Senate Bill No. 119
(By Senators Tomblin (Mr. President) and Sprouse
By Request of the Executive)
____________
[Introduced February 15, 2001; referred to the Committee
on the Judiciary; and then to the Committee on 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-two-b,
relating to allowing video lottery games to be played at
restricted access adult-only facilities licensed by alcohol
beverage control commissioner and by lottery commission under
regulation of lottery commission; providing short title and
statements of legislative purposes, findings and intents;
providing certain hardware and software requirements;
providing for video lottery terminals to be connected to
lottery commission's central computer system; limiting
aggregate number of video lottery terminals that may be
located at all licensed restricted access adult-only facilities; limiting number of video lottery terminals that
may be owned or leased by a licensed operator; limiting the
number of video lottery terminals located at any single
licensed restricted access adult-only facility; providing for
licensure of manufacturers and operators of video lottery
terminals, location managers of restricted access adult-only
facilities and service technicians; providing for allocation
of video lottery terminal among operators to be by competitive
bid; providing for distribution of net terminal income;
defining certain terms; specifying powers and duties of
lottery commission; specifying conditions for licensure and
duties of licensees; providing administrative procedures;
providing administrative and judicial remedies; providing
administrative and judicial due process; providing certain
civil money penalties; providing criminal penalties for
certain violations; declaring gray gambling machines
contraband after specified date; providing for forfeiture and
disposition of contraband; providing for distribution of
proceeds of forfeiture; defining relationship between this new
article and existing state and local laws; and providing for
timing of implementation.
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
constitution of West Virginia 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 constitution of West Virginia 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
the privilege.
(e) 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.
§29-22B-3. Application of article.
(a) The provisions of this article shall not apply to
activities of video lottery licensees or video lottery operations
conducted under article twenty-two-a or twenty-five of this
chapter.
(b) The provisions of article twenty-two of this chapter apply
as if set forth in this article, except in the event of conflict or
inconsistency between any of the provisions of this article and the
provisions of article twenty-two of this chapter, the provisions of
this article control.
(c) The provisions of this article supersede any conflicting
or inconsistent provisions contained in article ten, chapter
sixty-one of this code.
§29-22B-4. Financial interest of director, etc.; receiving reward
from interested party; criminal penalty; application
of bribery statute.
(a) No direct or indirect ownership. -- Neither the director
of the commission, nor any member or employee of the commission,
may be financially interested, or have any beneficial personal interest, direct or indirect, in any person furnishing video
lottery terminals or video lottery games, or in any person who is
a bidder for video lottery terminals, or who is a holder of a
license issued under this article.
(b) Gifts or other benefits. -- Neither the director of the
commission, nor any member or employee of the commission, may
accept or receive, directly or indirectly, from any person known by
the director, commission member or employee of the commission to be
interested in any bid, contract or licensee under this article, by
rebate, gift or otherwise, any money or other thing of value
whatsoever, or any promise, obligation or contract for future
reward, or compensation.
(c) Criminal penalty. -- A person who violates this section
shall be guilty of a misdemeanor and, upon conviction thereof,
shall be confined in jail not less than three months nor more than
one year, or fined not less than fifty nor more than one thousand
dollars, or both, in the discretion of the court: Provided, That
any person who violates any of the provisions of subsection (b) of
this section under circumstances constituting the crime of bribery
under the provisions of section three, article five-a, chapter
sixty-one of this code, shall, upon conviction of bribery, be punished as provided in article five-a of chapter sixty-one of this
code.
§29-22B-5. Definitions.
(a) General. -- As used in this article, words defined in
subsection (b) of this section have the meaning ascribed to them in
this section, except in those instances where a different meaning
is distinctly expressed or the context in which the word is used
clearly indicates that a different meaning is intended.
(b) Terms defined.
(1) "Applicant" means any person applying for a video lottery
license under this article.
(2) "Associated equipment" means any hardware located on the
premises of an adult-only restricted access facility that is
connected to the video lottery terminal or to the central computer
for the purpose of performing communication, validation or other
functions. "Associated equipment" does not include the
communication facilities of a regulated public utility.
(3) "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.
(4) "Central computer", "central control computer" or "central
site system" means any central site computer provided to and controlled by the commission to which video lottery terminals
communicate for purposes of information retrieval and terminal
activation and to disable programs. "Central computer" includes
the computer at the commission's hot backup site when it is
functioning as the central control computer.
(5) "Commission" or "state lottery commission" means the West
Virginia lottery commission created by article twenty-two of this
chapter.
(6) "Control" means the authority to direct the management and
policies of an applicant or a license holder.
(7) "Director" means the individual appointed by the governor
to provide management and administration necessary to direct the
state lottery office.
(8) "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.
(9) "Display" means the visual presentation of video lottery
game features on the video display monitor or screen of a video
lottery terminal.
(10) "EPROM" or "erasable programmable read-only memory chips"
means the electronic storage medium on which the operation software
for all games playable on a video lottery terminal resides and can also be in the form of CD ROM, flash RAM or other new technology
medium that the commission may from time to time approve for use in
video lottery terminals. All electronic storage media are
considered to be property of the state of West Virginia.
(11) "Gray gambling machine" means any video terminal or
device, other than a video lottery terminal licensed under this
article or article twenty-two-a of this chapter, upon which a
person can, in exchange for payment of a consideration, play: (A)
A game of chance; (B) a game where the outcome is predominantly
determined by chance; (C) a video poker game; or (D) any other kind
of video playing card game, 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.
(12) "Includes" and "including" when used in a definition
contained in this article shall not be determined to exclude other
things otherwise within the meaning of the term being defined.
(13) "Indirect ownership" means an interest a person owns in
an entity or in property solely as a result of application of
constructive ownership rules without regard to any direct ownership
interest (or other beneficial interest) in the entity or property. "Indirect ownership" shall be determined under the same rules
applicable to determining whether a gain or loss between related
parties is recognized for federal income tax purposes.
(14) "License" or "video lottery license" means authorization
granted by the commission pursuant to this article to a person
permitting that person to engage in the activity for which the
license was issued.
(15) "Location" means a restricted access adult-only facility
located on premises in which the location manager holds a license
as provided in section fourteen of this article.
(16) "Location manager" means a person who holds either a
valid license issued under article seven, chapter sixty of this
code, to operate a private club, or who holds a valid Class A
license issued under article sixteen, chapter eleven of this code,
to operate a business where nonintoxicating beer is sold for
consumption on the premises, or who holds both licenses, and the
person also holds a valid location manager's license issued under
this article.
(17) "Lottery" means the public gaming systems or games
regulated, controlled, owned and operated by the state lottery
commission as provided in this article and in articles twenty-two,
twenty-two-a and twenty-five of this chapter.
(18) "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 of video lottery terminals, the
random number generator of video lottery terminals, or the cabinet
in which the video lottery terminal is housed, and whose product is
intended for sale, lease or other assignment to a licensed operator
in West Virginia.
(19) "Net terminal income" means the total amount of cash
inserted into video lottery terminals operated by a licensee, minus
the total value of game credits which are cleared from the video
lottery terminals in exchange for winning redemption tickets. A
licensee may not deduct costs or expenses related to the operation
of video lottery games from net terminal income.
(20) "Operator" means a person holding an operator's license
granted under this article by the commission allowing the person
to: (A) Own or lease a specified number of video lottery terminals
from one or more manufacturers; (B) service and repair those video
lottery terminals; and (C) enter into contracts with location
managers for placement of those video lottery terminals in a
restricted access adult-only facility located on the premises of
the location managers.
(21) "Own" means any beneficial or proprietary interest in any
property and includes, but is not limited to, any direct or
indirect beneficial or proprietary interest in any business of an
applicant or licensee.
(22) "Permit" means the authorization issued by the commission
allowing a person licensed as an operator under this article to own
or lease a specified number of video lottery terminals.
(23) "Person" means any natural person and any corporation,
association, partnership, limited partnership, limited liability
company or other entity, regardless of its form, structure or
nature, other than a government agency or instrumentality.
(24) "Player" means a natural person who plays a video lottery
game on a video lottery terminal at a location licensed under this
article by the commission to have video lottery on its premises.
(25) "Resident of this state" means a natural person who: (A)
Maintains a bona fide full time primary place of abode in this
state; (B) is not registered to vote in any other state; (C) if
licensed to drive, holds a valid driver's license in this state and
does not hold a current drivers license issued by any other state;
(D) timely filed personal income tax returns as a resident of this
state for the two preceding calendar years (determined by including
any authorized extension of time for filing the return); and (E) does not claim to be a resident of any other state for any purpose
whatsoever.
(26) "Restricted access adult-only facility" means:
(A) A private club licensed under article seven, chapter sixty
of this code that is licensed under this article by the commission
to allow its members and their guests to play video lottery games;
and
(B) A place of business that: (i) Has a "Class A" license
issued under article sixteen, chapter eleven of this code to sell
nonintoxicating beer for consumption on the premises; (ii)
maintains a suitable kitchen and dining facility and related
equipment for serving meals for on-premises consumption; (iii)
regularly prepares and sells meals for consumption on the premises;
(iv) has a separate room suitable for the location of video lottery
terminals with adult-only restricted access, the interior of which
is not visible to persons outside the room who are consuming meals
on the premises; and (v) after meeting any additional standards
developed by the commission to implement and apply this paragraph
(B), is licensed under this article by the commission to allow
video lottery games to be played in the restricted access
adult-only separate room on the premises.
(27) "Service technician" means a natural person who is licensed under this article to service, maintain and repair video
lottery terminals that are licensed under this article. A licensed
service technician may be a sole proprietor, an employee of the
operator of the licensed video lottery terminals or an employee of
a business licensed under this article to service, maintain and
repair video lottery terminals owned or leased by an operator who
is licensed under this article.
(28) "Video lottery" means a lottery which allows a game to be
played utilizing an electronic computer and an interactive terminal
device, equipped with a video screen and keys, a keyboard or other
equipment allowing input by an individual player, into which the
player inserts coins or currency as consideration in order for play
to be available, and through which terminal device, the player may
receive free games or a voucher that can be redeemed for a cash or
non-cash prize, or nothing, determined wholly or predominantly by
chance. "Video lottery" does not include a lottery game that
merely utilizes an electronic computer and a video screen to
operate a lottery game and communicate the results of the game and
which does not utilize an interactive electronic terminal device
allowing input by one or more players.
(29) "Video lottery game" means an electronically simulated
game of chance that is approved, owned and controlled under this article by the commission, which is displayed on the screen or
video monitor of a video lottery terminal and which:
(A) Is connected to the commission's central control computer
by an on-line or dial-up communication system;
(B) 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;
(C) 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;
(D) Is based upon computer-generated random selection of
winning combinations based totally or predominantly on chance;
(E) 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: (i) 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;
(ii) 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 (iii) 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;
(F) 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
(G) 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.
(29) "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.
(30) "Wager" means a sum of money or thing of value risked on
an uncertain occurrence.
§29-22B-6. Promulgation of rules.
(a) The commission may propose legislative rules for
legislative approval and promulgation in accordance with the
provisions of article three, chapter twenty-nine-a of this code.
(b) The commissioner may promulgate emergency legislative
rules as the commission considers appropriate to effectuate
implement, explain and clarify the provisions of this article, in
accordance with the provisions of article three, chapter
twenty-nine-a of this code.
(c) The commission may promulgate other rules for this article
in accordance with the provisions of article three, chapter
twenty-nine-a of this code.
§29-22B-7. Video lottery games authorized.
The state lottery commission may 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.
§29-22B-8. Central monitoring of lottery terminals.
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-9. Video hardware and software.
(a) Video lottery terminals registered with and approved by
the commission may only offer video lottery games approved by the
commission.
(b) The video lottery games offered shall utilize specific
game rules separately filed from time to time by the commission
with the secretary of state. Game rules are not subject to the
provisions of article three, chapter twenty-nine-a of this code.
(c) A video lottery terminal may simulate the play of one or
more video lottery games.
§29-22B-10. Video lottery terminal specifications.
(a) Hardware specifications. -- 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 that 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 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 shall 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) 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) The value of the credits in dollars and cents displayed in
both numeric and written form;
(C) The time of day and date;
(D) The 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) The manufacturer of the video lottery terminal;
(B) The serial number of the terminal; and
(C) The model number of the terminal;
(12) A video lottery terminal shall not allow more than two
dollars to be wagered on a single game;
(13) All information required by this subdivision shall be
displayed under glass or another transparent substance:
(A) The rules of play for each game shall be displayed on the
video lottery terminal face or screen. The commission may reject any rules of play that are incomplete, confusing, misleading or
inconsistent with game rules approved by the commission;
(B) 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;
(14) No stickers or other removable devices shall be placed on
the video lottery terminal screen or face without the prior
approval of the commission;
(15) 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.
The protocol shall include information retrieval and terminal
activation and disable programs; and
(16) All video lottery terminals shall have a security system
which will temporarily disable the gaming function of the terminal
while opened.
(b) Random number generator required. -- 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; and
(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) Payout standards. -- Each video lottery terminal shall
meet the following maximum and minimum theoretical percentage payout during the expected lifetime of the 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 shall be determined using
standard methods of probability theory;
(2) Manufacturers shall 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
shall be obtained prior to applying for testing of the high payout
terminals; and
(3) Each game shall have a probability greater than one in
seventeen million of obtaining the maximum payout for each play.
(d) Continuation of current game after malfunction. -- 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 location manager shall
return the current wager and all credits appearing on the video
lottery terminal screen prior to the malfunction to the player.
(e) Electronic accounting required. -- 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) The number of coins inserted by players or the coin
equivalent if a bill acceptor is being used;
(2) The number of credits wagered;
(3) The number of credits won;
(4) The number of credits paid out by a printed ticket;
(5) The number of times the logic area was accessed;
(6) The number of times the cash door was accessed;
(7) The number of credits wagered in the current game;
(8) The number of credits won in the last complete video
lottery game; and
(9) The number of cumulative credits representing money
inserted by a player and credits for video lottery games won but
not collected.
(f) Clearing of accounting meters. -- No video lottery
terminal may have any mechanism that 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, the location manager shall record all meter readings in
the presence of a commission employee.
§29-22B-11. Procedure for approval of video lottery terminals and
associated equipment.
(a) Only licensed manufacturers may apply to the commission
for approval of a video lottery terminal or associated equipment.
(b) 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 the manufacturer transport
two working models of a video lottery terminal to the location
designated by the commission for testing, examination and analysis.
When this is required:
(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.
§29-22B-12. Commission to provide communications protocol data.
The commission shall provide to licensed manufacturers, or
applicants applying for a manufacturer's license, 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.
§29-22B-13. Conditions for sale or lease of video lottery
terminals.
(a) Manufacturer must be licensed. -- A manufacturer of video
lottery terminals may not sell or lease video lottery terminals to
any person for use in this state unless the manufacturer possesses
a current manufacturer's license issued by the commission as
provided in this article.
(b) Manufacturers may sell or lease only to operators. -- A
licensed manufacturer of video lottery terminals may only sell or
lease video lottery terminals for use in this state to a person who
possesses at time of delivery a valid permit issued under section
thirty-four of this article and a valid operator's license issued
by the commission as provided in this article.
(c) Terminals must be approved. -- A licensed 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 as provided in this article.
(d) Purchase or lease by operators. -- Licensed operators may
only purchase or lease video lottery terminals placed in use in
this state from a licensed manufacturer.
§29-22B-14. General licensing requirements.
(a) The commission shall grant a video lottery license to an
applicant who satisfies all of the following qualifications:
(1) The applicant is a person of good character and integrity;
(2) The applicant is 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) All new applicants for licenses and permits issued by the
commission under this article shall furnish fingerprints for a
national criminal records check by the criminal identification
bureau of the West Virginia state police and the federal bureau of
investigation;
(B) The fingerprints shall be furnished by all persons
required to be named in the application and shall be accompanied by
a signed authorization for the release of information by the
criminal investigation bureau and the federal bureau of
investigation;
(C) The commission may require any applicant seeking renewal
of a license, issued under this article, to furnish fingerprints
for a national criminal records check by the criminal
identification bureau of the West Virginia state police and the federal bureau of investigation;
(D) A person who has been convicted of any violation of this
article, or of article twenty-three, chapter nineteen of this code,
or of article twenty-two, twenty-two-a or twenty-five of this
chapter, or of any crime related to theft, bribery, gambling or
involving moral turpitude in this or in any other state or foreign
county, is not eligible for any license under this article.
The commission shall revoke the license of any person who is
convicted of any such crime after a license is granted;
(3) The applicant is 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) The applicant is a person who has secured adequate
financing for the business for which a video lottery license
application is made;
(A) The commission shall determine whether the financing is
from a source that meets the qualifications of this section and is
adequate to support the successful performance of the duties and
responsibilities of the licensee;
(B) 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) The applicant for an operator's license has, at the time
of application, been a citizen of the United States and a resident
of this state for not less than the preceding 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) shall meet this residency requirement;
(6) In the case of an applicant applying to be licensed as a
service technician, the applicant has passed a technical competence
test administered or approved by the commission;
(7) The applicant does not hold or directly or indirectly
control video lottery licenses in more than one of the following
three licensing classifications: (i) Manufacturer; (ii) operator;
and (iv) location manager; and
(8) In the case of an applicant applying to be licensed as an
operator, the applicant has filed with the commission a copy of any
proposed or current agreement between the applicant and any manufacturer for the sale, lease or other assignment to the
operator of video lottery terminals, the electronic computer
components thereof, the random number generator thereof or the
cabinet in which it was filed. Once filed with the commission, the
agreement is a public document subject to the provisions of article
one, chapter twenty-nine-b of this code.
(b) The commission shall not grant a video lottery license 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 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; and
(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 shall 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.
(d) The commission may not grant a video lottery license to an
applicant who fails to provide information or documentation
required by this article or requested by the commission.
(e) The burden of proving qualification for any video lottery
license is on the applicant.
(f) Each applicant bears 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.
(g) Each applicant shall, as a part of his, her or 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 under this article.
(h) 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.
(i) 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 under this article.
§29-22B-15. Form of applications.
The commission shall determine the forms of application to be
used.
§29-22B-16. Bonding requirements.
An applicant for a video lottery operator 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. The bond shall be issued by a surety company
authorized to transact business in West Virginia and the company
shall be approved by the insurance commission of this state as to solvency and responsibility.
§29-22B-17. Incomplete application not to be considered.
The commission may not consider incomplete applications. The
commission may consider an application when the applicant has
completed and executed all forms and documents required by the
commission and all application fees and costs have been paid.
§29-22B-18. No location manager license for premises within 150
feet of another licensed premises; no two license
manager locations within a common structure.
(a) A location manager license may not be granted for
operation of video lottery terminals on a premises if, at the time
of application for the license, the applicant's premises are within
one hundred fifty feet of, or has an external structural connection
not amounting to a common internal wall to, a premises that already
has a license for video lottery terminals and if the two premises
have one or more common owners:
(1) A measurement of the distance between two premises must be
taken between the nearest exterior wall of each premises;
(2) When determining common ownership, the commission shall
consider direct as well as indirect ownership.
(b) A premises for which a private club license to dispense
alcoholic liquors, under provisions of article seven, chapter sixty of this code, or a Class A nonintoxicating beer license, under the
provisions of article sixteen, chapter eleven of this code, was
granted, was applied for, or the transfer of which was validly
contracted for prior to the first day of January, two thousand one,
is not subject to subsection (a) of this section.
(c) No more than one restricted access adult-only facility
shall hold a location manager license to operate video lottery
terminals in any single structure under one roof.
§29-22B-19. Commission action on applications.
(a) The commission may not issue any license until the
background investigations are concluded.
(b) The commission shall make an affirmative determination
that the applicant is qualified and that 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 and licensees 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 twenty-one of this article.
(e) An applicant may request a hearing to review a license denial, suspension or revocation in accordance with section
fifty-four of this article.
§29-22B-20. Renewal of licenses.
The commission shall renew video lottery licenses annually on
a date set by the commission, 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.
§29-22B-21. Issuance of order refusing to issue or renew license,
or suspending or revoking same.
(a) In general. -- If the commission refuses to issue or renew
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 that 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 order in the manner provided for the
service of legal process for courts of record of this state.
(b) Appeal. -- An order issued under this section may be
appealed as provided in section fifty-four of this article.
§29-22B-22. Annual license fees.
(a) 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.
(b) The applicable fee shall be paid to the commission at the
time the application for a license is submitted to the commission
and upon the annual renewal date each year thereafter, at which
time the license may be renewed.
(c) 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.
(d) License fees collected under this section shall be
deposited in the state lottery fund.
§29-22B-23. Licensee's to notify commission of change in
circumstances.
A licensee 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.
§29-22B-24. License or permit does not create a property right.
A license or permit issued under this article is a privilege
personal to the license holder. It is not a legal right or a
property right.
§29-22B-25. License not assignable or transferable.
(a) A license granted or renewed pursuant to this article may
not be transferred or assigned to another person. A license may
not be pledged as collateral.
(b) The purchaser or successor of any license holder shall
independently qualify for a license.
(c) Transfers that require advance approval by the commission.
-- Before any sale or other transfer of the following ownership
interests is completed, the current owner shall notify the
commission in writing, sent by certified mail or delivered in
person, of the material circumstances and first obtain the
commission's written approval for:
(1) The sale or other transfer of more than five percent of a
license holder's voting stock;
(2) The sale or other transfer of more than five percent of
the voting stock of a corporation that controls the license holder;
(3) The sale or other transfer of a license holder's assets,
other than those bought and sold in the ordinary course of
business, or any interest therein, except when the transfer is upon
the death of a natural person.
§29-22B-26. General duties of all licensees.
All video lottery license holders shall:
(1) Promptly report to the commission any facts or
circumstances related to video lottery operations that constitute
a violation of state or federal law;
(2) Conduct all video lottery activities and functions in a
manner that 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 that may be
asserted against a license holder, this state or the commission and
its employees 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 or any designated agent of 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; and
(7) Keep current in all payments and obligations to the
commission.
§29-22B-27. Additional duties of location managers.
In addition to the general duties imposed on all licensees in
section twenty-six of this article, a location manager 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 twenty-one 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 or promotional
activities;
(14) Not use the words "video lottery" in the name of the
approved location;
(15) Install, post and display prominently within or about the
approved location signs, redemption information and other
promotional material as required by the commission;
(16) Permit video lottery to be played only during those hours
established and approved by the commission: Provided, That the
location manager shall not permit video lottery to be played beyond
the hour during which liquor may be served;
(17) Contract with no more than one licensed operator for the
placement of video lottery terminals at the licensed location;
(18) Maintain insurance covering all losses as the result of
fire, theft or vandalism to video lottery terminals and associated
equipment; and
(19) Comply with all applicable provisions of this article and
rules and orders of the commission.
§29-22B-28. Payment of credits.
(a) In general. -- A location manager shall not make payment
for credits awarded on a video lottery terminal 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) Payment of credits. -- 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. The location manager is responsible for all income
tax reporting of prize payments paid to players above the threshold
set by the United States Internal Revenue Service.
(1) A location manager may not redeem tickets for credits awarded on a video lottery terminal that is not located on its
premises;
(2) 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.
(c) Defacing of tickets. -- A location manager shall deface
all redeemed tickets in a manner that prevents any subsequent
presentment and payment.
(d) Commission not to be liable. -- The commission is not
responsible for any video lottery terminal malfunction that 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-29. Additional duties of manufacturer licensees.
In addition to the general duties imposed on all licensees in
section twenty-six of this article, a manufacturer shall:
(1) Manufacture terminals and associated equipment for
placement in this state in accordance with the specifications and
procedures specified in sections nine, ten and eleven 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) Pay no compensation of any kind to any location manager or
give or transfer anything of value to any location manager, beyond
a nominal consideration of one dollar per year;
(5) 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 the video lottery terminals;
(6) 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; and
(7) Comply with all applicable provisions of this article and
rules and orders of the commission.
§29-22B-30. Additional duties of operators.
In addition to the general duties imposed on all licensees in
section twenty-six of this article, an operator shall:
(1) Acquire video lottery terminals by purchase, lease or
other assignment only from licensed manufacturers;
(2) Acquire no video lottery terminals in excess of the number
they are authorized to operate in this state;
(3) Contract with location managers for a secure location for
the placement, operation and play of the video lottery terminals;
(4) Pay no compensation of any kind to any location manager or
give or transfer anything of value to any location manager, that is
in addition to the consideration stated in the written agreement
between the operator and the location manager;
(5) 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;
(6) Permit no person to tamper with or interfere with the
operation of any video lottery terminal;
(7) 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;
(8) 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;
(9) Assume financial responsibility for proper and timely
payments by location managers of all credits awarded to players in
accordance with legislative rules promulgated by the commission;
(10) 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;
(11) Conduct no video lottery advertising and promotional
activities;
(12) Install, post and display prominently within or about the
approved location signs, redemption information and other material
as required by the commission;
(13) Maintain general liability insurance coverage for all
video lottery terminals in an amount of at least one million
dollars per claim;
(14) Promptly notify the commission in writing of any breaks
or tears to any logic unit seals;
(15) Assume liability for all amounts due to the commission in
connection with any money lost or stolen from any video lottery
terminal; and
(16) Comply with all applicable provisions of this article and
rules and orders of the commission.
§29-22B-31. Additional duties of service technicians.
In addition to the general duties imposed on all licensees in
section twenty-six of this article, a service technician 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; and
(4) Comply with all applicable provisions of this article and
rules and orders of the commission.
§29-22B-32. Limitation on number and location of video lottery
terminals.
(a) Limitation on total number of video lottery terminals. --
The commission may not authorize the placement of more than nine
thousand video lottery terminals in restricted access adult-only
facilities in this state.
(b) Limitation on total number owned or leased by an operator.
-- The commission may not authorize any operator to place, in restricted access adult-only facilities in this state, any more
than ten percent of the total number of video lottery terminals
authorized in subsection (a) of this section. The number of video
lottery terminals that an operator may place at any given time
shall be determined as provided in section thirty-three of this
article.
(c) Limitation on total number of video lottery terminals
available for play. -- No more than five video lottery terminals
licensed under this article may be placed in a restricted access
adult-only facility located in this state and all video lottery
terminals in an adult-only facility shall be obtained from the same
operator.
§29-22B-33. Allocation of video lottery terminals to be by sealed
bid.
(a) The number of video lottery terminals that a licensed
operator may place in restricted access adult-only facilities shall
be determined by sealed competitive bid.
(b) Bids for permits to own or lease video lottery terminals
shall be governed by the provisions of this section.
(c) A permit to own or lease one or more video lottery
terminals, as defined in this article, may only be issued to a
person who is licensed as an operator under this article.
(d) Permits shall be issued by the commission for a period of
seven years, except that all permits shall expire on the thirtieth
day of June, two thousand eight, unless they are sooner
surrendered, modified, suspended or revoked as provided in this
article.
(e) All permits issued under this section shall be based on
sealed competitive bids in accordance with the provisions of this
section.
(f) The commission may set a single uniform minimum bid for
each video lottery terminal for which bids are sought. Each time
before the first publication of a legal notice soliciting bids, the
commission may set a new minimum bid.
(g) Bidding process:
(1) Bids for issuance of permits shall be obtained by public
notice published as a Class II-0 legal advertisement in compliance
with the provisions of article three, chapter fifty-nine of this
code;
(2) The second publication of the notice shall appear more
than sixty days next preceding the final day for submitting bids;
(3) Each bid shall indicate the number of video lottery
terminals for which the permit is sought. The bid shall state the
amount bid for each video lottery terminal for which the permit is sought;
(4) No bid may be altered or withdrawn after the appointed
hour for the opening of the bids;
(5) Subject to the provisions of subsection (f) of this
section, permits shall be awarded to the persons submitting highest
per terminal bids, except that no permit may award more than ten
percent of the total number of video lottery machines authorized in
section forty-one of this article and no permits may be issued for
less than five video lottery terminals. If a high bidder already
holds a permit issued under this section, the bid shall be awarded
to that bidder, but only to the extent the total number of video
lottery terminals the operator has permits under this section does
not exceed ten percent of the number of video lottery terminals for
the entire state specified in section forty-one of this article;
(6) No bid shall be considered unless the bond required by
section thirty-five of this article accompanies the bid or was
submitted to the state treasurer before the time designated for
opening of the bid;
(7) No bid shall be considered unless the amount of the bid
equals or exceeds the minimum bid amount for a video lottery
terminal specified by the commission;
(8) No bid shall be considered by the commission unless the bid is for five or more video lottery terminals;
(9) All bids for a permit may be rejected by the commission if
the commission determines that the bids are inadequate. In this
event, the director shall begin anew the bidding process for the
permits;
(10) A person submitting a bid under this article shall
deliver one copy to the director of purchasing, West Virginia
department of administration and deliver a second or duplicate copy
to the state auditor. Both copies must be received at the
respective offices prior to the specified date and time of the bid
opening;
(11) The failure to deliver or the nonreceipt of these bid
forms at either of these offices prior to the appointed date and
hour are grounds for rejection of the bids. In the event of any
deviation between the copies submitted to the purchasing division
and the state auditor, the bids as to which there is a deviation
shall be rejected;
(12) After the award of a permit, the director of the lottery
shall indicate upon the successful bid that it was the successful
bid and the number of video lottery terminals for which a permit is
awarded to the bidder. This shall be the number of video lottery
terminals for which the bid was submitted, or the remaining number of video lottery terminals to be awarded when the number of video
lottery terminals remaining is less than the number of terminals
for which the bid was submitted. Thereafter, a copy of the bid and
the bidder's application for an operator's license shall be
maintained as a public record at the commissions' offices and shall
be open to public inspection during its normal business hours.
These documents may not be destroyed without the prior written
consent of the legislative auditor;
(13) Prior to issuing a permit to a successful bidder, the bid
price for the number of video lottery terminals authorized in the
permit plus the amount of the operator's annual license fee for the
first license year, as specified in section twenty-two of this
article, shall be paid to the commission by money order, certified
check or cashier's check. If the operator's annual license fee was
paid for the current license year before the due date of the bid
amount, the license fee shall not be collected a second time for
the same license year. The amount paid shall be deposited into the
state lottery fund. The commission shall subtract this amount from
the aggregate bid amounts received from the bidders and transfer
the balance into the general revenue fund;
(14) All permits shall be signed by the director of the
lottery in the name of the state.
(h) If the successful bidder fails to pay to the commission
the bid price and the operator's annual license fee for the first
license year, at the time specified by the commission, the bond
provided for in section thirty-five of this article shall be
forfeited and the bidder shall not be issued the permit.
(i) In the event of a default, as provided in subsection (h)
of this section, the commission shall then issue the permit to the
next highest bidder for video lottery terminals, or reject all
remaining bids and start anew the bidding procedure for the
remaining number of video lottery terminals.
(j) If after a permit is awarded, an operator surrenders the
permit, in whole or in part, or the permit is revoked or canceled
by operation of law, the commission may seek bids for video lottery
terminals for which authorization was surrendered or revoked,
subject to the limitations and requirements of this article.
(k) During the fiscal year of the state ending the thirtieth
day of June, two thousand eight, the commission shall seek bids for
the seven-year period beginning the first day of July, two thousand
eight and ending the thirtieth day of June, two thousand fifteen.
§29-22B-34. Preference for current permit holders.
(a) After the first round of bidding, the commission shall, in
determining the amount a current holder of a permit issued under section thirty-three of this article shall pay for authorization to
place additional video lottery terminals in this state, afford the
bidder an additional preference, if the bidder submitted at least
the minimum bid amount prescribed by the commission, the amount of
which shall be determined as provided in subsection (b) of this
section.
(b) The preference allowed by this section shall be computed
adding five percent of the bid price submitted by the current
permit holder to the amount of the bid submitted by such holder.
(c) In no event may a permit holder be authorized to hold more
than ten percent of the video lottery terminals allowed to be
placed in this state, as provided in section thirty-three of this
article.
§29-22B-35. Bid bond required.
(a) Each person submitting a bid under section thirty-three of
this article shall furnish to the commission a bond at the time of
bidding, which bond shall guarantee the payment of one hundred
percent of the price bid for the permit sought by the bidder.
(b) The bond required by this section shall be furnished in
cash or negotiable securities or shall be a surety bond issued by
a surety company authorized to do business with the state or an irrevocable letter of credit issued by a financial institution
acceptable to the commission.
(c) If the bid bond is furnished in cash or negotiable
securities, the principal shall be deposited without restriction in
the state treasurer's office and credited to the commission, but
any income shall inure to the benefit of the bidder.
(d) The bond shall be returned to the bidder following the
bidding if the bidder is not a successful bidder for authorization
to place video lottery terminals in this state, as provided in this
article.
(e) If the bidder is a successful bidder, the bid bond shall
be released after the permit is issued, as provided in section
thirty-three of this article.
(f) If a successful bidder defaults in paying the amount due
by the date specified by the commission, as provided in section
thirty-five of this article, the bid bond shall be forfeited to the
state.
(g) If the defaulting bidder was successful only in part
because the bid submitted was for authorization to place more video
lottery terminals than were awarded to the bidder, the amount of
the bid bond shall be prorated and the portion of the bid bond
attributable to video lottery terminals not awarded to the defaulting bidder shall be returned to the bidder and the rest
shall be forfeited to the state.
§29-22B-36. Criminal penalties for unlawful inducement.
(a) Any person who gives another person any thing of value to
induce the other to refrain from bidding for a video lottery permit
is guilty of a misdemeanor and, upon conviction, shall be fined not
more than ten thousand dollars and, in addition, shall be subject
to a civil penalty payable to the commission of five hundred
thousand dollars.
(b) Any person who gives a person any thing of value to induce
the other to refrain from placing a video lottery terminal at a
restricted access adult-only facility is guilty of a misdemeanor
and, upon conviction, shall be fined not more than ten thousand
dollars and, in addition, shall be subject to a civil penalty
payable to the commission of five hundred thousand dollars.
§29-22B-37. Placement of video lottery terminals.
(a) Video lottery terminals allowed by this article may be
placed only in restricted access adult-only facilities approved by
the commission.
(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 sixty days and be
available for viewing by an authorized representative of the
commission or the commissioner of alcohol beverage control. The
cost of monitoring shall be paid by the location manager;
(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 may be relocated without prior
written approval from the commission.
(c) Personnel of the location manager shall be present during
all hours of operation at each video lottery terminal location.
These personnel shall make periodic inspections of the restricted
access adult-only facility in order to provide for the safe and approved operation of the video lottery terminals and the safety
and well-being of the players.
(d) Security personnel of the commission and investigators of
the alcohol beverage control commissioner shall have unrestricted
access to video lottery terminal locations.
§29-22B-38. Registration decals.
(a) Each video lottery terminal placed in operation in this
state shall have a commission registration decal permanently
affixed, with a video lottery terminal registration control number
placed on the video lottery terminal.
(b) 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.
(c) No terminal shall be transported out of this state until
authorized commission personnel have removed the commission
registration control number.
§29-22B-39. Installation of approved lottery terminals.
(a) The video lottery terminal manufacturer and licensed
operator are jointly responsible for the assembly and installation
of all video lottery terminals and associated equipment.
(b) The manufacturer and licensed operator may 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.
(c) The request for modification shall contain a detailed
description of the type of change, the reasons for the change and
technical documentation of the change.
(d) Each video lottery terminal approved for placement at a
licensed location shall conform to the exact specifications of the
video lottery terminal prototype tested and approved by the
commission.
(e) If any video lottery terminal or any video lottery
terminal modification which has not been approved by the commission
is supplied by a manufacturer and operated by a licensed operator,
the video lottery terminal shall be prima facie determined to be
contraband. The commission or any law-enforcement officer having
jurisdiction shall seize and destroy all of the licensed operator's
and manufacturer's noncomplying video lottery terminals, as
provided in sections seventy-three through seventy-six of this
article.
(f) In addition, the commission shall suspend the licenses of
the licensed operator and the licensed manufacturer for the period of time the commission considers to be appropriate under the
circumstances and may impose a civil money penalty, as provided in
section fifty-eight of this article.
§29-22B-40. Transportation from manufacturer and registration of
video lottery terminals.
(a) A manufacturer transporting or arranging for the
transportation of 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 of the operator;
(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.
(b) An operator that 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 date and time of video lottery terminal arrival; and
(6) The expected date and time of video lottery terminal
installation.
(c) If a video lottery terminal is not placed in operation,
the operator shall notify the commission of the location where the
terminal is stored.
§29-22B-41. Any other transportation of video lottery terminals.
(a) 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.
(b) 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.
§29-22B-42. Maintenance of video lottery terminals.
(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.
(b) Manufacturers shall 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.
(c) Manufacturers shall notify all licensed operators who have
purchased or leased that manufacturer's video lottery terminals of
all scheduled training programs.
(d) The manufacturers shall schedule training programs at
convenient locations within this state to facilitate attendance by
service technicians.
(e) Manufacturers shall inform licensed operators of any new
developments in the service and repair of video lottery terminals
and provide appropriate subsequent training programs.
(f) The manufacturers shall issue a training certificate to
each person upon successful completion of a video lottery training
program.
(g) The certificate shall include the name of the person who
completed the training program and the date and the location of the
training program.
(h) A person who successfully completes training is eligible
for a service technician's license.
(i) No person may conduct maintenance (other than clearing
paper ticket jams or clearing coin and bill acceptor jams) on any
video lottery terminal or associated equipment unless the
commission has issued a service technician license to that person.
(j) 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.
§29-22B-43. Maintenance log.
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 shall 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.
§29-22B-44. Master keys.
Operators shall provide the commission with a master key for
access into the main cabinet door of each video lottery terminal
placed in operation. The commission shall provide a logic box
seal. The seal shall be affixed by commission personnel to prevent
unauthorized access to the video lottery terminal logic unit.
§29-22B-45. Repairs to logic board or circuitry.
(a) 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 the repairs or
replacement.
(b) The logic area seal shall not be broken by anyone other
than authorized commission personnel.
(c) 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.
(d) The commission shall test the software eproms on the logic
board of each video lottery terminal prior to sealing the logic
area.
(e) License holders shall promptly notify the commission in
writing of any discovered damage, tears or breaks in the logic area
seal. This written notification shall be delivered electronically or by telephone facsimile machine whenever possible. Upon receipt
of that notice, the commission shall disable the video lottery
terminal. The video lottery terminal shall remain disabled until
completion by the commission of an investigation of the seal
damage.
§29-22B-46. Accounting for net terminal income.
(a) The net terminal income from all operating video lottery
terminals of an operator licensee shall be calculated periodically
by the commission.
(b) Each licensed operator shall maintain in its bank account
an amount equal to or greater than the commission's share of the
net terminal income from its operation of video lottery machines as
set forth in section fifty-three of this article, to be
electronically transferred by the commission on dates established
by the commission.
(c) Upon a licensed operator's failure to maintain the bank
account balance required in subsection (b) of this section, the
commission may disable all of a licensed operator's video lottery
terminals until full payment of all amounts due is made.
(d) Interest shall accrue on any unpaid balance due the
commission at the rates charged for state income tax delinquency
under chapter eleven of this code. The interest shall begin to accrue on the date payment is due to the commission and shall
continue to accrue until the amount due, including applicable
interest, is paid. Payments shall be applied first to interest and
then to the balance of the amount due the commission.
§29-22B-47. Resolution of discrepancies.
(a) 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 net terminal income generated by the licensee's
video lottery terminals. Each licensed operator shall report to
the commission any discrepancies between the commission's statement
and each terminal's mechanical and electronic meter readings.
(b) 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.
(c) The licensed operator is solely responsible for paying the
negotiated share of net terminal income, to each location manager
to whom it has supplied video lottery terminals under the
provisions of this article.
(d) Each location manager's periodic distribution from the
appropriate operator shall be paid by check or by electronic funds
transfer to the location manager's designated bank account.
(e) Until an accounting discrepancy is resolved in favor of
the licensed operator, the commission may make no credit
adjustments.
(f) 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.
(g) If the meter readings and the commission's records cannot
be reconciled, final disposition of the matter shall be determined
by the commission.
(h) Any accounting discrepancies that cannot be otherwise
resolved shall be resolved in favor of the commission.
§29-22B-48. Payover of net terminal income.
(a) 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.
(b) 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 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.
(c) 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.
§29-22B-49. Operators to furnish bank authorizations.
(a) Each licensed operator shall furnish to the commission all
information and bank authorizations required to facilitate the
timely transfer of moneys to the commission and from the commission
to each licensed operator.
(b) Each licensed operator shall provide the commission thirty
days' advance notice of any proposed account changes in order to
assure the uninterrupted electronic transfer of funds.
§29-22B-50. Net terminal income held in trust.
The amount of net terminal income required to be paid over to
the commission, shall be deemed to be moneys held in trust for the
state of West Virginia while in the possession or constructive
possession of any operator or location manager and until paid over
to the commission.
§29-22B-51. Examination of operator books and records.
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 shall 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-52. Civil penalty for failure to pay over net terminal
income.
(a) Imposition of penalty. -- Any person required by law or
contract to collect, truthfully account for, and pay over any net
terminal income who willfully fails to truthfully account for and
pay over the net terminal income, or willfully attempts in any manner to evade or defeat any payment thereof, shall, in addition
to other penalties provided by law, be liable for payment of a
civil money penalty equal to the total amount of the net terminal
income not paid over to the commission.
(b) Preliminary notice requirement. --
(1) In general. -- No penalty may be imposed under subsection
(a) unless the director notifies the operator in writing, delivered
in person or by mail sent to the last known address of the operator
or location manager, that he or she is subject to an assessment of
this penalty.
(2) Timing of notice. -- The mailing of the notice described
in subdivision (1) (or, in the case of notice delivered in person,
the delivery) shall precede any notice and demand for payment of
any penalty under subsection (a)of this section, by at least sixty
days.
(3) Statute of limitations. -- If a notice described in
subdivision (1) of this subsection (b) with respect to any penalty
is mailed or delivered in person before the expiration of the
three-year period for the assessment of the penalty (determined
without regard to this subdivision), the three-year period provided for the assessment of a penalty shall not expire before the later
of:
(A) The date ninety days after the date on which such notice
was mailed, or delivered in person, or
(B) If there is a timely protest of the proposed assessment,
the date thirty days after the director makes a final
administrative determination with respect to the protest.
(4) Exception for jeopardy. -- The requirement that
preliminary notice be given shall not apply if the director finds
that the collection of the penalty is in jeopardy.
(c) Collection of penalty. -- This penalty may be collected by
civil action instituted within three years after the date the
amount of net terminal income not paid over to the commission
should have been paid over to the commission, except as provided in
subsection (b) of this section.
(d) Right of contribution where more than one person liable
for penalty. -- If more than one person is liable for the penalty
under subsection (a) with respect to any payment of net terminal
income, each person who paid the penalty shall be entitled to
recover from other persons who are liable for the penalty an amount
equal to the excess of the amount paid by the person over that person's proportionate share of the penalty. Any claim for such a
recovery may be made only in a proceeding which is separate from,
and is not joined or consolidated with, an action for collection of
such penalty brought by the state of West Virginia.
(e) Exception for voluntary board members of tax-exempt
organizations. -- No penalty shall be imposed by subsection (a) on
any unpaid, volunteer member of any board of trustees or directors
of an organization exempt from tax under section 501 of the
Internal Revenue Code of 1986, as amended, if such member:
(1) Is solely serving in an honorary capacity,
(2) Does not participate in the day-to-day or financial
operations of the organization, and
(3) Does not have actual knowledge of the failure on which the
penalty is imposed.
This subsection (e) shall not apply if it results in no person
being liable for the penalty imposed by subsection (a) of this
section.
§29-22B-53. Distribution of net terminal income.
(a) The commission shall periodically distribute, as provided
in this section, the amount of net terminal income collected from
the operators.
(b) The commission shall deposit four percent of net terminal
income into the state lottery fund for the commission's costs and
expenses incurred in administering this article. From this amount,
not less than one hundred fifty thousand dollars nor more than five
hundred thousand dollars per fiscal year, as determined by the
commission each year, shall be transferred to the compulsive
gambling treatment fund created in section nineteen, article
twenty-two-a of this chapter;
(c) The commission shall deposit thirty-eight percent of net
terminal income as provided in this subsection (c) until the first
day of July, two thousand three. Beginning on the first day of
July, two thousand three, the commission shall deposit forty-eight
percent of net terminal income as follows:
(A) At least fifty percent of net terminal income shall be
deposited into the account hereby created in the treasurer's office
known as the "Education Improvement Fund" for appropriation by the
Legislature to the "PROMISE Scholarship Fund" created in section
seven, article seven, chapter eighteen-c of this code, and then to
other education improvement projects or programs recommended by the
governor; and
(B) Any remaining funds shall be deposited into the account
hereby created in the treasurer's office known as the "Infrastructure Improvement Fund" for appropriation by the
Legislature for water and sewer projects in this state.
(d) The licensed operators shall receive fifty-eight percent
of net terminal income until the first day of July, two thousand
three. Beginning the first day of July, two thousand three the
operators shall receive forty-eight percent of net terminal income.
§29-22B-54. Appeal of order.
(a) Petition for hearing. -- Any applicant or license holder
adversely affected by an order issued under this article has the
right to a hearing on the order 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.
(b) Service of petition. -- A petition for hearing shall be
served on the commission by delivery in person at the primary
office of the commission or by certified mail. By procedural rule,
the commission may allow other methods of service.
(c) Petition not to stay order. -- 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 or any other order of the commission with respect to which
a hearing is being demanded.
(d) Notice of hearing. -- 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. The hearing shall be held within thirty days
after receipt of the petition.
§29-22B-55. Contents of petition for hearing; security.
(a) A petition for a hearing shall be in writing and shall
include an original and one copy. The petition shall 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; and
(5) Verification by the petitioner.
(b) Security for cost of hearing. -- 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 a certified check, cashier's check or money order, which shall accompany the petition
demanding a hearing.
§29-22B-56. Hearing procedures.
(a) In general. -- Hearings held under this article shall be
subject to the provision of article five, chapter twenty-nine-a of
this code except to the extent otherwise provided in this article.
In case of any conflict, the provisions of this article shall
control.
(b) Subpoenas and subpoenas duces tecum. -- 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 shall 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
is required to prove service by registered or certified mail;
(2) All subpoenas and subpoenas duces tecum shall be issued in
the name of the commission. Service of subpoenas and subpoenas duces tecum issued at the insistence of the commission is the
responsibility of the commission, but any party requesting issuance
is 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 under this section shall honor the subpoena or subpoena
duces tecum as though it were issued by a circuit court of this
state, and shall appear as a witness or produce such 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 the circuit court or
a refusal to testify in the circuit court.
(c) Continuances. -- Hearings may not be delayed by a motion
for continuance made less than ten days before the date set for the
hearing.
(d) Hearing examiners. -- The commission may designate a
hearing examiner to conduct the hearing.
(e) Representation. -- The petitioner may appear individually,
or by legal counsel.
(f) Submission of case without hearing. -- 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 shall be in writing or
upon the record.
(g) Oral argument and briefs. -- The petitioner shall 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, shall accept briefs in addition to or in
lieu of argument. Briefs shall be filed within ten days after the
hearing date.
(h) Admission of evidence. -- 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.
(i) Record of hearing. -- A record shall be made of all
hearings held pursuant to this article. Testimony may be recorded
electronically or by a court reporter.
(j) Decision after hearing. -- After the conclusion of the
hearing and within ten days of receipt of the transcript of the hearing, 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 the
recommended decision, and if it accepts the decision, it shall
cause the director to sign and acknowledge the decision as its own,
after having reviewed the transcript and all exhibits attached and
affixed to the decision; if the commission rejects the decision, it
shall within ten days of receipt of the recommended decision
prepare a decision setting forth its own findings of fact and
conclusions of law. In either event, the decision is final unless
vacated or modified upon judicial review of the decision. 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.
§29-22B-57. Judicial review.
The applicant or license holder who filed the petition for
administrative review, may appeal the decision of the commission
issued under section fifty-six of this article to the circuit court
of Kanawha County, West Virginia, or with the judge thereof in vacation, if the petition for appeal is filed no later than thirty
days after the date upon which the petitioner receives notice of
the final decision of the commission.
§29-22B-58. Civil penalties.
(a) The commission may impose the fines provided in this
section. These fines may be imposed in conjunction with one or
more other fines provided in this section and in conjunction with
a license suspension or revocation or other administrative action
taken against a licensee, or as a result of an action or inaction
by a licensee for which the commission is also seeking criminal
prosecution.
(b) Location managers.
(1) For allowing persons under age twenty-one to play video
lottery games, the location manager shall be fined:
(A) One hundred dollars for a first violation;
(B) One thousand dollars for a second violation;
(C) Five thousand dollars for a third violation.
For each subsequent violation, the fine imposed by the
commission shall increase by five thousand dollars.
(2) For allowing persons under age twenty-one to be present at
a video lottery terminal or in the immediate area where video
lottery terminals are present, the location manager may be fined:
(A) One hundred dollars for a first violation;
(B) Two hundred dollars for a second violation;
(C) Three hundred dollars for a third violation.
For each subsequent violation, the fine imposed by the
commission shall increase by one hundred dollars.
(3) For allowing a person or persons to tamper in any way
with, or disconnect, any data line or feature that allows the
state's central control computer to communicate with each video
lottery terminal in the premises, the location manager may be
fined:
(A) One thousand dollars for a first violation;
(B) Five thousand dollars for a second violation;
(C) Ten thousand dollars for a third violation.
For each subsequent violation, the fine imposed by the
commission shall increase by ten thousand dollars.
(4) For entering the logic area of a video lottery terminal or
allowing an unauthorized person or persons to enter the logic area
of a video lottery terminal, or tampering in any way with the
lottery security seal, any EPROM or other chip or memory device
installed in the logic area, whether or not any tampering would
alter any characteristic of the video lottery terminal, the
location manager may be fined:
(A) One thousand dollars for a first violation;
(B) Five thousand dollars for a second violation;
(C) Ten thousand dollars for a third violation.
For each subsequent violation, the fine imposed by the
commission shall increase by ten thousand dollars.
(5) For failure to aim or focus a closed circuit television
camera on all video lottery terminals in the premises or for
failure to record all video lottery terminals during the hours of
operation of the limited access adults-only facility, the location
manager shall be fined:
(A) One hundred dollars for a first violation;
(B) One thousand dollars for a second violation;
(C) Five thousand dollars for a third violation.
For each subsequent violation, the fine imposed by the
commission shall increase by five thousand dollars.
(c) Service technicians.
(1) For entering the logic area of any video lottery terminal
at any time when a representative of the West Virginia Lottery
Commission is not present and observing the process, the service
technician shall be fined:
(A) One hundred dollars for a first violation;
(B) One thousand dollars for a second violation;
(C) Three thousand dollars for a third violation.
For each subsequent violation, the fine imposed by the
commission shall increase by one hundred dollars. If two or more
service technicians participate in violation of this subdivision
(c)(1), each service technician shall be fined according to this
schedule.
(d) Operators.
(1) For employing or contracting with persons, other than
service technicians licensed by the commission, to repair video
lottery terminals, the operator shall be fined:
(A) One thousand dollars for a first violation;
(B) Five thousand dollars for a second violation;
(C) Ten thousand dollars for a third violation.
For each subsequent violation, the fine imposed by the
commission shall increase by ten thousand dollars.
(2) For acquiring, or installing in licensed premises, any
video lottery terminal that has not been manufactured and supplied
by a licensed manufacturer, that has not also been tested and
approved by the commission's independent testing laboratory, and
that has not been approved for use in this state by the commission,
the operator shall be fined:
(A) Five thousand dollars for a first violation;
(B) Ten thousand dollars for a second violation.
For each subsequent violation, the fine imposed by the
commission shall increase by ten thousand dollars.
(e) Manufacturers.
(1) For shipping a video lottery terminal into this state to
a person who is not licensed by the commission either as an
operator under this article or a racetrack licensed under
provisions of article twenty-two-a of this chapter, the
manufacturer shall be fined:
(A) One thousand dollars for a first violation;
(B) Five thousand dollars for a second violation;
(C) Ten thousand dollars for a third violation.
For each subsequent violation, the fine imposed by the
commission shall increase by ten thousand dollars.
(2) For shipping a video lottery terminal into this state that
is not identical to a video lottery terminal make and model
approved by the commission, including the electronic computer
components, the random number generator, the coin acceptor, the
bill acceptor, and the cabinet in which the video lottery terminal
is housed, the manufacturer shall be fined:
(A) One thousand dollars for a first violation;
(B) Five thousand dollars for a second violation;
(C) Ten thousand dollars for a third violation.
For each subsequent violation, the fine imposed by the
commission shall increase by ten thousand dollars.
(f) Failure to perform any other duty. -- A person who fails
to perform any of the duties or obligations created and imposed
upon them by the provisions of this article or legislative rule of
the commission is subject to a civil penalty as may be determined
by the commission in an amount not to exceed ten thousand dollars.
§29-22B-59. Civil action to collect penalty.
(a) The commission may collect any money penalty imposed
pursuant to this article by instituting civil action in any court
of this state having jurisdiction over the named defendant.
(b) Collection shall be barred unless the civil action is
commenced within six years after the later of (1) the date on which
the prohibited conduct establishing the cause of action occurred,
or (2) the date on which the commission first knew or should
reasonably have known the prohibited conduct had occurred.
§29-22B-60. Criminal penalty for unauthorized game on authorized
video lottery terminal.
(a) A licensee who places a video lottery game on a video
lottery terminal that is allowed under this article without
authority of the commission to do so is guilty of a misdemeanor and, upon conviction thereof, shall for a first conviction 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 second and each subsequent offense under this section
shall be a felony and, upon conviction thereof, the person shall be
confined in a state correctional facility for a term of not less
than one year nor more than three years and fined not less than
five thousand dollars nor more than ten thousand dollars, except
that in the case of a person other than a natural person, the fine
may not be less than twenty-five thousand dollars nor more than
fifty thousand dollars.
§29-22B-61. Criminal penalty for unauthorized video lottery
terminal.
(a) A licensee who places a video lottery terminal that is not
a gray gambling device into play without authority of the
commission to do so is guilty of a misdemeanor and, upon conviction
thereof, shall for a first conviction be confined in a county or
regional jail for a term of not more than one year, and fined not
less than five thousand dollars nor more than ten thousand dollars, except that, in the case of a person other than a natural person,
the fine may not be less than twenty thousand dollars nor more than
thirty thousand dollars.
(b) A second and each subsequent offense under this section
shall be a felony and, upon conviction thereof, the person shall be
confined in a state correctional facility for a term of not less
than one year nor more than three years and fined not less than ten
thousand dollars nor more than twenty thousand dollars, except that
in the case of a person other than a natural person, the fine may
not be less than twenty-five thousand dollars nor more than fifty
thousand dollars.
§29-22B-62. Criminal penalty for possession of gray gambling
machine.
(a) After the thirty-first day of December, two thousand one,
any person who has a gray gambling machine in their actual or
constructive possession in this state is guilty of a felony and,
upon conviction thereof, shall for a first conviction be confined
in a state correctional facility for a term of not less than one
year nor more than three years, and fined not less than fifty
thousand dollars nor more than one hundred thousand dollars, for
each gray gambling machine in the person's actual or constructive
possession in this state, except that, in the case of a person other than a natural person, the fine may not be less than one
hundred thousand dollars nor more than five hundred thousand
dollars for each gray gambling machine in the person's actual or
constructive possession in this state.
(b) For any second or subsequent conviction under this section
the person shall be confined in a state correctional facility for
a term of not less than two years nor more than five years, and
fined not less than one hundred thousand dollars nor more than five
hundred thousand dollars, for each gray gambling machine in their
actual or constructive possession in this state, except that, in
the case of a person other than a natural person, the fine may not
be less than five hundred thousand dollars nor more than one
million dollars for each gray gambling machine in the person's
actual or constructive possession in this state.
§29-22B-63. Criminal penalty for expired operator or location
manager's license.
(a) 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 of the license
is guilty of a misdemeanor and, upon conviction thereof, shall for
a first conviction be confined in a county or regional jail for not
more than one year or fined not less than one thousand dollars nor 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 not be less than ten thousand dollars nor more than twenty-five
thousand dollars.
(b) A second and each subsequent offense under this section
shall be a felony and, upon conviction thereof, the person shall be
confined in a state correctional facility for a term of not less
than one year nor more than three years and fined not less than ten
thousand dollars nor more than twenty thousand dollars, except that
in the case of a person other than a natural person, the fine may
not be less than twenty-five thousand dollars nor more than fifty
thousand dollars.
§29-22B-64. Criminal penalty for possession of altered or
nonconforming video lottery terminal, device or
related material.
(a) A person who possesses any video lottery terminal that is
not a gray gambling machine or possesses any 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 for a first conviction be confined in a
county or regional jail not more than one year and fined not less than one thousand dollars nor 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 less than five thousand
dollars nor more than twenty-five thousand dollars.
(b) A second and each subsequent offense under this section
shall be a felony and, upon conviction thereof, the person shall be
confined in a state correctional facility for a term of not less
than one year nor more than three years and fined not less than
five thousand dollars nor more than twenty-five thousand dollars,
except that in the case of a person other than a natural person,
the fine may not be less than fifty thousand dollars nor more than
one hundred thousand dollars.
§29-22B-65. Criminal penalty for tampered game, terminal, device
or other equipment.
(a) 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 for a first conviction be confined in a county or regional
jail not more than one year and fined not less than one thousand
dollars nor 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 less than twenty-five thousand dollars nor
more than fifty thousand dollars.
(b) A second and each subsequent offense under this section
shall be a felony and, upon conviction thereof, the person shall be
confined in a state correctional facility for a term of not less
than one year nor more than three years and fined not less than
five thousand dollars nor more than twenty-five thousand dollars,
except that in the case of a person other than a natural person,
the fine may be not less than fifty thousand dollars nor more than
one hundred thousand dollars.
§29-22B-66. Criminal penalty for deceptive practices.
(a) 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, data line connection with the central control computer,
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 state lottery commission or
tends to alter the accurate recording of credits played and credits
won by the commission's central control computer, or the central
control computer's ability to disable and cause not to operate any
or all video lottery terminals of a licensed location manager, for
the first offense 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.
(b) A second and each subsequent offense under this section
shall be a felony and, upon conviction thereof, the person shall be
confined in a state correctional facility for at least one year but
not more than five years, and fined not less than one thousand
dollars nor more than five thousand dollars, except that when the
person is not a natural person, the amount of the fine imposed may
be not less than five thousand dollars nor more than fifty thousand
dollars.
§29-22B-67. Employment of unlicensed person who is required to be
licensed.
(a) 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 for a first offense be confined in a
county or regional jail for 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 second and each subsequent offense under this section
shall be a felony and, upon conviction thereof, the person shall be
confined in a state correctional facility for a term of not less
than one year nor more than three years, and fined not less than
five thousand dollars nor more than twenty-five thousand dollars,
except that, in the case of a person other than a natural person,
the fine may not be less than fifty thousand dollars nor more than
one hundred thousand dollars.
§29-22B-68. Criminal penalty for unlicensed person to work in a
position for which license is required.
(a) A natural person who is required by this article to obtain
a license from the commission to work as a location manager or
service technician but who works as a location manager or service technician without obtaining the requisite license, as provided for
in this article, 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.
(b) A second and each subsequent offense under this section
shall be a misdemeanor and, upon conviction thereof, the person
shall be confined in a county or regional jail for a term not to
exceed one year and fined not less than five thousand dollars nor
more than twenty thousand dollars.
§29-22B-69. Criminal penalty for use of device that gives player
an unauthorized advantage.
(a) A person who, while a video lottery game is being played,
uses, or assists another person 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 felony and, upon
conviction thereof, shall for a first offense be confined in a
state correctional facility for at least one year but not more than
five years, or shall be fined not less than one thousand dollars
nor more than five thousand dollars, or both.
(b) A second and each subsequent offense under this section
shall be a felony and, upon conviction thereof, the person shall be
confined in a state correctional facility for a term of not less
than one year nor more than three years, and fined not less than
five thousand dollars nor more than twenty-five thousand dollars,
except that, in the case of a person other than a natural person,
the fine may be not less than fifty thousand dollars nor more than
one hundred thousand dollars.
§29-22B-70. Criminal penalty for violation of rules of play.
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 for not more than one year and be fined not less than two
thousand dollars nor more than five thousand dollars. If the
person profits thereby in an amount less than one thousand dollars,
that 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 an amount not less than one thousand dollars nor more than two thousand five hundred dollars,
or both.
§29-22B-71. Timing of implementation.
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 that are declared by this article
to be contraband gambling devices a reasonable opportunity to
remove any existing devices from this state.
§29-22B-72. Gray gambling machines declared contraband.
Effective the first day of January, two thousand two, gray
gambling machines are thereafter 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 have no right to compensation for the seizure and
destruction of any gray gambling machine.
§29-22B-73. Seizure and sale of gray gambling machines and other
property.
(a) Legislative findings. -- The Legislature hereby finds and
declares that the seizure and sale of items under the provisions of
this article is not contemplated to be a forfeiture as the same is
used in article twelve, section five of the West Virginia
constitution and, to the extent that a seizure and sale may be
found to be such a forfeiture, the Legislature hereby finds and
declares that the proceeds from a seizure and sale under this
article is not part of net proceeds as the same is contemplated by
such article twelve, section five of the West Virginia
constitution.
(b) Items subject to forfeiture. -- The following items are
subject to forfeiture:
(1) Any gray gambling machine present in this state after the
first day of January, two thousand-two;
(2) All property found with the gray gambling machine that in
any way facilitates its operation for any purpose;
(3) Any video lottery terminal registered under this article
that is found on the premises where a gray gambling machine is
found;
(4) All conveyances, including aircraft, vehicles or vessels,
which are used, have been used, or are intended for use, to
transport, or in any manner to facilitate the transportation, sale, receipt, possession or concealment of a gray gambling machine,
except as follows:
(A) No conveyance used by any person as a common carrier in
the transaction of business as a common carrier shall be forfeited
under this section unless it appears that the person owning such
conveyance is a consenting party or privy to a violation of this
article;
(B) No conveyance shall be forfeited under the provisions of
this article if the person owning the conveyance establishes that
he neither knew, nor had reason to know, that the conveyance was
being employed or was likely to be employed in a violation of this
article; and
(C) No bona fide security interest or other valid lien in any
conveyance shall be forfeited under the provisions of this article,
unless the state proves by a preponderance of the evidence that the
holder of such security interest or lien either knew, or had reason
to know, that such conveyance was being used or was likely to be
used in a violation of this article.
(5) All books, records and materials, including microfilm,
tapes and data which are used, or have been used, or are intended
for use with a gray gambling device.
(6) All moneys, negotiable instruments, securities or other
things of value furnished or intended to be furnished in violation
of this article by any person in exchange for a gray gambling
device or in exchange for playing or operating a gray gambling
device, all proceeds traceable to such an exchange, and all moneys,
negotiable instruments and securities used, or which have been
used, or which are intended to be used to facilitate any violation
of this article: Provided, That no property may be forfeited under
this subdivision, to the extent of the interest of an owner, by
reason of any act or omission established by that owner to have
been committed or omitted without his knowledge or consent.
(7) All real property, including any right, title and interest
in any lot or tract of land, and any appurtenances or improvements,
which are used, or have been used, or are intended to be used, in
any manner or part, to commit, or to facilitate the commission of
a violation of this article punishable by more than one year
imprisonment: Provided, That no property may be forfeited under
this subdivision, to the extent of an interest of an owner, by
reason of any act or omission established by that owner to have
been committed or omitted without his knowledge or consent.
The requirements of this subsection (c) pertaining to the
removal of seized property are not mandatory in the case of real
property and the appurtenances thereto.
(c) Property subject to forfeiture under this section may be
seized by any person granted law-enforcement powers (hereinafter
referred to as the "appropriate person" in section seventy-four of
this article).
§29-22B-74. Procedure for seizure of forfeitable property.
(a) Seizure of property made subject to forfeiture by the
provisions of sections seventy-two and seventy-three of this
article may be made upon process issued by any court of record
having jurisdiction over the property.
(b) Notwithstanding the provisions of subsection (a) of this
section, seizure of property subject to forfeiture by the
provisions of this article may be made without process if:
(1) The seizure is incident to a lawful arrest or pursuant to
a search under a search warrant or an inspection warrant;
(2) The property subject to seizure has been the subject of a
prior judgment in favor of the state in a forfeiture proceeding
based upon this section; or
(3) The appropriate person has probable cause to believe that
the property was used or intended for use in violation of this
chapter.
(c) In the event of seizure pursuant to subsection (b) of this
section, forfeiture proceedings shall be instituted within ninety
days of the seizure thereof.
(d) Property taken or detained under this section shall not be
subject to replevin, but is deemed to be in the custody of the
appropriate person, subject only to the orders and decrees of the
court having jurisdiction over the forfeiture proceedings. When
property is seized under this article, the appropriate person may:
(1) Place the property under seal;
(2) Remove the property to a place designated by him;
(3) Require the appropriate law-enforcement agency to take
custody of the property and remove it to an appropriate location
for disposition in accordance with law; or
(4) In the case of seized moneys, securities or other
negotiable instruments, place the assets in any interest-bearing
depository insured by an agency of the federal government.
The requirements of this subsection (d), pertaining to the
removal of seized property, are not mandatory in the case of real
property and appurtenances thereto.
§29-22B-75. Procedures for forfeiture.
(a) The following procedures for forfeiture shall be followed:
(1) Any proceeding wherein the state seeks forfeiture of
property subject to forfeiture under this section shall be a civil
proceeding. A petition for forfeiture may be filed on behalf of
the state and any law-enforcement agency making a seizure under
this article by the prosecuting attorney of a county, or duly
appointed special prosecutor;
(2) A petition for forfeiture may be filed and proceedings
held thereon in the circuit court of the county wherein the seizure
was made or the circuit court of the county wherein any owner of
the property subject to forfeiture may reside;
(3) Any civil trial stemming from a petition for forfeiture
brought under this chapter at the demand of either party shall be
by jury;
(4) A petition for forfeiture of the seized property shall be
filed within ninety days after the seizure of the property in
question. The petition shall be verified by oath or affirmation of
a law-enforcement officer representing the law-enforcement agency
responsible for the seizure or the prosecuting attorney and shall
contain the following:
(A) A description of the property seized;
(B) A statement as to who is responsible for the seizure;
(C) A statement of the time and place of seizure;
(D) The identity of the owner or owners of the property, if
known;
(E) The identity of the person or persons in possession of the
property at the time seized, if known;
(F) A statement of facts upon which probable cause for belief
that the seized property is subject to forfeiture pursuant to the
provisions of this article is based;
(G) The identity of all persons or corporations having a
perfected security interest or lien in the subject property, as
well as the identity of all persons or corporations known to the
affiant who may be holding a possessory or statutory lien against
such property;
(H) A prayer for an order directing forfeiture of the seized
property to the state, and vesting ownership of such property in
the state.
(b) At the time of filing or as soon as practicable
thereafter, a copy of the petition for forfeiture shall be served
upon the owner or owners of the seized property, as well as all
holders of a perfected security interest or lien or of a possessory
or statutory lien in the same class, if known. Should diligent efforts fail to disclose the lawful owner or owners of the seized
property, a copy of the petition for forfeiture shall be served
upon any person who was in possession or alleged to be in
possession of the property at the time of seizure, where such
person's identity is known. The above service shall be made
pursuant to the provisions of the West Virginia Rules of Civil
Procedure. Any copy of the petition for forfeiture so served shall
include a notice substantially as follows:
"To any claimant to the within described property: You have
the right to file an answer to this petition setting forth your
title in, and right to possession of, the property within thirty
days from the service hereof. If you fail to file an answer, a
final order forfeiting the property to the state will be entered,
and such order is not subject to appeal."
If no owner or possessors, lienholders or holders of a
security interest be found, then such service may be made by Class
II legal publication in accordance with the provisions of article
three, chapter fifty-nine of this code, and the publication area
shall be the county wherein such property was located at the time
of seizure and the county wherein the petition for forfeiture is
filed.
(c) In addition to the requirements of subsection (b) of this
section, the prosecuting attorney or law-enforcement officer upon
whose oath or affirmation the petition for forfeiture is based,
shall be responsible for the publication of a further notice. Such
further notice that a petition for forfeiture has been filed shall
be published by Class II legal advertisement in accordance with
article three, chapter fifty-nine of this code. The publication
area shall be the county wherein the property was seized and the
county wherein the petition for forfeiture is filed. The notice
shall advise any claimant to the property of their right to file a
claim on or before the date set forth in the notice, which date
shall not be less than thirty days from the date of the first
publication. The notice shall specify that any claim must clearly
state the identity of the claimant and an address where legal
process can be served upon that person. In addition, such notice
shall contain the following information:
(1) A description of the property seized;
(2) A statement as to who is responsible for the seizure;
(3) A statement of the time and place of seizure;
(4) The identity of the owner or owners of the property, if
known;
(5) The identity of the person or persons in possession of the
property at the time of seizure, if known;
(6) A statement that prayer for an order directing forfeiture
of the seized property to the state, and vesting ownership of such
property in the state, shall be requested of the court.
(d) If no answer or claim is filed within thirty days of the
date of service of the petition pursuant to subsection (b) of this
section, or within thirty days of the first publication pursuant to
subsection (b) of this section, the court shall enter an order
forfeiting the seized property to the state. If any claim to the
seized property is timely filed, a time and place shall be set for
a hearing upon such claim. The claimant or claimants shall be
given notice of such hearing not less than ten days prior to the
date set for the hearing.
(e) At the hearing upon the claim or claims, the state shall
have the burden of proving by a preponderance of the evidence that
the seized property is subject to forfeiture pursuant to the
provisions of this chapter.
(f) Any order forfeiting property to the state and entered
pursuant to this section perfects the state's right, title and
interest in the forfeited property and relates back to the date of
seizure: Provided, That in any proceeding under this article the circuit court shall in its final order make specific findings with
respect to whether or not probable cause to seize such property
existed at the time of such seizure.
(g) During the pendency of a forfeiture proceeding, it is
unlawful for any property owner or holder of a bona fide security
interest or other valid lien-holder to transfer or attempt to
transfer any ownership interest or security interest in seized
property with the intent to defeat the purpose of this article, and
the court wherein the petition for forfeiture is filed may enjoin
a property owner or holder of a security interest or other
lien-holder from making such a transfer should one come to its
attention. Any such transfer, that is made in violation of the
provisions of this subsection, shall have no effect upon an order
of the court forfeiting seized property to the state if a notice of
lis pendens is filed prior to the recording of the instrument of
transfer.
(h) The court may void any transfer of property made before or
after a forfeiture proceeding has been commenced, which is subject
to forfeiture, if the transfer was not to a bona fide purchaser
without notice for value.
(i) An appeal of a decision of the circuit court concerning a
forfeiture proceeding brought pursuant to this chapter must be filed within one hundred twenty days of the date of entry of the
final appealable order. The appellant shall be required to give
notice of intent to appeal within thirty days of the entry of such
appealable order.
§29-22B-76. Disposition of forfeited moneys, securities or other
negotiable instruments.
(a) Whenever moneys, securities or other negotiable
instruments are forfeited under the provisions of this article,
such proceeds shall be distributed as follows:
(1) Ten percent of the proceeds shall be tendered to the
office of the prosecuting attorney which initiated the forfeiture
proceeding;
(2) The balance shall be deposited in a special
law-enforcement investigation fund. The fund may be placed in any
interest-bearing depository insured by an agency of the federal
government. The fund shall be administered by the chief of the
law-enforcement agency that seized the forfeited property.
(b) No funds shall be expended from the special
law-enforcement investigation fund except as follows:
(1) In the case of the funds belonging to the West Virginia
state police, the funds shall only be expended at the direction of
the superintendent of the department and in accordance with the provisions of section fifteen, article two, chapter five-a of this
code and the provisions of subsection (j), section two, article
two, chapter twelve of this code;
(2) In the case of funds belonging to the office of either the
sheriff or prosecuting attorney of any county in which the special
fund has been created, the funds therein may only be expended in
the manner provided in sections four and five, article five,
chapter seven of this code; and
(3) In the case of funds belonging to the police department of
any municipality in which the special fund has been created, the
funds therein may only be expended in the manner provided in
section twenty-two, article thirteen, chapter eight of this code.
§29-22B-77. Disposition of other forfeited property; distribution
of proceeds.
(a) When property other than that referred to in section
fifty-eight of this section is forfeited under this section, the
circuit court ordering the forfeiture, upon application by the
prosecuting attorney or the chief of the law-enforcement agency
that seized said forfeited property, may direct that:
(1) Title to the forfeited property be vested in the
law-enforcement agency so petitioning; or
(2) The law-enforcement agency responsible for the seizure
retain the property for official use; or
(3) The forfeited property shall be offered at public auction
to the highest bidder for cash. Notice of such public auction shall
be published as a Class III legal advertisement in accordance with
article three, chapter fifty-nine of this code. The publication
area shall be the county where the public auction will be held.
(b) When a law-enforcement agency receives property pursuant
to this section, the court may, upon request of the prosecuting
attorney initiating the forfeiture proceeding, require the
law-enforcement agency to pay unto the office of said prosecuting
attorney a sum not to exceed ten percent of the value of the
property received to compensate said office for actual costs and
expenses incurred.
(c) The proceeds of every public sale conducted pursuant to
this section shall be paid and applied as follows: First, to the
balance due on any security interest preserved by the court;
second, to the costs incurred in the storage, maintenance and
security of the property; third, to the costs incurred in selling
the property.
(d) Any proceeds of a public sale remaining after distribution
pursuant to this section shall be distributed as follows:
(1) Ten percent of such proceeds shall be tendered to the
office of the prosecuting attorney who initiated the forfeiture
proceeding;
(2) The balance shall be deposited in a special
law-enforcement investigation fund. Such fund shall be
administered by the chief of the law-enforcement agency that seized
the forfeited property sold and shall take the form of an
interest-bearing account with any interest earned to be compounded
to the fund. Any funds deposited in the special law-enforcement
investigative fund pursuant to this article shall be expended only
to defray the costs of protracted or complex investigations, to
provide additional technical equipment or expertise, to provide
matching funds to obtain federal grants or for such other
law-enforcement purposes as the chief of the law-enforcement agency
may deem appropriate; however, these funds may not be utilized for
regular operating needs.
(e) If more than one law-enforcement agency was substantially
involved in effecting the seizure and forfeiture of property, the
court wherein the petition for forfeiture was filed shall equitably
distribute the forfeited property among the law-enforcement
agencies. In the event of a public sale of such property pursuant
to subsection (a) of this section, the court shall equitably distribute any proceeds remaining after distribution pursuant to
subsection (c) and subdivision (1), subsection (d) of this section,
among such law-enforcement agencies for deposit into their
individual special law-enforcement investigative fund. Equitable
distribution shall be based upon the overall contribution of the
individual law-enforcement agency to the investigation which led to
the seizure.
(f) Upon the sale of any forfeited property for which title or
registration is required by law, the state shall issue a title or
registration certificate to any bona fide purchaser at a public
sale of the property conducted pursuant to this section. Upon the
request of the law-enforcement agency receiving, pursuant to the
order of the court, or electing to retain, pursuant to this
section, any forfeited property for which title or registration is
required by law, the state shall issue a title or registration
certificate to the appropriate governmental body.
(g) Any funds expended pursuant to the provisions of this
section, shall only be expended in the manner provided in
subsection (b), section seven hundred five, article seven, chapter
sixty-a of the code.
(h) Every prosecuting attorney or law-enforcement agency
receiving forfeited property or proceeds from the sale of forfeited property pursuant to this article shall submit an annual report to
the body which has budgetary authority over such agency. Such
report shall specify the type and approximate value of all
forfeited property and the amount of proceeds from the sale of
forfeited property received in the preceding year. No county or
municipality may use anticipated receipts of forfeited property in
their budgetary process.
(i) In lieu of the sale of any forfeited property subject to
a bona fide security interest preserved by an order of the court,
the law-enforcement agency receiving the forfeited property may pay
the balance due on any security interest preserved by the court
from funds budgeted to the office or department or from the special
fund and retain possession of the forfeited property for official
use pursuant to this section.
(j) In every case where property is forfeited, disposition of
the forfeited property, in accordance with this article, shall be
made within six months of the date upon which the court of
jurisdiction orders forfeiture. Should the office or agency
receiving the property fail either to place the property in
official use or dispose of the property in accordance with law, the
court of jurisdiction shall cause disposition of the property to be
made with any proceeds therefrom to be awarded to the state.
(k) No disposition shall occur until all applicable periods
for filing a notice of intent to appeal has expired and no party in
interest shall have filed such notice. The filing of the notice of
intent to appeal shall stay any such disposition until the appeal
has been finally adjudicated or until the appeal period of one
hundred eighty days has expired without an appeal having actually
been taken or filed, unless a valid extension of the appeal has
been granted by the circuit court under the provisions of section
seven, article four, chapter fifty-eight of this code.
(l) The special law-enforcement investigative funds of each
law-enforcement agency may be placed in an interest-bearing
depository insured by the federal government.
§29-22B-78. Effect of this article on certain taxes.
(a) Notwithstanding any provision of this code to the
contrary, persons who hold a current operators license issued under
this article shall be exempt from paying the taxes imposed by
articles fifteen and fifteen-a, chapter eleven of this code on
their purchases of video lottery terminals and video lottery games.
(b) Notwithstanding any provision of this code to the
contrary, the consideration paid by a patron of a restricted access
adult-only facility to play of video lottery games shall be exempt from the tax imposed by article fifteen, chapter eleven of this
code.
(c) Notwithstanding the provisions of section four, article
five, chapter eight of this code, municipalities may not impose the
license fees imposed by this article on manufacturers, operators,
location managers and service technicians. Municipalities may
continue to impose any other license fees they are allowed to
impose under this code.
(d) Notwithstanding any provision of this code to the
contrary, nothing in this article or article twenty-two of this
chapter shall exempt the net terminal income of an operator of
video lottery terminals from municipal business and occupation
taxes imposed pursuant to section five, article thirteen, chapter
eight of this code, or an amusement tax imposed pursuant to section
six of said article thirteen.
(e) Notwithstanding any provision of this code to the
contrary, nothing in this article or article twenty-two of this
chapter shall exempt payments a location manager receives from an
operator of video lottery terminals from municipal business and
occupation taxes imposed pursuant to section five, article
thirteen, chapter eight of this code.
§29-22B-79. Preemption of state laws or local regulation.
(a) No state or local law or regulation providing any penalty,
disability, restriction, regulation or prohibition for the
manufacture, transportation, storage, distribution, advertising,
possession or sale of any lottery video lottery terminal, games or
materials or for the operation of any lottery shall apply to
operations by the lottery commission or persons licensed pursuant
to this article or operations or activities that are authorized in
this article.
(b) The provisions of this article preempt all regulations,
rules, ordinances and laws of any county or municipality in
conflict herewith: Provided, That nothing herein shall invalidate
any zoning law, or Sunday closing law under article ten, chapter
sixty-one of this code.
(c) Nothing in this article shall be deemed to permit the
operation of any lottery otherwise prohibited by the laws of this
state, not owned and operated by this state and permitted by this
article.
NOTE: The purpose of this bill is to regulate and allow and
the playing of video lottery games in restricted access adult-only
facilities licensed by the Alcohol Beverage Control Commissioner
and by the Lottery Commission. The number of video lottery
terminals allowed under the bill would be limited in the aggregate
to 9,000. Licensed operators could own or lease no more than 900 video lottery terminals, and no more than five terminals could be
located in any one restricted access adult-only facility. The 9000
terminals would be allocated to operators pursuant to receipt of
competitive bids that would permit the licensed operator to own or
lease them for a period of seven years. The State's share of net
terminal income is dedicated to fund PROMISE scholarships,
education improvements and water and sewer projects. Existing so
called "gray gambling machines" would become contraband beginning
January 1, 2002. Contraband may be seized and destroyed. Criminal
penalties are provided for possession of "gray gambling machines"
after December 31, 2001, as well as for other violations of the
bill.
This article is new; therefore, strike-throughs and
underscoring have been omitted.