Bill Summary for H 929 (2019-2020)

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Summary date: 

Apr 22 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
House Bill 929 (Public) Filed Tuesday, April 16, 2019
Intro. by Warren, Hardister, Saine, Hunter.

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Bill summary

Requires the Revisor of Statutes to recodify Part 2 of Article 37 of GS Chapter 14, Bingo and Raffles, and Article 68 of GS Chapter 143, Regulation of Boxing, and GS Chapter 18C, North Carolina State Lottery, into a new GS Chapter 18E entitled Gaming. Sets out the structure of the new Chapter, consisting of 5 Subchapters and 26 Articles. Authorizes the Revisor of Statutes to change all references to the North Carolina State Lottery Commission, State Bureau of Investigation, and Alcohol Law Enforcement Branch of the Department of Public Safety, as appropriate, to the North Carolina Gaming Commission; allows for additional organizational, clarifying, and technical changes.

Enacts new GS Chapter 18E, Gaming, providing as follows. Creates the nine-member Gaming Commission (Commission), located within the Department of Commerce, but operating independently, to establish and oversee the operation of gaming in the State. Commission members serve terms varying from one year to four years and are prohibited from serving for more than two successive terms. Requires the Commission to meet at least quarterly. Sets out member qualifications. Makes Commission records open and available to the public. Sets out the Commission’s nine powers and duties including regulating and overseeing gaming; prescribing the nature of gaming advertising, which must meet the specified requirements; charging licensees and contractors fees for criminal records; and specifying the number and value of prizes for winning tickets or share in lottery games. Requires the Commission to send quarterly and annual reports on Commission operations to the Governor, State Treasurer, and NCGA. Requires the State Auditor to conduct annual audits of all accounts and transactions of the Commission. Requires the Commission to biennially engage an independent firm experienced in security procedures to study and evaluate all aspects of security in the operation of the Commission. Requires the portion of the security audit report with the overall evaluation of the Commission and lottery games to be presented to the Commission, Governor, and NCGA. Also requires the Commission to biennially engage an independent auditing firm to perform an audit of the lottery and present the results to the Commission, Governor, and NCGA. Allows the Commission to engage an independent auditing firm to conduct an audit of various games. Allows the Commission to apply to the superior court for an injunction to restrain any person from violating the Chapter or its rules. Allows the Commission, when it has reasonable cause to believe that a violation of any of the provisions of this Chapter may have occurred, to investigate to determine whether a violation has occurred. Allows the Commission or the Department of Public Safety, Alcohol Law Enforcement Branch, to inspect an establishment of a licensee during normal business hours.

Requires the Commission to select a Director to operate and administer the functions of the Commission and to serve as the Secretary to the Commission. Sets out the Director’s 10 powers and duties, under the Commission’s supervision, including setting salaries of Commission employees, entering into contracts upon Commission approval, and providing monthly financial reports to the Commission. Sets out six requirements for the Director and Commission employees, including that they not have a financial interest in any licensee or contractor, and prohibiting them from representing any licensee or contractor before the Commission for one year following termination of employment with the Commission. Prohibits the Commissioners, Director, and Commission employees, or a member of their immediate families residing in the same household as the individual, from accepting any economic opportunities, gifts, loan, gratuity, special discount, favor, hospitality, or service with a value exceeding $100 in any calendar year from any person being regulated by the Chapter.

Sets out and defines terms that are used in the Chapter.

Requires registering with the Commission to offer a fantasy contest in the State, defined as an online fantasy or simulated game or contest in which an entry fee is charged and (1) the value of all prizes and awards offered to winning participants is established and made known to the participants in advance of a contest that is open to the general public; (2) all winning outcomes reflect the relative knowledge and skill of the participants and is to be determined by accumulated statistical results of the performance of individuals; and (3) no winning outcome is based on the score, point spread, or any performance of any single actual team or combination of teams or solely on any single performance of any individual athlete or player in any single actual event. Sets out application requirements and requires submission of an initial registration fee equal to 10% of the operator’s gross fantasy contest revenues from the previous calendar year; to be no less than $2,500 or more than $10,000. Registration is valid for five years; sets out requirements for renewal including a renewal fee equal to the lesser of $5,000 or 10% of the operator’s net revenue from the previous calendar year. Allows an operator applying for registration who has been in continuous operation in this state for at least 180 days as of the effective date of this act to continue to offer fantasy contests until 60 days after applications for registration are published by the Commission; allows operators who have applied for registration during that 60-day period to continue operating while the registration is pending. Operators who have not registered must stop operation by the expiration of the 60-day period. Allows operators applying for registration or renewal of a registration to operate during the application. Requires the Commission to issue a registration within 60 days of receiving the registration application.

Allows the Commission to deny, revoke, or suspend a registration upon five specified actions, including defaulting on the payment of any obligation or debt due to the State. Allows suspending or revoking an operator’s registration after a hearing with 30 days' notice where a violation has been found by a preponderance of the evidence. Also allows assessing civil penalties. Allows suspending a registration for no more than seven business days if the Commission determines that a violation has occurred and emergency action is required to protect the public health, safety, and welfare. Sets out operator reporting and audit requirements.

Sets out provisions governing a change of ownership or acquisition of interest in operation.

Makes reports, data, or documents submitted to the Commission under the audit requirements and records submitted as part of an application for registration or renewal containing information about the character or financial responsibility of the operation or its principal stockholders confidential and not public records.

Specifies that fantasy contests conducted under the Article do not constitute gambling, lotteries, gaming, or any activity or enterprise prohibited by law. Specifies that nothing in the Article limits the ability of an operator to control or conduct its contest or to provide a uniform gameplay platform for players in multiple jurisdictions.

Repeals GS 18C-110; GS 18C-111; GS 18C-112; GS 18C-113(a), (b), and (c); GS 18C-115(a) and GS 18C-114, which established the North Carolina State Lottery Commission and sets out requirements related to the Commission. Repeals GS 18C-120 and GS 18C-122 concerning the selection of the State Lottery Director and setting out auditing requirements.

Amends GS 18C-500 to make alcohol law enforcement agents responsible for enforcing gaming laws.

Requires the Commission to study the feasibility of allowing sports betting, steeplechases, and video lottery terminals to operate in the state, including studying six specified issues. Requires a report to the 2020 Regular Session of the NCGA by January 31, 2020.

Specifies that each commission, board, or other function of State government transferred to the Commission is a continuation of the former entity for purposes of succession to all the rights, powers, duties, and obligations of the former.

Provides that no action or proceeding pending on May 1, 2017, brought by or against the North Carolina Lottery Commission, the State Bureau of Investigation, the Alcohol Law Enforcement Branch of the Department of Public Safety, or the Boxing Advisory Commission is affected by any provision of this act, and they may be prosecuted or defended in the name of the North Carolina Gaming Commission. Allows any business or other matter undertaken or commanded by any State program or office or contract transferred to the Commission pertaining to or connected with the functions, powers, obligations, and duties set forth herein, which is pending on May 1, 2017, to be conducted and completed by the Commission in the same manner and under the same terms and conditions and with the same effect as if conducted and completed by the original program, office, or commissioners or directors thereof.

Specifies that the consolidation does not affect any ongoing investigation or audit and that prosecutions for offenses or violations committed before May 1, 2017, are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions.

Specifies that rules, forms, policies, procedures, and guidance adopted by the North Carolina Lottery Commission, the State Bureau of Investigation, the Alcohol Law Enforcement Branch of the Department of Public Safety, or the Boxing Advisory Commission remain in effect until amended or repealed by the Commission.

Transfers the authority, powers, duties and functions, records, personnel, property, and unexpended balances of appropriations, allocations, or other funds of the North Carolina Lottery Commission and the North Carolina Gaming Commission to the Commission. Transfers specified powers and duties and other related functions and appropriations of the bingo and raffle functions of the State Bureau of Investigation and the boxing regulatory functions of the Alcohol Law Enforcement Branch to the Commission. Transfers the appropriations and resources of the North Carolina Lottery Commission, and the appropriations and resources of the bingo and raffle functions of the State Bureau of Investigation and the boxing regulatory functions of the Alcohol Law Enforcement Branch and the Boxing Advisory Commission to the Commission, with the elements of a Type I transfer.

Requires the Commission to report to the specified NCGA commission and committee by April 1, 2020, and March 1, 2021, on recommendations for statutory changes need to implement the consolidation.

Effective January 1, 2020.