Citations Affected: IC 7.1-7; IC 35-45-5-11.
Synopsis: Electronic gaming devices. Creates a license under the
jurisdiction of the Indiana alcoholic beverage commission that permits
gambling on electronic gaming devices in establishments that hold
permits issued by the commission. Imposes an annual establishment
license fee of $1,000 per electronic gaming device. Limits the number
of gaming devices that an establishment may have. Creates a license
for operators of electronic gaming devices. Requires operators to pay
a $5,000 annual fee. Provides that the fees are deposited in the
electronic gaming fund administered by the alcoholic beverage
commission. Specifies the distribution of money from the fund.
Establishes penalties for violations.
Effective: Upon passage; July 1, 2000.
January 20, 2000, read first time and referred to Committee on Public Policy.
A BILL FOR AN ACT to amend the Indiana Code concerning
alcoholic beverages and to make an appropriation.
SECTION 1. IC 7.1-7 IS ADDED TO THE INDIANA CODE AS A
NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1,
ARTICLE 7. ELECTRONIC GAMING
Chapter 1. Definitions
Sec. 1. The definitions in this chapter apply throughout this article.
Sec. 2. "Commission" refers to the Indiana alcoholic beverage commission established by IC 7.1-2-1-1.
Sec. 3. "Electronic gaming device" means an electromechanical device, an electrical device, or a machine that:
(1) upon payment of consideration is available to play or operate;
(2) makes payoffs in any manner, including delivery of premiums, merchandise, tokens, redeemable game credits, or anything of value to the person playing the game; and
(3) is approved by the commission under this article.
Sec. 4. "Establishment" means a place of business licensed to sell alcoholic beverages under IC 7.1-3.
Sec. 5. "Gambling operations" means the operation of electronic gaming devices in establishments licensed under this article.
Sec. 6. "Licensee" means a person that holds a license under IC 7.1-7-2.
Sec. 7. "Operator" means an individual or a business entity that is licensed under this article to:
(1) distribute, sell, or lease electronic gaming devices or associated equipment in Indiana; or
(2) own electronic gaming devices and physically place the devices for public gaming operations at an establishment in Indiana.
Sec. 8. "Person" means an individual, a firm, an association, a joint venture, a partnership, a limited liability company, a corporation, or any other group or combination.
Chapter 2. Licensing
Sec. 1. The commission does not have authority to regulate gaming devices that are operated on riverboats (as defined in IC 4-33-2-17 ).
Sec. 2. The commission may issue operator and establishment licenses to applicants that satisfy the requirements of this article.
Sec. 3. (a) An applicant seeking to obtain a license under this article must submit the fee required by the commission and apply to the commission in the manner required by the commission. The application must include at least the following:
(1) The name and address of the applicant and any individual holding at least a thirty percent (30%) interest in the applicant.
(2) The applicant's consent to credit investigations and criminal record searches.
(3) Waivers and releases signed by the applicant that the commission believes are necessary to ensure a full and complete review of the application.
(b) An applicant shall furnish all information requested by the commission, including financial data and documents, certifications, consents, waivers, and individual histories.
Sec. 4. Criminal history record information obtained during the investigation of an individual must be maintained by the commission for the term of the license and for any subsequent license term.
Sec. 5. (a) The commission shall conduct or cause to be
conducted a background investigation of each applicant for
(b) A background investigation conducted in connection with the issuance of a license under IC 7.1-3-4 , IC 7.1-3-9 , IC 7.1-3-14 , or IC 7.1-3-20 satisfies the requirements of subsection (a).
Sec. 6. (a) Except as provided in subsection (b), the commission may require that an application or other document submitted by an applicant or a licensee must be sworn to or affirmed before a notary public.
(b) A document submitted by an attorney on behalf of an applicant must be signed by the attorney. The attorney's signature constitutes certification that the attorney has read the forms or documents and that, to the best of the attorney's knowledge, information, and belief, the contents of the forms or documents are true.
Sec. 7. (a) The commission shall notify an applicant who is denied a license of the specific reasons for denial. The notification must be:
(1) in writing; and
(2) sent by certified mail.
(b) The applicant has forty-five (45) calendar days after the date the written notice is received by the applicant under subsection (a) to request a hearing on the denial of the license.
Sec. 8. The commission may not issue a license to an applicant who:
(1) has knowingly made a false statement of material fact to the commission;
(2) is found by the commission to lack the necessary financial stability or responsibility for licensure;
(3) if an individual, is less than twenty-one (21) years of age on the date the application is received by the commission;
(4) is on the most recent tax warrant list provided to the commission by the department of state revenue;
(5) if an individual, has been convicted of or entered a plea of guilty or nolo contendere to a felony in the preceding ten (10) years, unless the commission determines that:
(A) the individual has been pardoned or the individual's civil rights have been restored;
(B) after the conviction or entry of the plea, the individual has engaged in the kind of law abiding commerce and good citizenship that would reflect well upon the integrity of the commission; or
machines per licensed premises.
(C) Twenty (20) machines per licensed establishment for a licensed location for on-premises consumption that holds a race track permit under IC 7.1-3-17.7.
(13) The commission shall adopt rules under IC 4-22-2 concerning other qualifications and procedures for granting operator and establishment licenses under this article.
Sec. 3. The commission may employ or contract for additional investigators to oversee the gambling operations under this article.
Sec. 4. The commission shall require that a licensee's records concerning gambling operations must be maintained in the manner and for the time prescribed by the commission.
Sec. 5. (a) Except as provided in subsection (c), the commission may do any combination of the following to a licensee that violates this article:
(1) Suspend, revoke, or restrict the license of the licensee.
(2) Impose a civil penalty set by the commission against a licensee for each violation of this article.
(b) If a licensee holding an establishment license under IC 7.1-7-5 no longer holds a permit issued by the commission as required under IC 7.1-7-5-2 , the commission shall revoke the establishment license.
(c) A license issued under this article is automatically revoked if the commission determines that a licensee has offered, installed, serviced, maintained, possessed, or otherwise made available to the public an electronic gaming device that is not licensed by the commission.
(d) A person whose license is revoked under subsection (c) may not be licensed under this article for three (3) years after the revocation.
Sec. 6. The state police department shall assist the commission in conducting background investigations of applicants. The commission shall reimburse the state police department for the costs incurred as a result of the assistance. The commission shall make the payment from fees collected from applicants.
Chapter 4. Operator License
Sec. 1. A person must possess a license issued under this chapter to:
(1) distribute, sell, or lease electronic gaming devices or associated equipment in Indiana; or
(2) own more than twenty (20) electronic gaming devices and physically place the devices for gambling operations at an
Sec. 2. To qualify for a license under this chapter, an applicant must:
(1) prove, using tax records and bills of sale, that the applicant has been doing business in Indiana for at least two (2) years before the date of the application; and
(2) maintain a place of business located in Indiana, including at least a warehouse and service facility.
Sec. 3. (a) For each operator license that is issued by the commission, the commission shall create and maintain a list of the following:
(1) The name of the individual who signed the application for the license.
(2) The name, address, and telephone number of the operator who issued the license.
(3) The number of electronic gaming devices owned by each operator.
(4) The serial numbers of each electronic gaming device operated by the licensee.
(b) The lists described in subsection (a) must be made available for public inspection in the offices of the commission.
Sec. 4. An operator may not own, manage, or control an establishment licensed under IC 7.1-7-5.
Sec. 5. An operator may not distribute an electronic gaming device in Indiana unless the device is approved by the commission under this article.
Sec. 6. An operator may not distribute an electronic gaming device to an establishment unless the establishment is licensed under IC 7.1-7-5.
Sec. 7. (a) An operator license issued under this chapter expires one (1) year after the date of issuance.
(b) An operator license issued under this chapter may be renewed for a fee and in a manner determined by the commission.
Chapter 5. Establishment License
Sec. 1. An establishment license issued under this chapter entitles an establishment described in section 2 of this chapter to have gambling operations on the premises of the establishment.
Sec. 2. To qualify for an establishment license, an establishment must be licensed to sell alcoholic beverages, and the applicant must hold:
(1) a beer retailer's permit under IC 7.1-3-4 ;
(2) a liquor retailer's permit under IC 7.1-3-9 ;
establish fees for licenses issued under this article. The fees may
not exceed the following:
(1) Five thousand dollars ($5,000) annually for each operator license.
(2) One thousand dollars ($1,000) annually for an establishment license if the establishment has one (1) electronic gaming device. The licensee shall pay an additional one thousand dollars ($1,000) annually for each additional electronic gaming device that the licensee will operate in the establishment.
Sec. 2. Fees collected under this chapter must be deposited in the electronic gaming fund established by IC 7.1-7-8.
Sec. 3. A local governmental authority may not charge an additional fee or charge for the licensing of operators or establishments under this article.
Chapter 7. Operation of Electronic Gaming Devices
Sec. 1. Electronic gaming devices and equipment associated with electronic gaming devices must be maintained and serviced in the manner and condition required by the commission.
Sec. 2. (a) An establishment licensee is responsible for keeping a written service log in each of the electronic gaming devices. The log must be located in the main cabinet access area of the device's terminal.
(b) An individual, including an employee or agent of the commission, who gains entry into any internal space of an electronic gaming device shall sign the log and indicate the time, date, and purpose of entry, the electronic and mechanical meter readings, and the parts of the terminal inspected or repaired.
(c) Service log forms must be obtained from the commission and be retained by an establishment during the time that the electronic gaming device is being used for gambling operations and for at least one (1) year after the electronic gaming device is removed from service.
(d) Service logs created under this section must be available for inspection by an employee or agent of the commission upon request.
Sec. 3. The commission may inspect an electronic gaming device terminal before the device or terminal is placed in operation to ensure that the electronic gaming device is in compliance with this article and the rules of the commission.
Sec. 4. An electronic gaming device must prominently display a table listing the available prizes and the odds of winning.
Sec. 1. As used in this chapter, "fund" refers to the electronic gaming fund established by section 2 of this chapter.
Sec. 2. The electronic gaming fund is established. The fund shall be administered by the commission.
Sec. 3. (a) Expenses of administering the fund:
(1) may not exceed five percent (5%) of the total amount collected in any fiscal year; and
(2) shall be paid from money in the fund.
(b) Money in the fund is continually appropriated to the commission to carry out the purposes of this article.
Sec. 4. The fund consists of licensing fees deposited into the fund under IC 7.1-7-6-2.
Sec. 5. The treasurer of state shall invest the money in the fund not currently needed to meet the obligations of the fund in the same manner as other public funds may be invested. Interest that accrues from these investments shall be deposited in the fund.
Sec. 6. The commission shall distribute annually, at the end of a state fiscal year, after administrative expenses are paid under section 3 of this chapter, the following:
(1) Twenty percent (20%) of the money in the fund at the end of the state fiscal year shall be disbursed to the counties based on the population of the counties according to the most recent federal special or decennial census, special tabulation, or corrected population count effective under IC 1-1-3.5.
(2) Twenty percent (20%) of the money in the fund at the end of the state fiscal year shall be disbursed to cities and towns based on the population of the cities and towns according to the most recent federal special or decennial census, special tabulation, or corrected population count under IC 1-1-3.5.
Sec. 7. Money in the fund at the end of a state fiscal year after distributions are made under section 6 of this chapter must be transferred to the property tax replacement fund and used to increase the property tax replacement credit percentage under IC 6-1.1-21 and does not revert to the state general fund.
Sec. 8. With respect to a reimbursement that the commission is required to pay to the state or to an agency of the state, the commission may enter into an agreement with the state or the state agency under which the commission pays to the state or the state agency an amount reasonably anticipated to cover reimbursable expenses before these expenses are incurred.
Chapter 9. Crimes and Penalties