HB 2502 Authorizes sports wagering

     Handler: Hegeman

Current Bill Summary

- Prepared by Senate Research -


SS/HCS/HBs 2502 & 2556 - This act modifies provisions relating to gaming.

GAMING COMMISSION EMPLOYEES

Current law prohibits former Missouri Gaming Commission members and employees, members of the General Assembly, and elected or appointed officials of the state and certain other cities and counties from entering into a contractual relationship related to direct gaming activity during such employment and for two years after termination of such employment. This act provides that, in the case of employees of the Commission, the State Highway Patrol, and the State Attorney General's office, the two-year prohibition shall only apply in cases in which the employee's termination was either voluntary or was due to misconduct of such employee related to such employee's direct regulatory authority related to excursion gambling boats. (Section 313.004.10)

This provision is identical to SB 819 (2022) and SB 431 (2021), and is substantially similar to a provision contained in SB 78 (2021).

VIDEO LOTTERY CONTROL ACT

This act establishes the Missouri Video Lottery Control Act.

This act allows the State Lottery Commission to implement a system of video lottery game terminals and to issue licenses to video lottery game manufacturers, distributors, operators, handlers, and retailers, as defined in the act, provided that the commencement of video lottery gaming shall not occur prior to January 1, 2024. The Commission shall not allow a single vendor or licensee to be responsible for implementing the program, nor shall it allow a single vendor or licensee to control or operate more than 1,500 video lottery game terminals in the state before December 31, 2030. The Commission shall not allow more than 5,000 video lottery terminals to be placed in the state. (313.429.1 and .2)

Video lottery game terminals may be placed in fraternal organizations, veterans' organizations, designated sports districts, and truck stops, as defined in the act. The Commission may also authorize the placement of pull-tab machines in video lottery game retailer establishments. Beginning January 1, 2024, the Commission may allow the placement of pull-tab machines that utilize electronically generated ticket facsimiles where game plays are pre-determined from a finite pool of ticket results. (Sections 313.427 and 313.255)

Video lottery game terminals and video lottery game ticket redemption terminals shall be connected to a centralized computer system developed or procured by the Commission. No video lottery game terminal or video lottery game ticket redemption terminal shall be in operation without being connected to such centralized computer system.

The Commission may impose a non-refundable application fee, as described in the act. The initial license shall be for a period of two years. Thereafter, the license renewal period shall be four years with the applicable license renewal fee paid for each year such license is renewed, as described in the act. In addition to such license fees, video lottery game operators shall pay the Commission an annual license fee of $200 for each video lottery game terminal placed in service. No license shall be issued to any person who has been convicted of a felony or crime involving illegal gambling. Sales agents shall register with the Commission and may not solicit or enter into any agreement with a retailer or retail establishment prior to such registration with the Commission. The license of any sales agent violating such provision shall be revoked. (Section 313.429.3 and .4)

Video lottery game operators shall pay winning tickets using a video lottery game ticket redemption terminal, which shall be located within the video lottery game retailer's establishment in direct proximity of where such video lottery games are offered. Video lottery game operators shall pay to the Commission thirty-two percent of any unclaimed cash prizes associated with winning tickets that have not been redeemed within 180 days of issue.

Video lottery game operators and video lottery game retailers shall enter into a written agreement for the placement of video lottery game terminals. The agreement shall specify an equal division of adjusted gross receipts, or, upon approval of the Commission, a negotiated division of adjusted gross receipts between the operator and retailer after adjustments for taxes and administrative fees are made. Video lottery game operators and video lottery game retailers are prohibited from offering anything of value other than the percentage of adjusted gross receipts for the placement of video lottery terminals, except that video lottery game operators may provide up to $7,500 to video lottery game retailers for structural changes required by the act. (Section 313.429.7)

The cost of video lottery game terminal credits shall be $0.01, $0.05, $0.10, or $0.25, and the maximum wager played per video lottery game shall not exceed $5.00. No cash award for the maximum wager played on any individual lottery game shall exceed $1,000. Any state or federal tax reporting and withholding requirements shall be satisfied by the video lottery game operator.

Operators shall not operate more than seven terminals at any one fraternal organization, veterans organization, designated sports district, or truck-stop. The operating location for any video lottery game terminal shall be approved by the Commission prior to such video lottery game terminals being placed. The Commission may, at its sole discretion, deny such location pursuant to the provisions of the act. (Section 313.429.8)

A person under the age of twenty-one shall not play video lottery games, and such video lottery game terminals shall be under the supervision of a person that is at least twenty-one years of age. Video lottery game terminals shall be placed in a fully enclosed room that is continually monitored by video surveillance and where access to persons under the age of twenty-one is prohibited. Recorded video surveillance shall be made available as reasonably and specifically requested by the Commission. An operator that fails to report any known violation of law may be subject to an administrative fine not to exceed $5,000. Any operator or retailer found to have knowingly committed a violation of provisions governing the conduct of video lottery games may be subject to a fine of $5,000, the suspension of such operator's retailer's license for up to thirty days, or, in the case of repeated violations, the revocation of such operator's or retailer's license for up to one year. (Section 313.429.9 and .12)

Video lottery game operators shall pay to the Commission thirty-six percent of the video lottery game adjusted gross receipts. The net proceeds of the sale of video lottery game tickets shall be appropriated to public elementary and secondary education and public institutions of higher education. The Commission shall compensate the administrative costs of the city or county in which a video lottery retailer maintains an establishment in an amount equal to four percent of the video lottery game adjusted gross receipts.

The remainder of video lottery game adjusted gross receipts, after the cost of the centralized computer system and administrative costs are paid and apportioned, shall be retained by video lottery game operators and shall be split evenly between video lottery game operators and video lottery game retailers as provided under an agreement. (Section 313.429.10)

All revenues collected by the Commission from license renewal fees and any reimbursements associated with the enforcement of the act shall be appropriated for administrative expenses associated with supervising and enforcing the provisions of the act. (Section 313.429.11)

The Commission shall conduct background checks of applicants for licenses and to investigate violations of the provisions of the act and may contract with a state law enforcement entity or the Missouri Gaming Commission to assist in conducting such investigations. (Section 313.429.12)

The use or possession of any video gaming terminal, gambling machine, or device capable of simulating lottery games, games of chance, or gambling games, and that is not licensed by the Lottery Commission or Gaming Commission shall be guilty of a class D felony and fined up to $10,000 per occurrence. The Commission shall suspend or revoke the license of any vendor or licensee that allows the use of any prohibited video gaming terminal. (Section 313.429.13)

Participation in the state lottery under this act shall not be construed to be a lottery or gift enterprise in violation of Article III, Section 39 of the Constitution of Missouri, and shall not constitute a valid reason for the denial or revocation of a permit to sell liquor. (Section 313.433)

This act allows a municipality or county to adopt an ordinance within one hundred eighty days of the effective date of this act prohibiting video lottery game terminals within the municipality or county. (Section 313.435)

These provisions are substantially similar to SB 642 (2022), SB 19 (2021), SB 319 (2021), HB 1014 (2021), SB 566 (2020), SB 43 (2019), and SB 452 (2017), and to provisions contained in SCS/SB 98 (2021), HB 915 (2021), SS#3/SCS/SB 44 (2019), and SS/SCS/SB 767 (2018), and is similar to HB 990 (2017).

COMPULSIVE GAMBLING

The Commission shall promulgate rules for a sports wagering self-exclusion program, as described in the act. Any person who has been self-excluded and is found to have entered an excursion gambling boat or placed a sports wager shall forfeit his or her winnings. (Section 313.813)

Current law allows the Commission to establish programs to provide treatment, prevention and education services for compulsive gambling. This act requires such programs and includes recovery services. This act also requires the Commission to conduct a socioeconomic study every five years on the impact of gaming. (Section 313.842)

This act requires the General Assembly to appropriate at least $500,000 annually from the Gaming Commission Fund to the Compulsive Gamblers Fund. (Section 313.1021)

SPORTS WAGERING

This act authorizes wagering on sporting events, including esports, and modifies the definition of "gambling game" to include sports wagering.

Sports wagering shall only be authorized to be conducted on an excursion gambling boat or over the internet to persons physically located in this state. Licensed applicants shall apply to the Missouri Gaming Commission for authorization to conduct sports wagering and shall pay an application fee not to exceed $100,000. If granted a certificate of authority, a certificate holder shall be authorized to conduct sports wagering in a licensed facility or through an interactive sports wagering platform, as defined in the act. (Section 313.1006)

The act establishes designated sports districts, as defined in the act, in areas surrounding stadiums in which professional sports teams play their home games. Professional sports teams may designate a designated sports district mobile licensee, as defined in the act, to conduct sports wagering via an interactive sports wagering platform within the designated sports district. (Section 313.1000)

An excursion gambling boat may conduct sports wagering through up to three individually branded interactive sports wagering platforms, as defined in the act, and may operate such platforms or contract with a platform operator to administer sports wagering on behalf of the excursion gambling boat. Each designated sports district mobile licensee may offer sports wagering through one interactive sports wagering platform. (Section 313.1008)

An interactive sports wagering platform may apply to the Commission to conduct sports wagering on behalf of a certificate holder. Such interactive sports wagering platform shall submit an application fee not to exceed $150,000. Every year after licensure, an interactive sports wagering platform shall submit an annual license renewal fee not to exceed $125,000. (Section 313.1010)

Sports wagering commercial activity, defined as any operation, promotion, signage, advertising, or other business activity relating to sports wagering, shall be prohibited within designated sports districts, as defined in the act. (Section 313.1003.3)

A sports governing body may notify the Commission that official league data for determining tier two sports wagers is available. The Commission shall notify sports wagering operators of such availability within seven days, and within sixty days of receiving such notification, sports wagering operators shall use only official league data to determine the outcome of tier two sports wagers, with exceptions as provided in the act.

Certificate holders shall ensure that the certificate holder's surveillance system covers all areas in which sports wagering is conducted, allow the Commission to be present through gaming agents during the hours sports wagering is conducted, ensure that individuals under the age of 21 are not making sports wagers, provide certain information to sports wagering patrons, and post a sign indicating the minimum and maximum amounts that may be wagered. (Section 313.1004)

The Commission shall also promulgate rules to ensure that advertisements for sports wagering do not target minors or other persons who are ineligible to place wagers, problem gamblers, or other vulnerable persons. (Section 313.1012)

The Commission shall conduct background checks on individuals seeking licenses under the act. Such background checks shall include a search for criminal history and any charges or convictions involving corruption or manipulation of sporting events.

The act prohibits the direct or indirect legal or beneficial owner of five percent or more of a sports governing body or its member teams from placing or accepting a wager on an event in which a member team participates. A violation of this provision is a Class C misdemeanor. (Section 313.1014.3(2))

A sports governing body may submit a request to the Commission to restrict, limit, or exclude a certain type, form, or category of sports wagering on sporting events sponsored by such sports governing body. The Commission shall request comments on such requests from sports wagering operators. Upon demonstration of good cause, the Commission shall grant such request, as described in the act.

The Commission and certificate holders shall cooperate with investigations conducted by law enforcement agencies. (Section 313.1014)

A certificate holder shall maintain records of all bets and wagers placed through an interactive sports wagering platform, and all bets and wagers placed in person that exceed $10,000, including personally identifiable information of the bettor, the amount and type of bet, the time the bet was placed, the location of the bet, the outcome of the bet, and records of abnormal betting activity for at least three years after the sporting event occurs. (Section 313.1016)

A tax is imposed at a rate of 10% on the adjusted gross receipts received from sports wagering conducted by a certificate holder. Such tax shall be remitted by the last business day of each month. Revenues received from the tax shall be deposited in the Gaming Proceeds for Education Fund.

A certificate holder shall also pay to the Commission an annual license renewal fee not to exceed $50,000. In addition to such administrative fee, a certificate holder shall pay to the Commission a fee of $10,000 every five years for a reinvestigation of the certificate holder. Such fees shall be deposited in the Gaming Commission Fund. (Section 313.1021)

All sports wagers placed under this act shall be deemed to be initiated, received, and otherwise made on the property of an excursion gambling boat in this state. The intermediate routing of electronic data shall not determine the location or locations in which such wager is initiated, received, or otherwise made. (Section 313.1022)

These provisions are substantially similar to SB 643 (2022), SB 764 (2022), SB 1046 (2022), SB 1061 (2022), SB 18 (2021), SB 217 (2021), SB 256 (2021), SB 567 (2020), SB 754 (2020), HB 2318 (2020), HB 2691 (2020), HB 119 (2019), SB 1009 (2018), HB 2406 (2018), and to provisions contained in SB 906 (2022), SCS/SB 98 (2021), SB 643 (2020), HCS/HB 2088 (2020), HCS/HB 2284 (2020), SS#3/SCS/SB 44 (2019), and SB 187 (2019), and is similar to HB 2320 (2018) and to a provision contained in SB 195 (2019).

JOSH NORBERG


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