2013 -- S 0979 SUBSTITUTE A

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LC02729/SUB A

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO SPORTS, RACING, AND ATHLETICS -- CASINO GAMING

     Introduced By: Senators Goodwin, Felag, McCaffrey, Bates, and Ruggerio

     Date Introduced: June 05, 2013

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 41-9-1 of the General Laws in Chapter 41-9 entitled "Establishment

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and Extension of Gambling Activities and Other Facilities" is hereby amended to read as follows:

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     41-9-1. "Gambling" and "gambling facilities" defined. -- (a) As used in this chapter,

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the term "gambling" shall include, but not be limited to, horseracing, dog racing, and jai alai;

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however, casino gaming shall be governed by the provisions of chapter 9.1 of title 41, chapters

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42-61, 42-61.2, and 42-61.3. The term "gambling facility" as used in this chapter means a

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building or enclosure in which any gambling activity including, but not limited to, the foregoing

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is played or conducted.

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     (b) The term "gambling facility" shall also include any building, enclosure or other

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improvement designed, constructed, or used in connection with an overall plan or project

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involving the establishment of any gambling activity; provided, however, that this sentence shall

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not apply to any gambling facility licensed prior to July 3, 1998.

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     SECTION 2. Chapter 41-9.1 of the General Laws entitled "The Rhode Island Gaming

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Control and Revenue Act" is hereby repealed in its entirety.

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     CHAPTER 41-9.1

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The Rhode Island Gaming Control and Revenue Act

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     41-9.1-1. Title. -- This chapter shall be known as the "Rhode Island Gaming Control and

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Revenue Act."

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     41-9.1-2. Legislative findings. -- The general assembly makes the following findings:

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      (1) In accord with R.I. Const. Art. VI, section 22, only the people of the State of Rhode

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Island can determine whether the state should pursue casino gaming as a source of revenue;

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      (2) The people should be able to make this determination in a manner that is consistent

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with the Rhode Island Constitution;

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      (3) The people should be able to exercise their right and their elected representatives

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should be able to implement the people's determination based upon clear and objective criteria;

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      (4) A potential casino licensee should be provided with clear and objective criteria;

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      (5) Casino states have diverse regulatory schemes, but all have strong legislative and

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regulatory oversight to ensure integrity of casino operations and to maintain public confidence;

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      (6) To ensure the integrity of the commercial casino gaming industry and its reputation

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in Rhode Island, commercial casino gaming needs the strictest possible regulation with law

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enforcement oversight;

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      (7) There are socio-economic costs that expanded gaming may impose on communities

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and the state;

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      (8) Problem gambling already exists in Rhode Island and may increase with the

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introduction of casino gaming;

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      (9) The state of Rhode Island should follow the lead of other casino jurisdictions and

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take measures designed to detect the extent of problem gambling, educate the public, and assure

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availability of resources for treatment.

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     41-9.1-3. Definitions. -- As used in this chapter, the following terms are defined as

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follows:

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      (1) "Adjusted gross receipts" means the gross receipts less winnings paid to wagerers.

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      (2) "Affiliate" means a person who, directly or indirectly, through one or more

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intermediaries, controls, is controlled by, or is under common control with; is in a partnership

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(general or limited) or joint venture relationship with; or is a co-shareholder of a corporation, a

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co-member of a limited liability company, or co-partner in a limited liability partnership with a

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person who holds or applies for a casino license under this chapter.

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      (3) "Affiliated company" means any form of business organization which controls, is

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controlled by or is under common control with, is in a partnership (general or limited) or joint

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venture relationship with, or is a co-shareholder of a corporation, a co-member of a limited

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liability company, or co-partner in a limited liability partnership with a person who holds or

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applies for a casino license under this chapter.

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      (4) "Agent" means any person who is employed by any agency of the state other than the

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state lottery division, the state police, or attorney general who is assigned to perform full-time

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services on behalf of or for the benefit of the state lottery division regardless of the title or

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position held by that person.

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      (5) "Applicant" means any person who applies for any right, license or registration under

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this chapter:

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      (6) "Casino" means a building in which gaming is conducted.

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      (7) "Casino licensee" or "casino operator" means any person licensed to conduct gaming

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operations according to the provisions of this chapter.

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      (8) "Chairperson" means the chairperson of the state lottery division.

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      (9) "Commission" means the state lottery division as created by chapter 61 of title 42.

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      (10) "Company" means a sole proprietorship, corporation partnership (general or

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limited), limited liability partnership, limited liability company, trust, association, joint stock

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company, joint venture tribal corporation or other form of business organization.

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      (11) "Compensation" means any money, thing of value or financial benefit conferred on

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or received by a person in return for services rendered or to be rendered, whether by that person

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or another.

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      (12) "Conflict of interest" means a situation in which the private interest of a member,

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employee, or agent of the state lottery division may influence the judgment of the member,

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employee, or agent in the performance of his or her public duty under this chapter. A conflict of

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interest includes, but is not limited to, the following:

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      (i) Any conduct that would lead a reasonable person knowing all of the circumstances, to

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conclude that the member, employee, or agent of the state lottery division is biased against or in

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favor of an applicant.

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      (ii) Acceptance of any form of compensation other than from the state lottery division,

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for any services rendered as part of or related to the official duties of the member, employee, or

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agent for the state lottery division.

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      (iii) Participation in any business being transacted with or before the state lottery

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division, in which the member, employee, or agent of the state lottery division, or his or her

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parent, spouse or child, has a financial interest.

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      (iv) Use of the position, title, or any related authority of the member, employee, or agent

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of the state lottery division in a manner designed for personal gain or benefit.

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      (v) Demonstration through work or other action in the performance of the official duties

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of the member, employee, or agent of the state lottery division of any preferential attitude or

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treatment of any person.

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      (13) "Control" means having a greater than twenty percent (20%) direct or indirect

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pecuniary interest in the gaming operation with respect to which the license is sought.

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      (14) "Development agreement" means a written agreement between an applicant for a

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casino license and the Town of West Warwick pertaining to the casino including, but not limited

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to, approval of the location of the site and the process for addressing and approving zoning, land

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use, utility and other essential services, on-site and off-site improvements, local impacts and

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construction and operational issues.

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      (15) "Disciplinary action" is an action by the state lottery division suspending or

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revoking a license, fining, excluding, reprimanding or otherwise penalizing a person for violating

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this chapter or rules promulgated by the state lottery division.

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      (16) "Financial interest" or "financially interested" means any interest in investments,

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awarding of contracts, grants, loans, purchases, leases, sales, or similar matters under

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consideration or consummated by the state lottery division. A member, employee, or agent of the

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state lottery division will be considered to have a financial interest in a matter under consideration

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if any of the following circumstances exist:

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      (i) He or she owns a five percent (5%) or greater direct or indirect pecuniary interest in

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any party to the matter under consideration or consummated by the state lottery division; or

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      (ii) He or she is employed by or is an independent contractor for a party to the matter

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under consideration or consummated by the state lottery division.

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      (17) "Gambling game" means any game played with cards, dice, equipment or a

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machine, including any mechanical, electromechanical or electronic device which shall include

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computers and cashless wagering systems, for money, credit, or any representative of value;

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including, but not limited to faro, monte, roulette, keno, bingo fan tan, twenty-one, blackjack,

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seven and a half, klondike, craps, poker, chuck a luck, Chinese chuck a luck (dai shu), wheel of

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fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingui, slot machine, any banking

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or percentage game, or any other game or device approved by the state lottery division, but does

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not include games played with cards in private homes or residences in which no person makes

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money for operating the game.

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      (18) "Game" means any banking or percentage game located exclusively within a

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licensed casino, which is played with cards, dice, or any electronic, electrical, or mechanical

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device or machine for money, property, or any thing of value.

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      (19) "Gaming" means to deal, operate, carry on, conduct, maintain or expose or offer for

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play any gambling game or gaming operation.

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      (20) "Gaming device" means any equipment or mechanical, electromechanical, or

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electronic contrivance component or machine used directly or indirectly in connection with

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gaming or any game which affects the result of a wager by determining win or loss. The term

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includes a system for processing information, which can alter the normal criteria of random

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selection which affects the operation of any game or which determines the outcome of a game.

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The term does not include a system or device, which affects a game solely by stopping its

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operation so that the outcome remains undetermined.

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      (21) "Gaming operation" means the conduct of authorized gambling games in a casino

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pursuant to this chapter but does not include those operations governed by chapters 61 and 61.2

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of Title 42.

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      (22) "Gaming supplier" means any person who supplies, sells or leases or contracts to

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sell or lease gaming devices, equipment, or supplies to a holder of a license or a casino gaming

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operator.

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      (23) "Gaming supplier permit" means the permit of a gaming supplier.

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      (24) "Gaming supplies" means all materials and supplies other than gaming devices

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which the state lottery division finds or determines to be used or expended in gaming operations

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or activities and that can impact the outcome of game.

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      (25) "Gross receipts" means the total of all sums including valid or invalid checks,

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currency, tokens, coupons, vouchers, or instruments of monetary value whether collected or

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uncollected, received by a casino licensee from gaming, including all entry fees assessed for

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tournaments or other contests less a deduction for uncollectible gaming receivables not to exceed

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the uncollectible amounts owed as a result of wagers placed at or through a gambling game or

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four percent (4%) of the total gross receipts, whichever is less. The licensee shall not receive the

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deduction unless the licensee provides written proof to the state treasurer of the uncollected

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gaming receivable and has complied with all rules promulgated by the state lottery division

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regarding the issuance of credit and the collection of amounts due under a credit extension.

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      (26) "Institutional investor" means a person that is:

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      (a) A plan or trust established and maintained by the United States government, a state,

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or a political subdivision of a state for the benefit of its respective employees.

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      (b) An investment company that is registered under the Investment Company Act of

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1940.

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      (c) A Collective Investment Trust organized by a bank under Part Nine of the rules of the

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Comptroller of the Currency.

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      (d) A closed end investment trust registered with the United States Securities and

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Exchange Board.

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      (e) A mutual fund.

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      (f) A life insurance company or property and casualty insurance company.

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      (g) A federal or state bank.

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      (h) An investment advisor registered under the Investment Advisors Act of 1940.

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      (i) Such other similar regulated entities as may be approved by the state lottery division

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for good cause.

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      (27) "Institutional lender" means a person that is:

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      (a) An insurance company regulated by any state of the United States.

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      (b) Any investment company registered under the Investment Company Act of 1940.

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      (c) Any plan established and maintained by a state, its political subdivision or any

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agency or instrumentality of a state or its political subdivisions for the benefit of its employees.

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      (d) Any trust fund, the trustee of which is a bank or trust.

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      (e) Any investment adviser registered with the United States Securities and Exchange

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Board.

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      (f) Any real estate investment trust registered with the United States Securities and

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Exchange Board.

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      (g) Any dealer registered pursuant to section 15 of the Securities and Exchange Act of

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1934.

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      (h) Any qualified institutional buyer, as defined in Rule 144A under the Securities Act of

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1933 and any entity, all of the equity owners of which are qualified institutional buyers, as

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defined in rule 144A under the Securities Act of 1933, acting for its own account or the accounts

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of other qualified institutional buyers.

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      (i) Any bank as defined in section 3(a)(2) of the Securities Act of 1933, any savings and

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loan association or other institution as referenced in section 3(a)(5)(A) of the Securities Act of

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1933, or any foreign bank or savings and loan association or equivalent institution or any

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investment fund that participates in a bank syndication, and any purchaser that takes an

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assignment or other participation interest in the bank syndication.

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      (j) Any investor or group of investors purchasing debt securities of a licensee, permittee,

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or casino gaming operator, or a subsidiary of a licensee, permittee or casino gaming operator, in

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any public offering registered pursuant to the Securities Act of 1933 or through any private

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placement, and any investor purchasing such securities in a subsequent sale; however, such

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securities are widely held and freely traded, and the investor holds no more than twenty percent

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(20%) of a licensee, permittee or casino gaming operator's total debt or fifty percent (50%) of a

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material debt issue unless otherwise approved by the state lottery division, so as not to give such

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investor the ability to control a licensee, permittee, or casino gaming operator.

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      (k) Any business development company as defined in section 2(a)(48) of the Investment

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Company Act of 1940.

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      (l) Any business development company as defined in section 202(a)(22) of the

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Investment Advisers Act of 1940.

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      (m) Any other regulated lender as the state lottery division may determine in its sole

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discretion consistent with the provisions of this chapter.

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      (n) Such other similar regulated entities as may be approved by the state lottery division

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for good cause.

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      (28) "Key gaming employee" means any natural person employed in the operation of a

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licensed casino facility in a supervisory managerial capacity or empowered to make discretionary

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decisions, which regulate casino facility operations, as determined by the state lottery division.

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      (29) "Key gaming employee permit" means the permit of a key gaming employee.

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      (30) "License" means an authorization issued to a person or entity by or in the name of

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the state lottery division to engage in or assist gaming operations or activities regulated by this

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chapter.

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      (31) "Licensee" means any employee, agent, person or entity that is required to be issued

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a license under this chapter or under the rules and regulations of the state lottery division.

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      (32) "Managerial employee" means a person who by virtue of the level of their

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remuneration or otherwise holds a management supervisory, or policy-making position with any

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authorized licensee pursuant to this chapter, vendor, or the state lottery division.

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      (33) "Manufacturer" means any person or entity that manufactures or assembles

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programs or slot machines or other gaming devices for sale or use in this state.

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      (34) "Master contract" means that contract entered into among the Narragansett Indian

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Tribe, Harrah's Entertainment, Inc. or an Affiliate thereof ("Harrah's") and the state lottery

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division, which contract would have a term commencing on the date of execution and expiring

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ten (10) years from the date that Harrah's opens the casino for business.

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      (35) "Member" means a member appointed to the state lottery division's board.

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      (36) "Municipality" means any city or town within the state.

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      (37) "Non-gaming supplier" means any person or entity that sells, leases, or otherwise

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distributes directly or indirectly, goods or services other than gaming devices and supplies to the

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holder of a license.

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      (38) "Permit" means any permit or authorization, or application therefore, issued

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pursuant to the provisions of this chapter.

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      (39) "Permittee" means any person or entity that is issued or applying for a permit

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pursuant to the provisions of this chapter.

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      (40) "Person" means an individual, corporation, limited liability company, association,

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partnership (general or limited), limited liability partnership, trust, entity, or other legal entity.

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      (41) "Security" means the protection of information that would or could provide an

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unfair advantage to any individual involved in the operation of the casino gaming; protection and

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preservation of the integrity of casino gaming games and operations; as well as measures taken to

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prevent crimes against a gaming operator or the state lottery division.

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      (42) "Slot machine" means any mechanical, electrical, or other device, contrivance, or

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machine which, upon insertion of a coin, token, card or similar object therein or upon payment of

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any consideration whatsoever, is available to play or operate the play or operation of which,

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whether by reason of the skill of the operator or application of the element of change, or both,

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may deliver or entitle the person playing or operating the machine to receive cash, premiums,

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merchandise, tokens, or any thing of value, whether the payoff is made automatically from the

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machine or in any other manner.

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      (43) "Suitable" "suitability" or "suitability requirements" means the criteria provided for

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in section 41-9.1-22.

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      (44) "Vendor" means a person who supplies any goods or services to a casino licensee.

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      (45) "Video Lottery Terminal revenue" means net terminal income derived from video

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lottery games and deposited in the general fund and to the state lottery division for administrative

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purposes pursuant to section 42-61.2-7(a)(1).

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      (46) "Wagerer" means a person who plays a gambling game authorized under this

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chapter.

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      (47) "Wagering tax revenue" means the tax revenue to the state derived from the taxes

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imposed on the adjusted gross receipts of the casino licensee in accordance with section 41-9.1-

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12(b).

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      (48) "Winnings" means the total cash value of all property or sums including currency,

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tokens, or instruments of monetary value paid to wagerers as a direct result of wagers placed at or

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through a gambling game.

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     41-9.1-4. State lottery division -- Members, employees, agents -- Powers and duties. -

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- (a) In addition to its powers and duties set forth in chapter 61 of title 42, the state lottery

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division shall have the powers and duties specified within this chapter and all other powers

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necessary and proper to fully and effectively execute and administer the provisions of this chapter

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for its purpose of licensing, regulating and enforcing the system of casino gaming.

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      (b) By January 31st of each year, each member of the state lottery division shall prepare

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and file with the office of the state lottery division, a member disclosure form in which the

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member does all of the following:

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      (1) Affirms that the member or the member's spouse, parent, child, or child's spouse is

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not a member of the board of directors, or financially interested in, or employed by a licensee or

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applicant.

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      (2) Affirms that the member continues to meet any other criteria for state lottery division

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membership under this chapter or the rules promulgated by the state lottery division.

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      (3) Discloses any other information as may be required to ensure that the integrity of the

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state lottery division and its work is maintained.

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      (c) By January 31st of each year, each employee of the state lottery division shall

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prepare and file with the office of the state lottery division an employee disclosure form in which

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the employee does all of the following:

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      (1) Affirms the absence of financial interests prohibited by this chapter.

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      (2) Discloses any legal or beneficial interests in any real property that is or that may be

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directly or indirectly involved with gaming or gaming operations authorized by this chapter.

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      (3) Discloses whether the employee or the employee's spouse, parent, child, or child's

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spouse is financially interested in or employed by licensee or applicant.

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      (4) Discloses such other matters as may be required to ensure that the integrity of the

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state lottery division and its work is maintained.

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      (d) A member, employee, or agent of the state lottery division who becomes aware that

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the member, employee or agent of the state lottery division or his or her spouse, parent, or child is

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a member of the board of directors; or financially interested in, or employed by, a licensee or an

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applicant shall immediately provide detailed written notice thereon to the chairperson.

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      (e) A member, employee or agent of the state lottery division who has been indicted,

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charged with, convicted of, pled guilty or nolo contendere to or forfeited bail concerning a

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misdemeanor or felony involving gaming, dishonesty, theft, or fraud in this state or any state or of

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the United States shall immediately provide detailed written notice of the conviction or charge to

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the chairperson.

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      (f) Any member, employee, or agent of the state lottery division who is negotiating for,

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or acquires by any means any interest in any person who is a licensee or an applicant, or any

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person affiliated with such a person, shall immediately provide written notice of the details of the

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interest to the chairperson. The member, employee, or agent of the state lottery division shall not

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act on behalf of the state lottery division with respect to that person.

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      (g) A member, employee, or agent of the state lottery division may not enter into any

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negotiations for employment with any person or affiliate of any person who is a licensee or an

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applicant, and shall immediately provide written notice of the details of any such negotiations or

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discussions to the chairperson. The member, employee, or agent of the state lottery division shall

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not take any action on behalf of the state lottery division with respect to that person.

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      (h) Any member, employee, or agent of the state lottery division who receives an

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invitation, written or oral, to initiate a discussion concerning employment or the possibility of

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employment with a person or affiliate of a person who is a licensee or an applicant shall

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immediately report that he or she received the invitation to the chairperson. The member,

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employee, or agent of the state lottery division shall not take action on behalf of the state lottery

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division with respect to the person.

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      (i) A licensee or applicant shall not knowingly initiate a negotiation for or discussion of

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employment with a member, employee, or agent of the state lottery division. A licensee or

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applicant who initiates a negotiation or discussion about employment shall immediately provide

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written notice of the details of the negotiation or discussion to the chairperson as soon as he or

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she becomes aware that the negotiation or discussion has been initiated with a member,

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employee, or agent of the state lottery division.

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      (j) A member, employee, or agent of the state lottery division, or former member,

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employee, or agent of the state lottery division, shall not disseminate or otherwise disclose any

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material or information in the possession of the state lottery division that the state lottery division

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considers confidential unless specifically authorized to do so by the chairperson of the state

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lottery division.

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      (k) A member, employee or agent of the state lottery division shall not engage in any

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conduct that constitutes a conflict of interest and shall immediately advise the chairperson, in

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writing, of the details of any incident or circumstances that would present the existence of a

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conflict of interest with respect to the performance of the state lottery division -related work or

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duty of the member, employee, or agent of the state lottery division.

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      (l) A member, employee, or agent of the state lottery division who is approached and

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offered a bribe shall immediately provide written account of the details of the incident to the

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chairperson and to a law enforcement officer of a law enforcement agency having jurisdiction.

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      (m) A member, employee, or agent of the state lottery division shall disclose his or her

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past involvement with any casino interest in the past five (5) years.

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      (n) A member, employee, or agent of the state lottery division or a parent, spouse,

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sibling, spouse of a sibling, child, or spouse of a child of a member, employee, or agent of the

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state lottery division may not accept, other than that which they may be able to receive as a

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legislator in compliance with campaign contribution, disclosure and other rules, regulations and

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general laws in existence, any gift, gratuity, compensation, travel, lodging, or anything of value,

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directly or indirectly, from any licensee or any applicant or affiliate or representative of an

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applicant or licensee. Any member, employee, or agent of the state lottery division who is offered

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or receives any gift, gratuity, compensation, travel, lodging, or anything of value, directly or

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indirectly, from any licensee or any applicant or affiliate or representative of an applicant or

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licensee shall immediately provide written notification of the details to the chairperson.

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      (o) A licensee or applicant, or affiliate or representative of an applicant or licensee, may

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not, directly or indirectly, give or offer to give any gift, gratuity, compensation, travel, lodging, or

11-9

anything of value to any member, employee, or agent of the state lottery division which the

11-10

member, employee, or agent of the state lottery division is prohibited from accepting under

11-11

subsection (j).

11-12

      (p) Except as follows, no member, employee, or agent of the state lottery division may

11-13

participate in or wager on any gambling game conducted by any licensee or applicant or any

11-14

affiliate of an applicant or licensee in Rhode Island or in any other jurisdiction. A member,

11-15

employee, or agent of the state lottery division may participate in and wager on a gambling game

11-16

conducted by a licensee under this chapter, to the extent authorized by the chairperson or board of

11-17

the state lottery division as part of the person's surveillance, security, or other official duties for

11-18

the state lottery division.

11-19

      (q) A former member, employee or agent of the state lottery division may appear before

11-20

the state lottery division as a fact witness about matters or actions handled by the member,

11-21

employee, or agent during his or her tenure as a member, employee, or agent of the state lottery

11-22

division. The member, employee, or agent of the state lottery division shall not receive

11-23

compensation for such an appearance other than standard witness fee for reimbursement for travel

11-24

expenses as established by statute or court rule.

11-25

      (r) A new or current employee or agent of the state lottery division shall obtain written

11-26

permission from the executive director before continuing outside employment held at the time the

11-27

employee begins to work for the state lottery division. Permission shall be denied, or permission

11-28

previously granted will be revoked, if the nature of the work is considered to or does create a

11-29

possible conflict of interest or otherwise interferes with the duties of the employee or agent for

11-30

the state lottery division.

11-31

      (s) An employee or agent of the state lottery division granted permission for outside

11-32

employment shall not conduct any business or perform any activities, including solicitation,

11-33

related to outside employment on premises used by the state lottery division or during the

11-34

employee's working hours for the state lottery division.

12-1

      (t) Whenever the chairperson, as an employee of the state lottery division, is required to

12-2

file disclosure forms or report, in writing, the details of any incident or circumstance pursuant to

12-3

this section, he or she shall make such filings or written reports to the state lottery division.

12-4

      (u) The chairperson shall report any action he or she has taken or contemplates taking

12-5

under this section with respect to an employee or agent or former employee or former agent to the

12-6

state lottery division at the next meeting of the state lottery division. The state lottery division

12-7

may direct the executive director to take additional or different action.

12-8

      (v) Violation of this section by a licensee or applicant, or affiliate of a licensee or

12-9

applicant, may result in denial of the application of licensure or revocation or suspension of

12-10

license or other disciplinary action by the state lottery division.

12-11

      (w) Violation of this section by a member of the state lottery division may result in

12-12

disqualification or constitute cause for removal pursuant to the provisions of this chapter or other

12-13

disciplinary action as determined by the state lottery division.

12-14

      (x) A violation of this section by an employee or agent of the state lottery division will

12-15

not result in termination of employment if the state lottery division determines that the conduct

12-16

involved does not violate the purpose of this chapter. However, employment will be terminated as

12-17

follows:

12-18

      (1) If, after being offered employment or beginning employment with the state lottery

12-19

division, the employee or agent intentionally acquires a financial interest in a licensee or an

12-20

applicant, or affiliate of a licensee or applicant, employment with the state lottery division shall

12-21

be terminated.

12-22

      (2) If a financial interest in a licensee or an applicant, or affiliate of a licensee or

12-23

applicant, is acquired by an employee or agent that has been offered employment with the state

12-24

lottery division, an employee of the state lottery division, or the employee's or agent's spouse,

12-25

parent, or child, through no intentional action of the employee or agent, the individual shall have

12-26

up to thirty (30) days to divest or terminate the financial interest. Employment may be terminated

12-27

if the interest has not been divested after thirty (30) days.

12-28

      (3) Employment shall be terminated if the employee or agent is a spouse, parent, child,

12-29

or spouse of a child of a state lottery division member.

12-30

      (y) Violation of this section does not create a civil cause of action.

12-31

      (z) As used in this section, "Outside employment" includes, but is not limited to, the

12-32

following:

12-33

      (1) Operation of a proprietorship.

13-34

      (2) Participation in a partnership or group business enterprise.

13-35

      (3) Performance as a director or corporate officer of any for-profit corporation or

13-36

banking or credit institution.

13-37

     41-9.1-5. State lottery division -- Jurisdiction -- Powers. -- (a) In addition to its

13-38

jurisdiction and powers set forth in chapter 61 of title 42, the state lottery division shall also have

13-39

such jurisdiction and powers as provided for in this title. The state lottery division shall have

13-40

jurisdiction over and shall supervise all gaming operations governed by this chapter. The state

13-41

lottery division shall have all powers necessary and proper to fully and effectively execute this

13-42

chapter; including, but not limited to, the authority to do all of the following:

13-43

      (1) Investigate applicants and determine the eligibility of applicants for licenses or

13-44

registration and to grant licenses to applicants in accordance with this chapter and the rules

13-45

promulgated under this chapter.

13-46

      (2) Have jurisdiction over and supervise casino gaming authorized by this chapter and all

13-47

persons in casinos where gaming is conducted under this chapter.

13-48

      (3) Enter, to the extent permissible under the Constitutions of the State of Rhode Island

13-49

and of the United States of America, through its investigators agents, auditors, and the state police

13-50

at any time without a warrant and without notice to the licensee, the premises, offices, casinos,

13-51

facilities or other places of business of a casino licensee or gaming supplier permittee where

13-52

evidence of the compliance or noncompliance with this chapter or the rules promulgated by the

13-53

state lottery division is likely to be found, for the following purposes:

13-54

      (i) To inspect and examine all premises wherein casino gaming or the business of

13-55

gaming or the business of a gaming supplier is conducted, or where any records of the activities

13-56

are prepared.

13-57

      (ii) To inspect, examine, audit, impound, seize or assume physical control of, or

13-58

summarily remove from the premises all books, ledgers, documents, writings, photocopies,

13-59

correspondence, records, videotapes, including electronically stored records, money receptacles,

13-60

other containers and their contents, equipment in which the records are stored, or other gaming

13-61

related equipment and supplies on or around the premises including counting rooms.

13-62

      (iii) To inspect the person, and inspect, examine and seize personal effects present in a

13-63

casino facility licensed under this chapter, of any holder of a license or registration issued

13-64

pursuant to this chapter while that person is present in a licensed casino facility.

13-65

      (iv) To investigate and deter alleged violations of this chapter or the rules promulgated

13-66

by the state lottery division.

13-67

      (4) Investigate alleged violations of this chapter or rules promulgated by the state lottery

13-68

division and to take appropriate disciplinary action against a licensee, permittee or any other

14-1

person or holder of an occupational license or permit for a violation, or institute appropriate legal

14-2

action for enforcement, or both.

14-3

      (5) Adopt standards for the licensing or permitting of all persons pursuant to this chapter,

14-4

as well as for electronic or mechanical gambling games, and to establish fees for such licenses

14-5

and permits.

14-6

      (6) Adopt appropriate standards for all casino gaming facilities and equipment.

14-7

      (7) Require that all records of casino licensees and gaming supplier permittees, including

14-8

financial or other statements, be kept on the premises of the casino licensee or gaming supplier

14-9

permittee in the manner prescribed by the state lottery division.

14-10

      (8) Require that the casino licensee submit to the state lottery division an annual balance

14-11

sheet, profit and loss statement, and any other information the state lottery division considers

14-12

necessary in order to effectively administer this chapter, all rules promulgated by the state lottery

14-13

division, and orders and final decisions made under this chapter.

14-14

      (9) Prescribe a form to be used by any licensee involved in the ownership or

14-15

management of gambling operations as an application for employment for prospective

14-16

employees.

14-17

      (10) Revoke or suspend licenses or permits, impose fines and penalties as the state

14-18

lottery division considers necessary and in compliance with this chapter and applicable laws of

14-19

the state regarding administrative procedure, and review and decide the renewal of licenses.

14-20

      (11) In addition to a disassociated person, eject or exclude or authorize the ejection or

14-21

exclusion of a person from a casino if the person violates the provisions of this chapter, rules

14-22

promulgated by the state lottery division or final orders of the state lottery division or when the

14-23

state lottery division determines that the person's conduct or reputation is such that his or her

14-24

presence within the casino gaming facilities may compromise the honesty and integrity of the

14-25

gambling operations or interfere with the orderly conduct of the gaming operations. However, the

14-26

propriety of the election or exclusion is subject to a subsequent hearing by the state lottery

14-27

division.

14-28

      (12) Suspend, revoke or restrict licenses and permits, and require the removal of a

14-29

licensee or permittee or an employee of a licensee or permittee, for a violation of this chapter or a

14-30

rule promulgated by the state lottery division or for engaging in a fraudulent practice, and impose

14-31

civil penalties pursuant to the provisions of this chapter.

14-32

      (13) Disqualify a person in accordance with the applicable provisions of this chapter.

14-33

      (14) In addition to the authority provided under subsection (a)(12), revoke or suspend a

14-34

casino license or impose any other disciplinary action for any of the following reasons:

15-1

      (i) The casino licensee has violated the provisions of chapter 2 of title 3 or rules

15-2

promulgated pursuant to this chapter.

15-3

      (ii) At any time the licensee no longer meets the eligibility requirements or suitability

15-4

determination by the state lottery division for a casino license under this chapter.

15-5

      (iii) The failure to revoke or suspend the license would undermine the public's

15-6

confidence in the Rhode Island gaming industry.

15-7

      (15) Conduct periodic compliance or special or focused audits of casinos authorized

15-8

under this chapter. Said audits may be conducted by state agency personnel or private sector audit

15-9

firms and shall be in addition to annual financial audits conducted by certified public accountant

15-10

firms.

15-11

      (16) Establish minimum levels of insurance to be maintained by licensees.

15-12

      (17) Perform a background check, at the vendor's expense, of any vendor using the same

15-13

standards that the state lottery division uses in determining whether to grant a gaming or non-

15-14

gaming supplier's permit.

15-15

      (18) Review the business practices of a casino licensee including, but not limited to, the

15-16

price and quality of goods and services offered to patrons, and take disciplinary action as the state

15-17

lottery division considers appropriate to prevent practices that undermine the public's confidence

15-18

in the Rhode Island gaming industry.

15-19

      (19) Review a holder of a license, permit or registration if that holder is under review or

15-20

is otherwise subject to discipline by a regulatory body in any other jurisdiction for a violation of a

15-21

gaming law or regulation in that jurisdiction.

15-22

      (20) Take any other action as may be reasonable or appropriate to enforce this chapter

15-23

and rules promulgated by the state lottery division.

15-24

      (b) The state lottery division may seek and shall receive the cooperation and assistance

15-25

of the department of state police and department of attorney general in conducting background

15-26

investigations of applicants and in fulfilling its responsibilities under this chapter.

15-27

      (c) The state lottery division shall establish, issue and promulgate rules and regulations

15-28

pertaining to any or all matters within the state lottery division's jurisdiction, in accordance with

15-29

the provisions of the state administrative procedures act, chapter 35 of title 42, including, but not

15-30

limited to:

15-31

      (1) The issuance of any license, registration, or permit authorized by this chapter or other

15-32

law providing for gaming operations and activities subject to regulation of the state lottery

15-33

division.

16-34

      (2) The methods and procedures for making an application for a license, registration, or

16-35

permit to be considered by the state lottery division.

16-36

      (3) The methods for providing to the state lottery division information concerning a

16-37

person's family, habits, character, associates, criminal record, business activities, and financial

16-38

affairs.

16-39

      (4) Enforcement of this chapter, gaming laws administered by the state lottery division,

16-40

and rules of the state lottery division including imposition and collection of fines, penalties, and

16-41

other sanctions which may be imposed by the state lottery division against a casino operator or

16-42

any other licensee or permittee of the state lottery division.

16-43

      (5) The operation and management of the facility, the hiring of employees thereof, the

16-44

establishment of prevention, education and other services related to pathological gambling, the

16-45

conduct of gaming, electronic funds transfer terminals, audits, annual reports, prohibited conduct,

16-46

and such other matters as the state lottery division shall determine.

16-47

      (d) The state lottery division may conduct hearings or may designate a hearing officer or

16-48

hearing panel to conduct hearings and in connection therewith may:

16-49

      (1) Issue subpoenas and compel the attendance of witnesses or the production of

16-50

documents.

16-51

      (2) Administer oath.

16-52

      (3) Require testimony under oath before the hearing officer or hearing panel in the

16-53

course of a hearing being held for any reason.

16-54

      (4) Issue written interrogatories.

16-55

      (e) Notwithstanding any other provisions of the general laws or regulations adopted

16-56

thereunder to the contrary, including, but not limited to, the provisions of chapter 2 of title 37,

16-57

and chapter 61 of title 42, the state lottery division is hereby authorized, empowered and directed

16-58

to enter into a Master Contract with the Narragansett Indian Tribe and Harrah's Entertainment,

16-59

Inc. or an Affiliate thereof ("Harrah's") which contract will have a term commencing on the date

16-60

of execution and expiring ten (10) years from the date that the casino opens for business, and to

16-61

fix in the Master Contract for the duration of such term the following: the casino license fee; the

16-62

rate of taxation on the adjusted gross receipts from gaming authorized under this chapter; the two

16-63

(2) year tax revenue insurance policy; the hotel occupancy tax which shall be in lieu of all other

16-64

parking, admission and other related patron taxes and fees; the project investment requirement of

16-65

the casino licensee; the annual funding covenant of the casino licensee in favor of the Rhode

16-66

Island Council on Problem Gambling; and the annual funding covenant of the casino licensee in

16-67

connection with a joint marketing budget in favor of the Rhode Island Hospitality and Tourism

16-68

Association and Rhode Island Convention Center and Visitors Bureau, all as set forth and

17-1

described in section 41-9.1-12. Insofar as the provisions of this act are inconsistent with the

17-2

provisions of any other general or special law, the provisions of this act shall be controlling. The

17-3

state does hereby pledge and agree under this act that the state will not limit, alter, diminish, or

17-4

adversely impact the rights or economic benefits which vest in the casino licensee under the terms

17-5

of the Master Contract authorized hereby, unless authorized by this act, and the state lottery

17-6

division is hereby authorized, empowered and directed to memorialize this pledge and agreement

17-7

on behalf of the state in the Master Contract.

17-8

      (f) After the expiration of the ten (10) year period of the Master Contract described

17-9

above, the parties thereto shall renegotiate the wagering tax rates set forth in section 41-9.1-12(b)

17-10

and the casino license renewal fee set forth in section 41-9.1-11.

17-11

     41-9.1-6. Division of state police -- Jurisdiction -- Powers. -- The division of state

17-12

police shall:

17-13

      (a) Conduct investigations and audits regarding the qualifications of applicants for

17-14

licenses, permits or registrations requiring suitability determinations as required by law or rule or

17-15

determined necessary by the state lottery division.

17-16

      (b) Submit all investigative reports to the state lottery division by and through the

17-17

executive director for analysis, review, and action pursuant to the provisions of this chapter.

17-18

      (c) Conduct audits to assist the state lottery division in determining compliance with all

17-19

gaming laws, rules and regulations on gaming activities and operations under the state lottery

17-20

division's jurisdiction.

17-21

      (d) Perform all other duties and functions necessary for the efficient, efficacious, and

17-22

thorough regulation and control of gaming activities and operations under the state lottery

17-23

division's jurisdiction.

17-24

     41-9.1-7. Appropriation -- Reimbursement. -- Operations of the state lottery division

17-25

during fiscal years shall be funded by the fees paid by licensees and suppliers pursuant to the

17-26

provisions of this chapter, including without limitation section 41-9.1-11.

17-27

     41-9.1-8. Casino gaming authorized. -- (a) Notwithstanding any other section of Rhode

17-28

Island General Laws, gaming is authorized at a single casino in the state of Rhode Island to the

17-29

extent that it is conducted in accordance with this chapter.

17-30

      (b) This chapter does not apply to any of the following:

17-31

      (1) The pari-mutuel system of wagering used or intended to be used in connection with

17-32

race meetings as authorized under chapters 3.1 and 4 of this title.

17-33

      (2) Lottery games authorized under chapters 61 and 61.2 of title 42; including, without

17-34

limitation, video lottery terminals located at Newport Grand and Lincoln Greyhound Park.

18-1

      (3) Bingo.

18-2

      (4) The pari-mutuel system of wagering used or intended to be used in connection with

18-3

jai alai as authorized under chapter 7 of this title.

18-4

      (5) The pari-mutuel system of wagering used or intended to be used in connection with

18-5

Simulcast programs from licensed betting facilities as authorized under chapter 11 of this title.

18-6

     41-9.1-9. State and local referendum election. -- (a) Pursuant to the terms of R.I.

18-7

Const., Art. VI, section 22 and chapter 5 of title 17, the general assembly hereby authorizes

18-8

submission to all of the electors of the state, at the general election to take place on November 2,

18-9

2004, the following question: "Shall there be a casino in the Town of West Warwick operated by

18-10

an Affiliate of Harrah's Entertainment in association with the Narragansett Indian Tribe?"

18-11

      (b) Prior to the general election question being submitted to the electors of the state and

18-12

prior to any casino being established in the Town of West Warwick, and in order for such town to

18-13

be eligible as the host community for such casino, the casino license applicant shall, within

18-14

seventy-five (75) days of the passage of this act, file a statement of intent with the state lottery

18-15

division that demonstrates the following:

18-16

      (1) Evidence that the West Warwick Town Council has agreed to pose, by adopting

18-17

subsequent to July 1, 2004, a resolution to be placed on the ballot at the next general election to

18-18

be submitted to the qualified electors of the Town of West Warwick and to the qualified electors

18-19

of the state, the question referenced in subsection (a) of this section;

18-20

      (2) Adequate description of real estate designated and available for the development of

18-21

the casino, which real estate shall constitute at least thirty (30) acres;

18-22

      (3) Evidence of a fully executed development agreement; and

18-23

      (4) A complete proposal as referred to in section 41-9.1-10.

18-24

      (c) In the event of certification by the state lottery division of the statement of intent, the

18-25

question referenced in subsection (a) shall then be submitted by the secretary of state to the

18-26

qualified electors of the state at a general election to take place on November 2, 2004. The

18-27

secretary of state shall certify the election results. The question shall also be submitted at the

18-28

same general election by the local board of canvassers to the qualified electors of the Town of

18-29

West Warwick, and the local board of canvassers shall certify the election results to the secretary

18-30

of state. Notwithstanding any provisions of this section, in the event that certification by the state

18-31

lottery division of the statement of intent does not occur, then any vote by the qualified electors of

18-32

the state and the Town of West Warwick on the question referenced in subsection (a) shall be

18-33

deemed non-binding.

19-34

      (d) In the event of the affirmative vote of the qualified electors of the Town of West

19-35

Warwick and the qualified electors of the state, the state lottery division shall, in accordance with

19-36

the provisions of this section and section 41-9.1-11, award the casino license to the applicant that

19-37

is a party with the Town of West Warwick to the development agreement no later than March 1,

19-38

2005.

19-39

      (e) In the event that the affirmative vote of both the Town of West Warwick and the

19-40

electors of the state does not occur, or in the event that the casino license applicant is not able to

19-41

timely file a statement of intent with the state lottery division in accordance with the provisions of

19-42

subsection (b), then this chapter shall cease to have effect, and shall become null and void.

19-43

      (f) Notwithstanding any provision of the General Laws to the contrary, with respect to

19-44

the matters contemplated in this chapter, the application and license issuance process described in

19-45

this chapter shall govern and control and shall be in lieu of any other public bidding, request for

19-46

proposal rights or requirements contained in the General Laws. Any decision or act by the general

19-47

assembly, the secretary of state or the state lottery division in: (i) phrasing or submitting the

19-48

statewide question, (ii) determining whether a statement of intent is in compliance with the filing

19-49

and other provisions of this chapter, or (iii) awarding the single casino license, shall be final and

19-50

binding and shall not be reviewable in any court on any grounds except corruption or fraud, so as

19-51

to promote and not hinder the economic development initiatives and matters contemplated in this

19-52

chapter. Jurisdiction of any suit, action or proceeding with respect to any of the foregoing shall

19-53

immediately and exclusively vest in the Superior Court, and any appeal to the Rhode Island

19-54

Supreme Court shall be heard on an expedited basis; provided, however, that no such suit, action

19-55

or proceeding shall serve to enjoin (i) the question referenced in subsection (a) from being

19-56

submitted by the Secretary of State to the qualified electors of the state at a general election to

19-57

take place on November 2, 2004, and submitted at the same general election by the local board of

19-58

canvassers to the qualified electors of the Town of West Warwick, (ii) the awarding and issuance

19-59

of the single casino license, or (iii) any recipient of a casino license from proceeding with

19-60

development or operational matters, until a final, non-appealable decision has been rendered by a

19-61

court.

19-62

     41-9.1-10. Content of proposal. -- The proposal filed with the state lottery division shall

19-63

be made under oath, and shall include without limitation all of the following:

19-64

      (a) The name and business address of the applicant, and the names and business

19-65

addresses of the board of directors and the key officers thereof. In the event that a person or entity

19-66

directly owns or controls a five percent (5%) or greater voting interest in the applicant, then the

19-67

applicant shall also disclose the names and business addresses of such person or entity and the

19-68

officers and directors thereof unless such entity is an institutional investor in which case the name

20-1

and address of the institutional investor need only be disclosed. The applicant shall also disclose

20-2

whether it has knowledge that any disclosed person or entity has been convicted of any felony

20-3

crime.

20-4

      (b) A fully executed development agreement between the applicant and the Town of

20-5

West Warwick.

20-6

      (c) A description of the proposed gaming operation and related amenities, including the

20-7

economic benefits to the host community and the state (i.e., the proposed amount of investment in

20-8

construction and development; square footage of the casino; the number and types of games; the

20-9

presence of hotels, restaurants and other non-gaming amenities; parking spaces; etc.).

20-10

      (d) A description of the physical location of the proposed gaming operation and related

20-11

amenities, and evidence that applicant has the real estate site control (i.e., real estate purchase and

20-12

sale agreements or option agreements) necessary to support such development.

20-13

      (e) A description of the anticipated or actual number of employees, and related wages

20-14

and benefits.

20-15

      (f) A description of the marketing and operating experience of the applicant, and a

20-16

description of how such experience and other assets of the applicant would enable it and the state

20-17

to secure and maintain a strategic and competitive position within New England's casino gaming

20-18

industry.

20-19

      (g) A statement regarding compliance with federal and state affirmative action

20-20

guidelines.

20-21

     41-9.1-11. Issuance of single casino license. -- (a) The casino license issued shall remain

20-22

in effect so long as the licensee complies with the provisions below. The initial issuance of the

20-23

casino license shall be valid for a period of five (5) years and shall be renewable for periods of

20-24

five (5) years, each upon the payment of a fee in the amount of five hundred thousand ($500,000)

20-25

dollars and determination by the state lottery division that the casino licensee is in compliance

20-26

with the suitability requirements of section 41-9.1-22. The fee shall be paid to the state.

20-27

      (b) Any casino license issued pursuant to this chapter shall be subject to the continuing

20-28

duty of the licensee to maintain the suitability requirements of section 41-9.1-22 and all

20-29

requirements of the state lottery division.

20-30

     41-9.1-12. Wagering and other related taxes and fees. -- Subject to the provisions of

20-31

section 41-9.1-5(e), the wagering and other related taxes and fees set forth below in this section

20-32

shall be paid by the casino licensee, shall be fixed and memorialized in the Master Contract, and

20-33

shall constitute the total remuneration owed from the casino licensee to the state during the term

20-34

of the Master Contract other than as provided for in this act as of the date of its passage [July 30,

21-1

2004]and other than general business and corporate taxes that all businesses of this state are

21-2

subject to under the laws of this state.

21-3

      (a) Casino License Fee. - Subject to the terms and conditions of the Master Contract, a

21-4

casino license fee in the amount of one hundred million dollars ($100,000,000) shall be payable

21-5

by the casino licensee to the state in three installments of thirty-three million three hundred thirty-

21-6

three thousand three hundred thirty-three dollars and thirty-three cents ($33,333,333.33) each on

21-7

the following dates: (i) the date of issuance of the casino license; (ii) the one-year anniversary

21-8

date of the issuance of the casino license; and (iii) the two-year anniversary date of the issuance

21-9

of the casino license.

21-10

      (b) Wagering Tax. - The annual rate of taxation on the adjusted gross receipts ("AGR")

21-11

received by the casino licensee from gaming authorized under this chapter shall be as follows for

21-12

the period of time commencing on the first (1st) day on which the casino opens for business (the

21-13

"Commencement Date") and expiring at the end of five (5) years from the Commencement Date

21-14

(the "Expiration Date").

21-15

      AGR up to an including $400 million 25.00%

21-16

      AGR greater than $400 million and up to and including $500 million 27.00%

21-17

      AGR greater than $500 million and up to and including $600 million 29.00%

21-18

      AGR greater than $600 million and up to and including $750 million 31.00%

21-19

      AGR greater than $750 million and up to and including $900 million 33.00%

21-20

      AGR greater than $900 million and up to and including $1 billion 35.00%

21-21

      AGR greater than $1 billion 40.00%

21-22

      The annual rate of taxation on AGR received by the casino licensee from gaming

21-23

authorized under this chapter shall be as follows subsequent to the Expiration Date and going

21-24

forward:

21-25

      AGR up to and including $400 million 25.00%

21-26

      AGR greater than $400 million and up to and including $500 million 28.00%

21-27

      AGR greater than $500 million and up to and including $600 million 30.00%

21-28

      AGR greater than $600 million and up to and including $750 million 32.00%

21-29

      AGR greater than $750 million and up to and including $900 million 35.00%

21-30

      AGR greater than $900 million 40.00%

21-31

      (c) Tax Revenue Insurance Policy. - For purposes of this subsection (c), the term

21-32

"Effective Period" shall mean that period of time commencing on the first (1st) day on which the

21-33

casino opens for business and expiring two (2) years from such date, and the term "Base Year"

21-34

shall mean the one-year period immediately preceding the date on which the casino opens for

22-1

business. Subject to the terms and conditions of the Master Contract, the casino licensee shall

22-2

covenant therein that in the event that the aggregate amount of video lottery terminal revenue and

22-3

wagering tax revenue, minus any amounts refunded to GTECH Corporation under the Master

22-4

Contract between GTECH Corporation and the Commission effective July 1, 2003 and due to

22-5

passage of this act, received by the state each year during the Effective Period is not at least equal

22-6

to that amount which is one hundred ten percent (110%) of the video lottery terminal revenue

22-7

received by the state during the Base Year, then the casino licensee shall reimburse to the state

22-8

dollar for dollar the amount of such shortfall.

22-9

      (d) Hotel Occupancy Tax. - With respect to each hotel room that is occupied by a guest,

22-10

the casino licensee shall pay to the state, in addition to other state and local hotel taxes that apply

22-11

to all hotels in the state, a one dollar ($1.00) hotel occupancy tax, which tax shall be in lieu of all

22-12

other parking, admission, complimentary and other related patron taxes and fees.

22-13

      (e) Project Investment Requirement. - The casino licensee shall demonstrate to the

22-14

satisfaction of the state lottery division prior to the opening of the casino for business that it has

22-15

invested in the aggregate at least five hundred million dollars ($500,000,000) of hard and soft

22-16

costs in connection with acquiring interests in land, making improvements to real property and

22-17

otherwise developing and constructing the casino and related facilities.

22-18

      (f) Funding Covenant of Casino Licensee in favor of the Rhode Island Hospitality and

22-19

Tourism Association and the Rhode Island Convention Center and Visitors Bureau. - Fifty

22-20

thousand dollars ($50,000) per year to each entity throughout the term of the casino license shall

22-21

be provided by casino licensee for the marketing of state convention and tourism business.

22-22

      (g) Funding Covenant of Casino Licensee in favor of the Rhode Island Council on

22-23

Problem Gambling. - One hundred fifty thousand dollars ($150,000) per year throughout the term

22-24

of the casino license shall be provided by casino licensee to the Rhode Island Council on Problem

22-25

Gambling or such other department, agency or entity that the legislature shall designate.

22-26

     41-9.1-13. State lottery division and other approvals necessary for construction of

22-27

casino. -- (a) No casino licensed under this chapter shall open for operation until the state lottery

22-28

division and all appropriate state agencies have received and approved certification from the

22-29

Town of West Warwick that all casino construction has complied with all applicable provisions

22-30

of this chapter, any regulations promulgated thereunder, and applicable state and local law, as

22-31

well as with all provisions of the development agreement.

22-32

      (b) So long as the Town of West Warwick is actively seeking authorization to amend its

22-33

comprehensive plan to include a casino development, authority is hereby granted to the casino

22-34

licensee to proceed with the construction of the casino development approved by the voters in the

23-1

state and local referendum election pursuant to section 41-9.1-9; subject to the receipt of any and

23-2

all municipal approvals.

23-3

     41-9.1-14. Promulgation of operational rules and regulations. -- Upon the licensing of

23-4

a casino under the provisions of this chapter, the state lottery division shall have authority to issue

23-5

such regulations as it deems appropriate pertaining to the operation and management of the

23-6

facility, the hiring of employees thereof, the establishment of compulsive gambling treatment

23-7

programs, the conduct of gaming, electronic funds transfer terminals, audits, annual reports,

23-8

prohibited conduct and such other matters as the state lottery division shall determine.

23-9

     41-9.1-15. Gaming and non-gaming supplier permits and gaming employee permits

23-10

required -- Terms. -- (a) The securing of a permit under the provisions of this chapter shall be a

23-11

prerequisite for performing any activity which requires a permit pursuant to this chapter.

23-12

      (b) The permits provided for in this chapter shall not be transferable.

23-13

      (c) Any permit applied for, granted, or issued under the provisions of this chapter is an

23-14

absolute revocable privilege, the awarding, denial or withdrawal of which is solely within the

23-15

discretion of the state lottery division where applicable except as provided in this chapter. Any

23-16

permit used or renewed under the provisions of this chapter is not a property right or a protected

23-17

interest under the constitutions of either the United States or the state of Rhode Island.

23-18

      (d) A licensee shall not employ any person in a capacity for which he is required to be

23-19

issued a permit, unless he possesses a valid permit.

23-20

      (e) Every person desiring to obtain a gaming supplier permit, a key gaming employee

23-21

permit or a non-gaming supplier permit shall make application to the state lottery division where

23-22

applicable on a form and in a manner prescribed by the state lottery division. The application

23-23

forms shall be provided by the state lottery division and shall contain such information pursuant

23-24

to the provisions of this chapter and the state lottery division. No application shall be accepted

23-25

unless the state lottery division determines that all relevant requirements of this chapter have been

23-26

met. Notwithstanding anything to the contrary contained in this chapter, the state lottery division

23-27

in its sole discretion may issue such permits on a temporary basis prior to all relevant

23-28

requirements of this chapter having been met, to such applicants under the circumstances and on

23-29

terms that it deems appropriate.

23-30

      (f) The term of a permit shall be for five (5) years; however, the state lottery division

23-31

may issue temporary permits.

23-32

      (g) The state lottery division shall establish by rule a procedure for issuing and renewing

23-33

permits that are issued so that a similar number of permits will come up for renewal in each

23-34

subsequent year. The rule may provide for a one-time renewal period of less than a five (5)-year

24-1

duration. Appropriate fees shall also be established.

24-2

     41-9.1-16. Gaming supplier permits. -- (a) The state lottery division shall issue a

24-3

gaming supplier permit to suitable persons who supply, sell, lease or repair, or contract to supply,

24-4

sell lease or repair gaming devices, equipment, and supplies to the holder of a license. A person

24-5

shall not supply, sell, lease, or repair, or contract to supply, sell, lease or repair, gaming devices,

24-6

equipment and supplies unless then possess a valid gaming supplier permit.

24-7

      (b) Gaming devices or supplies may not be distributed to the holder of a license unless

24-8

such devices or supplies conform to rules adopted by the state lottery division.

24-9

      (c) A gaming supplier shall furnish to the state lottery division a list of any gaming

24-10

devices and supplies offered by the gaming supplier for sale or lease in connection with games

24-11

authorized under this chapter. A gaming supplier shall keep books and records for the furnishing

24-12

of gaming devices and supplies to gaming operations separate and distinct from any other

24-13

business that the gaming supplier might operate. A gaming supplier shall file an annual return

24-14

with the state lottery division listing all sales and leases. A gaming supplier shall permanently

24-15

affix its name to all its gaming devices and supplies for gaming operations unless otherwise

24-16

authorized by the state lottery division. Any gaming supplier's gaming devices or supplies, which

24-17

are used by any person in unauthorized gaming operations, shall be forfeited to the state lottery

24-18

division. The holder of a license may own its own gaming devices and supplies. Each gaming

24-19

supplier and the holder of a license shall file an annual report with the state lottery division listing

24-20

its inventories of gaming devices, equipment, and supplies.

24-21

      (d) The initial fee for a gaming supplier permit issued under the provisions of this section

24-22

is three thousand dollars ($3,000), and the renewal fee shall be one thousand dollars ($1,000).

24-23

This fee is required to be submitted at the time of application and on the anniversary date of the

24-24

issuance of the permit thereafter. The state lottery division may assess the gaming supplier any

24-25

costs incurred in testing and approving any devices or supplies.

24-26

      (e) Except as is otherwise required under section 41-9.1-17, non-gaming suppliers shall

24-27

not be required to obtain a permit from the state lottery division; provided, however, the state

24-28

lottery division may call forward any such non-gaming supplier and require a finding of

24-29

suitability if necessary to protect the public interest.

24-30

     41-9.1-17. Non-gaming supplier permits. -- (a) The state lottery division shall issue a

24-31

non-gaming supplier permit to suitable persons who supply, sell, lease or repair, or contract to

24-32

supply, sell, lease or repair, non-gaming devices and supplies, in amounts that in the aggregate

24-33

exceed two hundred thousand dollars ($200,000) per calendar year, to the holder of a license. A

24-34

person shall not be entitled to compensation for the supply, sale, lease or repair of, or a contract to

25-1

supply, sell, lease, or repair, non-gaming devices and supplies in amounts that in the aggregate

25-2

exceed two hundred thousand dollars ($200,000) per calendar year, unless they possess a valid

25-3

non-gaming supplier permit.

25-4

      (b) The initial fee for a non-gaming supplier permit issued under the provisions of this

25-5

section is one hundred dollars ($100) and the renewal fee shall be one hundred dollars ($100).

25-6

This fee is required to be submitted at the time of application and on the anniversary date of the

25-7

issuance of the permit thereafter. The state lottery division may assess the non-gaming supplier

25-8

any costs incurred in testing and approving any devices or supplies.

25-9

     41-9.1-18. Key gaming employee and key gaming employee permit. -- (a) The state

25-10

lottery division shall issue a key gaming employee permit to suitable persons pursuant to this

25-11

chapter. No key gaming employee required by this chapter to be permitted may commence

25-12

employment or be employed as a key gaming employee unless that person is the holder of a valid

25-13

key gaming employee permit; provided, however, the state lottery division may issue temporary

25-14

permits.

25-15

      (b) The state lottery division shall issue a key gaming employee permit to suitable

25-16

persons pursuant to this chapter.

25-17

      (c) The holder of a key gaming employee permit or temporary permit issued under this

25-18

chapter shall be authorized to work in the capacity for which permitted for the holder of a license.

25-19

      (d) The fee for the initial application for a key gaming employee permit issued under the

25-20

provisions of this section is two hundred dollars ($200). This fee is required to be submitted at the

25-21

time of application. The renewal fee for the key gaming employee permit is one hundred dollars

25-22

($100).

25-23

     41-9.1-19. License, permit and registration as revocable privilege -- Rights,

25-24

limitations and prohibitions -- Revocation and suspension -- Penalties for violation. -- (a) A

25-25

license, permit or registration issued under this chapter is a revocable privilege granted by the

25-26

state dependent upon the holder's compliance with this chapter and rules promulgated hereunder

25-27

and is not a property right. Granting a license, permit or registration under this chapter does not

25-28

create or vest any right, title, franchise or other property interest. Any casino license or gaming

25-29

supplier permit is exclusive to the holder, and a holder or any other person shall apply for and

25-30

receive the state lottery division's approval before a casino license or gaming supplier permit is

25-31

transferred, sold or purchased, or before a voting trust agreement or other similar agreement is

25-32

established with respect to such. A holder of a casino license or gaming supplier permit, or any

25-33

other person, shall not lease, pledge, or borrow, or loan money against such license or permit. The

25-34

attempted transfer, sale or other conveyance of an interest in a casino license or gaming supplier

26-1

permit without prior state lottery division approval is grounds for suspension or revocation of the

26-2

license or permit, or other sanctions considered appropriate by the state lottery division. In the

26-3

event of any transfer, sale or other conveyance of a casino license or gaming supplier permit,

26-4

including those ordered by a court of competent jurisdiction in connection with a bankruptcy,

26-5

receivership or other like proceeding, the state lottery division shall have the right to approve any

26-6

proposed transferee pursuant to the requirements of this chapter. Any costs associated with a

26-7

transfer, sale or other conveyance of a casino license or gaming supplier permit shall be borne by

26-8

the transferee.

26-9

      (b) The state lottery division may upon its own motion, and shall upon the verified

26-10

complaint, in writing, of any person initiating a cause under this chapter, ascertain the facts and, if

26-11

warranted, hold a hearing for the nonrenewal, suspension or revocation of a license, permit or

26-12

registration. The state lottery division shall have the power to suspend or revoke a license, permit

26-13

or registration or place a holder on probation where the license permit or registration has been

26-14

obtained by false representation or by fraudulent act or conduct or where a holder violates any of

26-15

the provisions of this chapter.

26-16

      (c) In addition to the nonrenewal, revocation or suspension of a license, permit or

26-17

registration, the state lottery division is authorized to levy an administrative penalty not exceeding

26-18

the greater of:

26-19

      (1) Five hundred thousand dollars ($500,000); or

26-20

      (2) Two hundred percent (200%) of the amount unreported or underreported for any

26-21

violation of the reporting requirements of this chapter and/or the rules and regulations

26-22

promulgated by the state lottery division. For violations of the chapter and/or the rules

26-23

promulgated by the state lottery division other than reporting requirements, the state lottery

26-24

division may levy administrative penalties of up to five thousand dollars ($5,000) against

26-25

individuals and up to ten thousand dollars ($10,000) or an amount equal to the daily gross

26-26

receipts on the date of the violation, whichever is greater, against casino licensees for each such

26-27

violation.

26-28

      (d) (1) Except as provided in subsection (e), before refusing to renew, suspending or

26-29

revoking a license, permit or registration on its own motion, the state lottery division shall, in

26-30

writing, notify the holder of its intended action and the grounds for the action. The holder may,

26-31

within twenty (20) days, file with the state lottery division, in triplicate, a request for a hearing

26-32

stating his or her answer to the grounds specified in the notification. The state lottery division

26-33

shall consider the answer and set a date for a hearing, notifying the holder of the date at least

26-34

twenty (20) days prior to the hearing date.

27-1

      (2) Before refusing to renew, suspending or revoking an existing license, permit or

27-2

registration upon the verified written complaint of any person stating a violation of this chapter,

27-3

the state lottery division shall, in writing, notify the holder of its receipt of the complaint,

27-4

enclosing a copy of the complaint. The holder shall, within twenty (20) days, file with the state

27-5

lottery division, in quadruplicate his or her answer to the complainant or complainants.

27-6

      (3) The state lottery division shall transmit a copy of the answer to the complainant or

27-7

complainants with the scheduled date, time and place for hearing at least twenty (20) days prior to

27-8

the hearing date.

27-9

      (4) All notices and answers required or authorized to be made or filed under this section

27-10

may be served or filed personally, or by certified mail to the last known business address of the

27-11

addressee. If served personally, the time runs from the date of service; if by registered mail, from

27-12

the postmarked date of the letter enclosing the document.

27-13

      (5) Hearings are subject to chapter 46 of title 42, entitled "open meetings", and the

27-14

holder has an opportunity to be heard in person or by counsel. The state lottery division shall

27-15

render a decision on any application or complaint within sixty (60) days after the final hearing on

27-16

the matter and shall immediately notify the parties to the proceedings, in writing, of its ruling,

27-17

order or decision. In the event the matter contained in the complaint has been filed or made part

27-18

of a case pending in any court of this state, the state lottery division may then withhold its

27-19

decision until the court action has been concluded. Hearings are held in accordance with rules

27-20

promulgated by the state lottery division in conformity with state and federal law.

27-21

      (e) The state lottery division may suspend a license, permit or registration, without notice

27-22

or hearing, upon a determination that the safety or health of patrons or employees is jeopardized.

27-23

If the state lottery division suspends a license, permit or registration under this subsection without

27-24

notice or hearing, a prompt post-suspension hearing shall be held in accordance with subsection

27-25

(d) to determine if the suspension should remain in effect. The suspension may remain in effect

27-26

until the state lottery division determines that the cause for suspension has been abated. The state

27-27

lottery division may revoke the license, permit or registration upon a determination that the

27-28

holder has not made satisfactory progress toward abating the hazard.

27-29

      (f) (1) The state lottery division is authorized and empowered to issue subpoenas for the

27-30

attendance of witnesses and the production of records or documents. The process issued by the

27-31

state lottery division may extend to all parts of the state, and the process may be served by any

27-32

person designated by the state lottery division. The person serving that process shall receive any

27-33

compensation that is allowed by the state lottery division, not to exceed the fee prescribed by law

27-34

for similar services. All witnesses subpoenaed who appear in any proceedings before the state

28-1

lottery division shall receive the same fees and mileage allowances allowed by law, and all those

28-2

fees and allowances are taxed as part of the costs of the proceedings.

28-3

      (2) Where, in any proceeding before the state lottery division, any witness fails or

28-4

refuses to attend upon subpoena issued by the state lottery division, or refuses to testify, or

28-5

refuses to produce any records or documents the production of which is called for by the

28-6

subpoena, the attendance of the witness and the giving of his or her testimony and the production

28-7

of the documents and records shall be enforced by any court of competent jurisdiction of this state

28-8

in the same manner as are enforced the attendance, testimony of witnesses and production of

28-9

records in civil cases in the courts of this state.

28-10

      (g) The procedures of the administrative procedures act, chapter 35 of title 42, and all

28-11

amendments and modifications to that act and the rules adopted pursuant to the act, apply to and

28-12

govern all proceedings for the judicial review of final administrative decisions of the state lottery

28-13

division. Any party aggrieved by a final administrative decision of the state lottery division may

28-14

seek review of that decision in the superior court of the county of his or her residence if a natural

28-15

person, or the county in which the aggrieved party maintains a place of business, if other than a

28-16

natural person.

28-17

      (h) Any person aggrieved has the right of appeal from any adverse ruling, order or

28-18

decision of the state lottery division to a court of competent jurisdiction in the county where the

28-19

hearing was held within thirty (30) days from the service of notice of the action of the state lottery

28-20

division upon the parties to the hearing.

28-21

      (i) Notice of appeal is filed in the office of the clerk of the court, which shall issue a writ

28-22

of certiorari directed to the state lottery division, commanding it, within fifteen (15) days after

28-23

service of the writ, to certify to the court its entire record in the matter in which the appeal has

28-24

been taken. The appeal shall be heard in due course, by the court, which shall review the record

28-25

and, after a hearing on the matter, make its determination of the cause.

28-26

      (j) A final administrative decision of the state lottery division shall not become effective

28-27

until time for appeal has expired. If an appeal is taken, it shall not act as a stay of decision unless

28-28

the court so directs.

28-29

      (k) In the event of a suspension or revocation of a license, permit or registration, the state

28-30

lottery division may take such action as is necessary to continue the daily operation of the casino

28-31

until the reinstatement of the license, permit or registration in the case of a suspension, or the

28-32

approval of a replacement license, permit or registration in accordance with the approval process

28-33

contained in this chapter in the case of a revocation.

29-34

     41-9.1-20. Records of state lottery division deemed open -- Exceptions. -- (a) Except

29-35

as otherwise provided in this chapter or other chapters, records of the state lottery division shall

29-36

be public records. A record of the state lottery division shall be confidential when the record:

29-37

      (1) Relates to the background of an applicant and was provided by the applicant or a

29-38

confidential source or informant.

29-39

      (2) Relates to security measures of the state lottery division, an applicant, or a licensee or

29-40

permittee.

29-41

      (3) Consists of an applicant's personal history form or questionnaires, disclosure forms,

29-42

or financial statements and records.

29-43

      (4) Relates to surveillance and security techniques, procedures, or practices of the state

29-44

lottery division, an applicant, or a licensee or permittee.

29-45

      (5) Relates to trade secrets or design of experimental gaming devices and equipment.

29-46

      (6) Consists of proprietary architectural, construction, schematic or engineering plans,

29-47

blueprints, specifications, computer programs or software, or economic or financial calculations

29-48

which relate to authorized gaming activities on the premises where authorized gaming activities

29-49

are conducted or to be conducted.

29-50

      (7) Relates to an ongoing investigation of the state lottery division into a possible

29-51

violation by a licensee or permittee, until the state lottery division initiates proposed enforcement

29-52

action against the licensee or the permittee and makes the record public in the course thereof.

29-53

      (8) Results from or is part of a state lottery division background investigation of an

29-54

applicant.

29-55

      (9) Relates to specific financial data concerning casino operations and results; provided,

29-56

however, the monthly gross gaming revenue amount shall be publicly disclosed.

29-57

      (b) Confidential information or data which is obtained by the state lottery division may

29-58

not be revealed in whole or in part except in the course of the proper administration of this

29-59

chapter. However, the state lottery division or its authorized agents may reveal such information

29-60

or data to an authorized agent of any agency of the United States government or to any agent of

29-61

this state or of any political subdivision of this state, pursuant to rules and regulations adopted by

29-62

the state lottery division, or pursuant to a lawful order of a court of competent jurisdiction. Notice

29-63

of the content of any information or data furnished or released pursuant to this section may be

29-64

given to the applicant or licensee to whom it pertains in a manner prescribed by rules adopted by

29-65

the state lottery division.

29-66

      (c) No state lottery division member, employee, agent, or authorized representative shall

29-67

disclose, divulge, disseminate, or otherwise transmit or communicate any confidential state

29-68

lottery division record, reports, or any confidential information therein, except as permitted in this

30-1

section and then only with the approval of the state lottery division. Disclosure of any

30-2

confidential state lottery division record, report, or any information therein other than as provided

30-3

in this section shall be grounds for removal of a state lottery division member or termination of

30-4

any employee.

30-5

      (d) All files, records, reports, and other information pertaining to gaming matters in the

30-6

possession of the division of state police or any other state or municipal law enforcement

30-7

authority, and otherwise not specifically provided for in this chapter shall be made available to

30-8

the state lottery division as necessary for the regulation of gaming activities and operations as

30-9

provided by law.

30-10

      (e) The state lottery division shall maintain a file of all applications for licenses, permits

30-11

or registrations, and requests for all other state lottery division actions or approvals received by

30-12

the state lottery division, together with a record of all action taken with respect to those

30-13

applications and requests. The file and record shall be open to public inspection.

30-14

      (f) The state lottery division shall maintain a file of all bids or proposals for any contract

30-15

let or entered into by the state lottery division together with a record of all action taken with

30-16

respect to those bids. The file and record shall be open to public inspection.

30-17

     41-9.1-21. Restricted use agreements -- confidentiality of records. -- (a) The state

30-18

lottery division may enter into intelligence sharing, reciprocal use, or restricted use agreements

30-19

with a department or agency of the federal government, law enforcement agencies, and gaming

30-20

enforcement and regulatory agencies of other jurisdictions which provide for and regulate the use

30-21

of information provided and received pursuant to the agreement.

30-22

      (b) Records, documents and information in the possession of the state lottery division

30-23

received pursuant to an intelligence sharing, reciprocal use or restricted use agreement entered

30-24

into by the state lottery division with a federal department or agency, any law enforcement

30-25

agency, or the gaming enforcement or regulatory agency of any jurisdiction shall be considered

30-26

investigative records of a law enforcement agency and shall not be disseminated under any

30-27

condition without the permission of the person or agency providing the record or information or

30-28

by order of a court with competent jurisdiction over the matter.

30-29

     41-9.1-22. Standards for license, permit and registration issuance suitability

30-30

qualifications. -- (a) No applicant shall be eligible to obtain a license to conduct gaming

30-31

operations, a permit or registration unless the state lottery division: (i) has, with respect to a

30-32

casino license applicant, received a filing made under oath that includes, without limitation, the

30-33

information set forth below, and (ii) is satisfied that the applicant is suitable. In determining

30-34

whether a casino license applicant is suitable, the state lottery division may consider, in addition

31-1

to the information set forth below, whether the applicant has been found suitable and/or has been

31-2

issued a license to conduct casino gaming in other jurisdictions.

31-3

      (1) The identity of every person in accordance with the provisions of this subdivision,

31-4

who has or controls any ownership interest in the applicant with respect to which the license is

31-5

sought. If the disclosed entity is a trust, the application shall disclose the names, addresses, birth

31-6

dates and social security number of all such beneficiaries, if a corporation, the names, addresses,

31-7

birth dates, and social security numbers of all such officers and directors; if a partnership, the

31-8

names, addresses, birth dates, and social security numbers of all such partners, both general and

31-9

limited, if a limited liability company, the names, addresses, birth dates, and social security

31-10

numbers of all such members. The applicant shall also separately disclose in like manner any

31-11

person or entity directly or indirectly owning or controlling a five percent (5%) or greater voting

31-12

interest in such owners of the applicant. If any such person is an entity with one or more classes

31-13

of securities registered pursuant to the Securities Exchange Act of 1934, as amended, the

31-14

applicant shall disclose names, addresses, birth dates and social security numbers of all officers

31-15

and directors and provide public filings with the U.S. Securities and Exchange Commission for

31-16

the past year. If any such persons or entities are institutional investors or institutional lenders

31-17

owning or controlling a five percent (5%) or greater voting interest in such owners of the

31-18

applicant, the applicant shall not be required to provide detailed information on such institutional

31-19

investors or institutional lenders other than their respective identities unless otherwise requested

31-20

by the commission. The applicant will forward any request for additional information to the

31-21

institutional investors or institutional lenders.

31-22

      (2) An identification of any business, including, if applicable, the state of incorporation

31-23

or registration, in which an applicant or any other person or entity identified in subdivision (a)(1)

31-24

has an equity interest of five percent (5%) or more. If an applicant is a corporation, partnership, or

31-25

other business entity, the applicant shall identify any other corporation, partnership, or other

31-26

business entity in which it has an equity interest of five percent (5%) or more; including, if

31-27

applicable, the state of incorporation or registration. An applicant can comply with this

31-28

subdivision by filing a copy of the applicant's registration with the securities exchange board if

31-29

the registration contains the information required by this subsection.

31-30

      (3) Whether an applicant or any other person or entity identified in subdivision (a)(1) is

31-31

known by applicant to have been indicted, charged, arrested, convicted, pleaded guilty or nolo

31-32

contendere, forfeited bail concerning, or has had expunged any criminal offense under the laws of

31-33

any jurisdiction, either felony or misdemeanor, not including traffic violations, regardless of

31-34

whether the offense has been expunged, pardoned or reversed on appeal or otherwise, including

32-1

the date, the name and location of the court, arresting agency and prosecuting agency, the case

32-2

caption, the docket number, the offense, the disposition, and the location and length of

32-3

incarceration.

32-4

      (4) Whether an applicant or any other person or entity identified in subdivision (a)(1) is

32-5

known by applicant to have ever applied for or has been granted any gaming license or certificate

32-6

issued by a licensing authority within this state or any other jurisdiction that has been denied,

32-7

restricted, suspended, revoked, or not renewed, and a statement describing the facts and

32-8

circumstances concerning the application, denial restriction, suspension, revocation or

32-9

nonrenewal, including the licensing authority, the date each action was taken, and the reason for

32-10

each action.

32-11

      (5) Such information, documentation and assurances as may be required to establish by

32-12

clear and convincing evidence:

32-13

      a. the financial stability, integrity and responsibility of the applicant, including, but not

32-14

limited to, bank references, financial statements, tax returns and other reports filed with

32-15

governmental agencies;

32-16

      b. the adequacy of financial resources both as to the completion of the casino proposal

32-17

and the operation of the casino; and

32-18

      c. that the applicant has sufficient business ability and casino experience as to establish

32-19

the likelihood of creation and maintenance of a successful, efficient and competitive casino

32-20

operation.

32-21

      (6) Such information, documentation and assurances to establish to the satisfaction of the

32-22

state lottery division the applicant's good character, honesty and integrity, and the applicant's

32-23

suitability qualification pursuant to this section.

32-24

      (7) A statement listing the names and titles of all Rhode Island public officials or officers

32-25

of any unit of government, and the spouses, parents, and children of those public officials or

32-26

officers who, directly or indirectly, own any financial interest in, have any beneficial interest in,

32-27

are the creditors of or hold any debt instrument issued by, or hold or have any interest in any

32-28

contractual or service relationship with an applicant. As used in this subsection, the terms "public

32-29

official" and "officer" do not include a person who would have to be listed solely because of his

32-30

or her state or federal military service. This subsection shall not apply to public officials or

32-31

officers or the spouses, parents and children thereof, whose sole financial interest amounts to less

32-32

than a one percent (1%) ownership interest in a publicly traded company.

32-33

      (8) The name and business telephone number of any attorney, counsel, lobbyist, agent, or

32-34

any other person representing an applicant in matters before the state lottery division.

33-1

      (9) Whether an applicant or any other person or entity identified in subdivision (a)(1) has

33-2

ever filed or had filed against it a civil or administrative action or proceeding in bankruptcy or has

33-3

ever been involved in any formal process to adjust, defer, suspend, or otherwise work out the

33-4

payment of any debt including the date of filing, the name and location of the court, the case

33-5

caption, the docket number, and the disposition.

33-6

      (10) Whether an applicant or any other person or entity identified in subdivision (a)(1)

33-7

has filed, or been served with, a complaint or other notice filed with any public body, regarding

33-8

the delinquency in the payment of, or a dispute over the filings concerning the payment of any tax

33-9

required under federal, state, or local law, including the amount, type of tax, the taxing agency,

33-10

and the periods involved.

33-11

      (11) Financial and other information in the manner and form prescribed by the

33-12

commission.

33-13

      (b) For purposes of this chapter, "suitable" means that the proposed casino licensee, or

33-14

other applicant or permittee has demonstrated to the state lottery division by clear and convincing

33-15

evidence that he or she:

33-16

      (1) Is a person of good character, honesty, and integrity or an entity whose reputation

33-17

indicates it possesses honesty, integrity and sufficient knowledge of the gaming industry.

33-18

      (2) Is a person whose prior activities, criminal record, if any, reputation, habits, and

33-19

associations do not pose a threat to the public interest of this state or to the effective regulation

33-20

and control of gaming, or create or enhance the dangers of unsuitable, unfair, or illegal practices,

33-21

methods, and activities in the conduct of gaming or the carrying on of the business and financial

33-22

arrangements incidental thereto.

33-23

      (3) Is capable of and likely to conduct the activities for which the applicant or casino

33-24

gaming operator is licensed or approved in accordance with the provisions of this chapter and any

33-25

rules of the state lottery division.

33-26

      (c) For purposes of a casino licensee, the applicant shall also demonstrate by clear and

33-27

convincing evidence that:

33-28

      (1) He or she or the entity has adequate business competence and experience in the

33-29

operation of gaming operations.

33-30

      (2) The proposed financing of the conducting of gaming operations is:

33-31

      (i) Adequate for the nature of the proposed operation; and

33-32

      (ii) From a suitable source, subject to provisions of section 41-9.1-23 hereof.

33-33

      (d) Information provided by the applicant shall be used as a basis for a thorough

33-34

background investigation which the state lottery division shall conduct. A false or incomplete

34-1

filing may be cause for denial of a license. The state lottery division in its sole discretion may

34-2

provide the applicant a reasonable opportunity to correct any deficiency in the filing.

34-3

      (e) Applicants shall consent, in writing, to being subject to the inspections, searches, and

34-4

seizures provided for in this chapter and to disclosure to the state lottery division and its agents of

34-5

otherwise confidential records including tax records held by any federal, state, or local agency, or

34-6

credit bureau or financial institution while applying for or holding a license under this chapter.

34-7

      (f) The state lottery division may contract for, at the expense of the applicants, any

34-8

technical or investigative services that it shall require to conduct such research and/or

34-9

investigation as it deems appropriate with respect to its evaluation of the filing. A nonrefundable

34-10

application fee of fifty thousand dollars ($50,000) shall be paid at the time of filing to defray the

34-11

costs associated with such research and investigation conducted by the state lottery division. If

34-12

the costs of the research and investigation exceed fifty thousand dollars ($50,000), the applicant

34-13

shall pay the additional amount.

34-14

      (g) All licensees, all permittees, and any other persons who have been found suitable or

34-15

approved by the state lottery division shall maintain suitability throughout the term of the license,

34-16

permit or approval. In the event of a current prosecution of an offense, the state lottery division

34-17

shall have the discretion to defer a determination on a person's continuing suitability pending the

34-18

outcome of the proceedings, provided that if a decision is deferred pending such outcome, the

34-19

state lottery division, where applicable, may take such action as is necessary to protect the public

34-20

trust, including the suspension of any license, permit or registration.

34-21

      (h) All holders of licenses, permits and registrations, and any other persons required to

34-22

be found suitable, shall have a continuing duty to inform the state lottery division of any possible

34-23

violation of this chapter and of any rules adopted by the state lottery division. No person who so

34-24

informs the state lottery division or any law enforcement authority within the state of a violation

34-25

or possible violation shall be discriminated against by the applicant, licensee, permittee, registrant

34-26

or casino gaming operator because of supplying such information, and shall be afforded the

34-27

protection of section 28-50-1 et al. "The Rhode Island Whistleblower's Protection Act", so called.

34-28

      (i) The state lottery division shall have the power to call forward for a finding of

34-29

suitability any person that is affiliated with a licensee, permittee or registrant if necessary to

34-30

protect the public interest. Subject to section 41-9.1-24, any person who has or controls directly

34-31

or indirectly five percent (5%) or greater voting interest shall meet all suitability requirements and

34-32

qualifications pursuant to the provisions of this chapter, unless otherwise determined by the state

34-33

lottery division.

35-34

      (j) If the state lottery division finds that an individual owner or holder of a security of a

35-35

licensee, permittee, or registrant, or of a holding or intermediary company of a licensee or

35-36

permittee, or registrant, or any person or persons with an economic interest in a licensee,

35-37

permittee, or registrant, or a director, partner, officer, or managerial employee is not suitable, and

35-38

if as a result, the licensee, permittee, or registrant is no longer qualified to continue as a licensee,

35-39

permittee, or registrant, the state lottery division shall propose action necessary to protect the

35-40

public interest, including the suspension of the license, permit or registration. The state lottery

35-41

division may also issue under penalty of revocation or suspension of a license, permit, or

35-42

registration, impose a condition of disqualification naming the person or persons and declaring

35-43

that such person or persons may not:

35-44

      (1) Receive dividends or interest on securities of a person, or a holding or intermediary

35-45

company of a person, holding a license, permit, or other approval.

35-46

      (2) Exercise directly, or through a trustee or nominee, a right conferred by securities of a

35-47

person, or a holding or intermediary company of a person, holding a license, permit, or other

35-48

approval of the state lottery division issued pursuant to the provisions of this chapter.

35-49

      (3) Receive remuneration or other economic benefit from any person, or a holding or

35-50

intermediary company of a person, holding a license, permit, or other approval issued pursuant to

35-51

this chapter.

35-52

      (4) Exercise significant influence over activities of a person, or a holding or intermediary

35-53

company of a person, holding a license, permit, or other approval issued pursuant to the

35-54

provisions of this chapter.

35-55

      (5) Continue owning or holding a security of a person, or a holding or intermediary

35-56

company of a person, holding a license, permit, or other approval of the state lottery division

35-57

issued pursuant to the provisions of this chapter or remain as a manager, officer, director, or

35-58

partner of a licensee or permittee.

35-59

     41-9.1-23. Casino license -- Disqualification criteria. -- The state lottery division shall

35-60

not award a casino or other license, permit or registration to any person who is disqualified on the

35-61

basis of any of the following criteria:

35-62

      (1) Failure of the applicant to prove by clear and convincing evidence that he or she is

35-63

suitable in accordance with the provisions of this chapter.

35-64

      (2) Failure of the applicant to provide information and documentation to reveal any fact

35-65

material to a suitability determination, or the supplying of information which is untrue or

35-66

misleading as to a material fact pertaining to the qualification criteria.

35-67

      (3) The conviction of, or a plea of guilty or nolo contendere by, the applicant, or of any

35-68

person required to be qualified under this chapter for an offense punishable by imprisonment of

36-1

more than one year or a fine up to one thousand dollars ($1,000); provided, however, a conviction

36-2

or plea of guilty or nolo contendere by the applicant shall not constitute an automatic

36-3

disqualification as otherwise required if:

36-4

      (i) Ten (10) or more years has elapsed between the date of application and the successful

36-5

completion of service of any sentence, deferred adjudication, or period of probation or parole; or

36-6

      (ii) Five (5) or more years has elapsed between the date of application and the successful

36-7

completion of any sentence, deferred adjudication, or period of probation or parole and the

36-8

conviction for an offense which was a misdemeanor offense.

36-9

      (4) Notwithstanding any provision of law to the contrary, the state lottery division may

36-10

consider the seriousness and circumstances of any offense, any arrest, or any conviction in

36-11

determining suitability.

36-12

     41-9.1-24. Institutional investors or institutional lenders. -- (a) Requirements of

36-13

disclosure or of being suitable or qualified with respect to an institutional investor or institutional

36-14

lender, pursuant to the provisions of this chapter and the rules adopted pursuant thereto, shall be

36-15

deemed to have been complied with upon submission of documentation by the casino licensee

36-16

applicant, casino licensee, permittee or the institution, as appropriate, sufficient to establish

36-17

qualifications as an institutional investor or institutional lender as defined herein and it is

36-18

determined that:

36-19

      (1) It owns, holds, or controls publicly traded securities issued by a casino licensee

36-20

applicant, casino licensee, permittee or holding, intermediate or parent company of a casino

36-21

licensee applicant, casino licensee or permittee in the ordinary course of business for investment

36-22

purposes.

36-23

      (2) It does not intend to exercise influence over the affairs of the issuer of such

36-24

securities, nor over any licensed or permitted subsidiary of the issuer of such securities, in the

36-25

future, and that it agrees to notify the state lottery division, in writing, within thirty (30) days if

36-26

such intent should change.

36-27

      (b) The exercise of voting privileges with regard to publicly traded securities shall not be

36-28

deemed to constitute the exercise of influence over the affairs of the issuer of such securities.

36-29

      (c) The state lottery division may rescind the presumption of suitability for an

36-30

institutional lender or institutional investor at any time if the institutional lender or investor

36-31

exercises or intends to exercise influence or control over the affairs of the casino licensee

36-32

applicant, the casino licensee, permittee, or a holding, intermediate, or parent company of the

36-33

casino licensee applicant, the casino licensee or permittee.

37-34

      (d) This section shall not be construed to preclude the state lottery division from

37-35

investigating the suitability or qualifications of an institutional investor or institutional lender

37-36

should the state lottery division become aware of facts or information which may result in such

37-37

institutional investor or institutional lender being found unsuitable or disqualified.

37-38

     41-9.1-25. Uniform compulsive and problem gambling program. -- (a) The gaming

37-39

industry through the American Gaming Association in the Responsible Gaming Resource Guide

37-40

has stated that the industry recognizes that gaming entertainment companies must stand up and

37-41

take responsible actions to address social problems and costs that are created when some

37-42

individuals have problems handling the product or services they provide. The industry has also

37-43

stated that they know that the vast majority of the men and women who are their customers can

37-44

enjoy their games responsibly, but that they also know the customers expect them to act

37-45

responsibly toward those who cannot. It is imperative for the health, safety, and welfare of the

37-46

citizens of the state of Rhode Island that all casino licensees develop and implement

37-47

comprehensive compulsive and problem gambling programs to be approved by the state lottery

37-48

division.

37-49

      (b) Any casino licensee shall adopt a comprehensive program that provides policies and

37-50

procedures that, at a minimum, cover the following areas of concern and are designed to:

37-51

      (1) Provide procedures designed to prevent employees from willfully permitting a person

37-52

identified on a self-exclusion list from engaging in gaming activities at the licensed establishment

37-53

or facility.

37-54

      (2) Provide procedures to offer employee assistance programs or equivalent coverage.

37-55

The procedures shall be designed to provide confidential assessment and treatment referral for

37-56

gaming employees and, if covered, their dependents who may have a gambling problem.

37-57

      (3) Provide procedures for the development of programs to address issues of underage

37-58

gambling and unattended minors at gaming facilities.

37-59

      (4) Provide procedures for the training of all employees that interact with gaming patrons

37-60

in gaming areas.

37-61

      (5) Provide procedures designed to prevent serving alcohol to individuals who appear to

37-62

be intoxicated consistent with the provisions of Rhode Island law.

37-63

      (6) Provide procedures for removing self-excluded person from the licensed

37-64

establishment or facility, including, if necessary, procedures that include obtaining the assistance

37-65

of local law enforcement.

37-66

      (7) Provide procedures preventing any person identified on the self-exclusion list from

37-67

receiving any advertisement promotion, or other targeted mailing after ninety (90) days of

37-68

receiving notice from the state lottery division that the person has been placed on the self-

38-1

exclusion list.

38-2

      (8) Provide procedures for the distribution or posting within the gaming establishment of

38-3

information that promotes public awareness about problem gambling and provides information on

38-4

available services and resources to those who have a gambling problem.

38-5

      (9) Provide procedures for the distribution of responsible gaming materials to

38-6

employees.

38-7

      (10) Provide procedures for the posting of local curfews or laws and prohibitions, if any,

38-8

regarding underage gambling and unattended minors.

38-9

      (11) Provide procedures to prevent any person placed on the self-exclusion list from

38-10

having access to credit or from receiving complimentary services, check-cashing services, and

38-11

other club benefits.

38-12

      (c) (1) The state lottery division shall provide by rule for the establishment of a list of

38-13

self-excluded persons from gaming activities at all gaming establishments. Any person may

38-14

request placement on the list of self-excluded persons by acknowledging in a manner to be

38-15

established by the state lottery division that the person wishes to be excluded and by agreeing

38-16

that, during any period of voluntary exclusion, the person may not collect any winnings or

38-17

recover any losses resulting from any gaming activity at such gaming establishments.

38-18

      (2) The rules of the state lottery division shall establish procedures for placements on,

38-19

and removals from, the list of self-excluded persons, provided that notwithstanding any law to the

38-20

contrary, prior to the removal from such list, the state lottery division or a hearing officer shall

38-21

conduct a hearing not open to the general public at which it shall be established by the person

38-22

seeking removal that there is no longer a basis to be maintained on the self-exclusion list.

38-23

      (3) The rules shall establish procedures for the transmittal to the gaming establishment of

38-24

identifying information concerning self-excluded persons, and shall require all the gaming

38-25

establishment to establish procedures designed, at a minimum, to remove self-excluded persons

38-26

from targeted mailings or other forms of advertising or promotions and deny self-excluded

38-27

persons access to credit, complimentaries, check-cashing privileges and other club benefits.

38-28

      (4) The rules shall provide that the state lottery division's list of self-excluded persons

38-29

shall not be open to public inspection. The state lottery division, any licensee, permittee and any

38-30

employee or agent thereof shall not be liable to any self-excluded person or to any other party in

38-31

any judicial proceeding for any monetary damages or to other remedy which may arise as a result

38-32

of disclosure or publication in any manner other than a willfully unlawful disclosure to a third

38-33

party that is not an employee, affiliated company, or employee or agent of the state lottery

38-34

division of the identity of any self-excluded person.

39-1

      (d) A person who is prohibited from any gaming establishment by any provision of this

39-2

chapter or pursuant to any self-exclusion rules adopted by the state lottery division shall not

39-3

collect in any manner or proceeding any winnings or recover any losses arising as a result of any

39-4

prohibited gaming activity.

39-5

      (e) In any proceeding brought against any licensee, permittee any employee thereof for a

39-6

willful violation of the self-exclusion rules of the state lottery division, the state lottery division

39-7

may order the forfeiture of any money or thing of value obtained by the licensee from any self-

39-8

excluded person.

39-9

      (f) Nothing herein shall prevent any licensee or permittee from adopting and maintaining

39-10

a self-exclusion policy that may impose different or greater standards so long as such policy is in

39-11

addition to the state lottery division's self-exclusion rules, and any actions taken pursuant to such

39-12

a policy of a licensee or permittee shall be subject to the limitations of liability set forth in this

39-13

section.

39-14

      (g) The provisions of this section shall not require the state lottery division, licensees,

39-15

permittees and the employees thereof to identify problem or compulsive gamblers, which is an

39-16

activity that requires medical and clinical expertise.

39-17