Senate Bill sb0882
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Florida Senate - 2006 SB 882
By Senator Geller
31-258A-06
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 for fines and
14 orders of suspension; providing a payout
15 percentage; providing for the distribution of
16 income; providing for weekly allocations;
17 providing penalties; creating s. 24.128, F.S.;
18 providing for the licensure of video lottery
19 terminal vendors; providing for emergency
20 rules; creating s. 24.129, F.S.; prohibiting
21 certain local zoning ordinances; creating s.
22 24.130, F.S.; providing requirements for video
23 lottery terminals; creating s. 24.131, F.S.;
24 requiring video lottery terminal vendors to
25 establish training programs for employees who
26 service such terminals; requiring departmental
27 approval of such programs; providing
28 certification requirements for such employees;
29 providing for the adoption of rules; creating
30 s. 24.132, F.S.; providing for the distribution
31 of proceeds from the Video Lottery Purse Trust
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1 Fund; providing for the adoption of rules;
2 creating s. 24.133, F.S.; requiring operators
3 of facilities where video lottery games are
4 conducted to post certain signs regarding
5 compulsive gambling; creating s. 24.134, F.S.;
6 establishing programs for compulsive gambling
7 within the Department of Children and Family
8 Services; creating s. 24.136, F.S.; authorizing
9 a caterer's license for video lottery
10 retailers; amending s. 212.02, F.S.; excluding
11 video lottery terminals from the definition of
12 the term "coin-operated amusement machine" for
13 purposes of the sales and use tax; providing an
14 effective date.
15
16 Be It Enacted by the Legislature of the State of Florida:
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18 Section 1. Subsections (7), (8), (9), (10), and (11)
19 are added to section 24.103, Florida Statutes, to read:
20 24.103 Definitions.--As used in this act:
21 (7) "Video lottery game" means an electronically
22 simulated game involving any element of chance, skill, or
23 both, played on a video lottery terminal that, upon insertion
24 of currency, coins, tokens, credits, vouchers, or anything of
25 value, is available to play or simulate a lottery-type game.
26 The games include, but are not limited to, lineup games,
27 traditional card games, poker, and progressive games where the
28 jackpot grows and accumulates as it is being played in a video
29 lottery terminal, or network of video lottery terminals, using
30 a cathode ray tube, video display screen, or microprocessors,
31 or other similar technology available now or in the future, as
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1 approved by the department. A player may receive a payoff in
2 the form of currency, coins, tokens, credits, vouchers, or
3 anything of value, automatically 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 video
6 lottery terminal may use spinning reels or video displays or
7 other similar technology available now or in the future, as
8 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 a 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. However, in order
24 to be included in the definition, a greyhound racing
25 permitholder must have also conducted, during the prior fiscal
26 year, no fewer than 80 percent of the number of performances
27 and no fewer than 80 percent of the number of live races that
28 it conducted during the 1997-1998 state fiscal year;
29 (b) Applied for a pari-mutuel permit between January
30 1, 2003 and March 1, 2003, and has conducted a full schedule
31 of live races or games as described in s. 550.002(11); or
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1 (c) Is authorized to receive broadcasts of horse races
2 under s. 550.6308.
3 Section 2. Subsections (21), (22), (23), (24), (25),
4 (26), and (27) are added to section 24.105, Florida Statutes,
5 to read:
6 24.105 Powers and duties of department.--The
7 department shall:
8 (21) Have in place the capacity to support video
9 lottery games at facilities of video lottery retailers by
10 October 1, 2006.
11 (22) Hear and decide promptly and in reasonable order
12 all video-lottery-related license applications and enforcement
13 proceedings for suspension or revocation of licenses.
14 (23) Collect and disburse video lottery revenue due
15 the department as described in this chapter.
16 (24) Certify net terminal income of video lottery
17 retailers by inspecting records, conducting audits, or any
18 other reasonable means.
19 (25) Maintain a list of licensed video lottery
20 terminal vendors and a current list of all contracts between
21 video lottery terminal vendors and video lottery retailers.
22 (26) Approve an application for a video lottery
23 retailer within 30 days after receipt of the application. Any
24 person holding a pari-mutuel permit meets all qualifications
25 of licensure under this section if the person has been
26 licensed pursuant to chapter 550, meets the definition of a
27 video lottery retailer under s. 24.103(11), and has paid the
28 fee required in subsection (27).
29 (27) Within 10 days after approval of the application
30 and on every July 1 thereafter, the video lottery retailer
31 shall pay to the department a fee of $2 million, which shall
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1 be deposited into the Education Enhancement Trust Fund to be
2 available to be bonded for school capital facilities
3 construction.
4 Section 3. Section 24.125, Florida Statutes, is
5 created to read:
6 24.125 Rules authorized.--
7 (1) The department may adopt rules relating to:
8 (a) The regulation of video lottery retailers and
9 video lottery products, including provisions to ensure that
10 video lottery terminals are operated only by persons at least
11 18 years of age.
12 (b) Specifications for video lottery terminals to be
13 approved and authorized as the department deems necessary in
14 order to maintain the integrity of video lottery games and
15 terminals. The specifications may not limit the number of
16 video lottery terminal vendors who supply terminals to fewer
17 than four.
18 (c) The regulation of video lottery terminal vendors.
19 (2) Initial rules to permit the operation of video
20 lotteries and the licensing of video lottery vendors shall be
21 adopted by July 1, 2006. The department may adopt emergency
22 rules under ss. 120.536(1) and 120.58(4) to implement this
23 section.
24 Section 4. Section 24.126, Florida Statutes, is
25 created to read:
26 24.126 Video lottery; minimum age.--
27 (1) A person who is younger than 18 years of age may
28 not play a video lottery game.
29 (2) Each video lottery retailer shall post a clear and
30 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.
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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.
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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 annual fee of $2 million
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 per year,
24 shall be transferred to the Department of Children and Family
25 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. Six percent of the retailer's net terminal income
31 shall be distributed by the video lottery retailer as purses
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1 for live performances conducted as a part of the video lottery
2 retailer's pari-mutuel meet in accordance with chapter 550;
3 however, if the video lottery retailer holds a license
4 pursuant to s. 550.06308, the 6 percent shall be distributed
5 as thoroughbred breeders' awards and stallion awards and
6 awards to owners of registered Florida-bred thoroughbred
7 horses under ss. 550.26165 and 550.2625(3), subject to the fee
8 provided in s. 550.2625(3).
9 2. Six and seventy-five hundredths percent of the
10 retailer's net terminal income shall be remitted to the Video
11 Lottery Administrative Trust Fund for transfer to the Video
12 Lottery Purse Trust Fund, to be distributed pursuant to s.
13 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 following the weekly period in which the net
26 terminal income is earned. The accumulated amount to be
27 distributed as purses during the next ensuing meet shall be
28 distributed weekly during the permitholder's next race meeting
29 in an amount determined by dividing the amount to be
30 distributed by the number of performances approved for the
31 permitholder pursuant to its annual license and multiplying
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1 that amount by the number of performances conducted each week.
2 Any interest income on funds required to be distributed under
3 paragraph (6)(c) prior to distribution of the funds as purses
4 shall be distributed by the video lottery retailer as purses
5 for live performances conducted at the video lottery
6 retailer's pari-mutuel facility or a facility authorized under
7 s. 550.475.
8 (8) Any person who intentionally manipulates or
9 attempts to manipulate the outcome, payoff, or operation of a
10 video lottery terminal by physical or electronic tampering or
11 other means commits a felony of the third degree, punishable
12 as provided in s. 775.082, s. 775.083, or s. 775.084.
13 (9) Notwithstanding s. 24.115, each video lottery
14 retailer is responsible for payment of video lottery prizes.
15 (10) In the area or room in a facility in which a
16 video lottery terminal is placed, the video lottery retailer
17 shall also place video monitors displaying live races or games
18 being conducted in that facility. If live races or games are
19 not being conducted at the facility, any simulcast races or
20 games that are displayed otherwise in the facility shall be
21 displayed. In each area or room, the retailer shall also
22 provide a means by which patrons may wager on pari-mutuel
23 activity.
24 Section 6. Section 24.128, Florida Statutes, is
25 created to read:
26 24.128 Licensure of video lottery terminal
27 vendors.--Video lottery terminal vendors shall be licensed by
28 the department by July 1, 2006. The department may adopt
29 emergency rules under ss. 120.536(1) and 120.54(4) to
30 implement this section. The department may not license a
31 person as a video lottery terminal vendor who has an interest
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1 in a video lottery retailer or a business relationship with a
2 video lottery retailer other than as a vendor or lessor of
3 video lottery terminals.
4 Section 7. Section 24.129, Florida Statutes, is
5 created to read:
6 24.129 Local zoning of pari-mutuel facilities.--The
7 installation, operation, or use of a video lottery on any
8 property where pari-mutuel operations were or would have been
9 lawful under any county or municipal zoning ordinance on July
10 1, 2005, does not change the character of the use of such
11 property and may not be prohibited by any local land use or
12 zoning ordinance.
13 Section 8. Section 24.130, Florida Statutes, is
14 created to read:
15 24.130 Video lottery terminals.--
16 (1) Video lottery terminals may not be offered for use
17 or play in this state unless approved by the department.
18 (2) Each video lottery terminal approved for use in
19 this state shall:
20 (a) Be protected against manipulation to affect the
21 random probabilities of winning plays.
22 (b) Have one or more mechanisms that accept currency,
23 coins, tokens, vouchers, or anything of value in exchange for
24 game credits. Such mechanisms must be designed to prevent
25 players from obtaining currency, coins, tokens, vouchers, or
26 anything of value, or from obtaining game credits, by physical
27 tampering.
28 (c) Be capable of suspending play until reset at the
29 direction of the department as a result of physical tampering.
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1 (d) Be capable of being linked to a central computer
2 communications system to audit the operation, financial data,
3 and program information, as required by the department.
4 Section 9. Section 24.131, Florida Statutes, is
5 created to read:
6 24.131 Video lottery terminal training program.--
7 (1) Each licensed video lottery terminal vendor shall
8 submit a training program for the service and maintenance of
9 terminals and equipment for approval by the department. The
10 training program must include an outline of the training
11 curriculum; a list of instructors and their qualifications; a
12 copy of the instructional materials; and the dates, times, and
13 location of training classes. A service and maintenance
14 program may not be held unless approved by the department.
15 (2) Each video lottery terminal service employee must
16 complete the requirements of the manufacturer's training
17 program before performing service, maintenance, or repairs on
18 video lottery terminals or associated equipment. Upon the
19 successful completion of the training program by an employee,
20 the department shall issue a certificate authorizing the
21 employee to service, maintain, and repair video lottery
22 terminals and associated equipment. A certificate of
23 completion may not be issued to a person until the department
24 determines that such person has completed the required
25 training. Before being certified as a video lottery terminal
26 service employee, a person must pass a background
27 investigation conducted by the department. The department may
28 revoke certification upon finding that a person is in
29 violation of this chapter or a department rule.
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1 (3) The department may adopt rules regarding the
2 training, qualifications, and certification of video lottery
3 terminal service employees.
4 Section 10. Section 24.132, Florida Statutes, is
5 created to read:
6 24.132 Administration of the Video Lottery Purse Trust
7 Fund.--
8 (1) The proceeds of the Video Lottery Purse Trust Fund
9 shall be distributed to pari-mutuel permitholders to be
10 distributed as purses at their respective pari-mutuel
11 facilities as follows:
12 (a) Fifty-eight percent shall be paid to holders of
13 valid thoroughbred racing permits.
14 (b) Eight percent shall be paid to holders of valid
15 harness racing permits.
16 (c) Seven percent shall be paid to holders of valid
17 jai alai permits.
18 (d) Twenty-seven percent shall be paid to holders of
19 valid greyhound racing permits.
20 (2) Distributions to permitholders under subsection
21 (1) shall be determined by dividing the amounts paid in purses
22 during the previous fiscal year by the amount of purses by
23 those permitholders paid by all permitholders of the same
24 class of permits statewide during the previous fiscal year.
25 (3) All proceeds distributed under this section are in
26 addition to and supplement the other funds set forth in this
27 chapter and chapter 550 for use as purses, awards, and, in the
28 case of jai alai, player compensation.
29 (4) Ten percent of the amounts distributed pursuant to
30 this section and s. 24.127(6)(c) to persons holding valid
31 greyhound racing permits shall be distributed as additional
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1 purses on all live races at each facility for Florida-bred
2 greyhounds in a manner similar to the distribution of regular
3 purses.
4 (5) Ten percent of the amounts distributed pursuant to
5 this section and s. 24.127(6)(c)1. to persons holding valid
6 harness racing permits shall be distributed for payment of
7 breeders' awards, stallion awards, and stallion stakes, and
8 for additional expenditures, including, but not limited to,
9 medical, dental, surgical, life, funeral, and disability
10 insurance and retirement benefits for occupational licensees
11 who work at tracks in this state in which harness horse races
12 are conducted pursuant to ss. 550.26165 and 550.2625, subject
13 to the fee provided in s. 550.2625(4).
14 (6) Ten percent of the amounts distributed pursuant to
15 this section and s. 24.127(6)(c)2. to persons holding valid
16 thoroughbred racing permits shall be distributed as
17 thoroughbred breeders' awards and stallion awards and awards
18 to owners of registered Florida-bred thoroughbred horses
19 pursuant to ss. 550.26165 and 550.2625(3), subject to the fee
20 provided in s. 550.2625(3).
21 (7) The department may adopt rules to provide for the
22 equitable distribution of funds by permitholders for purses,
23 awards, or jai alai player compensation.
24 Section 11. Section 24.133, Florida Statutes, is
25 created to read:
26 24.133 Notice of availability of assistance for
27 compulsive gambling required.--
28 (1) The owner of each facility at which video lottery
29 games are conducted shall post signs with the statement:
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1 "IF YOU OR SOMEONE YOU KNOW HAS A GAMBLING
2 PROBLEM, HELP IS AVAILABLE, CALL
3 1-800-426-7711."
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5 The department may approve additional toll-free numbers to
6 ensure compliance with this section. The signs must be posted
7 within 50 feet of each entrance and within 60 feet of each
8 credit location within the facility.
9 Section 12. Section 24.134, Florida Statutes, is
10 created to read:
11 24.134 Compulsive gambling program.--The Mental
12 Health Program Office within the Department of Children and
13 Family Services shall establish a program for public
14 education, awareness, and training regarding problem and
15 compulsive gambling and the treatment and prevention of
16 problem and compulsive gambling. The program shall include:
17 (1) Maintenance of a compulsive gambling advocacy
18 organization's toll-free, problem-gambling telephone number to
19 provide crisis counseling and referral services to families
20 experiencing difficulty as a result of problem or compulsive
21 gambling.
22 (2) The promotion of public awareness regarding the
23 recognition and prevention of problem or compulsive gambling.
24 (3) Facilitation, through inservice training and other
25 means, of the availability of effective assistance programs
26 for problem and compulsive gamblers and family members
27 affected by problem and compulsive gambling.
28 (4) Studies to identify adults and juveniles in this
29 state who are, or are at risk of becoming, problem or
30 compulsive gamblers.
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1 Section 13. Section 24.136, Florida Statutes, is
2 created to read:
3 24.136 Licensure of video lottery retailer.--A video
4 lottery retailer is entitled to a caterer's license pursuant
5 to s. 565.02 on days in which the pari-mutuel facility is open
6 to the public for video lottery play as authorized by this
7 chapter.
8 Section 14. Subsection (24) of section 212.02, Florida
9 Statues, is amended to read:
10 212.02 Definitions.--The following terms and phrases
11 when used in this chapter have the meanings ascribed to them
12 in this section, except where the context clearly indicates a
13 different meaning:
14 (24) "Coin-operated amusement machine" means any
15 machine operated by coin, slug, token, coupon, or similar
16 device for the purposes of entertainment or amusement. The
17 term includes, but is not limited to, coin-operated pinball
18 machines, music machines, juke boxes, mechanical games, video
19 games, arcade games, billiard tables, moving picture viewers,
20 shooting galleries, and all other similar amusement devices.
21 However, the term does not include a video lottery terminal
22 operated pursuant to chapter 24.
23 Section 15. This act shall take effect upon becoming a
24 law.
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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 for duties of the Department of the
5 Lottery in regulating video lottery licensees and
collecting revenue. Provides for emergency rulemaking.
6 Provides for a minimum age of 18 to operate video games
and for the placing of appropriate signage. Provides for
7 locating video lottery games at a pari-mutuel facility.
Authorizes the department to suspend and fine any
8 noncompliant retailer and determine the number of
terminals, dates and hours of play, mix of games
9 available, type of currency, location and movement of
terminals on the premises, staffing, and minimum and
10 maximum betting amounts. Provides for the allocation of
net terminal income. Provides for criminal penalties for
11 intentional manipulation of the terminals and for the
licensure of video lottery terminal vendors. Provides
12 that a video lottery terminal does not change the
character of the pari-mutuel facility for local zoning
13 purposes. Provides requirements concerning the terminals.
Requires signage alerting patrons to a hotline for
14 gambling problems. Provides for a caterer's license when
video lottery terminals are operating. (See bill for
15 details.)
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