Bill Summary for S 523 (2011-2012)

Summary date: 

Apr 7 2011

Bill Information:

View NCGA Bill Details2011-2012 Session
Senate Bill 523 (Public) Filed Wednesday, April 6, 2011
TO ESTABLISH THE NORTH CAROLINA CASINO GAMING ACT BY ALLOWING CERTAIN SLOT MACHINES TO BE OPERATED BY PERMITTED AND LICENSED ENTITIES WITHIN TIER 1 COUNTIES THAT BORDER ANOTHER STATE AND WHICH HAVE A HIGHWAY DESIGNATED AS AN INTERSTATE HIGHWAY IN THE COUNTY; TO CREATE A PERMITTING SCHEME; TO CREATE AN ADMINISTRATION AND ENFORCEMENT SCHEME; TO CREATE FUNDS TO DIRECT THE PAYMENT OF MONIES AND RECEIVE REVENUES; AND TO ENHANCE ECONOMIC GROWTH IN ECONOMICALLY DISADVANTAGED COUNTIES.
Intro. by Jenkins.

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Bill summary

Creates new GS Chapter 18D to authorize and regulate slot machines in certain counties as described in title. Expands authority of existing NC State Lottery Commission (“SLC”) to oversee and regulate slot machines.
Defines a slot machine as “Any mechanical or electrical contrivance, terminal, machine, or other device approved by the Commission which, upon insertion of a coin, bill, ticket, token, or similar object therein or upon payment of any consideration whatsoever, including the use of any electronic payment system except a credit card or debit card, is available to play or operate, the play or operation of which, whether by reason of skill or application of the element of chance or both, may deliver or entitle the person or persons playing or operating the contrivance, terminal, machine, or other device to receive cash, billets, tickets, tokens, or electronic credits to be exchanged for cash or to receive merchandise or anything of value whatsoever, whether the payoff is made automatically from the machine or manually. A slot machine: a. May utilize spinning reels or video displays or both. b. May or may not dispense coins, tickets, or tokens to winning patrons. c. May use an electronic credit system for receiving wagers and making payouts.”
Requires SLC to hold public hearings on applications for slot machine licenses. Orders SLC to mandate minimum payout percentages for all slot machines that are no less than 80%.
Mandates all fees from applicants, licensees, and permittees be deposited into the existing State Lottery Fund. The proceeds of civil fines and penalties are to be remitted to the Civil Penalty and Forfeitures Fund. Suppliers and manufacturers of slot machines must pay initial fees of $25,000 and annual renewal fees of $10,000. Licensees operating the machines must pay an initial fee of $50 million, which will permit the licensee to operate up to 3,000 slot machines, with a minimum of 1,500 available machines, at one licensed facility. Creates criteria, application and review process for manufacturer, supplier and operator licenses. Creates auditing procedures for slot machine accounting. Requires all slot machines to be connected to central control computer under the control of the SLC.
Levies a 34% tax on daily slot machine gross revenue. Requires each slot machine operator to maintain a $5 million escrow fund to guarantee payment of tax obligations. Mandates operators to pay 5% of daily slot machine gross revenue to new NC Gaming Economic Development and Tourism Fund, which must be used to provide incentives to new and existing employers to locate and grow businesses in Tier 1 counties, to provide support and transitional training for displaced employees who have lost employment due to workplace closures or layoffs, and for any other purpose the General Assembly deems appropriate. Mandates that the following amounts be transferred annually from the State Lottery Fund: $1.5 million to the Department of Health and Human Services for gambling addiction and treatment programs; $20 million to the Alcohol Law Enforcement Division (“ALE”) of the Department of Crime Control and Public Safety; and, the remaining balance derived from slot machine proceeds to the State Public School Fund.
Prohibits slot machines from accepting credit cards or debit cards and prohibits operators from extending any credit to slot machine players. Prohibits wagering on any athletic events. Authorizes SLC to create list of persons to be excluded from slot machine facilities. Authorizes ALE to enforce all regulations and laws relating to slot machines, including investigations of license applicants and monitoring of slot machines to ensure compliance with regulations and implementation of adequate security measures. Criminalizes numerous offenses relating to slot machines, including misrepresentations to ALE or SLC, operation of slot machines without valid license, use of counterfeit money or tokens to play slot machines, unauthorized possession of key or device to open slot machines, and playing of slot machines by individuals under 18. Sets criminal fines of between $75,000 and $300,000 for first violation of criminal laws relating to slot machines and between $150,000 and $600,000 for subsequent violations. Makes it a Class A1 misdemeanor to make misrepresentations to ALE or SLC and a Class H felony for subsequent such criminal acts.
Makes corresponding changes to criminal laws in GS Chapter 14 to permit the operation of slot machines as described in new Chapter 18D.

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