SENATE BILL NO. 272

INTRODUCED BY V. COCCHIARELLA, D. FUCHS, B. DEPRATU, L. GRINDE, D. SHEA, S. STANG

A BILL FOR AN ACT ENTITLED: "AN ACT ALLOWING ILLEGAL GAMBLING DEVICES AND ASSOCIATED EQUIPMENT TO BE IMPORTED, STORED, DEMONSTRATED, AND SOLD TO OTHER JURISDICTIONS; PROVIDING FOR AN ENDORSEMENT FOR EXPORTERS OF ILLEGAL GAMBLING DEVICES OR ASSOCIATED EQUIPMENT; PROVIDING PENALTIES RELATING TO THE ENDORSEMENT; AND AMENDING SECTIONS 23-5-112, 23-5-152, AND 23-5-614, MCA."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 23-5-112, MCA, is amended to read:

"23-5-112. Definitions. Unless the context requires otherwise, the following definitions apply to parts 1 through 8 of this chapter:

(1) "Applicant" means a person who has applied for a license or permit issued by the department pursuant to parts 1 through 8 of this chapter.

(2) "Application" means a written request for a license or permit issued by the department. The department shall adopt rules describing the forms and information required for issuance of a license.

(3) "Authorized equipment" means, with respect to live keno or bingo, equipment that may be inspected by the department and that randomly selects the numbers.

(4) "Bingo" means a gambling activity played for prizes with a card bearing a printed design of 5 columns of 5 squares each, 25 squares in all. The letters B-I-N-G-O must appear above the design, with each letter above one of the columns. More than 75 numbers may not be used. One number must appear in each square, except for the center square, which may be considered a free play. Numbers are randomly drawn using authorized equipment until the game is won by the person or persons who first cover one or more previously designated arrangements of numbers on the bingo card.

(5) "Bingo caller" means a person 18 years of age or older who, using authorized equipment, announces the order of the numbers drawn in live bingo.

(6) "Card game table" or "table" means a live card game table:

(a) authorized by permit and made available to the public on the premises of a licensed gambling operator; or

(b) operated by a senior citizen center.

(7) "Card game tournament" means a gambling activity for which a permit has been issued involving participants who pay valuable consideration for the opportunity to compete against each other in a series of live card games conducted over a designated period of time.

(8) "Dealer" means a person with a dealer's license issued under part 3 of this chapter.

(9) "Department" means the department of justice.

(10) "Distributor" means a person who:

(a) purchases or obtains from a licensed manufacturer, distributor, or route operator equipment of any kind for use in gambling activities or who, subject to the provisions of subsection (11), imports illegal gambling devices and associated equipment as provided in 23-5-614(4); and

(b) sells the equipment to a licensed distributor, route operator, or operator or who, subject to the provisions of subsection (11), stores and sells illegal gambling devices and associated equipment as provided in 23-5-614(4).

(11) "Exporter of illegal gambling devices or associated equipment endorsement" means an endorsement issued by the department to a distributor licensed under this chapter authorizing the distributor to import and store illegal gambling devices and associated equipment manufactured by companies licensed or authorized in North America by the appropriate government entity and to demonstrate and export for sale to any jurisdiction where legally authorized illegal gambling devices and associated equipment as provided in 23-5-614(4) and [section 4].

(12) "Gambling" or "gambling activity" means risking money, credit, deposit, check, property, or any other thing of value for a gain that is contingent in whole or in part upon lot, chance, or the operation of a gambling device or gambling enterprise. The term does not mean conducting or participating in a promotional game of chance and does not include amusement games regulated by Title 23, chapter 6, part 1.

(13) "Gambling device" means a mechanical, electromechanical, or electronic device, machine, slot machine, instrument, apparatus, contrivance, scheme, or system used or intended for use in any gambling activity.

(14) "Gambling enterprise" means an activity, scheme, or agreement or an attempted activity, scheme, or agreement to provide gambling or a gambling device to the public.

(15) "Gift enterprise" means a gambling activity in which persons have qualified to obtain property to be awarded by purchasing or agreeing to purchase goods or services. The term does not mean:

(a) a cash or merchandise attendance prize or premium that county fair commissioners of agricultural fairs and rodeo associations may give away at public drawings at fairs and rodeos;

(b) a promotional game of chance; or

(c) an amusement game regulated under chapter 6 of this title.

(16) "Gross proceeds" means gross revenue received less prizes paid out.

(17) "Illegal gambling device" means a gambling device not specifically authorized by statute or by the rules of the department. The term includes:

(a) a ticket or card, by whatever name known, containing concealed numbers or symbols that may match numbers or symbols designated in advance as prize winners, including a pull tab, punchboard, push card, tip board, pickle ticket, break-open, or jar game, except for one used under chapter 7 of this title or under part 5 of this chapter or in a promotional game of chance approved by the department; and

(b) an apparatus, implement, or device, by whatever name known, specifically designed to be used in conducting an illegal gambling enterprise, including a faro box, faro layout, roulette wheel, roulette table, or craps table or a slot machine except as provided in 23-5-153.

(18) "Illegal gambling enterprise" means a gambling enterprise that violates or is not specifically authorized by a statute or a rule of the department. The term includes:

(a) a card game, by whatever name known, involving any bank or fund from which a participant may win money or other consideration and that receives money or other consideration lost by the participant and includes the card games of blackjack, twenty-one, jacks or better, baccarat, or chemin de fer;

(b) a dice game, by whatever name known, in which a participant wagers on the outcome of the roll of one or more dice, including craps, hazard, or chuck-a-luck, but not including activities authorized by 23-5-160;

(c) sports betting, by whatever name known, in which a person places a wager on the outcome of an athletic event, including bookmaking, parlay bets, or sultan sports cards, but not including those activities authorized in chapter 4 of this title and parts 2, 5, and 8 of this chapter; and

(d) credit gambling.

(19) "Keno" means a game of chance in which prizes are awarded using a card with 8 horizontal rows and 10 columns on which a player may pick up to 10 numbers. A keno caller, using authorized equipment, shall select at random at least 20 numbers out of numbers between 1 and 80, inclusive.

(20) "Keno caller" means a person 18 years of age or older who, using authorized equipment, announces the order of the numbers drawn in live keno.

(21) "License" means a license for an operator, dealer, card room contractor, manufacturer of devices not legal in Montana, sports tab game seller, manufacturer of electronic live bingo or keno equipment, other manufacturer, distributor, or route operator that is issued to a person by the department.

(22) "Licensee" means a person who has received a license from the department.

(23) "Live card game" or "card game" means a card game that is played in public between persons on the premises of a licensed gambling operator or in a senior citizen center.

(24) "Lottery" means a scheme, by whatever name known, for the disposal or distribution of property among persons who have paid or promised to pay valuable consideration for the chance of obtaining the property or a portion of it or for a share or interest in the property upon an agreement, understanding, or expectation that it is to be distributed or disposed of by lot or chance. The term does not mean lotteries authorized under chapter 7 of this title.

(25) "Manufacturer" means a person who assembles from raw materials or subparts a completed piece of equipment or pieces of equipment of any kind to be used as a gambling device and who sells the equipment directly to a licensed distributor, route operator, or operator.

(26) "Nonprofit organization" means a nonprofit corporation or nonprofit charitable, religious, scholastic, educational, veterans', fraternal, beneficial, civic, senior citizens', or service organization established for purposes other than to conduct a gambling activity.

(27) "Operator" means a person who purchases, receives, or acquires, by lease or otherwise, and operates or controls for use in public, a gambling device or gambling enterprise authorized under parts 1 through 8 of this chapter.

(28) "Permit" means approval from the department to make available for public play a gambling device or gambling enterprise approved by the department pursuant to parts 1 through 8 of this chapter.

(29) "Person" or "persons" means both natural and artificial persons and all partnerships, corporations, associations, clubs, fraternal orders, and societies, including religious and charitable organizations.

(30) "Premises" means the physical building or property within or upon which a licensed gambling activity occurs, as stated on an operator's license application and approved by the department.

(31) "Promotional game of chance" means a scheme, by whatever name known, for the disposal or distribution of property among persons who have not paid or are not expected to pay any valuable consideration or who have not purchased or are not expected to purchase any goods or services for a chance to obtain the property, a portion of it, or a share in it. The property is disposed of or distributed by simulating a gambling enterprise authorized by parts 1 through 8 of this chapter or by operating a device or enterprise approved by the department that was manufactured or intended for use for purposes other than gambling.

(32) "Public gambling" means gambling conducted in:

(a) a place, building, or conveyance to which the public has access or may be permitted to have access;

(b) a place of public resort, including but not limited to a facility owned, managed, or operated by a partnership, corporation, association, club, fraternal order, or society, including a religious or charitable organization; or

(c) a place, building, or conveyance to which the public does not have access if players are publicly solicited or the gambling activity is conducted in a predominantly commercial manner.

(33) "Raffle" means a form of lottery in which each participant pays valuable consideration for a ticket to become eligible to win a prize. Winners must be determined by a random selection process approved by department rule.

(34) "Route operator" means a person who:

(a) purchases from a licensed manufacturer, route operator, or distributor equipment of any kind for use in a gambling activity;

(b) leases the equipment to a licensed operator for use by the public; and

(c) may sell to a licensed operator equipment that had previously been authorized to be operated on a premises.

(35) "Senior citizen center" means a facility operated by a nonprofit or governmental organization that provides services to senior citizens in the form of daytime or evening educational or recreational activities and does not provide living accommodations to senior citizens. Services qualifying under this definition must be recognized in the state plan on aging adopted by the department of public health and human services.

(36) "Slot machine" means a mechanical, electrical, electronic, or other gambling device, contrivance, or machine that, upon insertion of a coin, currency, token, credit card, or similar object or upon payment of any valuable consideration, is available to play or operate, the play or operation of which, whether by reason of the skill of the operator or application of the element of chance, or both, may deliver or entitle the person playing or operating the gambling device to receive cash, premiums, merchandise, tokens, or anything of value, whether the payoff is made automatically from the machine or in any other manner. This definition does not apply to video gambling machines authorized under part 6 of this chapter.

(37) "Video gambling machine" is a gambling device specifically authorized by part 6 of this chapter and the rules of the department."

Section 2. Section 23-5-152, MCA, is amended to read:

"23-5-152. Possession of illegal gambling device or conducting illegal gambling enterprise prohibited -- exceptions. (1) Except as provided in 23-5-153, 23-5-614(4), and subsections (2) through (5) of this section, it is a misdemeanor punishable under 23-5-161 for a person to purposely or knowingly:

(a) have in the person's possession or under the person's control or permit to be placed, maintained, or kept in any room, space, enclosure, or building owned, leased, or occupied by or under the person's management or control an illegal gambling device; or

(b) operate an illegal gambling enterprise.

(2) Subsection (1) does not apply to a public officer or to a person coming into possession of an illegal gambling device in or by reason of the performance of an official duty and holding it to be disposed of according to law.

(3) (a) The department may adopt rules to license persons to manufacture gambling devices that are not legal for public play in the state.

(b) A person may not manufacture an illegal gambling device without having obtained a license from the department. The department may charge an administrative fee for the license that is commensurate with the cost of issuing the license.

(4) (a) A person licensed under subsection (3) may conduct only those activities authorized under this subsection (4).

(b) A licensee may bring an illegal gambling device, including an illegal video gambling machine, into the state if:

(i) the illegal gambling device contains a component that will be used by the licensee to manufacture an illegal gambling device for export from the state; or

(ii) the illegal gambling device will be reconditioned, refurbished, repaired, or otherwise substantially modified in preparation for export from the state; and

(iii) the illegal gambling device will be exported from the state; and

(iv) the licensee has notified the department and received authorization from the department to bring the illegal gambling device into the state. The licensee is subject to reporting requirements provided for in rules adopted under subsection (3)(a).

(c) A licensee may also bring an illegal video gambling machine into the state if:

(i) the illegal video gambling machine will be reconditioned, refurbished, repaired, or otherwise substantially modified for conversion to an authorized video gambling machine; and

(ii) the licensee has notified the department and has received authorization from the department to bring the illegal video gambling machine into the state. The licensee is subject to reporting requirements provided for in rules adopted under subsection (3)(a).

(5) An illegal gambling device may be possessed or located for display purposes only and not for operation:

(a) in a public or private museum; or

(b) in any other public place if the device has been made permanently inoperable for purposes of conducting a gambling activity.

(6) Illegal gambling devices and associated equipment may be imported, stored, demonstrated, and sold as provided in 23-5-614(4)."

Section 3. Section 23-5-614, MCA, is amended to read:

"23-5-614. Sale of video gambling machines. (1) A licensed operator who is not licensed as a manufacturer, distributor, or route operator may sell up to 20 video gambling machines in a calendar year if the operator:

(a) had obtained permits for the video gambling machines and legally operated them prior to the sale; and

(b) sells the video gambling machines to another licensed operator or to a licensed manufacturer, distributor, or route operator.

(2) A lienholder who acquires title to video gambling machines through a foreclosure action involving a licensed manufacturer, distributor, route operator, or operator may sell the video gambling machines to a licensed manufacturer, distributor, route operator, or operator.

(3) A licensed manufacturer or distributor may sell video gambling machines and associated equipment approved by the department for delivery to any jurisdiction outside of this state if the sale and transportation of the video gambling machines or equipment comply with all applicable local, tribal, state, and federal laws and regulations. Prior to the date of the sale, the seller shall notify the department of the terms of the sale, the identities of the seller, purchaser, and person to whom the shipment will be made, the type and number of video gambling machines or equipment to be sold, and the method of shipment and provide the department with the approval of the jurisdiction in which the video gambling machines or equipment will be received. A person convicted of purposely or knowingly violating this subsection shall be punished as provided in 23-5-162.

(4) (a) A licensed distributor may import and store illegal gambling devices and associated equipment manufactured by a company licensed or authorized in North America by the appropriate government entity from a jurisdiction outside this state located in North America that does not prohibit the export of the illegal gambling devices and associated equipment to other jurisdictions. The illegal gambling devices and associated equipment may be stored in this state while the licensed distributor seeks to sell the illegal gambling devices and associated equipment for delivery in jurisdictions wherever located outside this state that do not prohibit the sale of the illegal gambling devices and associated equipment for delivery in those jurisdictions. The licensed distributor may use the illegal gambling devices and associated equipment for purposes of demonstrating the illegal gambling devices and associated equipment to prospective purchasers from jurisdictions wherever located outside this state that do not prohibit the sale of the illegal gambling devices and associated equipment for delivery in those jurisdictions. The licensed distributor may sell the illegal gambling devices and associated equipment for delivery in jurisdictions wherever located outside this state that, subject to the provisions of [section 4], do not prohibit the sale of the illegal gambling devices and associated equipment for delivery in those jurisdictions.

(b) For the purposes of this subsection (4), "licensed distributor" means a licensed distributor that has obtained an exporter of illegal gambling devices or associated equipment endorsement."

NEW SECTION. Section 4. Exporter of illegal gambling devices or associated equipment -- application for endorsement -- requirements -- criminal penalties. (1) (a) A person licensed as a distributor on the [effective date of this act] that desires to obtain an exporter of illegal gambling devices or associated equipment endorsement shall apply to the department for the endorsement within 1 year of the [effective date of this act]. A person licensed as a distributor after the [effective date of this act] shall apply for the endorsement within 1 year of being licensed as a distributor.

(b) A distributor that does not obtain an endorsement under this section and that engages in any activity subject to the provisions of 23-5-614(4) or this section is subject to the penalty provisions of 23-5-162.

(c) The department may charge an annual endorsement fee of $1,000 for issuing or renewing an exporter of illegal gambling devices and associated equipment endorsement. The department shall retain the fee for administrative purposes. The department may waive the endorsement fee provided for in this subsection if the applicant is licensed as a manufacturer, distributor, route operator, or operator and may waive the application processing fee provided for in subsection (1)(e) if the applicant is licensed as a manufacturer, distributor, route operator, or operator.

(d) The endorsement provided for in this section expires on June 30 of each year and the endorsement fee may not be prorated.

(e) The department may charge a one-time endorsement application processing fee to cover the actual cost of processing the original endorsement application. The department shall refund any amount of the application processing fee not needed to cover the department's actual costs. The department shall retain the application processing fee for administrative purposes.

(2) With respect to the purchase, demonstration, transportation, and sale outside of this state of illegal gambling devices or associated equipment, a distributor obtaining an endorsement under this section shall comply with all applicable local, tribal, state, federal, or other laws of the other jurisdiction and shall obtain any license or authorization needed to purchase, demonstrate, transport, or sell illegal gambling devices in the other jurisdiction.

(3) A distributor with an endorsement subject to the provisions of this section may possess and demonstrate illegal gambling devices or associated equipment in this state only on premises approved by the department.

(4) Prior to importing or exporting any illegal gambling device or associated equipment, a distributor with an endorsement shall notify the department of the terms of the sale, the identities of the seller, purchaser, and person to whom the shipment is to be made, the type and number of illegal gambling devices or associated equipment to be sold, the method of shipment, and confirmation of the approval of the jurisdiction where the goods are to be delivered in the case of a sale.

(5) A person convicted of purposely or knowingly violating this section shall be punished as provided in 23-5-162.

NEW SECTION. Section 5. Codification instruction. [Section 4] is intended to be codified as an integral part of Title 23, chapter 5, part 6, and the provisions of Title 23, chapter 5, part 6, apply to [section 4].

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