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:

17  

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:

31  

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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 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.

30  

31  

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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.

30  

31  

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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:

30  

31  

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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."

 4  

 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.

31  

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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.

25  

26  

27  

28  

29  

30  

31  

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