H. B. 2569
(By Delegates Farris, Sorah, Houvouras,
and Mezzatesta)
[Introduced March 12, 1993; referred to the
Committee on the Judiciary then Finance.]
A BILL to amend chapter twenty-nine of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article twenty-four,
relating to authorizing the state lottery commission to
license and regulate excursion boat gambling; defining
certain terms; describing the scope of authorization;
legalizing wagering on a gambling game when conducted on an
excursion gambling boat; describing the powers and authority
of the commission; providing for the licensing of boats and
gambling operations; establishing requirements for
licensees; setting forth the terms and conditions of
licenses and providing for revocation; requiring licensees
to be bonded; prohibiting wagering by minors; imposing an
admission tax; imposing a wagering tax; requiring audits of
licensees' operations; requiring the commission to report
annually to the governor; defining the misdemeanor offense
of unlawful operation of a gambling excursion and
establishing the penalty therefor; defining the felony
offense of felonious wagering and establishing the penalty
therefor; and providing for the forfeiture of property for
certain unlawful acts.
Be it enacted by the Legislature of West Virginia:
That chapter twenty-nine of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article twenty-four, to
read as follows:
ARTICLE 24. EXCURSION BOAT GAMBLING.
§29-24-1. Definitions.
As used in this article unless the context otherwise
requires:
(1) "Applicant" means any person applying for an
occupational license, applying for a license for an excursion
gambling boat, or applying for a license to conduct gambling
games on an excursion gambling boat.
(2) "Commission" means the state lottery commission created
under section four, article twenty-two of this chapter.
(3) "Holder of occupational license" means a person licensed
by the commission to perform an occupation which the commission
has identified as requiring a license to engage in excursion boat
gambling in West Virginia.
(4) "Licensee" means any person licensed under section seven
of this article.
(5) "Gambling game" means twenty-one, slot machine, videogame of chance, roulette wheel, klondike table, punchboard, faro
layout, keno layout, numbers ticket, push card, jar ticket, or
pull tab which is authorized by the commission as a wagering
device under this article.
(6) "Excursion gambling boat" means a self-propelled
excursion boat on which lawful gambling is authorized and
licensed as provided in this article.
(7) "Gambling excursion" means the time during which
gambling games may be operated on an excursion gambling boat
whether docked or during a cruise.
(8) "Excursion season" includes the months of April through
October.
(9) "Off season" includes the months of November through
March.
(10) "Dock" means the location where an excursion gambling
boat moors for the purpose of embarking passengers for and
disembarking passengers from a gambling excursion.
(11) "Gross receipts" means the total sum wagered under this
article.
(12) "Adjusted gross receipts" means the gross receipts less
winnings paid to wagerers.
(13) "Cheat" means to alter the selection of criteria which
determine the result of a gambling game or the amount or
frequency of payment in a gambling game.
§29-24-2. Scope of provisions.
This article does not apply to the pari-mutuel system ofwagering used or intended to be used in connection with the horse
race or dog race meetings as authorized under article twenty-
three, chapter nineteen of this code, lottery or lotto games
authorized under article twenty-two of this chapter, or bingo or
games of skill or chance authorized under article twenty, chapter
forty-seven of this code.
§29-24-3. Excursion boat gambling authorized.
The system of wagering on a gambling game as provided by
this article is legal, when conducted on an excursion gambling
boat at authorized locations by a licensee as provided in this
article.
§29-24-4. Powers and authority.
The commission has full jurisdiction over and shall
supervise all gambling operations governed by this article. The
commission has the following powers:
(1) To propose legislative rules pursuant to chapter twenty-
nine-a of this code to implement this article;
(2) To investigate applicants and determine the eligibility
of applicants for a license and to select among competing
applicants for a license the applicant which best serves the
interests of the citizens of West Virginia;
(3) To license owners of gambling game operations, to
license operators of excursion gambling boats, to identify
occupations within the excursion gambling boat operations which
require licensing, and to adopt standards for licensing the
occupations including establishing fees for the occupationallicenses and licenses for owners of gambling game operations.
The fees shall be paid to the commission and deposited in a
special account of the general fund of the state. All revenue
received by the commission from license fees and admission taxes
shall be deposited in the special account in the general fund of
the state;
(4) To adopt standards under which all excursion gambling
boat operations shall be held and standards for the facilities
within which the gambling operations are held. The commission
may authorize the operation of gambling games on an excursion
boat which is also licensed to sell or serve alcoholic beverages,
wine, or beer;
(5) To regulate the wagering structure for gambling
excursions;
(6) To enter the office, excursion gambling boat,
facilities, or other places of business of a licensee to
determine compliance with this article;
(7) To investigate alleged violations of this article or the
commission rules, orders, or final decisions and to take
appropriate disciplinary action against a licensee or a holder of
an occupational license for a violation, or institute appropriate
legal action for enforcement, or both;
(8) To authorize a licensee, an employee of a licensee or
holder of an occupational license to expel a person violating a
provision of this article or the commission rules, orders, or
final orders, or other person considered to be undesirable fromthe excursion gambling boat facilities;
(9) To require the removal of a licensee, an employee of a
licensee or a holder of an occupational license for a violation
of this article or a commission rule or engaging in a fraudulent
practice;
(10) To require a licensee to file an annual balance sheet
and profit and loss statement pertaining to the licensee's
gambling activities in this state, together with a list of the
stockholders or other persons having any beneficial interest in
the gambling activities of each licensee;
(11) To issue subpoenas for the attendance of witnesses and
subpoenas duces tecum for the production of books, records and
other pertinent documents, and to administer oaths and
affirmations to the witnesses, when, in the judgment of the
commission, it is necessary to enforce this article or the
commission rules;
(12) To keep accurate and complete records of its
proceedings and to certify the records as may be appropriate;
(13) To revoke or suspend licenses;
(14) To take any other action as may be reasonable or
appropriate to enforce this article and the commission rules;
(15) To require all licensees of gambling game operations to
utilize a cashless wagering system whereby all players' money is
converted to tokens, electronic cards, or chips which can only be
used for wagering on the excursion gambling boat; and
(16) To determine the payouts from the gambling gamesauthorized under this article. In making the determination of
payouts, the commission shall consider factors that provide
gambling and entertainment opportunities which are beneficial to
the gambling licensees and the general public.
§29-24-5. Licenses for boat and game owners; applications.
(a) A qualified person may apply to the commission for a
license to operate an excursion gambling boat or to own a
gambling game operation on an excursion gambling boat as provided
in this article. The application shall be filed with the
director of the commission at least sixty days before the first
day of the next riverboat gambling excursion season as determined
by the commission, shall identify the excursion boat upon which
gambling games will be authorized, shall specify the exact
location where the boat will be docked, and shall be in a form
and contain information as the commission prescribes.
(b) The annual license fee to operate an excursion gambling
boat shall be based on the passenger-carrying capacity including
crew, for which the excursion gambling boat is registered. The
annual fee shall be five dollars per person capacity.
§29-24-6. Requirements of applicant; penalty; consent to
search.
(a) A person may not be issued a license to own a gambling
game operation on an excursion gambling boat, or a license to
operate an excursion gambling boat under this article or an
occupational license unless the person has completed and signed
an application on the form prescribed and published by thecommission. The application shall include the full name, social
security number, residence, date of birth and other personal
identifying information of the applicant that the commission
considers necessary. The application shall also indicate whether
the applicant has any of the following:
(1) A record of conviction of a felony;
(2) An addiction to alcohol or a controlled substance; or
(3) A history of mental illness or repeated acts of
violence.
(b) An applicant shall submit pictures, fingerprints, and
descriptions of physical characteristics to the commission in the
manner prescribed on the application forms.
(c) The commission shall charge the applicant a fee set by
the department of public safety, criminal identification bureau,
to defray the costs associated with the search and classification
of fingerprints required in subsection (b) of this section. This
fee is in addition to any other license fee charged by the
commission.
(d) Before a license is granted, the superintendent of the
division of public safety shall conduct a thorough background
investigation of the applicant for a license to operate a
gambling game operation on an excursion gambling boat. The
applicant shall provide information on a form as required by the
superintendent.
(e) A person who knowingly makes a false statement on the
application is guilty of a misdemeanor, and, upon convictionthereof, shall be fined not less than one hundred nor more than
five hundred dollars or confined in the county or reginal jail
not less than six months or both fined and confined.
(f) The licensee or a holder of an occupational license
shall consent to members of the division of public safety or
commission employees designated by the director of the commission
to the search without a warrant of the licensee or holder's
person, personal property and effects, and premises which are
located on the excursion gambling boat or adjacent facilities
under control of the licensee to inspect or investigate for
criminal violations of this article or violations of rules
adopted by the commission.
§29-24-7. Licenses; terms and conditions; revocation.
(a) If the commission is satisfied that this article and its
rules adopted under this article applicable to licensees have
been or will be complied with, it shall issue a license for a
period of not more than three years. The commission may decide
which gambling games it will permit. The commission shall decide
the number, location, and type of excursion gambling boats
licensed under this article. The commission shall license not
more than a total of twelve excursion gambling boats. Not more
than eight excursion gambling boats may be licensed for operation
on the Ohio and Kanawha rivers and not more than four excursion
gambling boats may be licensed for operation on lakes and
reservoirs within the state and on rivers other than the Ohio
River and the Kanawha River. The license shall set forth thename of the licensee, the type of license granted, the place
where the excursion gambling boats will operate and dock, and the
time and number of days during the excursion season and the off
season when gambling may be conducted by the licensee. The
commission shall not allow a licensee to conduct gambling games
on an excursion gambling boat while docked during the off season
if the licensee does not operate gambling excursions for a
minimum number of days during the excursion season.
(b) A license may only be granted to an applicant upon the
express condition that:
(1) The applicant shall not, by a lease, contract,
understanding, or arrangement of any kind, grant, assign, or turn
over to a person the operation of an excursion gambling boat
licensed under this section or of the system of wagering
described in section nine of this article. This section does not
prohibit a management contract approved by the commission; and
(2) The applicant shall not in any manner permit a person
other than the licensee to have a share, percentage, or
proportion of the money received for admissions to the excursion
gambling boat.
(c) A license shall not be granted if there is substantial
evidence that the applicant for a license:
(1) Has been suspended from operating a game of chance or
gambling operation in another jurisdiction by a board or
commission of that jurisdiction;
(2) Has not demonstrated financial responsibility sufficientto meet adequately the requirements of the enterprise proposed;
(3) Is not the true owner of the enterprise proposed;
(4) Is not the sole owner, and other persons have ownership
in the enterprise which fact has not been disclosed;
(5) Is a corporation and ten percent of the stock of the
corporation is subject to a contract or option to purchase at any
time during the period for which the license is issued unless the
contract or option was disclosed to the commission and the
commission approved the sale or transfer during the period of the
license;
(6) Has knowingly made a false statement of a material fact
to the commission; or
(7) Has failed to meet any monetary obligation in connection
with an excursion gambling boat.
(d) Character references may be required of persons
licensed, but the character references shall not be obtained from
persons in the same or similar occupations or professions in
other states.
(e) A license shall not be granted to a licensee for
gambling on more than two excursion gambling boats at the same
time.
(f) A licensee may not loan to any person money or any other
thing of value for the purpose of permitting that person to wager
on any game of chance.
(g) A licensee may not dock an excursion gambling boat
within the jurisdiction of a city which enacts an ordinanceprohibiting excursion boat gambling or within an area outside the
limits of a city if the county enacts an ordinance prohibiting
excursion boat gambling.
(h) An excursion gambling boat operated on inland waters of
this state is subject to an inspection of its sanitary facilities
to protect the environment and water quality before a license is
issued under this article.
(i) Upon a violation of any of the conditions listed in this
section, the commission shall immediately revoke the license.
§29-24-8. Bond of licensee.
A licensee licensed under section seven shall post a bond to
the state of West Virginia before the license is issued in a sum
as the commission shall fix, with sureties to be approved by the
commission. The bond shall be used to guarantee that the
licensee faithfully makes the payments, keeps its books and
records and makes reports, and conducts its games of chance in
conformity with this article and the rules adopted by the
commission. The bond may not be canceled by a surety on less
than thirty days notice in writing to the commission. If a bond
is canceled and the licensee fails to file a new bond with the
commission in the required amount on or before the effective date
of cancellation, the licensee's license shall be revoked. The
total and aggregate liability of the surety on the bond is
limited to the amount specified in the bond.
§29-24-9. Wagering; minors prohibited.
(a) Except as permitted in this section, the licensee shallpermit no form of wagering on gambling games.
(b) The licensee may receive wagers only from a person
present on a licensed excursion gambling boat.
(c) The licensee shall exchange the money of each wagerer
for tokens, chips, or other forms of credit to be wagered on the
gambling games. The licensee shall exchange the gambling tokens,
chips, or other forms of wagering credit for money at the request
of the wagerer.
(d) Wagering may not be conducted with money or other
negotiable currency.
(e) A person under the age of eighteen years is not
permitted on an excursion gambling boat and shall not be allowed
in the area of the excursion boat where gambling is being
conducted.
(f) A licensee may not conduct gambling games while the
excursion gambling boat is docked unless it is temporarily docked
for embarking or disembarking passengers, crew or supplies during
the course of an excursion cruise, for mechanical problems,
adverse weather, or other conditions adversely affecting safe
navigation, during the duration of the problem or condition, or
as authorized by the commission during off season.
§29-24-10. Admission tax; tax fees.
(a) An owner of a gambling game operation on an excursion
gambling boat licensed under section seven shall pay the tax
imposed by section eleven.
(b) An excursion boat licensee shall pay to the commissionan admission tax for each person embarking on an excursion
gambling boat with a ticket of admission. The admission tax
shall be set by the commission.
(1) If tickets are issued which are good for more than one
excursion, the admission tax shall be paid for each person using
the ticket on each excursion that the ticket is used.
(2) If free passes or complimentary admission tickets are
issued, the licensee shall pay the same tax upon these passes or
complimentary tickets as if they were sold at the regular and
usual admission rate.
(3) However, the excursion boat licensee may issue tax-free
passes to actual and necessary officials and employees of the
licensee or other persons actually working on the excursion
gambling boat.
(4) The issuance of tax-free passes is subject to the rules
of the commission, and a list of all persons to whom the tax-free
passes are issued shall be filed with the commission.
(c) In addition to the admission tax charged under
subsection (b), a city may adopt, by ordinance, an admission tax
not exceeding fifty cents for each person embarking on an
excursion gambling boat docked within the city or a county may
adopt, by ordinance, an admission tax not exceeding fifty cents
for each person embarking on an excursion gambling boat docked
outside the boundaries of a city.
(1) The admission tax revenue received by a city shall be
used for one or more of the following purposes:
(A) Law enforcement programs;
(B) Acquisition of, and necessary improvements to, natural
areas, green spaces, parks, recreational facilities, and
historical heritage projects; or
(C) Cultural programs.
(2) The admission tax revenue received by a county shall be
used for one or more of the following purposes:
(A) Law enforcement programs;
(B) Credited to the emergency services and volunteer fire
commissions; or
(C)Libraries.
(d)In determining the license fees and state admission taxes
to be charged as provided under section four and this section,
the commission shall use the amount appropriated to the
commission as the basis for determining the amount of revenue to
be raised from the license fees and admission taxes.
(e) No other license tax, permit tax, occupation tax, or
excursion fee, may be levied, assessed, or collected from a
licensee by the state or by a political subdivision, except as
provided in this article.
(f) No other excise tax may be levied, assessed, or
collected from the licensee relating to gambling excursions or
admission charges by the state or by a political subdivision,
except as provided in this article.
§29-24-11. Wagering tax; rate; credit.
(a) A tax is imposed on the adjusted gross receipts receivedannually from gambling games authorized under this article at the
rate of five percent on the first one million dollars of adjusted
gross receipts and at the rate of ten percent on any amount of
adjusted gross receipts over one million dollars. The taxes
imposed by this section shall be paid by the licensee to the
treasurer of state within ten days after the close of the day
when the wagers were made and shall be credited to a special fund
in the state treasury which shall be designated and known as the
"riverboat lottery fund."
(b) The tax revenue deposited in the riverboat lottery fund
shall be used, subject to appropriation by the Legislature, as
follows:
(1) Fifty percent to the benefit fund of the state teachers
retirement system.
(2) Twenty-five percent to the death, disability and
retirement fund for the the benefit of members of the department
of public safety and any dependent of a retired or deceased
member thereof; and
(3) Twenty-five percent to the ports or ports visited by
such boats.
§29-24-12. Licensees; roads; reports; supervision.
(a) A licensee shall keep its books and records so as to
clearly show the following:
(1) The total number of admissions to gambling excursions
conducted by it on each day, including the number of admissions
upon free passes or complimentary tickets.
(2) The amount received daily from admission fees.
(3) The total amount of money wagered during each excursion
day and the adjusted gross receipts for the day.
(b) The licensee shall furnish to the commission reports and
information as the commission may require with respect to its
activities. The commission may designate a representative to
board a licensed excursion gambling boat, who shall have full
access to all places within the enclosure of the boat and who
shall supervise and check the admissions. The compensation of
the representative shall be fixed by the commission but shall be
paid by the licensee.
(c) The books and records kept by a licensee as provided by
this section are public records and examination, publication and
dissemination of the books and records are governed by the
provisions of article one, chapter twenty-nine-b of this code.
§29-24-13. Audit of licensee operations.
Within ninety days after the end of each month, the licensee
shall transmit to the commission an audit of the financial
transactions and conditions of the licensee's operations
conducted under this article. Additionally, within ninety days
after the end of the licensee's fiscal year, the licensee shall
transmit to the commission an audit of the financial transactions
and condition of the licensee's total operations. All audits
shall be conducted by certified public accountants registered in
the state of West Virginia.
§29-24-14. Annual report of commission.
The commission shall make an annual report to the governor
for the period ending the thirty-first day of December of each
year. Included in the report shall be an account of the
commission's actions, its financial position and results of
operation under this article, the practical results attained
under this article, and any recommendations for legislation which
the commission considers advisable.
§29-24-15. Prohibited activities; penalty.
(a) A person is guilty of unlawful operation of a gambling
excursion when:
(1) Such person operates a gambling excursion where wagering
is used or is to be used without a license issued by the
commission.
(2) Such person operates a gambling excursion where wagering
is permitted other than in the manner specified by section nine
of this article.
(3) Such person acts, or employs another person to act, as
a shill or decoy to encourage participation in a gambling game.
(4) Such person knowingly permits a person under the age of
eighteen years to make a wager.
(5) Such person exchanges tokens, chips or other forms of
credit to be used on gambling games for anything of value. The
provisions of this subdivision shall not apply to wagers on
gambling games or exchanges for money as provided in subsection
(d), section nine of this article.
(b) A person is guilty of felonious wagering when:
(1) Such person offers, promises, or gives anything of value
or benefit to a person who is connected with an excursion
gambling boat operator, pursuant to an agreement or arrangement
or with the intent that the promise or thing of value or benefit
will influence the actions of the person to whom the offer,
promise, or gift was made in order to affect or attempt to affect
the outcome of a gambling game, or to influence official action
of a member of the commission. For the purposes of this
subdivision and subdivision (2) of this subsection, the term
"person who is connected with an excursion gambling boat
operator" includes, but is not limited to, an officer or employee
of a licensee or holder of an occupational license.
(2) Such person solicits or knowingly accepts or receives a
promise of anything of value or benefit while the person is
connected with an excursion gambling boat, pursuant to an
understanding or arrangement or with the intent that the promise
or thing of value or benefit will influence the actions of the
person to affect or attempt to affect the outcome of a gambling
game, or to influence official action of a member of the
commission.
(3) Such person uses or possesses with the intent to use a
device to assist:
(A) In projecting the outcome of the game;
(B) In keeping track of the cards played;
(C) In analyzing the probability of the occurrence of an
event relating to the gambling game; or
(D) In analyzing the strategy for playing or betting to be
used in the game, except as permitted by the commission.
(4) Such person cheats at a gambling game.
(5) Such person manufactures, sells, or distributes any
cards, chips, dice, game or device which is intended to be used
to violate any provision of this article.
(6) Such person instructs a person in cheating or in the use
of a device for that purpose with the knowledge or intent that
the information or use conveyed may be employed to violate any
provision of the article.
(7) Such person alters or misrepresents the outcome of a
gambling game on which wagers have been made after the outcome is
made sure but before it is revealed to the players.
(8) Such person places a bet after acquiring knowledge, not
available to all players, of the outcome of the gambling game
which is subject of the bet or to aid a person in acquiring the
knowledge for the purpose of placing a bet contingent on that
outcome.
(9) Such person claims, collects, or takes, or attempts to
claim, collect, or take, money or anything of value in or from
the gambling games, with intent to defraud, without having made
a wager contingent on winning a gambling game, or claims,
collects, or takes an amount of money or thing of value of
greater value than the amount won.
(10) Such person knowingly entices or induces a person to go
to any place where a gambling game is being conducted or operatedin violation of the provisions of this article with the intent
that the other person plays or participates in that gambling
game.
(11) Such person uses counterfeit chips or tokens in a
gambling game.
(12) Such person knowingly uses, other than chips, tokens,
coin, or other methods or credit approved by the commission,
legal tender of the United States of America, or to use coin not
of the denomination as the coin intended to be used in the
gambling games.
(13) Such person, not a gambling licensee or employee of a
gambling licensee acting in furtherance of the employee's
employment, has in his or her possession any device intended to
be used to violate a provision of this article.
(14) Such person, not a gambling licensee or employee of a
gambling licensee acting in furtherance of the employee's
employment, has in his or her possession any key or device
designed for the purpose of opening, entering, or affecting the
operation of a gambling game, drop box, or an electronic or
mechanical device connected with the gambling game or for
removing coins, tokens, chips or other contents of a gambling
game.
(c) Any person who violates the provisions of subsection (a)
of this section is guilty of a misdemeanor, and, upon conviction
thereof, shall be fined not less than one hundred dollars nor
more than one thousand dollars and confined in the county orregional jail not more than six months.
(d) Any person who violates the provisions of subsection (b)
of this section is guilty of a felony, and, upon conviction
thereof, shall be fined not less than one thousand dollars nor
more than ten thousand dollars and imprisoned in the penitentiary
not less than one year nor more than five years.
§29-24-16. Forfeiture of property.
(a) Anything of value, including all traceable proceeds
including, but not limited to, real and personal property,
moneys, negotiable instruments, securities, and conveyances, is
subject to forfeiture to the state of West Virginia if the item
was used for any of the following:
(1) In exchange for a bribe intended to affect the outcome
of a gambling game.
(2) In exchange for or to facilitate a violation of this
article.
(b) All moneys, coin, and currency found in close proximity
of wagers, or of records of wagers are presumed forfeited. The
burden of proof is upon the claimant of the property to rebut
this presumption.
(c) Subsections (a) and (b) do not apply if the act or
omission which would give rise to the forfeiture was committed or
omitted without the owner's knowledge or consent.
NOTE: The purpose of this bill is to authorize the state
lottery commission to license and regulate riverboat gambling inthis state.
Article 24 is new, therefore, strike-throughs and
underscoring have been omitted.