Chapter 11-151-25

ARTICLE 25 AS AMENDED

RELATING TO AUTHORIZING STATE-OPERATED CASINO GAMING AT TWIN RIVER SUBJECT TO STATEWIDE AND LOCAL VOTER APPROVAL

SECTION 1. Section 42-61.2-1 of the General Laws in Chapter 42-61.2 entitled "Video

Lottery Terminal" is hereby amended to read as follows:

42-61.2-1. Definitions. [Effective June 30, 2009.] -- 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 an entity licensed and authorized to conduct:

(i) Dog racing, pursuant to chapter 3.1 of title 41; and/or

(ii) Jai-alai games, pursuant to chapter 7 of title 41.

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

that designs, manufactures, installs, operates, 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, is available to play a video game authorized by the lottery

division, and which 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.

(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, pai gow, 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 which is approved by the

state through the division of state lottery.

SECTION 2. Chapter 42-61.2 of the General Laws entitled "Video Lottery Terminal" is

hereby amended by adding thereto the following section:

42-61.2-2.1. State authorized to operate casino gaming. -- (a) State-operated casino

gaming shall be authorized at the facility of the licensed video lottery terminal retailer known as

"Twin River" located in the town of Lincoln; provided, that the requirements of Article VI,

Section 22 of the Rhode Island Constitution are met with respect to said facility at the general

election next held after enactment of this section.

(1) With respect to the "Twin River" facility, the authorization of this section 2.1 shall be

effective upon: (i) The certification by the secretary of state that the qualified voters of the state

have approved the expansion of gambling at such facility to include casino gaming; and (ii) The

certification by the board of canvassers of the town of Lincoln that qualified electors of the town

of Lincoln have approved the expansion of gambling at such facility to include casino gaming.

(b) The general assembly finds that:

(1) The operation of casino gaming at Twin River will play a critical role in the economy

of the state and enhance state and local revenues;

(2) Pursuant to Article VI, Section 15 of the Rhode Island Constitution and the specific

powers, authorities and safeguards set forth in subsection (c) herein in connection with the

operation of casino gaming, the state shall have full operational control over the specified

location at which casino gaming shall be conducted;

(3) It is in the best interest of the state to have the authorization to operate casino gaming

as specified at Twin River; and

(4) It is in the best interest of the state to conduct an extensive analysis and evaluation of

competitive casino gaming operations and thereafter for the general assembly to enact

comprehensive legislation during the 2012 legislative session to determine the terms and

conditions pursuant to which casino gaming would be operated in the state if it is authorized as

set forth herein.

15 of the Rhode Island Constitution, the state is authorized to operate, conduct and control casino

gaming at Twin River, subject to subsection (a) above. In furtherance thereof, the state, through

the division of state lottery and/or the department of business regulation, shall have full

operational control to operate the foregoing facility, the authority to make all decisions about all

aspects of the functioning of the business enterprise, including, without limitation, the power and

authority to:

(1) Determine the number, type, placement and arrangement of casino gaming games,

tables and sites within the facility;

(2) Establish with respect to casino gaming one or more systems for linking, tracking,

deposit and reporting of receipts, audits, annual reports, prohibitive conduct and other such

matters determined from time to time;

(3) Collect all receipts from casino gaming, require that Twin River collect casino

gaming gross receipts in trust for the state through the division of state lottery, deposit such

receipts into an account or accounts of its choice, allocate such receipts according to law, and

otherwise maintain custody and control over all casino gaming receipts and funds;

(4) Hold and exercise sufficient powers over Twin River’s accounting and finances to

allow for adequate oversight and verification of the financial aspects of casino gaming at the

facility, including, without limitation:

(i) The right to require Twin River to maintain an annual balance sheet, profit and loss

statement, and any other necessary information or reports; and

(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 with the facility containing records

of casino gaming or in which the business of Twin River’s casino gaming operations are

conducted;

(5) Monitor all casino gaming operations and have the power to terminate or suspend any

casino gaming activities in the event of an integrity concern or other threat to the public trust, and

in furtherance thereof, require the licensed video lottery retailer to provide a specified area or

areas from which to conduct such monitoring activities;

(6) Define and limit the rules of play and odds of authorized casino gaming games,

including, without limitation, the minimum and maximum wagers for each casino gaming game;

(7) Have approval rights over matters relating to the employment of individuals to be

involved, directly or indirectly, with the operation of casino gaming at Twin River;

(8) Establish compulsive gambling treatment programs;

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

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

chapter; and

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

administer the provisions of this chapter for its purpose of allowing the state to operate a casino

gaming facility through a licensed video lottery retailer hosting said casino gaming on behalf of

the State of Rhode Island.

(d) Subject to subsection (a) above, the state, through the division of state lottery and/or

the department of business regulation, may expand Twin River existing video lottery license

issued, or issue Twin River a new casino gaming license, to permit casino gaming to the extent

authorized by this act.

(e) Subject to subsection (a) above, all rules and regulations shall be promulgated by the

state, through the division of state lottery and the department of business regulation, in

accordance with the authority conferred upon the general assembly pursuant to Article VI,

Section 15 of the Rhode Island Constitution. In accord therewith, subject to subsection (a) above,

the state, through the division of state lottery and/or the department of business regulation, shall

have authority to issue such regulations as it deems appropriate pertaining to control, operation

and management of casino gaming as specifically set forth in subsections (b) and (c) herein.

SECTION 3. Nothing in this act shall abrogate or diminish the powers of the state,

through the division of state lottery and/or the department of business regulation, to conduct and

control video lottery terminals pursuant to chapter 42-61.2 of the general laws.

SECTION 4. Pursuant to Article VI, Section 22 of the Rhode Island Constitution, the

following question shall be submitted by the secretary of state to the qualified electors of the state

at the next statewide general election, and the secretary of state shall certify the election results:

“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?”

SECTION 5. Pursuant to Article VI, Section 22 of the Rhode Island Constitution, the

following question shall be submitted by the local board of canvassers to the qualified electors of

the town of Lincoln at the next statewide general election, and the results thereof shall be certified

to the secretary of state:

“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?”

SECTION 6. Purpose. The purpose of Sections 7 through 10 of this act is to help

strengthen the commercial health of the Twin River facility and the Newport Grand facility and

protect for the people of Rhode Island the public's share of revenues generated at the Twin River

and Newport Grand facilities.

SECTION 7. Unless otherwise amended by this Act, the terms, conditions, provisions,

and definitions of Chapter 322 and 323 of the Public Laws of 2005 and Chapter 16 of the Public

Laws of 2010 are hereby incorporated herein by reference and shall remain in full force and

effect.

SECTION 8. Authorized Procurement of Second Amendment to the Master Video

Lottery Terminal Contract.

(a) Notwithstanding any provision of the general or public laws or regulations adopted

thereunder to the contrary, the division of state lottery is hereby expressly authorized and

empowered, to enter into with Twin River and Newport Grand a Second Amendment to the Twin

River Master Contract and to the Newport Grand Master Contract, for the following purposes and

containing the following terms and conditions, all of which shall be set forth in more particular

detail in the Second Amendment:

(i) To provide that the requirements of Part A, Section 4(a)(ii) as to Twin River and Part

B, Section (4)(a)(ii) as to Newport Grand be amended to add the following provision thereto: The

Division is authorized, in addition to the Promotional Points Program established in Part A,

Section 4(a)(ii) and Part B, Section 4(a)(ii), to approve an additional amount of Promotional

Points not to exceed seven hundred fifty thousand dollars ($750,000) per facility pursuant to the

same terms and conditions authorized by Chapter 16 of the Public Laws of 2010.

(ii) To provide that the requirements of the following subsection found in Chapter 16 of

the Public Laws of 2010, Part B, Section 4(a)(iii)(2) be stricken and removed from the First

Amendment to Master Video Terminal Contract, to wit: and (2) the division shall not owe any

amount pursuant to said section 4(a)(iii) in any given marketing year unless, pursuant to

subsection 42-61.2-7(a), the state has received net terminal income for such marketing year in an

amount equal to or exceeding the amount of net terminal income the state received for the state's

fiscal year 2010. The requirements so stricken shall allow the Marketing Program and payments

due thereunder to be in effect for fiscal year 2011 pursuant to the terms and conditions set forth in

said section.

Lottery Terminal Contract shall remain in full force and effect.

SECTION 9. Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled "Video

Lottery Terminal" is hereby amended to read as follows:

42-61.2-7. Division of revenue. [Effective June 30, 2009 and expires June 30, 2011.] -

- (a) Notwithstanding the provisions of section 42-61-15, the allocation of net terminal income

derived from video lottery games is as follows:

(1) For deposit in the general fund and to the state lottery division fund for

administrative purposes: Net terminal income not otherwise disbursed in accordance with

subdivisions (a)(2) -- (a)(6) herein;

(i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one

percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally

allocated to the distressed communities as defined in section 45-13-12 provided that no eligible

community shall receive more than twenty-five percent (25%) of that community's currently

enacted municipal budget as its share under this specific subsection. Distributions made under

this specific subsection are supplemental to all other distributions made under any portion of

general laws section 45-13-12. For the fiscal year ending June 30, 2008 distributions by

community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and

shall be made from general appropriations. For the fiscal year ending June 30, 2009, the total

state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2008 and shall be made from general appropriations. For the fiscal year ending June 30, 2010, the

total state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2009 and shall be made from general appropriations, provided however that $784,458 of the total

appropriation shall be distributed equally to each qualifying distressed community.

(ii) Five one hundredths of one percent (0.05%) up to a maximum of five million dollars

($5,000,000) shall be appropriated to property tax relief to fully fund the provisions of section 44-

33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum

amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit

of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be

less than the prior fiscal year.

(iii) One and twenty-two one hundredths of one percent (1.22%) to fund section 44-34.1-

1, entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum

amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event

shall the exemption in any fiscal year be less than the prior fiscal year.

(iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent

(0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to

communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of

general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008

distributions by community shall be identical to the distributions made in the fiscal year ending

June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30,

2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter,

funding shall be determined by appropriation.

(2) To the licensed video lottery retailer:

(a) (i) Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-

six percent (26%) minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996);

(ii) On and after the effective date of the NGJA Master Contract, to the licensed video

lottery retailer who is a party to the NGJA Master Contract, all sums due and payable under said

Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996).

(b) (i) Prior to the effective date of the UTGR Master Contract, to the present licensed

video lottery retailer at Lincoln Park which is not a party to the UTGR Master Contract, twenty-

eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven

thousand six hundred eighty-seven dollars ($767,687);

(ii) On and after the effective date of the UTGR Master Contract, to the licensed video

lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said

Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars

($767,687).

(3) (i) To the technology providers who are not a party to the GTECH Master Contract

as set forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the net

terminal income of the provider's terminals; in addition thereto, technology providers who

provide premium or licensed proprietary content or those games that have unique characteristics

such as 3D graphics, unique math/game play features or merchandising elements to video lottery

terminals may receive incremental compensation, either in the form of a daily fee or as an

increased percentage, if all of the following criteria are met:

(A) A licensed video lottery retailer has requested the placement of premium or licensed

proprietary content at its licensed video lottery facility;

(B) The division of lottery has determined in its sole discretion that the request is likely to

increase net terminal income or is otherwise important to preserve or enhance the competiveness

of the licensed video lottery retailer;

or licensed propriety content video lottery terminals does not exceed ten percent (10%) of the

total number of video lottery terminals authorized at the respective licensed video lottery retailer;

and

(D) All incremental costs are shared between the division and the respective licensed

video lottery retailer based upon their proportionate allocation of net terminal income. The

division of lottery is hereby authorized to amend agreements with the licensed video lottery

retailers, or the technology providers, as applicable, to effect the intent herein.

(ii) To contractors who are a party to the Master Contract as set forth and referenced in

Public Law 2003, Chapter 32, all sums due and payable under said Master Contract;

(iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted

proportionately from the payments to technology providers the sum of six hundred twenty-eight

thousand seven hundred thirty-seven dollars ($628,737);

(4) To the city of Newport one and one hundredth percent (1.01%) of net terminal

income of authorized machines at Newport Grand except that effective November 9, 2009, the

allocation shall be one and two tenths percent (1.2%) of net terminal income of authorized

machines at Newport Grand for each week the facility operates video lottery games on a twenty-

four (24) hour basis for all eligible hours authorized and to the town of Lincoln one and twenty-

six hundredths percent (1.26%) of net terminal income of authorized machines at Lincoln Park

except that effective November 9, 2009, the allocation shall be one and forty-five hundredths

percent (1.45%) of net terminal income of authorized machines at Lincoln Park for each week the

facility operates video lottery games on a twenty-four (24) hour basis for all eligible hours

authorized;

(5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net

terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars

($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the account of a

Tribal Development Fund to be used for the purpose of encouraging and promoting: home

ownership and improvement, elderly housing, adult vocational training; health and social

services; childcare; natural resource protection; and economic development consistent with state

law. Provided, however, such distribution shall terminate upon the opening of any gaming facility

in which the Narragansett Indians are entitled to any payments or other incentives; and provided

further, any monies distributed hereunder shall not be used for, or spent on previously contracted

debts; and

(6) Unclaimed prizes and credits shall remit to the general fund of the state;

(7) Payments into the state's general fund specified in subdivisions (a)(1) and (a)(6) shall

be made on an estimated monthly basis. Payment shall be made on the tenth day following the

close of the month except for the last month when payment shall be on the last business day.

(b) Notwithstanding the above, the amounts payable by the Division to UTGR related to

the Marketing Program shall be paid on a frequency agreed by the Division, but no less

frequently than annually.

Director is authorized to fund the Marketing Program as described above in regard to the First

Amendment to the UTGR Master Contract.

(d) Notwithstanding the above, the amounts payable by the Division to Newport Grand

related to the Marketing Program shall be paid on a frequency agreed by the Division, but no less

frequently than annually.

(e) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

Director is authorized to fund the Marketing Program as described above in regard to the First

Amendment to the Newport Grand Master Contract.

42-61.2-7. Division of revenue. [Effective June 30, 2011.] -- (a) Notwithstanding the

provisions of section 42-61-15, the allocation of net terminal income derived from video lottery

games is as follows: