

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

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

     (24)(31) "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 chapters 61, 61.2, and 61.3 of this title.

     (25)(32) "Premier" means Premier Entertainment II, LLC and/or and its successor in

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

assets of such entity.

     (26)(33) "Prior marketing year," means, with respect to a marketing year, the most recent

previous marketing year during which the Division operated a majority of the authorized video

lottery games at each of the Lincoln gaming facility and the Tiverton gaming facility for at least

360 days (or 361 days in the case there are 366 days in such marketing year). For the avoidance of

LC002864/SUB A/2 - Page 9 of 20

doubt, because the Division will not have operated a majority of the authorized video lottery games

at the Lincoln gaming facility and at the Tiverton gaming facility for at least 361 days during the

marketing year expiring on June 30, 2020, the prior marketing year with respect to the marketing

year expiring on June 30, 2021, shall be the marketing year expiring on June 30, 2019.

     (27)(34) "Promotional points" has the meaning given such term in the 2017 Budget Act.

     (28)(35) "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.

     (29)(36) "Server-based gaming system" means all hardware, software, and

communications devices that comprise a system utilized for the purpose of offering an electronic

platform used in connection with the process of placing and accepting sports wagers and/or

iGaming wagers (as applicable).

     (30)(37) "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 "sporting event" shall not include a prohibited

sporting event.

     (31)(38) "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:

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

the state, through the Division, as of June 22, 2018.

     (ii) 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 § 41-11-1), as regulated elsewhere pursuant to the general laws, including

in chapters 3, 3.1, 4, and 11 of title 41.

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

including in chapter 10 of title 41.

     (iv) 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 7 of title 41.

LC002864/SUB A/2 - Page 10 of 20

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

tickets, to the extent permitted and regulated pursuant to chapter 19 of title 11.

     (iv) iGaming (as defined in this section).

     (32)(39) "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.

     (33)(40) "Sports-wagering revenue" means:

     (i) 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 § 42-61.2-5(c);

     (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; and

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

     (ii) 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 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.

     (34)(41) "Sports-wagering vendor" means any entity authorized by the Division to operate

sports betting on the Division's behalf in accordance with this chapter.

     (35)(42) "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, using cards, dice, or equipment and conducted by one or more live

persons.

     (36)(43) "Table-game retailer" means a retailer authorized to conduct table gaming

pursuant to § 42-61.2-2.1 or § 42-61.2-2.3.

     (37)(44) "Technology provider" means any individual, partnership, corporation, or

association that designs, manufactures, installs, maintains, distributes, or supplies Video Lottery

Terminals or associated equipment for the sale or use in this state.

LC002864/SUB A/2 - Page 11 of 20

     (38)(45) "Tiverton gaming facility" means the gaming and entertainment facility located at

the intersection of William S. Canning Boulevard and Stafford Road in the town of Tiverton, Rhode

Island (sometimes referred to as "Twin River-Tiverton").

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

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

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

mean the Lincoln gaming facility.

     (40)(47) "Twin River-Tiverton" means Twin River-Tiverton, LLC and/or and its successor

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

assets of such entity; provided, however, where the context indicates that the term is referring to a

physical facility, then "Twin River-Tiverton" shall mean the Tiverton gaming facility.

     (41)(48) "Twin River-Tiverton Marketing Year" has the same meaning as Marketing Year

(as defined in subsection (14) of this section).

     (42)(49) "Twin River-Tiverton Master Contract" has the same meaning as Newport Grand

Master Contract (as defined in subsection (19) of this section).

     (43)(50) "UTGR Master Contract" means that certain master video lottery terminal contract

made as of July 1, 2005, by and between the division of lotteries of the Rhode Island department

of administration (now the division of lotteries of the Rhode Island department of revenue) and

Twin River, as amended and extended from time to time as authorized therein and/or and as such

UTGR Master Contract may be assigned as permitted therein.

     (44)(51) "Video Lottery Agreement" means that certain Video Lottery Central Computer

System Agreement dated as of December 20, 2001, by and between IGT and the Division, as

amended, extended, assigned, and assumed from time to time.

     (45)(52) "Video lottery games" means lottery games played on Video Lottery Terminals

controlled by the Division.

     (46)(53) "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, is available to play a video game authorized by the 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.

     (47)(54) "VLT Agreement" means that certain Video Lottery Terminal Technology

Provider License Agreement dated as of September 28, 2000, by and between IGT and the Division,

as amended, extended, assigned, and assumed from time to time.

LC002864/SUB A/2 - Page 12 of 20

     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,

and iGaming in 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;

     (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;

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

provision of server-based gaming systems, facilities, and related technology necessary and/or or

desirable for the state-operated online sports wagering; and

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

provision of services and technology necessary or desirable for state-operated iGaming;

     (6)(7) 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 that 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 division, even if that facility is not conducting a

LC002864/SUB A/2 - Page 13 of 20

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.

     (c) Casino gaming (including iGaming) authorized by this chapter and including accepting

wagers and administering payoffs of winning wagers on casino gaming, online slot games and

online table games, 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.

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

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

iGaming 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, iGaming 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.

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

supporting, or participating in casino gaming, including iGaming, or any acts done in connection

with casino gaming, including iGaming, shall apply to conducting, hosting, maintaining,

supporting, or participating in casino gaming, including iGaming pursuant to this chapter.

     (c)(d) 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

LC002864/SUB A/2 - Page 14 of 20

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.

     42-61.2-14. Compulsive and problem gambling programs.

     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 Twin River-

Tiverton, 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; and (d) Education

on responsible gambling and prevention of problem gambling. Twin River and Twin River-

Tiverton shall modify their existing compulsive and problem gambling programs to include table

games, and sports wagering and iGaming to the extent such games are authorized at such facilities

or through the Internet or a mobile application. Twin River and Twin River-Tiverton shall

reimburse and pay to the Division no less than two hundred thousand dollars ($200,000) in

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

and no less than fifty thousand dollars ($50,000) in the aggregate annually for education and

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

person who is prohibited from gaming in a gaming establishment due to the player self-exclusion

program shall not collect any winnings or recover losses arising as a result of prohibited gaming

activity by said person. Winnings from a self-excluded person, after the deduction of taxes and

other applicable withholdings, shall be forfeited to the division. The division shall forward such

forfeited winnings, up to one hundred fifty thousand dollars ($150,000) per year, to the Rhode

Island Council on Problem Gambling for its use for research, education, and prevention of teenage

gambling addiction, with the balance to be transferred by the division to the general fund.

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

wagering, and iGaming 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.

LC002864/SUB A/2 - Page 15 of 20

     (c) To the extent online sports wagering is authorized at a hosting facility, such online

sports wagering may be offered without any restriction on hours of operation and shall not be

limited by the days and times that video lottery games and/or or table games are offered.

     (d) To the extent iGaming is authorized at a hosting facility, such iGaming may be offered

without any restriction on hours of operation and shall not be limited by the days and times that

video lottery games or table games are offered.

     SECTION 5. Chapter 42-61.2 of the General Laws entitled "Video Lottery Games, Table

Games and Sports Wagering" is hereby amended by adding thereto the following sections:

     42-61.2-3.4. iGaming Regulation.

     In addition to the powers and duties of the Division director under §§ 42-61-4, 42-61.2-3,

42-61.2-3.1, 42-61.2-3.2, 42-61.2-3.3, and 42-61.2-4 and pursuant to §§ 42-61.2-2.1 and 42-61.2-

2.3, the Division director shall promulgate rules and regulations relating to state-operated iGaming

and set policy for such gaming. Such rules and regulations shall include, but not be limited to:

     (1) Standards, rules, and regulations to govern the conduct of iGaming, including, without

limitation:

     (i) Procedures for investigation of patron complaints related to iGaming;

     (ii) Terms and conditions for iGaming;

     (iii) Internal controls for all aspects of iGaming, including procedures for system integrity,

system security, operations, accounting, and reporting of problem gamblers;

     (iv) Operational controls for server-based gaming systems, software, and hardware utilized

for iGaming, including, but not limited to, appearance, functionality, contents, collection, storage,

and retention of data and security;

     (v) Operational controls for online gaming accounts, including, but not limited to,

procedures for the establishment and closure of an online gaming account, funding of withdrawal

of funds from an online gaming account, and generation of an account statement for a patron's

online gaming account; and

     (vi) Age restrictions for online iGaming patrons, which shall prohibited for players who

not reached twenty-one (21) years of age.

     (2) Establishing the method for calculating online slot gaming revenue and online table

gaming revenue and standards for the daily counting and recording of cash and cash equivalents

received in the conduct of online slot games and online table games, and ensuring that internal

controls are followed and financial books and records are maintained and audits are conducted;

     (3) Requiring the iGaming platform vendor to provide written information prominently

displayed on any electronic platform available to the patron through a server-based gaming system,

LC002864/SUB A/2 - Page 16 of 20

regarding wagering rules, payoffs on winning wagers, deposits, withdrawals, and other information

as the Division may require; and

     (4) Any other matters necessary for conducting iGaming.

     42-61.2-5.1. Allocation of online slot gaming revenue.

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

enter into an agreement to allocate online slot gaming revenue among the state, the state's

authorized iGaming platform vendor, and the state's authorized iGaming game vendor.

     (b) The allocation of online slot gaming revenue shall be as follows:

     (1) To the state, sixty-one percent (61%) of online slot gaming revenue;

     (2) To the state's authorized iGaming platform vendor twenty-two and fifty-five percent

(22.55%)of online slot gaming revenue; and

     (3) To the state's authorized iGaming game vendor fifteen percent (15%) of online slot

gaming revenue;

     (4) To the Town of Lincoln and the Town of Tiverton collectively, one and forty-five

hundredth percent (1.45%) of online slot gaming revenue, divided whereby the Town of Lincoln

receives seventy-seven (77%) of such allocation and the Town of Tiverton receives twenty-three

percent (23%) of such allocation; provided that the amounts received under this subsection shall be

credited towards the Lincoln Minimum and Tiverton Minimum, respectively, pursuant to § 42-

61.2-7.

     (c) Online slot gaming 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.

     42-61.2-5.2. Allocation of online table gaming revenue.

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

enter into an agreement to allocate online table gaming revenue among the state, the state's

authorized iGaming platform vendor, and the state's authorized iGaming game vendor.

     (b) The allocation of online table gaming revenue shall be:

     (1) To the state, fifteen and one-half percent (15.5%) of online table gaming revenue;

     (2) To the state's authorized iGaming platform vendor, thirty-five percent (35%) of online

table gaming revenue;

     (3) To the state's authorized iGaming game vendor, forty-eight and one-half percent

(48.5%) of online table gaming revenue; and

     (4) To the Town of Lincoln and the Town of Tiverton collectively, one percent (1%) of

online table game revenue, divided whereby the Town of Lincoln receives eighty percent (80%) of

such allocation and the Town of Tiverton receives twenty percent (20%) of such allocation;

LC002864/SUB A/2 - Page 17 of 20

provided that the amounts received under this subsection shall be credited towards the Lincoln

Minimum and Tiverton Minimum, respectively, pursuant to § 42-61.2-7.

     (c) Online table gaming 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.

     42-61.2-17. General requirements for iGaming.

     (a) Wagers in connection with iGaming shall only be initiated, received or otherwise made

within the State of Rhode Island. The iGaming platform vendor shall only accept wagers in

connection with iGaming from players who have been affirmatively located as being physically

present in the State of Rhode Island at the time of their wager.

     (b) The server-based gaming system shall employ a mechanism to detect the physical

location of a player at the time the player is wagering, and as frequently as specified in any

regulations promulgated by the state, through the Division. If the system detects that the physical

location of the patron at the time the player is wagering is in an area outside the State of Rhode

Island, or if it cannot detect the physical location of the patron, the system shall not accept that

patron's wagers until such time as the patron is determined to be physically located in the State of

Rhode Island.

     (c) The server-based gaming system used to process wagers in connection with iGaming,

and all other hardware, software, and technology or equipment located on a hosting facility's

premises and used in connection with iGaming, shall be located in a restricted area on the hosting

facility's premises. This restriction shall not apply to online table games, which may be conducted

on the hosting facility's premises in a place and manner approved by the Division.

     (d) Other than the server-based gaming system used for iGaming, the hardware, software

and other technology and equipment used by the iGaming game vendor and its suppliers do not

need to be located in the State of Rhode Island.

     (e) iGaming shall only be engaged in by patrons who have established an online gaming

account pursuant to the rules and regulations promulgated by the Division.

     42-61.2-18. Acceptance of out-of-state iGaming.

     (a) Notwithstanding any other provision of law to the contrary, wagers may be accepted

under this chapter from persons who are not physically present in Rhode Island if the Division has

determined that:

     (1) Accepting the wagers is not inconsistent with federal or Rhode Island constitutional

and statutory law and not inconsistent with the law of the jurisdiction in which the person placing

the wagers is located; or

     (2) The wagering is conducted pursuant to a reciprocal agreement to which Rhode Island

LC002864/SUB A/2 - Page 18 of 20

is a party that is not inconsistent with federal or state law, including Rhode Island constitutional

and statutory law.

     (b) The Division may enter into an interactive gaming reciprocal agreement with a

regulatory agency of one or more other states or jurisdictions in which interactive gaming is

authorized to allow an interactive gaming operator to accept wagers from persons not physically

present in Rhode Island, and to allow persons physically present in Rhode Island to place wagers

with parties to the interactive gaming reciprocal agreement, if the Division has determined that the

reciprocal agreement is not inconsistent with federal and state law, including Rhode Island

constitutional and statutory law.

     SECTION 6. This act shall take effect on March 1, 2024.

========

LC002864/SUB A/2

========

LC002864/SUB A/2 - Page 19 of 20

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- VIDEO LOTTERY GAMES,

TABLE GAMES AND SPORTS WAGERING

***

     This act would legalize iGaming by patrons located in the State of Rhode Island.

     This act would take effect on March 1, 2024.

========

LC002864/SUB A/2

========

LC002864/SUB A/2 - Page 20 of 20