S
Senate Bill No. 636
(By Senator Chafin)
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[Introduced February 21, 2000; referred to the Committee
on the Judiciary; and then to the Committee on Finance.]
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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-two-b,
relating to the operation of video lottery games at restricted
access adult-only facilities licensed by the alcohol beverage
control commissioner; providing legislative findings; relating
to intent; providing definitions of terms; specifying video
lottery terminal requirements and specifications; relating to
applications for approval of video lottery terminals, testing
of video lottery terminals and report of test results;
providing for modifications to approved video lottery
terminals; providing for seizure and destruction of
nonconforming video lottery terminals; providing for hardware specifications, software specifications for randomness
testing, percentage payout, continuation of game play after
malfunction and play transaction records; providing license
qualifications for manufacturers, operators, service
technicians and location managers; relating to information to
be furnished by applicants for licenses and waiver of
liability; requiring oath or affirmation of applications;
requiring applicants to provide accurate and material
information; relating to forms of application, issuance of
video lottery licenses, notice of incomplete application and
notice of license denial, suspension or revocation; providing
procedures for review of license denial, suspension or
revocation; relating to license fees, renewal fees and renewal
dates, bonding, renewal of license and notice of change
affecting license; providing that license is not transferrable
or assignable; relating to general duties of all video lottery
license holders and specific duties of licensed manufacturers,
licensed operators, service technicians and licensed location
managers; specifying video lottery game accounting and
reporting requirements; relating to communications protocol
data, imposition of video lottery tax, remittance through
electronic transfer of funds, commission control of accounting for net terminal income, optional manual reporting and
payment, request for reports, examination of accounts and
records and video lottery terminal maintenance; requiring
manufacturers to provide training; relating to availability of
training, reports and certificates of training programs and
requirements of service technicians; providing requirements
for maintenance logs and keys to video lottery terminals;
regarding notification of repairs to the logic area and
notification of broken seals on logic boards; providing for
location of terminals; providing for payment of credits,
method of payments and restrictions on payment of credits;
requiring redeemed tickets to be defaced; relating to
liability for video lottery terminal malfunction; providing
for transportation and registration of video lottery
terminals; providing penalties for possession of illegal
devices and forfeiture of illegal devices; providing hearing
and appeal procedures; defining certain misdemeanor and felony
offenses related to the operation of video lottery games and
establishing penalties therefor; providing for civil penalties
for certain violations; and providing for severability.
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-two-b, to read as
follows:
ARTICLE 22B. RESTRICTED ACCESS ADULT VIDEO LOTTERY.
§29-22B-1. Short title.
This article shall be known and may be cited as the
"Restricted Access Adult Video Lottery Act."
§29-22B-2. Legislative purposes, findings and intent.
(a) The purpose of this article is to define and provide
specific standards for the operation of video lottery games at
restricted access adult-only facilities located within premises
licensed by the alcohol beverage control commissioner pursuant to
the provisions of article sixteen, chapter eleven of this code or
article seven, chapter sixty of this code. The Legislature finds
and declares that the limited video lottery games authorized by
this article are "lotteries" as that term is commonly understood
and as that term is used in section thirty-six, article VI of the
West Virginia constitution, the video lottery games authorized by
this article being lottery games which utilize advanced computer
technology; and that the constitution grants to the Legislature the
authority to establish, by general law, the manner of regulation,
control, ownership and operation of lottery games.
(b) The Legislature further finds and declares that the state
can control, own and operate a video lottery by possessing a
proprietary interest in the main logic boards, all erasable,
programmable read-only memory chips used in any video lottery
equipment or games and software consisting of computer programs,
documentation and other related materials necessary for the video
lottery system to be operated. The state may acquire a proprietary
interest in video lottery game software, for purposes of this
article, through outright ownership or through an exclusive product
license agreement with a manufacturer whereby the manufacturer
retains copyrighted ownership of the software but the license
granted to the state is nontransferable and authorizes the state to
run the software program, solely for its own use, on the state's
central equipment unit and electronic video terminals networked to
the central equipment unit.
(c) The Legislature further finds and declares that the state
can control and regulate video lottery at licensed restricted
access adult-only facilities if the state limits licensure to a
limited number of video lottery facilities, extends strict and
exclusive state regulation to all persons, locations, practices and
associations related to the operation of those licensed video
lottery facilities and provides comprehensive law enforcement supervision of video lottery activities.
(d) The Legislature further finds and declares that since the
public has an interest in video lottery operations and since
lottery operations conducted pursuant to section thirty-six,
article VI of the West Virginia constitution, and under this
article represent an exception to the general statutory policy of
the state concerning wagering for private gain, participation in a
video lottery by a licensee under this article shall be considered
a privilege conditioned upon the proper and continued qualification
of the licensee and upon the discharge of the affirmative
responsibility of each licensee to provide to the regulatory and
investigatory authorities established by this article any
assistance and information necessary to assure that the policies
declared by this article are achieved. Consistent with this
policy, it is the intent of this article to preclude the creation
of any property right in any license issued by the state under this
article, the accrual of any value to the privilege of participation
in any video lottery operation or the transfer of any license and
to require that participation in video lottery operations be solely
conditioned upon the individual qualifications of persons seeking
such privilege.
§29-22B-3. Definitions.
As used in this article:
(a) "Applicant" means any person applying for a video lottery
license under this article.
(b) "Associated equipment" means any hardware located on a
video licensee's premises which is connected to the video lottery
system for the purpose of performing communication, validation or
other functions, but not including the video lottery terminals or
the communication facilities of a regulated public utility.
(c) "Background investigation" means a security, criminal and
credit investigation of a person who has applied for a video
lottery license, or who has been granted a video lottery license.
(d) "Commission" or "state lottery commission" means the West
Virginia lottery commission created by article twenty-two of this
chapter.
(e) "Control" means the authority to direct the management and
policies of an applicant or a license holder.
(f) "Costs" means the expenses incurred by the commission in
the testing and examination of video lottery terminals and the
performance of background investigations and other related
activities which shall be charged to and collected from applicants
or license holders.
(g) "Director" means the individual appointed by the governor to provide management and administration necessary to direct the
state lottery office.
(h) "Disable" or "terminal disable" means the process of
executing a shutdown command from the central control computer
which causes video lottery terminals to cease functioning.
(i) "Display" means the visual presentation of video lottery
game features on the video display monitor or screen of a video
lottery terminal.
(j) "Gray gambling machine" means any video terminal or
device, other than a video lottery terminal, upon which a person
can, in exchange for payment of a consideration, play games of
chance or games where the outcome is predominantly determined by
chance, and which awards free play credits and has any mechanical
or electronic knock-off button or any other device, feature or
design whatsoever allowing those free play credits to be cleared by
any means whatsoever, other than playing additional games using
those free play credits.
(k) "License" or "video lottery license" means authorization
granted by the commission to a person permitting the person to
supply or operate video lottery terminals authorized by the
commission.
(l) "Location" means a restricted access adult-only facility located on premises in which the location manager holds a license
as provided in subsection (m) of this section.
(m) "Location manager" means a person holding a Class A
license in accordance with the provisions of section nine, article
sixteen, chapter eleven of this code in which at least seventy-five
percent of the nonintoxicating beer sold by the Class A licensee in
the preceding year was sold for consumption on the premises or
under article seven, chapter sixty of this code and who is licensed
under this article to operate video lottery terminals at a
restricted access adult-only facility: Provided, That if sales
information on persons holding a Class A license to sell
nonintoxicating beer is not available for the preceding year, the
commission in its discretion may base any issuance or denial of an
annual license upon a reasonable projection of the volume of sales
of nonintoxicating beer for consumption on the premises as a
percentage of the total sales of nonintoxicating beer.
(n) "Lottery" means the public gaming systems or games
established and operated by the state lottery commission.
(o) "Net terminal income" means the total amount of cash
inserted into a video lottery terminal minus the total value of
game credits which are cleared from the video lottery terminal in
exchange for winning redemption tickets.
(p) "Manufacturer" means any person holding a license granted
by the commission to engage in the business of designing, building,
constructing, assembling or manufacturing video lottery terminals,
the electronic computer components thereof, the random number
generator thereof, or the cabinet in which the same is housed, and
whose product is intended for sale, lease or other assignment to a
licensed operator in West Virginia.
(q) "Operator" means a person holding a license granted by the
commission who acquires or leases video lottery terminals from a
manufacturer, services and repairs those video lottery terminals
and enters into contracts with location managers for placement of
those video lottery terminals on the premises of location
managers.
(r) "Own" means any beneficial or proprietary interest in any
property or business of an applicant or licensee.
(s) "Person" means any natural person, corporation,
association, partnership, limited partnership, or other entity,
regardless of its form, structure or nature.
(t) "Player" means a person who plays a video lottery game on
a video lottery terminal at a location licensed by the commission
to conduct video lottery games.
(u) "Resident of this state" means a natural person who maintains a bona fide full-time primary place of abode in this
state and who is not registered to vote in any other state, and if
licensed to drive, holds a valid driver's license in this state,
and who files personal income tax returns as a resident of this
state, and who does not claim to be a resident of any other state
for any purpose whatsoever.
(v) "Restricted access adult-only facility" means a facility
which is a bona fide separate adult-only environment which the
commission determines has met the requirements and limitations
established in rules promulgated by the commission.
(w) "Service technician" means a person employed by an
operator who performs service, maintenance and repair on that
operator's licensed video lottery terminals in this state.
(x) "Video lottery game" means a commission approved, owned
and controlled electronically simulated game of chance which shall
be displayed on the screen or video monitor of a video lottery
terminal and which:
(1) Is connected to the commission's central control computer
by an on-line communication system;
(2) Is initiated by a player's insertion of coins or currency
into a video lottery terminal, which causes game play credits to be
displayed on the video lottery terminal and, with respect to which, each game play credit entitles a player to choose one or more
symbols or numbers or to cause the video lottery terminal to
randomly select symbols or numbers;
(3) Allows the player to win additional game play credits
based upon game rules which establish the random selection of
winning combinations of symbols or numbers or both and the number
of free play credits to be awarded for each winning combination of
symbols or numbers or both;
(4) Is based upon computer-generated random selection of
winning combinations based totally or predominantly on chance;
(5) In the case of a video lottery game which allows the
player an option to select replacement symbols or numbers or
additional symbols or numbers after the game is initiated and in
the course of play, either: (A) Signals the player, prior to any
optional selection by the player of randomly generated replacement
symbols or numbers, as to which symbols or numbers should be
retained by the player to present the best chance, based upon
probabilities, that the player may select a winning combination;
(B) signals the player, prior to any optional selection by the
player of randomly generated additional symbols or numbers, as to
whether the additional selection presents the best chance, based
upon probabilities, that the player may select a winning combination; or randomly generates additional or replacement
symbols and numbers for the player after automatically selecting
the symbols and numbers which should be retained to present the
best chance, based upon probabilities, for a winning combination,
so that in any event, the player is not permitted to benefit from
any personal skill, based upon a knowledge of probabilities, before
deciding which optional numbers or symbols to choose in the course
of video lottery game play;
(6) Allows a player at any time to simultaneously clear all
game play credits and print a redemption ticket entitling the
player to receive the cash value of the free plays cleared from the
video lottery terminal; and
(7) Does not use the following game themes commonly associated
with casino gambling: Roulette, dice or baccarat card games:
Provided, That games having a video display depicting symbols which
appear to roll on drums to simulate a classic casino slot machine,
game themes of other card games and keno may be used.
(y) "Video lottery terminal" means a commission approved
machine or device, which is compatible with the commission's
central computer system, and which is used for the purpose of
playing commission licensed video lottery games.
§29-22B-4. Video lottery games authorized; application of article.
(a) The state lottery commission is authorized to implement
and operate video lottery games at restricted access adult-only
facilities licensed in accordance with the provisions of this
article and the applicable provisions of article twenty-two of this
chapter. The commission is authorized to propose rules for
legislative approval and to promulgate emergency legislative rules
as the commission considers appropriate to effectuate the
provisions of this article, in accordance with the provisions of
article three, chapter twenty-nine-a of this code.
(b) The provisions of this article may not apply to video
lottery licensees or video lottery operations under article
twenty-two-a of this chapter. The provisions of article twenty-two
of this chapter shall apply as if set forth herein, except in the
event of conflict or inconsistency between any of the provisions of
this article and the provisions of article twenty-two, the
provisions of this article shall control. The provisions of this
article supersede any conflicting or inconsistent provisions
contained in article ten, chapter sixty-one of this code.
§29-22B-5. Video lottery terminal requirements; application for
approval of a video lottery terminal; testing of
video lottery terminals; report of test results;
modifications to previously approved models; conformity to prototype; seizure and destruction of
terminals.
(a) Video lottery terminals registered with and approved by
the commission may offer video lottery games utilizing specific
game rules separately filed from time to time by the commission
with the secretary of state. A video lottery terminal may simulate
the play of one or more video lottery games.
(b) A manufacturer may not sell or lease a video lottery
terminal for placement by an operator in this state unless the
terminal has been approved by the commission. Only licensed
manufacturers may apply for approval of a video lottery terminal or
associated equipment. The manufacturer shall submit two copies of
terminal illustrations, schematics, block diagrams, circuit
analysis, technical and operation manuals, and any other
information requested by the commission for the purpose of
analyzing and testing the video lottery terminal or associated
equipment.
(c) The commission may require that two working models of a
video lottery terminal be transported to the location designated by
the commission for testing, examination and analysis.
(1) The manufacturer shall pay all costs of testing,
examination, analysis and transportation of the video lottery terminal models. The testing, examination and analysis of any
video lottery terminal model may require dismantling of the
terminal, and some tests may result in damage or destruction to one
or more electronic components of the terminal model. The
commission may require that the manufacturer provide specialized
equipment or pay for the services of an independent technical
expert to test the terminal.
(2) The manufacturer shall pay the cost of transportation of
two video lottery terminals to lottery headquarters. The
commission shall conduct an acceptance test to determine terminal
functions and central system compatibility. If the video lottery
terminal fails the commission conducted acceptance test, the
manufacturer shall make all modifications required by the
commission.
(d) After each test has been completed, the commission shall
provide the terminal manufacturer with a report containing
findings, conclusions and pass/fail results. The report may
contain recommendations for video lottery terminal modification to
bring the terminal into compliance with the provisions of this
article.
(e) The video lottery terminal manufacturer and licensed
operator are jointly responsible for the assembly and installation of all video lottery terminals and associated equipment. The
manufacturer and licensed operator shall not change the assembly or
operational functions of a terminal licensed for placement in West
Virginia unless a request for modification of an existing video
terminal prototype is approved by the commission. The request must
contain a detailed description of the type of change, the reasons
for the change and technical documentation of the change.
(f) Each video lottery terminal approved for placement at a
licensed location must conform to the exact specifications of the
video lottery terminal prototype tested and approved by the
commission. Should any video lottery terminal or any video lottery
terminal modification which has not been approved by the commission
be supplied by a manufacturer and operated by a licensed operator,
the commission shall seize and destroy all of that licensed
operator's and manufacturer's noncomplying video lottery terminals
and shall suspend the license of the licensed operator and
manufacturer.
§29-22B-6. Video lottery terminal hardware and software
requirements; hardware specifications; software
requirements for randomness testing; software
requirements for percentage payout; software
requirements for continuation of video lottery game after malfunction; software requirements for
play transaction records.
(a) Video lottery terminals licensed for placement in this
state shall meet the following hardware specifications:
(1) Electrical and mechanical parts and design principles may
not subject a player to physical hazards or injury;
(2) A surge protector shall be installed on the electrical
power supply line to each video lottery terminal. A battery or
equivalent power back-up for the electronic meters shall be capable
of maintaining accuracy of all accounting records and terminal
status reports for a period of ninety days after power is
disconnected from the terminal. The power back-up device shall be
located within the locked logic board compartment of the video
lottery terminal;
(3)An on/off switch which controls the electrical current
used in the operation of the terminal shall be located in an
accessible place within the interior of the video lottery terminal;
(4) The operation of each video lottery terminal may not be
adversely affected by any static discharge or other electromagnetic
interference;
(5) A minimum of one electronic or mechanical coin acceptor or
other means by which to accurately and efficiently to establish credits shall be installed on each video lottery terminal. Each
video lottery terminal may also contain bill acceptors for one or
more of the following: One dollar bills, five dollar bills, ten
dollar bills and twenty dollar bills. All coin and bill acceptors
must be approved by the commission prior to use on any video
lottery terminal in this state;
(6) Access to the interior of video lottery terminals shall be
controlled through a series of locks and seals;
(7) The main logic boards and all erasable programmable read-
only memory chips (eproms), as the term is defined by subsection
(k), section three, article twenty-two-a of this chapter, are
considered to be owned by the commission and shall be located in a
separate locked and sealed area within the video lottery terminal;
(8) The cash compartment shall be located in a separate locked
area within or attached to the video lottery terminal;
(9) No hardware switches, jumpers, wire posts or any other
means of manipulation may be installed which alter the pay tables
or payout percentages in the operation of a game. Hardware
switches on a video lottery terminal to control the terminal's
graphic routines, speed of play, sound and other purely cosmetic
features may be approved by the commission;
(10) Each video lottery terminal shall contain a single printing mechanism capable of printing an original ticket and
retaining an exact legible copy within the video lottery terminal,
or other means of capturing and retaining an electronic copy of the
ticket data as approved by the commission. The following
information shall be recorded on the ticket when credits accrued on
a video lottery terminal are redeemed for cash:
(A) The number of credits accrued;
(B)Value of the credits in dollars and cents displayed in
both numeric and written form;
(C) Time of day and date;
(D) Validation number; and
(E) Any other information required by the commission.
(11) A permanently installed and affixed identification plate
shall appear on the exterior of each video lottery terminal and the
following information shall be on the plate:
(A) Manufacturer of the video lottery terminal;
(B) Serial number of the terminal; and
(C) Model number of the terminal.
(12) The rules of play for each game shall be displayed on the
video lottery terminal face or screen. The commission may reject
any such rules of play which are incomplete, confusing, misleading,
or inconsistent with game rules approved by the commission. For each video lottery game, there shall be a display detailing the
credits awarded for the occurrence of each possible winning
combination of numbers or symbols. A video lottery terminal may
not allow more than two dollars to be wagered on a single game.
All information required by this subdivision shall be displayed
under glass or another transparent substance. No stickers or other
removable devices shall be placed on the video lottery terminal
screen or face without the prior approval of the commission;
(13) Communication equipment and devices shall be installed to
enable each video lottery terminal to communicate with the
commission's central computer system by use of a communications
protocol provided by the commission to each licensed manufacturer,
which protocol shall include information retrieval and terminal
activation and disable programs;
(14) All video lottery terminals shall have a security system
which will temporarily disable the gaming function of the terminal
while opened.
(b) Each video lottery terminal shall have a random number
generator to determine randomly the occurrence of each specific
symbol or number used in video lottery games. A selection process
is random if it meets the following statistical criteria:
(1) Chi square test. Each symbol or number shall satisfy the ninety-nine percent confidence limit using the standard chi-square
statistical analysis of the difference between the expected result
and the observed result;
(2) Runs test. Each symbol or number may not produce a
significant statistic with regard to producing patterns of
occurrences. Each symbol or number is random if it meets the
ninety-nine percent confidence level with regard to the "runs test"
for the existence of recurring patterns within a set of data;
(3) Correlation test. Each pair of symbols or numbers is
random if it meets the ninety-nine percent confidence level using
standard correlation analysis to determine whether each symbol or
number is independently chosen without regard to another symbol or
number within a single game play;
(4) Serial correlation test. Each symbol or number is random
if it meets the ninety-nine percent confidence level using standard
serial correlation analysis to determine whether each symbol or
number is independently chosen without reference to the same symbol
or number in a previous game.
(c) Each video lottery terminal shall meet the following
maximum and minimum theoretical percentage payout during the
expected lifetime of said terminal:
(1) Video lottery games shall pay out no less than eighty percent and no more than ninety-five percent of the amount wagered.
The theoretical payout percentage will be determined using standard
methods of probability theory;
(2) Manufacturers must file a request and receive approval
from the commission prior to manufacturing for placement in this
state video lottery games programmed for a payout greater than
ninety-two percent of the amount wagered. Commission approval must
be obtained prior to applying for testing of such high payout
terminals;
(3) Each game shall have a probability greater than one in
seventeen million of obtaining the maximum payout for each play.
(d) Each video lottery terminal shall be capable of continuing
the current game with all current game features after a video
lottery terminal malfunction is cleared. If a video lottery
terminal is rendered totally inoperable during game play, the
current wager and all credits appearing on the video lottery
terminal screen prior to the malfunction shall be returned to the
player.
(e) Each video lottery terminal shall at all times maintain
electronic accounting regardless of whether the terminal is being
supplied with electrical power. Each meter shall be capable of
maintaining a total of no less than eight digits in length for each type of data required. The electronic meters shall record the
following information:
(1) Number of coins inserted by players or the coin equivalent
if a bill acceptor is being used;
(2) Number of credits wagered;
(3) Number of credits won;
(4) Number of credits paid out by a printed ticket;
(5) Number of times the logic area was accessed;
(6) Number of times the cash door was accessed;
(7) Number of credits wagered in the current game;
(8) Number of credits won in the last complete video lottery
game; and
(9) Number of cumulative credits representing money inserted
by a player and credits for video lottery games won but not
collected.
(f) No video lottery terminal may have any mechanism which
would allow the electronic accounting meters to clear
automatically. Electronic accounting meters may not be cleared
without the prior approval of the commission. Both before and
after any electronic accounting meter is cleared, all meter
readings shall be recorded in the presence of a commission
employee.
(g) The commission shall maintain a central site system of
monitoring the lottery terminals, utilizing an on-line or dial-up
inquiry. The central site system shall be capable of monitoring
the operation of each video lottery game or video lottery terminal
operating pursuant to this article and, at the direction of the
director, immediately disable and cause not to operate, any video
lottery game and video lottery terminal.
§29-22B-7. License qualifications; individual qualifications;
applicant required to furnish information; waiver
of liability; oath or affirmation; duty to provide
accurate and material information.
(a) No video lottery license shall be granted unless the
commission shall have determined that the applicant satisfies all
of the following qualifications:
(1) An applicant must be a person of good character and
integrity;
(2) An applicant must be a person whose background, including
criminal record, reputation and associations, does not pose a
threat to the security and integrity of the lottery or to the
public interest of the state. A person who has been convicted of
any violation of article twenty-two of this chapter or of this
article or of any crime related to theft, bribery, gambling or involving moral turpitude is not eligible for any license. The
commission shall revoke the license of any person who is convicted
of any such crime after a license is granted;
(3) An applicant must be a person who demonstrates the
business ability and experience necessary to establish, operate,
and maintain the business for which a video lottery license
application is made;
(4) An applicant must be a person who has secured adequate
financing for the business for which a video lottery license
application is made. The commission shall determine whether
financing is from a source which meets the qualifications of this
section, and is adequate to support the successful performance of
the duties and responsibilities of the licensee. An applicant for
a video lottery operator's license shall disclose all financing or
refinancing arrangements for the purchase, lease or other
acquisition of video lottery terminals and associated equipment in
the degree of detail requested by the commission. A licensed
operator shall request commission approval of any change in
financing or lease arrangements at least thirty days before the
effective date of the change;
(5) An applicant for an operator's or location manager's
license must have been a citizen of the United States and a resident of this state for not less than two years, and, in the
case of a corporation, partnership or other business legal entity,
the chief executive officer and the majority of the officers, the
directors, the members and the partners(to the extent each of these
groups exists with respect to a particular business organization)
must meet the residency requirement;
(6) No person may be licensed as a service technician unless
that person has passed a technical competence test administered or
approved by the commission;
(7) No person may hold or control video lottery licenses in
more than one of the following three licensing classifications:
manufacturer, operator and location manager.
(b) No video lottery license shall be granted to an applicant
until the commission determines that each person who has control of
the applicant meets all applicable qualifications of subsection (a)
of this section. The following persons shall be considered to have
control of an applicant:
(1) Each person associated with a corporate applicant,
including any corporate holding company, parent company or
subsidiary company of the applicant (but not including a bank or
other licensed lending institution which holds a mortgage or other
lien acquired in the ordinary course of business) who has the ability to control the activities of the corporate applicant or
elect a majority of the board of directors of that corporation;
(2) Each person associated with a noncorporate applicant who
directly or indirectly holds any beneficial or proprietary interest
in the applicant or who the commission determines to have the
ability to control the applicant;
(3) Key personnel of an applicant, including any executive,
employee or agent, having the power to exercise significant
influence over decisions concerning any part of the applicant's
business operation.
(c) Applicants must furnish all information, including
financial data and documents, certifications, consents, waivers,
individual history forms and other materials requested by the
commission for purposes of determining qualifications for a
license. No video lottery license may be granted to an applicant
who fails to provide information and documentation requested by the
commission. The burden of proving qualification for any video
lottery license shall be on the applicant.
(d) Each applicant shall bear all risks of adverse public
notice, embarrassment, criticism, damages, or financial loss which
may result from any disclosure or publication of any material or
information obtained by the commission pursuant to action on an application. The applicant shall, as a part of its application,
expressly waive any and all claims against the commission, the
state of West Virginia and the employees of either for damages as
a result of any background investigation, disclosure or publication
relating to an application for a video lottery license.
(e) All application, registration, and disclosure forms and
other documents submitted to the commission by or on behalf of the
applicant for purposes of determining qualification for a video
lottery license shall be sworn to or affirmed before an officer
qualified to administer oaths.
(f) An applicant who knowingly fails to reveal any fact
material to qualification or who knowingly submits false or
misleading material information is ineligible for a video lottery
license.
§29-22B-8. Form of application; issuance of license; notice of
incomplete application; notice of license denial,
suspension or revocation; procedure for review of
license denial, suspension or revocation; fees,
renewal fees and renewal dates; bonding; renewal of
licenses; notice of change affecting license;
license not transferrable or assignable.
(a) The commission shall determine the forms of application to be used and shall not consider incomplete applications.
Applications may be considered when the applicant has completed and
executed all forms and documents required by the commission and all
application fees and costs have been paid.
(b) The commission may not issue any license until background
investigations are concluded. The commission must make an
affirmative determination that the applicant is qualified and the
applicable license fees have been paid prior to issuing any
license.
(c) The commission shall notify the applicant if an
application is incomplete and the notification shall state the
deficiencies in the application.
(d) The commission shall notify applicants in writing of the
denial, suspension or revocation of a license and the reasons for
the denial, suspension or revocation in accordance with the
provisions of section sixteen of this article.
(e) An applicant may request a hearing to review a license
denial, suspension or revocation in accordance with section fifteen
of this article.
(f) The following license fees shall be paid annually by each
licensed operator, manufacturer, service technician or location
manager:
(1) Operator: $10,000;
(2) Manufacturer: $10,000;
(3) Service technician: $100;
(4) Location manager: $500 plus $100 per video lottery
terminal in excess of five at the location.
The fees shall be paid to the commission at the time of
license application and on the first day of July of each year
thereafter, at which time the license may be renewed, provided that
a manufacturer who ceases supplying any additional video lottery
terminals to operators in this state may continue to supply repair
parts and service for video lottery terminals previously provided
to operators, if an annual renewal fee of one thousand dollars is
paid and the manufacturer is otherwise eligible for licensure under
this article.
(g) An applicant for a video lottery license shall, prior to
the issuance of the license, post a bond or irrevocable letter of
credit in a manner and in an amount established by the commission.
Any bond shall be issued by a surety company authorized to transact
business in West Virginia and the company shall be approved by the
insurance commissioner of this state as to solvency and
responsibility.
(h) The commission shall renew video lottery licenses annually as of the first day of July of each year, if each person seeking
license renewal submits the applicable renewal fee, completes all
renewal forms provided by the commission, and continues to meet all
qualifications for a license.
(i) Licensees shall notify the commission of any proposed
change of ownership or control of the license holder and of all
other transactions or occurrences relevant to license
qualification. Commission approval is required prior to any change
of ownership or control of a licensed manufacturer or operator.
(j) A license is a privilege personal to the license holder
and is not a legal right. A license granted or renewed pursuant to
this article may not be transferred or assigned to another person,
nor may a license be pledged as collateral. The purchaser or
successor of any license holder must independently qualify for a
license. The sale of more than five percent of a license holder's
voting stock, or more than five percent of the voting stock of a
corporation which controls the license holder, or the sale of a
license holder's assets, other than those bought and sold in the
ordinary course of business, or any interest therein, must be
approved in advance by the commission.
§29-22B-9. General duties of all video lottery license holders;
duties of manufacturers; duties of service technicians; duties of location managers; duties of
operators.
(a) All video lottery license holders shall:
(1) Promptly report to the commission any facts or
circumstances related to video lottery operations which constitute
a violation of state or federal law;
(2) Conduct all video lottery activities and functions in a
manner which does not pose a threat to the public health, safety,
or welfare of the citizens of this state, and which does not
adversely affect the security or integrity of the lottery;
(3) Hold the commission and this state harmless from and
defend and pay for the defense of any and all claims which may be
asserted against a license holder, the commission, the state or the
employees thereof, arising from the license holder's participation
in the video lottery system authorized by this article;
(4) Assist the commission in maximizing video lottery
revenues;
(5) Maintain all records required by the commission;
(6) Upon request by the commission, provide the commission
access to all records and the physical premises of the business or
businesses where the license holder's video lottery activities
occur, for the purpose of monitoring or inspecting the license holder's activities and the video lottery games, video lottery
terminals and associated equipment;
(7) Keep current in all payments and obligations to the
commission.
(b) Manufacturers shall:
(1) Manufacture terminals and associated equipment for
placement in this state in accordance with the specifications and
procedures specified in sections five and six of this article;
(2) Manufacture terminals and associated equipment to ensure
timely delivery to licensed operators;
(3) Maintain and provide an inventory of spare parts to assure
the timely repair and continuous operation of licensed video
lottery terminals intended for placement in this state;
(4) Provide to licensed operators technical assistance and
training in the service and repair of video lottery terminals and
associated equipment so as to assure the continuous authorized
operation and play of such video lottery terminals;
(5) Obtain certification of compliance under the provisions of
part fifteen of the federal communication commission rules for all
video lottery terminals placed in this state.
(c) Service technicians shall:
(1) Maintain all skills necessary for the timely repair and service of licensed video lottery terminals and associated
equipment so as to ensure the continued, approved operation of
those terminals;
(2) Attend all commission mandated meetings, seminars, and
training sessions concerning the repair and maintenance of licensed
video lottery terminals and associated equipment;
(3) Promptly notify the commission of any electronic or
mechanical video lottery terminal malfunctions.
(d) Location managers shall:
(1) Attend all commission mandated meetings, seminars and
training sessions concerning operation of video lottery terminals,
the validation and redemption of video lottery winning tickets and
the operation of all ticket validation terminals and equipment;
(2) Maintain all skills necessary for the accurate validation
of video lottery tickets;
(3) Supervise video lottery operations and ticket validation
procedures at the applicable location;
(4) Permit no person to tamper with or interfere with the
operation of any video lottery terminal;
(5) Ensure that telephone lines from the commission's central
control computer to the video lottery terminals located at the
approved location are at all times connected, and prevent any person from tampering or interfering with the operation of the
telephone lines;
(6) Ensure that video lottery terminals are within the sight
and control of designated employees of the location manager;
(7) Ensure that video lottery terminals are placed and remain
placed in the specific locations which have been approved by the
commission. No video lottery terminal or terminals at a location
shall be relocated without the prior approval of the commission;
(8) Monitor video lottery terminals to prevent access to or
play by persons who are under the age of eighteen years or who are
visibly intoxicated;
(9) Maintain at all times sufficient change and cash in the
denominations accepted by the video lottery terminals;
(10) Provide no access by a player to an automated teller
machine (ATM) in the area where video lottery games are played,
accept no credit card or debit card from a player for the exchange
or purchase of video lottery game credits or for an advance of
coins or currency to be utilized by a player to play video lottery
games, and extend no credit, in any manner, to a player so as to
enable the player to play a video lottery game;
(11) Pay for all credits won upon presentment of a valid
winning video lottery ticket;
(12) Report promptly to the operator and the commission all
video lottery terminal malfunctions and notify the commission of
the failure of an operator or service technician to provide prompt
service and repair of the terminals and associated equipment;
(13) Conduct no video lottery advertising and promotional
activities without the prior written approval of the director;
(14) Install, post and display prominently within or about the
approved location signs, redemption information and other
promotional material as required by the commission;
(15) Permit video lottery to be played only during those hours
established and approved by the commission;
(16) Contract with no more than one licensed operator for the
placement of video lottery terminals at the licensed location;
(17) Maintain insurance covering all losses as the result of
fire, theft or vandalism to video lottery terminals and associated
equipment.
(e) Licensed operators shall:
(1) Acquire video lottery terminals by purchase, lease or
other assignment and contract with location managers for a secure
location for the placement, operation and play of the video lottery
terminals;
(2) Pay for the installation and operation of commission approved telephone lines to provide direct dial up or on-line
communication between each video lottery terminal and the
commission's central control computer;
(3) Permit no person to tamper with or interfere with the
operation of any video lottery terminal;
(4) Ensure that telephone lines from the commission's central
control computer to the video lottery terminals located at the
approved location are at all times connected, and prevent any
person from tampering or interfering with the operation of the
telephone lines;
(5) Ensure that video lottery terminals are placed and remain
placed in the specific places within the approved locations which
have been approved by the commission. No video lottery terminal or
terminals at a location shall be relocated without the prior
approval of the commission;
(6) Assume financial responsibility for proper and timely
payments by location managers of all credits awarded to players in
accordance with rules promulgated by the commission;
(7) Enter into contracts with location managers to provide for
the maintenance and repair of video lottery terminals and
associated equipment, and to provide for the placement of video
lottery terminals pursuant to the provisions of this article;
(8) Conduct no video lottery advertising and promotional
activities without the prior written approval of the director;
(9) Install, post and display prominently within or about the
approved location signs, redemption information and other
promotional material as required by the commission;
(10) Maintain general liability insurance coverage for all
video lottery terminals in an amount of at least one million
dollars per claim;
(11) Promptly notify the commission in writing of any breaks
or tears to any logic unit seals;
(12) Assume liability for all amounts due to the commission in
connection with any money lost or stolen from any video lottery
terminal.
§29-22B-10. Accounting and reporting; commission to provide
communications protocol data; distribution of net
terminal income; remittance through electronic
transfer of funds; establishment of accounts and
nonpayment penalties; commission control of
accounting for net terminal income; settlement of
accounts; manual reporting and payment may be
required; request for reports; examination of
accounts and records.
(a) The commission shall provide to manufacturers, or
applicants applying for a manufacturer's permit, the protocol
documentation data necessary to enable the respective
manufacturer's video lottery terminals to communicate with the
commission's central computer for transmitting auditing program
information and for activation and disabling of video lottery
terminals.
(b) The gross terminal income of a licensed operator shall be
remitted to the commission through the electronic transfer of
funds. Licensed operators shall furnish to the commission all
information and bank authorizations required to facilitate the
timely transfer of moneys to the commission. Licensed operators
must provide the commission thirty days' advance notice of any
proposed account changes in order to assure the uninterrupted
electronic transfer of funds. From the gross terminal income
remitted by the licensee to the commission, the commission shall
deduct an amount sufficient to reimburse the commission for its
actual costs and expenses incurred in administering video lottery,
and the resulting amount after the deduction shall be the net
terminal income. The amount deducted for administrative costs and
expenses of the commission may not exceed four percent of gross
terminal income.
(c) Net terminal income shall be divided as set out in this
subsection. The division shall be made as follows:
(1) The commission shall receive forty percent of net terminal
income until the first day of July, two thousand one. Beginning on
the first day of July, two thousand one, the commission shall
receive fifty percent of net terminal income. Of this amount
twenty-five percent shall be directly appropriated to the public
employees insurance agency and seventy-five percent shall be paid
into the general revenue fund to be appropriated by the Legislature
as provided in subsection (d) of this section;
(2) Licensed operators shall receive thirty percent of net
terminal income until the first day of July, two thousand one.
Beginning on the first day of July, two thousand one, licensed
operators shall receive twenty-five percent of net terminal income;
(3) Location managers shall receive thirty percent of net
terminal income until the first day of July, two thousand one.
Beginning on the first day of July, two thousand one, location
managers shall receive twenty-five percent of net terminal income.
(d) The Legislature shall annually appropriate the
seventy-five percent share of the amount allocated by subdivision
(1), subsection (c) of this section in such proportions as it
considers beneficial to the citizens of this state to: (1) The lottery education fund created in subsection (g), section eighteen,
article twenty-two of this chapter; (2) the school construction
fund created in section six, article nine-d, chapter eighteen of
this code; (3) the lottery senior citizens fund created in
subsection (j), section eighteen, article twenty-two of this
chapter; (4) the division of natural resources created in section
three, article one, chapter twenty of this code and the West
Virginia development office as created in section one, article two,
chapter five-b of this code, in accordance with subsection (k),
section eighteen, article twenty-two of this chapter; and (5) the
PROMISE scholarship program created in article six, chapter
eighteen-c of this code.
(e) Each licensed operator shall maintain in its account an
amount equal to or greater than the gross terminal income from its
operation of video lottery machines, to be electronically
transferred by the commission on dates established by the
commission. Upon an operator's failure to maintain this balance,
the commission may disable all of a licensed operator's video
lottery terminals until full payment of all amounts due is made.
Interest shall accrue on any unpaid balance at a rate consistent
with the amount charged for state income tax delinquency under
chapter eleven of this code, which interest shall begin to accrue on the date payment is due to the commission.
(f) The commission's central control computer shall keep
accurate records of all income generated by each video lottery
terminal. The commission shall prepare and send to the licensed
operator a statement by mail, facsimile or internet e-mail
reflecting the gross terminal income generated by the licensee's
video lottery terminals. Each licensed operator must report to the
commission any discrepancies between the commission's statement and
each terminal's mechanical and electronic meter readings. The
licensed operator is solely responsible for resolving income
discrepancies between actual money collected and the amount shown
on the accounting meters or on the commission's billing statement.
(g) Until an accounting discrepancy is resolved in favor of
the licensed operator, the commission may make no credit
adjustments. For any video lottery terminal reflecting a
discrepancy, the licensed operator shall submit to the commission
the maintenance log which includes current mechanical meter
readings and the audit ticket which contains electronic meter
readings generated by the terminal's software. If the meter
readings and the commission's records cannot be reconciled, final
disposition of the matter shall be determined by the commission.
Any accounting discrepancies which cannot be otherwise resolved shall be resolved in favor of the commission.
(h) Licensed operators shall remit payment by mail if the
electronic transfer of funds is not operational or the commission
notifies licensed operators that remittance by this method is
required. The licensed operators shall report an amount equal to
the total amount of cash inserted into each video lottery terminal
operated by a licensee, minus the total value of game credits which
are cleared from the video lottery terminal in exchange for winning
redemption tickets, and remit the amount as generated from its
terminals during the reporting period. The remittance shall be
sealed in a properly addressed and stamped envelope and deposited
in the United States mail no later than noon on the day when the
payment would otherwise be completed through electronic funds
transfer.
(i) Licensed operators may, upon request, receive additional
reports of play transactions for their respective video lottery
terminals and other marketing information not considered
confidential by the commission. The commission may charge a
reasonable fee for the cost of producing and mailing any report
other than the billing statements.
(j) The commission has the right to examine all accounts, bank
accounts, financial statements and records in a licensed operator's possession, under its control or in which it has an interest and
the licensed operator must authorize all third parties in
possession or in control of the accounts or records to allow
examination of any of those accounts or records by the commission.
§29-22B-11. Maintenance of video lottery terminals; manufacturers
required to provide training; notice of
availability of training; reports and certificates
of training programs; terminals to be maintained in
the condition approved; maintenance log required;
keys to video lottery terminals; notice of repairs
to the logic area; notice of broken seals on logic
board.
(a) No video lottery terminal may be placed in operation in
this state until the manufacturer provides training in the service
and repair of each approved video lottery terminal model and
service technicians complete the training. Manufacturers must
submit to the commission the following information on each training
program conducted:
(1) An outline of the training curriculum;
(2) A list of the instructors and their qualifications;
(3) Instructional materials; and
(4) The time, dates and location of the training programs.
(b) Manufacturers shall notify all licensed operators who have
purchased or leased that manufacturer's video lottery terminals of
all scheduled training programs. Training programs must be
scheduled at convenient locations within this state to facilitate
attendance by service technicians. Manufacturers must inform
licensed operators of any new developments in the service and
repair of video lottery terminals and provide appropriate
subsequent training programs.
(c) The manufacturers shall issue training certificates to
each person upon successful completion of a video lottery training
program. The certificate shall include the name of the person who
completed the training program and the date and the location of the
training program. A person who successfully completes training is
eligible for a service technician's license. No person may conduct
maintenance (other than clearing paper ticket jams or clearing coin
and bill accepter jams) on any video lottery terminal or associated
equipment unless the commission has issued a service technician
license to that person.
(d) Each manufacturer shall file with the commission the
following information within two weeks after the completion of a
training program:
(1) The name of each person who attended and completed the training program;
(2) The name of the manufacturer offering the course;
(3) The manufacturer's video lottery terminal models on which
training for service and repair was provided;
(4) The date and location of the training program; and
(5) Copies of all certificates of completion.
(e) A written maintenance log shall be kept within the main
cabinet access area in each video lottery terminal. Every person,
including lottery personnel, who gains entry into any internal
space of a video lottery terminal must sign the log, record the
time and date of entry, record the mechanical meter readings, and
list the areas inspected or repaired. The maintenance log forms
shall be retained by operators for a period of three years from the
date of the last entry. The maintenance logs shall be available
upon request for inspection by the commission.
(f) Operators shall provide the commission with a master key
for access into the main cabinet door of each video lottery
terminal placed in operation. A logic box seal shall be provided
by the commission. The seal shall be affixed by commission
personnel to prevent unauthorized access to the video lottery
terminal logic unit.
(g) No repairs to, or replacement of, the logic board or circuitry within the logic area shall occur unless authorized
commission personnel are present and observe such repairs or
replacement. The logic area seal shall not be broken by anyone
other than authorized commission personnel. Each service
technician shall submit a written report within twenty-four hours
after the repairs or replacement are completed and the report shall
include the serial number of any replacement board and the new
logic area seal number.
(h) The software eproms on the logic board of each video
lottery terminal shall be tested by the commission prior to sealing
the logic area. License holders shall notify the commission in
writing of any discovered damage, tears or breaks in the logic area
seal, and upon the notice the video lottery terminal shall be
disabled. The video lottery terminal shall remain disabled until
completion by the commission of an investigation of the seal
damage.
§29-22B-12. Number and location of video lottery terminals;
security.
(a) No operator shall place any video lottery terminal in a
location if that placement would cause that operator's number of
terminals to exceed an average of five terminals per location for
the locations actually operating under contracts with that operator: Provided, That no single licensed location shall have
more than ten video lottery terminals.
(b) All video lottery terminals in approved locations shall be
physically located as follows:
(1) The video lottery terminals shall be continuously
monitored through the use of a closed circuit television system
capable of identifying players and terminal faces and of recording
activity for a continuous twenty-four hour period. All video tapes
shall be retained for a period of at least thirty days;
(2) Access to video lottery terminal locations shall be
restricted to persons legally entitled by age to play video lottery
games;
(3) The operator shall submit, for commission approval, a
floor plan of the area or areas where video lottery terminals are
to be operated showing terminal locations and security camera mount
location; and
(4) No video lottery terminal shall be relocated without prior
approval from the commission.
(c) Personnel of the location manager shall be present during
all hours of operation at each video lottery terminal location in
order to provide for safe and approved operation of the video
lottery facilities and the safety and well-being of the players.
(d) The security personnel of the commission shall have
unlimited access to video lottery terminal locations.
§29-22B-13. Payment of credits; no state liability; method of
payment; restrictions on payment of credits;
redeemed tickets required to be defaced; liability
for video lottery terminal malfunction.
(a) No payment for credits awarded on a video lottery terminal
shall be made unless the ticket meets the following requirements:
(1) The ticket is fully legible and printed on paper approved
by the commission and the ticket contains all information required
by this article;
(2) The ticket is not mutilated, altered, unreadable or
tampered with in any manner;
(3) The ticket is not counterfeit, in whole or in part; and,
(4) The ticket is presented by a person authorized to play
video lottery pursuant to this article.
(b) Each location manager shall redeem tickets during the
business hours of operation. Credits shall be immediately paid in
cash or by check when a player presents a valid ticket for payment.
No credits may be paid in tokens, chips or merchandise.
(c) Location managers shall not redeem tickets for credits
awarded on video lottery terminals which are not located on its premises. A ticket must be presented for payment no later than ten
days after the date the ticket is printed. The commission is not
liable for the payment of any video lottery ticket credits.
(d) All tickets redeemed by a location manager shall be
defaced in a manner which prevents any subsequent presentment and
payment.
(e) The commission is not responsible for any video lottery
terminal malfunction which causes a credit to be wrongfully awarded
or denied to players. The operator is solely responsible for any
wrongful award or denial of credits.
§29-22B-14. Transportation and registration of video lottery
terminals.
(a) Trucking companies or common carriers shipping video
lottery terminals shall be bonded and shall ship all terminals in
sealed trailers.
(b) A manufacturer transporting one or more video lottery
terminals into this state shall, prior to shipment, provide the
commission with the following information on forms prescribed by
the commission:
(1) The full name and address of the person shipping the video
lottery terminals;
(2) The method of shipment and the name of the carrier;
(3) The full name and address of the operator to which the
video lottery terminals are being sent and the destination of the
terminals if different from the address;
(4) The number of video lottery terminals in the shipment;
(5) The serial number of each video lottery terminal in the
shipment;
(6) The model number and description of each video lottery
terminal in the shipment; and
(7) The expected arrival date of the video lottery terminals
at their respective destination within this state.
(c) An operator which purchases or leases a video lottery
terminal shall, upon receipt of the terminal, provide the
commission with the following information on forms prescribed by
the commission:
(1) The full name and address of the location manager who will
receive the video lottery terminal;
(2) The full name and address of the manufacturer from whom
the video lottery terminal was received;
(3) The serial number of each video lottery terminal received;
(4) The model number and description of each video lottery
terminal received;
(5) The expected date and time of video lottery terminal arrival; and
(6) The expected date and time of video lottery terminal
installation, and if a video lottery terminal is not placed in
operation, the operator must notify the commission of the location
where the terminal is stored.
(d) Any person transporting a video lottery terminal from one
location to another in this state, other than for repair or
servicing purposes, shall notify the commission in writing prior to
the transportation of the terminal and provide the following
information on forms required by the commission:
(1) The full name and address of the person or entity
transporting the video lottery terminal;
(2) The reason for transporting the video lottery terminal;
(3) The full name and address of the person or entity to whom
the terminal is being sent and the destination of the video lottery
terminal if it is different from the address;
(4) The serial and model number of the video lottery terminal;
(5) The video lottery terminal license number, if affixed;
(6) The manufacturer of the video lottery terminal; and
(7) The expected date and time of video lottery terminal
installation or reinstallation.
(e) Any person shipping video lottery terminals to a destination outside of this state shall, prior to the shipment,
provide the commission with the following information on forms
prescribed by the commission:
(1) The full name and address of the person shipping the video
lottery terminals;
(2) The method of shipment and the name of the carrier;
(3) The full name and address of the person to whom the video
lottery terminals are being sent and the destination of the video
lottery terminals if different from the address;
(4) The serial number of each video lottery terminal being
shipped;
(5) The model number and description of the video lottery
terminal being shipped;
(6) The video lottery terminal control number, if affixed;
(7) The manufacturer of the video lottery terminal being
shipped; and
(8) The expected date and time of the shipment.
(f) Each video lottery terminal placed in operation in this
state must have a commission registration decal permanently
affixed, with a video lottery terminal registration control number
placed thereon. No person other than authorized commission
personnel shall affix or remove a registration control number. The affixing of the commission decal on a video lottery terminal
evidences that the terminal has been registered, inspected, and
approved for operation in this state. No terminal shall be
transported out of this state until authorized commission personnel
have removed the commission registration control number.
§29-22B-15. Timing of implementation of the provisions of this
article; penalties; and forfeiture.
(a) The Legislature finds and declares that the success of
this state's implementation of video lottery operations under this
article requires that the operations be phased in over a manageable
transition period designed to allow careful regulation and control
of the implementation of operations under this article and also to
allow persons possessing devices which are declared by this article
to be contraband gambling devices a reasonable opportunity to
remove any existing devices from this state.
(b) Effective as of the first day of January, two thousand,
any person who shall thereafter possess, transport, display or
operate a gray gambling machine in this state shall be guilty of a
felony and, upon conviction thereof, shall be confined in a state
correctional facility for at least one year but not more than five
years or be fined not more than five thousand dollars, or both.
Effective as of the first day of January, two thousand, gray gambling machines shall thereafter be per se illegal gambling
devices which may be seized and destroyed as illegal contraband by
any law-enforcement agency having jurisdiction over the political
subdivision in which the device is found, and the owner or owners
of the device shall have no right to compensation for the seizure
and destruction of any gray gambling machine.
§29-22B-16. Hearing and appeal procedure; order refusing license
or suspending or revoking same; petition for
hearing; petition requirements; cost of hearings;
subpoenas and subpoenas duces tecum; no stay of
suspension or revocation order; hearing date; place
of hearing; continuances; absence of petitioner;
hearing; argument and briefs; evidence admissible
at hearing; record of proceedings; commission's
decision; appeal to circuit court.
(a) If the commission refuses to issue a license, or suspends
or revokes a license, it shall make and enter an order to that
effect including a statement of the reasons for the action and
shall, by certified mail, return receipt requested, mail a copy of
the order to the applicant, or the license holder, or serve the
same in the manner provided for the service of legal process.
(b) Any applicant or license holder adversely affected by the order shall have the right to a hearing thereon before the
commission or a person designated as hearing examiner, if a
petition in writing requesting a hearing is served upon the
commission within ten days following the receipt of the order by
the applicant, or license holder.
(c) The petition for a hearing shall be in writing and shall
include an original and one copy. The petition must contain the
following:
(1) A clear and concise statement of each error which the
petitioner alleges to have been committed by the commission in
refusing to issue a license, or suspending or revoking a license,
with each assignment of error being shown in separately numbered
paragraphs;
(2) A clear and concise statement of fact upon which the
petitioner relies as sustaining each assignment of error;
(3) A prayer setting forth the relief sought;
(4) The signature of the petitioner;
(5) Verification by the petitioner.
(d) The person demanding a hearing shall give security for the
cost of the hearing in the amount of three hundred dollars in the
form of certified check, cashier's check or money order, which
shall accompany the petition demanding a hearing.
(e) In all hearings held under this article, oral and
documentary evidence may be required through the use of subpoenas
and subpoenas duces tecum. The subpoenas or subpoenas duces tecum
may be issued by either the commission or its duly appointed
hearing examiner, and the following provisions shall govern and
control:
(1) Every subpoena or subpoena duces tecum must be served at
least five days before the return date thereof, either by personal
service made by any person eighteen years of age or older, or by
registered or certified mail, but a return acknowledgment signed by
the person to whom the subpoena or subpoena duces tecum is directed
shall be required to prove service by registered or certified mail;
(2) All subpoenas and subpoenas duces tecum will be issued in
the name of the commission. Service of subpoenas and subpoenas
duces tecum issued at the insistence of the commission shall be the
responsibility of the commission, but any party requesting issuance
shall be responsible for service. Any person who serves any
subpoena or subpoena duces tecum is entitled to the same fee as
sheriffs who serve witness subpoenas for the circuit courts of this
state, and fees for the attendance and travel of witnesses shall be
the same as for witnesses before the circuit courts of this state;
(3) All fees shall be paid by the commission if the subpoena or subpoena duces tecum is issued, without the request of an
interested party, at the insistence of the commission;
(4) All fees related to any subpoenas or subpoena duces tecum
issued at the insistence of an interested party shall be paid by
the interested party;
(5) All requests by an interested party for a subpoena and
subpoena duces tecum shall be in writing and shall contain a
statement acknowledging that the requesting party agrees to pay the
fees;
(6) Any person receiving a subpoena or subpoena duces tecum
issued hereunder shall honor the same as though it were issued by
a circuit court of this state, and shall appear as a witness or
produce books, records or papers in response to the subpoena or
subpoena duces tecum. In case of disobedience or neglect of any
subpoena or subpoena duces tecum served on any person or the
refusal of any witness to testify to any matter regarding which he
or she may be lawfully interrogated, the circuit court of the
county in which the hearing is being held, or the judge thereof in
vacation, shall, upon application by the commission, compel
obedience by contempt proceedings as in the case of disobedience of
the requirements of a subpoena or subpoena duces tecum issued from
such circuit court or a refusal to testify therein.
(f) The service of a petition for hearing upon the commission
shall not operate to suspend the execution of any suspension or
revocation of a video lottery license with respect to which a
hearing is being demanded.
(g) The commission shall set a date for any hearing demanded
and notify the person demanding the hearing not later than seven
days before the hearing date of the date and time of the hearing,
which hearing shall be held within thirty days after receipt of the
petition.
(h) Hearings may not be delayed by a motion for continuance
made less than ten days before the date set for the hearing.
(i) The commission may designate a hearing examiner to conduct
any such hearing.
(j) The petitioner may appear individually, or by legal
counsel.
(k) The petitioner, or his or her duly authorized
representative, may, with the approval of the commission, waive the
right to a hearing and agree to submit the case for decision upon
the petition and record, with or without a written brief. The
waivers and agreements must be in writing or upon the record.
(l) The petitioner will be given an opportunity for argument
within the time limits fixed by the commission following submission of evidence. The commission, upon request of the petitioner, will
accept briefs in addition to or in lieu of argument. Briefs must
be filed within ten days after the hearing date.
(m) The commission may admit any relevant evidence, except
that it shall observe the rules of privilege recognized by law. A
finding is to be supported by the kind of evidence commonly relied
upon by reasonably prudent men in the conduct of their affairs,
whether or not the evidence would be admissible before a jury. The
commission may exclude any evidence which is irrelevant, unduly
repetitious, or lacking in substantial probative effect.
(n) There shall be a record made of all hearings held pursuant
to this article.
(o) After the conclusion of the hearing and within ten days of
receipt of the transcript thereof, and receipt of any briefs, the
person designated by the commission as hearing examiner shall
prepare a recommended decision, supported by findings of fact and
conclusions of law, affirming, modifying or vacating the earlier
order of the commission. Thereafter, the commission, within ten
days of receipt of the recommended decision, shall either accept or
reject such recommended decision, and if it shall accept the
decision, it shall cause the director to sign and acknowledge the
same as its own, after having reviewed the transcript and all exhibits attached and affixed thereto; and if it shall reject the
same, it shall within ten days of receipt of such recommended
decision prepare a decision setting forth its own findings of fact
and conclusions of law. In either event, the decision shall be
final unless vacated or modified upon judicial review thereof. A
copy of the decision shall be served upon each party to the hearing
and their attorney of record, if any, in person or by registered or
certified mail.
(p) An appeal by the applicant or license holder may be filed
with the circuit court of Kanawha County, West Virginia, or with
the judge thereof in vacation, if filed no later than thirty days
after the date upon which the petitioner receives notice of the
final decision of the commission.
§29-22B-17. Offenses and penalties.
(a) A licensee who places a video lottery game or video
lottery terminal into play without authority of the commission to
do so is guilty of a misdemeanor and, upon conviction thereof,
shall be confined in a county or regional jail for a term of not
more than one year, and fined not more than five thousand dollars,
except that, in the case of a person other than a natural person,
the amount of the fine imposed may be not more than twenty-five
thousand dollars.
(b) A person who operates, carries on or exposes for play a
video lottery game or video lottery terminal after the person's
license has expired and prior to the actual renewal thereof is
guilty of a misdemeanor and, upon conviction thereof, shall be
confined in a county or regional jail not more than one year and
fined not more than five thousand dollars, except that, in the case
of a person other than a natural person, the amount of the fine
imposed may be not more than twenty-five thousand dollars.
(c) A person who possesses any video lottery terminal or other
device, equipment or material which the person knows has been
manufactured, distributed, sold, tampered with or serviced in
violation of the provisions of this article is guilty of a
misdemeanor and, upon conviction thereof, shall be confined in a
county or regional jail not more than one year and fined not more
than five thousand dollars, except that, in the case of a person
other than a natural person, the amount of the fine imposed may be
not more than twenty-five thousand dollars.
(d) A person who knowingly conducts, carries on, operates or
exposes for play, or allows to be conducted, carried on, operated
or exposed for play, any video lottery game, video lottery terminal
or other device, equipment or material which has in any manner been
tampered with or placed in a condition or operated in a manner the result of which tends to deceive the public or tends to alter the
normal random selection of characteristics or the normal chance of
the video lottery game which could determine or alter the result of
the game is guilty of a misdemeanor and, upon conviction thereof,
shall be confined in a county or regional jail not more than one
year and fined not more than five thousand dollars, except that, in
the case of a person other than a natural person, the amount of the
fine imposed may be not more than fifty thousand dollars.
(e) A person who employs or continues to employ an individual
not issued a license under the provisions of this article in a
position with duties which would require a license under the
provisions of this article is guilty of a misdemeanor and, upon
conviction thereof, shall be confined in a county or regional jail
not more than one year and fined not more than five thousand
dollars, except that, in the case of a person other than a natural
person, the amount of the fine imposed may be not more than twenty-
five thousand dollars.
(f) A person who, without obtaining the requisite license as
provided for in this article, works or is employed in a position
with duties which would require a license under the provisions of
this article is guilty of a misdemeanor and, upon conviction
thereof, shall be confined in a county or regional jail not more than one year and fined not more than ten thousand dollars.
(g) A person who, while a video lottery game is being played,
uses, or assists another in the use of, an electronic, electrical
or mechanical device which is designed, constructed or programmed
specifically for use in obtaining an advantage at playing any video
lottery game is guilty of a misdemeanor and, upon conviction
thereof, shall be confined in a county or regional jail not more
than six months or fined not more than one thousand dollars, or
both.
(h) A person who knowingly violates a provision of this
article or the rules of play or game rules of a video lottery game,
and who profits thereby in an amount equal to one thousand dollars
or more, is guilty of a felony and, upon conviction thereof, shall
be imprisoned in the state correctional facility not less than one
nor more than ten years or, in the discretion of the court, be
confined in jail not more than one year and shall be fined not more
than two thousand five hundred dollars. If the person profits
thereby in an amount less than one thousand dollars, the person is
guilty of a misdemeanor and, upon conviction thereof, shall be
confined in a county or regional jail for a term not to exceed one
year or fined in an amount not to exceed two thousand five hundred
dollars, or both.
(i) A person who fails to perform any of the duties or
obligations created and imposed upon them by the provisions of this
article shall be subject to a civil penalty as may be determined by
the commission in an amount not to exceed ten thousand dollars.
§29-22B-18. Severability.
If any provision of this article or the application thereof to
any person or circumstance is held invalid, such invalidity shall
not affect other provisions or applications of this article, and to
this end the provisions of this article are declared to be
severable.
NOTE: The purpose of this bill is to outlaw certain amusement
devices which may be used for gambling purposes and to authorize
the West Virginia Lottery Commission to regulate video lottery
games at ABCC licensed adult-only facilities under specific
definitions and standards governing the operation of such video
lottery games.
This article is new; therefore, strike-throughs and
underscoring have been omitted.