House committee substitute deletes the provisions of the 1st edition and now provides the following.

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 4 Subchapters and 22 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. Prohibits legislators and former legislators from serving on the Commission while in office or within 12 months after leaving office. Makes Commission records open and available to the public. Sets out the Commission’s ten 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; specifying the number and value of prizes for winning tickets or share in lottery games; and studying the feasibility of authorizing new gaming activities. Establishes that the Commission does not have any authority to regulate or oversee any gaming conducted pursuant to a compact entered into between the State and a federally recognized Indian tribe. 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.

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 and steeplechases to operate in the state, including studying seven specified issues. Requires a report to the specified NCGA committee by February 15, 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 August 31, 2019, 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 August 31, 2019, 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 August 31, 2019, 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.

Establishes that the members of the NC Lottery Commission are to operate as the NC Gaming Commission until appointments have been made to the NC Gaming Commission pursuant to the act's provisions.

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 needed to implement the consolidation.

Effective September 1, 2019.

Changes the act's titles.