Senate Bill sb2634

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    Florida Senate - 2004                                  SB 2634

    By Senator Bullard





    39-1795-04

  1                      A bill to be entitled

  2         An act relating to video lotteries; amending s.

  3         24.103, F.S.; providing definitions; amending

  4         s. 24.105, F.S.; providing powers and duties of

  5         the Department of the Lottery pertaining to

  6         video lottery games; providing for an annual

  7         fee; providing for disposition of the fee;

  8         creating s. 24.125, F.S.; providing for the

  9         adoption of rules; creating s. 24.126, F.S.;

10         prohibiting certain persons from playing video

11         lottery games; creating s. 24.127, F.S.;

12         providing requirements for the operation of

13         video lottery games; providing a payout

14         percentage; providing for distribution of

15         income; providing for weekly allocations;

16         providing penalties; creating s. 24.128, F.S.;

17         providing for the licensure of video lottery

18         terminal vendors; creating s. 24.129, F.S.;

19         prohibiting certain local zoning ordinances;

20         creating s. 24.130, F.S.; providing

21         requirements for video lottery terminals;

22         creating s. 24.131, F.S.; requiring video

23         lottery terminal vendors to establish training

24         programs for employees who service such

25         terminals; requiring departmental approval of

26         such programs; providing certification

27         requirements for such employees; providing for

28         the adoption of rules; creating s. 24.132,

29         F.S.; providing for distribution of proceeds

30         from the Video Lottery Purse Trust Fund;

31         providing for the adoption of rules; creating

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 1         s. 24.133, F.S.; requiring operators of

 2         facilities where video lottery games are

 3         conducted to post certain warning signs

 4         regarding compulsive gambling; amending s.

 5         212.02, F.S.; excluding video lottery terminals

 6         from the definition of "coin-operated amusement

 7         machine" for purposes of the sales and use tax;

 8         creating s. 24.134, F.S.; establishing programs

 9         for compulsive gambling within the Department

10         of Children and Family Services; creating s.

11         24.136, F.S.; authorizing a caterer's license

12         for video lottery retailers; providing an

13         effective date.

14  

15  Be It Enacted by the Legislature of the State of Florida:

16  

17         Section 1.  Subsections (7), (8), (9), (10), and (11)

18  are added to section 24.103, Florida Statutes, to read:

19         24.103  Definitions.--As used in this act:

20         (7)  "Video lottery game" means an electronically

21  simulated game involving any element of chance, skill, or

22  both, played on a video lottery terminal that, upon insertion

23  of currency, coins, tokens, credits, vouchers, or anything of

24  value, is available to play or simulate a lottery-type game.

25  The games include, but are not limited to, line-up games,

26  traditional card games, poker, and progressive games where the

27  jackpot grows and accumulates as it is being played in a video

28  lottery terminal, or network of video lottery terminals, using

29  a cathode ray tube, video display screen, and or

30  microprocessors, or other similar technology available now or

31  in the future, as approved by the department. A player may

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 1  receive a payoff in the form of currency, coins, tokens,

 2  credits, vouchers, or anything of value either automatically

 3  or in some other manner.

 4         (8)  "Video lottery terminal" means a machine or device

 5  upon which a "video lottery game" is played or operated. A

 6  video lottery terminal may use spinning reels or video

 7  displays or other similar technology available now or in the

 8  future, as approved by the department.

 9         (9)  "Video lottery terminal vendor" means any person

10  licensed by the department who engages in the business of

11  selling, leasing, servicing, repairing, or upgrading video

12  lottery terminals for video lottery retailers or who provides

13  to the department or to a video lottery retailer computer

14  equipment, software, or other functions related to video

15  lottery terminals.

16         (10)  "Net terminal income" means currency and other

17  consideration placed into a video lottery terminal, less

18  payouts to or credits redeemed by players.

19         (11)  "Video lottery retailer" means any pari-mutuel

20  permitholder under chapter 550, who has paid the annual fee of

21  $2 million pursuant to s. 24.105(27) who:

22         (a)  Conducted a full schedule of live races or games,

23  as described in ss. 550.002(11) and 550.475, between July 1,

24  2000 and June 30, 2001;

25         (b)  Applied for a pari-mutuel permit between January

26  1, 2003 and March 1, 2003, and has conducted a full schedule

27  of live races or games as described in s. 550.002(11); or

28         (c)  Is authorized to receive broadcasts of horse races

29  under s. 550.6308.

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 1         Section 2.  Subsections (21), (22), (23), (24), (25),

 2  (26) and (27) are added to section 24.105, Florida Statutes,

 3  to read:

 4         24.105  Powers and duties of department. The department

 5  shall:

 6         (21)  Have in place the capacity to support video

 7  lottery games at facilities of video lottery retailers by

 8  October 1, 2004.

 9         (22)  Hear and decide promptly and in reasonable order

10  all video lottery related license applications and enforcement

11  proceedings for suspension or revocation of licenses.

12         (23)  Collect and disburse video lottery revenue due

13  the department as described in this chapter.

14         (24)  Certify net terminal income of video lottery

15  retailers by inspecting records, conducting audits, or any

16  other reasonable means.

17         (25)  Maintain a list of licensed video lottery

18  terminal vendors and a current list of all contracts between

19  video lottery terminal vendors and video lottery retailers.

20         (26)  Approve an application for a video lottery

21  retailer within 30 days after receipt of the application. Any

22  person holding a pari-mutuel permit who has been licensed

23  pursuant to chapter 550, meets the definition of a video

24  lottery retailer under s. 24.103(11), and has paid the fee

25  required in subsection (27), meets all qualifications of

26  licensure under this section.

27         (27)  Within 10 days after approval of the application

28  and on every July 1 thereafter, the video lottery retailer

29  shall pay to the department a fee of $2 million. The $2

30  million fee shall be deposited into the Education Enhancement

31  

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 1  Trust Fund to be available to be bonded for school capital

 2  facilities construction.

 3         Section 3.  Section 24.125, Florida Statutes, is

 4  created to read:

 5         24.125  Rules authorized.--

 6         (1)  The department may adopt rules relating to:

 7         (a)  The regulation of video lottery retailers and

 8  video lottery products, including provisions to ensure that

 9  video lottery terminals are operated only by persons at least

10  18 years of age.

11         (b)  Specifications for video lottery terminals to be

12  approved and authorized as the department deems necessary in

13  order to maintain the integrity of video lottery games and

14  terminals. The specifications may not limit the number of

15  video lottery terminal vendors who supply terminals to fewer

16  than four.

17         (c)  The regulation of video lottery terminal vendors.

18         (2)  Initial rules to permit the operation of video

19  lotteries and the licensing of video lottery vendors shall be

20  adopted by July 1, 2004. The department may adopt emergency

21  rules under s. 120.536(1) and s. 120.58(4) to implement this

22  section.

23         Section 4.  Section 24.126, Florida Statutes, is

24  created to read:

25         24.126  Video lottery; minimum age.--

26         (1)  A person who is younger than 18 years of age may

27  not play a video lottery game.

28         (2)  Each video lottery retailer shall post a clear and

29  conspicuous sign on all video lottery terminals which states:

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 1         THE USE OF A VIDEO LOTTERY TERMINAL BY PERSONS

 2         UNDER THE AGE OF 18 IS AGAINST FLORIDA LAW.

 3         PROOF OF AGE IS REQUIRED FOR USE.

 4  

 5         (3)  Any person who violates this section commits a

 6  misdemeanor of the second degree, punishable as provided in s.

 7  775.082 or s. 775.083.

 8         Section 5.  Section 24.127, Florida Statutes, is

 9  created to read:

10         24.127  Video lottery games.--

11         (1)  Video lottery games may be offered by a video

12  lottery retailer only at its pari-mutuel facility at any time.

13  During any calendar year in which a video lottery retailer

14  maintains video lottery terminals, the retailer must have

15  conducted in the prior year a full schedule of live racing or

16  games, as defined in s. 550.002(11), including the conduct of

17  races or games under s. 550.475, or be authorized to receive

18  broadcasts of horse races under s. 550.6308. The department

19  shall waive such requirements upon a showing that the failure

20  to conduct races or games resulted from a natural disaster or

21  other acts beyond the control of the permitholder, including

22  legal restrictions or prohibitions placed on the

23  permitholder's activities. If the retailer for any other

24  reason does not comply with the requirement to conduct a full

25  schedule of races or games, the department shall order the

26  retailer to suspend its video lottery operation. The

27  department may assess an administrative fine, not to exceed

28  $5,000 per video lottery terminal per day, against any

29  retailer who does not suspend its video lottery operation when

30  ordered to do so by the department. The department may enforce

31  a suspension order or administrative fine as provided in s.

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 1  120.69. Each video lottery retailer shall post a bond payable

 2  to the state in an amount determined by the department which

 3  is sufficient to guarantee the payment of revenue due in any

 4  payment period.

 5         (2)  Each video lottery terminal retailer shall

 6  determine the following pertaining to the video lottery

 7  terminals located on its premises:

 8         (a)  Number of video lottery terminals;

 9         (b)  Dates and hours during which the video lottery

10  terminals are available for play;

11         (c)  Mix of games available for play on video lottery

12  terminals;

13         (d)  Use of currency, coins, tokens, vouchers,

14  electronic credits, or anything of value;

15         (e)  Location and movement of video lottery terminals

16  on the premises;

17         (f)  Staffing of video lottery terminal operations on

18  the premises; and

19         (g)  Minimum and maximum betting amounts and the

20  payout, based upon a suitable range, as determined by the

21  video lottery retailer, with a minimum of 88 percent and a

22  maximum of 95 percent of the amount of currency, coins,

23  tokens, credits, vouchers, or anything of value put into a

24  video lottery terminal. Upon 10 days' written notice to the

25  department, the department may approve a greater payout

26  percentage than 95 percent if the total annual payout is not

27  greater than 95 percent.

28         (3)  Each video lottery terminal retailer shall notify

29  the department prior to commencing the initial operation of

30  the video lottery games.

31  

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 1         (4)  To facilitate the auditing and security programs

 2  critical to the integrity of the video lottery system, the

 3  department has overall control of the entire system. Each

 4  video lottery terminal shall be linked, directly or

 5  indirectly, to a computer system approved by the department.

 6         (5)  Video lottery games may be played at an authorized

 7  video lottery retailer's facility, regardless of whether the

 8  retailer is conducting a pari-mutuel event.

 9         (6)  Income derived from video lottery operations is

10  not subject to s. 24.121. The allocation of net terminal

11  income derived from video lottery games shall be as follows:

12         (a)  Forty-two percent shall be remitted to the Video

13  Lottery Administration Trust Fund for transfer to the

14  Education Enhancement Trust Fund. The $2 million annual fee

15  paid by each permitholder pursuant to s. 24.105(27), shall be

16  credited back to the permitholder on a weekly basis out of the

17  Video Lottery Administrative Trust Fund until the total $2

18  million is credited. However, weekly credits may not exceed

19  $100,000 per week per permitholder.

20         (b)  Seventy-five hundredths percent shall be remitted

21  to the Video Lottery Administrative Trust Fund for transfer to

22  the Administrative Trust Fund.  Twenty-five percent of the

23  0.75 percent, with a cap not to exceed 5 million dollars per

24  year, shall be transferred to the Department of Children and

25  Family Services for the establishment and administration of a

26  treatment program for compulsive gambling.

27         (c)  Fifty-seven and twenty-five hundredths percent

28  shall be retained by the video lottery retailer as

29  compensation, and of that amount:

30         1.  Four and twenty-five hundredths percent of the

31  retailer's net terminal income shall be distributed by the

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 1  video lottery retailer as purses for live performances

 2  conducted as a part of the video lottery retailer's

 3  pari-mutuel meet in accordance with chapter 550; however, if

 4  the video lottery retailer holds a license pursuant to s.

 5  550.06308, the 4.25 percent shall be distributed as

 6  thoroughbred breeders' awards and stallion awards and awards

 7  to owners of registered Florida-bred thoroughbred horses under

 8  ss. 550.26165 and 550.2625(3), subject to the fee provided in

 9  s. 550.2625(3).

10         2.  Four percent of the retailer's net terminal income

11  shall be remitted to the Video Lottery Administrative Trust

12  Fund for transfer to the Video Lottery Purse Trust Fund, to be

13  distributed pursuant to s. 24.132.

14         (7)  The allocation provided in subsection (6) shall be

15  made weekly. Amounts allocated pursuant to paragraphs (6)(a)

16  and (b) shall be remitted to the department by electronic

17  transfer within 24 hours after the allocation is determined.

18  If live meets were conducted by the video lottery retailer

19  during the weekly period for which the allocation is made, the

20  portion of the allocation to be distributed as purses under

21  paragraph (6)(c) shall be paid as purses for those live meets.

22  If live meets were not conducted at the pari-mutuel facility

23  during the weekly period for which the allocation is made, the

24  distribution of purse money shall be made during the next

25  ensuing meet. Any interest income on funds required to be

26  distributed under paragraph (6)(c) prior to distribution of

27  the funds as purses shall be distributed by the video lottery

28  retailer as purses for live performances conducted at the

29  video lottery retailer's pari-mutuel facility or a facility

30  authorized under s. 550.475.

31  

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 1         (8)  Any person who intentionally manipulates or

 2  attempts to manipulate the outcome, payoff, or operation of a

 3  video lottery terminal by physical or electronic tampering or

 4  other means commits a felony of the third degree, punishable

 5  as provided in s. 775.082, s. 775.083, or s. 775.084.

 6         (9)  Notwithstanding s. 24.115, each video lottery

 7  retailer is responsible for payment of video lottery prizes.

 8         (10)  In the area or room in a facility in which a

 9  video lottery terminal is placed, the video lottery retailer

10  shall also place video monitors displaying live races or games

11  being conducted in that facility. If live races or games are

12  not being conducted at the facility, any simulcast races or

13  games that are displayed otherwise in the facility shall be

14  displayed.  In each area or room, the retailer shall also

15  provide a means by which patrons may wager on pari-mutuel

16  activity.

17         Section 6.  Section 24.128, Florida Statutes, is

18  created to read:

19         24.128  Licensure of video lottery terminal

20  vendors.--Video lottery terminal vendors shall be licensed by

21  the department by July 1, 2004. The department may adopt

22  emergency rules under s. 120.536(1) and s. 120.54(4) to

23  implement this section. The department may not license a

24  person as a video lottery terminal vendor who has an interest

25  in a video lottery retailer or a business relationship with a

26  video lottery retailer other than as a vendor or lessor of

27  video lottery terminals.

28         Section 7.  Section 24.129, Florida Statutes, is

29  created to read:

30         24.129  Local zoning of pari-mutuel facilities.--The

31  installation, operation, or use of a video lottery on any

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 1  property where pari-mutuel operations were or would have been

 2  lawful under any county or municipal zoning ordinance on July

 3  1, 2003, does not change the character of the use of such

 4  property and may not be prohibited by any local land use or

 5  zoning ordinance.

 6         Section 8.  Section 24.130, Florida Statutes, is

 7  created to read:

 8         24.130  Video lottery terminals.--

 9         (1)  Video lottery terminals may not be offered for use

10  or play in this state unless approved by the department.

11         (2)  Each video lottery terminal approved for use in

12  this state shall:

13         (a)  Be protected against manipulation to affect the

14  random probabilities of winning plays.

15         (b)  Have one or more mechanisms that accepts currency,

16  coins, tokens, vouchers, or anything of value in exchange for

17  game credits. Such mechanisms must be designed to prevent

18  players from obtaining currency, coins, tokens, vouchers, or

19  anything of value, or from obtaining game credits by physical

20  tampering.

21         (c)  Be capable of suspending play until reset at the

22  direction of the department as a result of physical tampering.

23         (d)  Be capable of being linked to a central computer

24  communications system to audit the operation, financial data,

25  and program information, as required by the department.

26         Section 9.  Section 24.131, Florida Statutes, is

27  created to read:

28         24.131  Video lottery terminal training program.--

29         (1)  Each licensed video lottery terminal vendor shall

30  submit a training program for the service and maintenance of

31  terminals and equipment for approval by the department. The

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 1  training program must include an outline of the training

 2  curriculum; a list of instructors and their qualifications; a

 3  copy of the instructional materials; and the dates, times, and

 4  location of training classes.  A service and maintenance

 5  program may not be held unless approved by the department.

 6         (2)  Each video lottery terminal service employee must

 7  complete the requirements of the manufacturer's training

 8  program before performing service, maintenance, or repairs on

 9  video lottery terminals or associated equipment. Upon the

10  successful completion of the training program by an employee,

11  the department shall issue a certificate authorizing the

12  employee to service, maintain, and repair video lottery

13  terminals and associated equipment. A certificate of

14  completion may not be issued to a person until the department

15  determines that such person has completed the required

16  training. Before being certified as a video lottery terminal

17  service employee, a person must pass a background

18  investigation conducted by the department. The department may

19  revoke certification upon finding that a person is in

20  violation of this chapter or a department rule.

21         (3)  The department may adopt rules regarding the

22  training, qualifications, and certification of video lottery

23  terminal service employees.

24         Section 10.  Section 24.132, Florida Statutes, is

25  created to read:

26         24.132  Administration of the Video Lottery Purse Trust

27  Fund.--

28         (1)  The proceeds of the Video Lottery Purse Trust Fund

29  shall be distributed to pari-mutuel permitholders to be

30  distributed as purses at their respective pari-mutuel

31  facilities as follows:

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 1         (a)  Fifty-eight percent shall be paid to holders of

 2  valid thoroughbred racing permits.

 3         (b)  Eight percent shall be paid to holders of valid

 4  harness racing permits.

 5         (c)  Seven percent shall be paid to holders of valid

 6  jai alai permits.

 7         (d)  Twenty-seven percent shall be paid to holders of

 8  valid greyhound racing permits.

 9         (2)  Distributions to permitholders under subsection

10  (1) shall be determined by dividing the amounts paid in purses

11  during the previous fiscal year by the amount of purses by

12  those permitholders paid by all permitholders of the same

13  class of permits statewide during the previous fiscal year.

14         (3)  All proceeds distributed under this section are in

15  addition to and supplement the other funds set forth in this

16  chapter and chapter 550 for use as purses, awards, and, in the

17  case of jai alai, player compensation.

18         (4)  Ten percent of the amounts distributed pursuant to

19  this section and s. 24.127(6)(c)1. to persons holding valid

20  harness racing permits shall be distributed for payment of

21  breeders' awards, stallion awards, and stallion stakes, and

22  for additional expenditures, including, but not limited to,

23  medical, dental, surgical, life, funeral, and disability

24  insurance and retirement benefits for occupational licensees

25  who work at tracks in this state in which harness horse races

26  are conducted pursuant to ss. 550.26165 and 550.2625, subject

27  to the fee provided in s. 550.2625(4).

28         (5)  Ten percent of the amounts distributed pursuant to

29  this section and s. 24.127(6)(c)2. to persons holding valid

30  thoroughbred racing permits shall be distributed as

31  thoroughbred breeders' awards and stallion awards and awards

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 1  to owners of registered Florida-bred thoroughbred horses

 2  pursuant to ss. 550.26165 and 550.2625(3), subject to the fee

 3  provided in s. 550.2625(3).

 4         (6)  The department may adopt rules to provide for the

 5  equitable distribution of funds by permitholders for purses,

 6  awards, or jai alai player compensation.

 7         Section 11.  Section 24.133, Florida Statutes, is

 8  created to read:

 9         24.133  Notice of availability of assistance for

10  compulsive gambling required.--

11         (1)  The owner of each facility at which video lottery

12  games are conducted shall post signs with the statement:

13  

14         "IF YOU OR SOMEONE YOU KNOW HAS A GAMBLING

15         PROBLEM, HELP IS AVAILABLE, CALL

16         1-800-426-7711."

17  

18  The department may approve additional toll-free numbers to

19  ensure compliance with this section. The signs must be posted

20  within 50 feet of each entrance and within 60 feet of each

21  credit location within the facility.

22         Section 12.  Subsection (24) of section 212.02, Florida

23  Statues, is amended to read:

24         212.02  Definitions.--The following terms and phrases

25  when used in this chapter have the meanings ascribed to them

26  in this section, except where the context clearly indicates a

27  different meaning:

28         (24)  "Coin-operated amusement machine" means any

29  machine operated by coin, slug, token, coupon, or similar

30  device for the purposes of entertainment or amusement.  The

31  term includes, but is not limited to, coin-operated pinball

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 1  machines, music machines, juke boxes, mechanical games, video

 2  games, arcade games, billiard tables, moving picture viewers,

 3  shooting galleries, and all other similar amusement devices.

 4  However, the term does not include a video lottery terminal

 5  operated pursuant to chapter 24.

 6         Section 13.  Section 24.134, Florida Statutes, is

 7  created to read:

 8           24.134  Compulsive gambling program.--The Mental

 9  Health Program Office within the Department of Children and

10  Family Services shall establish a program for public

11  education, awareness, and training regarding problem and

12  compulsive gambling and the treatment and prevention of

13  problem and compulsive gambling. The program shall include:

14         (1)  Maintenance of a compulsive gambling advocacy

15  organization's toll-free, problem-gambling telephone number to

16  provide crisis counseling and referral services to families

17  experiencing difficulty as a result of problem or compulsive

18  gambling.

19         (2)  The promotion of public awareness regarding the

20  recognition and prevention of problem or compulsive gambling.

21         (3)  Facilitation, through in-service training and

22  other means, of the availability of effective assistance

23  programs for problem and compulsive gamblers and family

24  members affected by problem and compulsive gambling.

25         (4)  Studies to identify adults and juveniles in this

26  state who are or are at risk of becoming problem or compulsive

27  gamblers.

28         Section 14.  Section 24.136, Florida Statutes, is

29  created to read:

30         24.136  Licensure of video lottery retailer.--A video

31  lottery retailer is entitled to a caterer's license pursuant

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 1  to s. 565.02 on days in which the pari-mutuel facility is open

 2  to the public for video lottery play as authorized by this

 3  chapter.

 4         Section 15.  This act shall take effect upon becoming a

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 1            *****************************************

 2                          SENATE SUMMARY

 3    Establishes the regulation of video lotteries and defines
      essential components of the video lottery, including
 4    games, terminal, vendor, net terminal income, and
      retailer. Provides that the Department of the Lottery
 5    must have Video Lottery Terminals in place by October 1,
      2004. Provides for duties of the department in regulating
 6    video lottery licenseers and collecting revenue. Provides
      for emergency rulemaking on the regulation of the
 7    retailers, specifications for terminals, and the
      regulation of vendors. Provides for minimum age of 18 to
 8    operate video games and the placing of appropriate
      signage. Provides for the location of operation for video
 9    lottery games to be at the retailer's pari-mutuel
      facility. Specifies that the retailer must have conducted
10    a full schedule of live racing or games in the prior year
      or be authorized to receive broadcasts of horse races.
11    Gives the department authority to suspend and fine any
      noncompliant retailer and gives the retailer authority to
12    determine the number of terminals, dates and hours of
      play, mix of games available, utilization of the type of
13    currency, location and movement of terminals on the
      premises, staffing, and minimum and maximum betting
14    amounts with the range of 88 percent and 95 percent.
      Provides that the department may grant a greater payout
15    percentage provided that the total annual payout of the
      facility is not greater than 95 percent. Provides for the
16    allocation of net terminal income with 42 percent going
      to Education; .75 percent going to the Administrative
17    Trust Fund; with 25 percent of the .75 percent going to
      the Department of Children and Families for a compulsive
18    gambling program; and 57.25 percent going for
      compensation for the permitholders, less 8.25 percent of
19    the net terminal income going for purses. Provides for
      criminal penalties for intentional manipulation of the
20    terminals and for the licensure of video lottery terminal
      vendors. Provides that a Video Lottery Terminal will not
21    change the character of the pari-mutuel facility for
      local zoning purposes. Provides for requirements for the
22    terminals and for a terminal training program. Requires
      signage alerting contact for gambling problems. Provides
23    for a caterer's license when Video Lottery Terminals are
      operating. Requires pari-mutuel permitholders to pay an
24    annual $2 million fee in order to be a video lottery
      retailer. Requires that the $2 million fee be deposited
25    into the Educational Enhancement Trust Fund and be
      available to be bonded for school capital facilities
26    construction. Credits the $2 million annual fee back to
      the permitholder out of the Video Lottery Administration
27    Trust Fund on a weekly basis until the total $2 million
      is credited. Provides that weekly credits may not exceed
28    $100,000 per week, per permitholder. Allows a pari-mutuel
      permitholder who applied for a pari-mutuel permit between
29    January 1, 2004 and March 1, 2004, and has conducted a
      full schedule of live races or games to apply to be a
30    video lottery retailer once the permit is granted.

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CODING: Words stricken are deletions; words underlined are additions.