Senate File 2224 - Introduced
SENATE FILE
BY BOLKCOM, HAHN, HANCOCK, ZAUN,
ZIEMAN, RAGAN, DOTZLER,
DEARDEN, and WIECK
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act concerning the licensure, operation, and taxation of card
2 game tournaments and allowable prizes at annual game nights.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 5903SS 81
5 ec/sh/8
PAG LIN
1 1 Section 1. Section 99B.1, Code 2005, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 8A. "Card game" includes cribbage,
1 4 bridge, pinochle, hearts, spades, euchre, poker, and other
1 5 similar card games.
1 6 Sec. 2. Section 99B.1, subsection 25, Code 2005, is
1 7 amended to read as follows:
1 8 25. "Qualified organization" means any licensed
1 9 organization which dedicates the net receipts of a game of
1 10 skill, game of chance, or raffle as provided in section 99B.7
1 11 or complies with the requirements for conducting a card game
1 12 tournament as provided in section 99B.7B, and meets the
1 13 requirements of section 99B.7, subsection 1, paragraph "m".
1 14 Sec. 3. Section 99B.6, subsection 1, paragraph k, Code
1 15 2005, is amended to read as follows:
1 16 k. A person under the age of twenty=one years shall not
1 17 participate in the gambling except pursuant to sections 99B.3,
1 18 99B.4, 99B.5, and 99B.7, and 99B.7B. Any licensee knowingly
1 19 allowing a person under the age of twenty=one to participate
1 20 in the gambling prohibited by this paragraph or any person
1 21 knowingly participating in gambling with a person under the
1 22 age of twenty=one, is guilty of a simple misdemeanor.
1 23 Sec. 4. Section 99B.6, subsection 6, Code 2005, is amended
1 24 to read as follows:
1 25 6. A qualified organization may conduct games of skill,
1 26 games of chance, or raffles pursuant to section 99B.7, or a
1 27 card game tournament pursuant to section 99B.7B, in an
1 28 establishment that serves or sells alcoholic beverages, wine,
1 29 or beer as defined in section 123.3 if the games or raffles
1 30 are conducted pursuant to this chapter or rules adopted
1 31 pursuant to this chapter.
1 32 Sec. 5. NEW SECTION. 99B.7B CARD GAME TOURNAMENTS
1 33 CONDUCTED BY QUALIFIED ORGANIZATIONS.
1 34 1. Except as otherwise provided in section 99B.8, card
1 35 game tournaments lawfully may be conducted by a qualified
2 1 organization if all of the following are complied with:
2 2 a. The organization conducting the card game tournament
2 3 has been issued a license pursuant to subsection 3 and
2 4 prominently displays that license in the playing area of the
2 5 card game tournament.
2 6 b. The card games to be conducted during a card game
2 7 tournament, including the rules of each card game and how
2 8 winners are determined, shall be displayed prominently in the
2 9 playing area of the card game tournament. Each card game
2 10 shall be conducted in a fair and honest manner and shall not
2 11 be operated on a build=up or pyramid basis. Every participant
2 12 in a card game tournament must be given the same chances of
2 13 winning the tournament and shall not be allowed any second
2 14 chance entries or multiple entries in the card game
2 15 tournament.
2 16 c. Participation in a card game tournament conducted by a
2 17 qualified organization shall be open to the public. The cost
2 18 to participate in a card game tournament shall be limited to
2 19 fifty dollars and shall be the same for every participant in
2 20 the card game tournament. Participants in a card game
2 21 tournament shall be at least eighteen years of age.
2 22 d. Cash or merchandise prizes may be awarded during a card
2 23 game tournament and shall not exceed one thousand dollars. A
2 24 qualified organization shall distribute amounts awarded as
2 25 prizes on the day they are won and merchandise prizes shall
2 26 not be repurchased. An organization conducting a card game
2 27 tournament shall only display prizes in the playing area of
2 28 the card game tournament that can be won.
2 29 e. No person receives or has any fixed or contingent right
2 30 to receive, directly or indirectly, any profit, remuneration,
2 31 or compensation from or related to a game in a card game
2 32 tournament, except any amount which the person may win as a
2 33 participant on the same basis as the other participants.
2 34 f. A qualified organization shall not hold more than
2 35 fifteen card game tournaments per month. Card game
3 1 tournaments held under an annual game night license shall not
3 2 count towards the limit of fifteen card game tournaments per
3 3 month. With the exception of an annual game night license, no
3 4 more than three card game tournaments per week shall be held
3 5 within a structure or building and only one qualified
3 6 organization licensed to conduct card game tournaments under
3 7 this section may hold card game tournaments within a structure
3 8 or building. A qualified organization shall be allowed to
3 9 hold only one card game tournament during a calendar day.
3 10 g. At the conclusion of each card game tournament, the
3 11 person conducting the card game tournament shall announce the
3 12 gross receipts received, the total amount of money withheld
3 13 for expenses, and the amount withheld for state taxes.
3 14 h. The organization conducting the card game tournament
3 15 meets the requirements of section 99B.7, subsection 1,
3 16 paragraph "m".
3 17 i. The person conducting the card game tournament does
3 18 none of the following:
3 19 (1) Hold, currently, another license issued under this
3 20 section.
3 21 (2) Own or control, directly or indirectly, any class of
3 22 stock of another person who has been issued a license to
3 23 conduct games under this section.
3 24 (3) Have, directly or indirectly, an interest in the
3 25 ownership or profits of another person who has been issued a
3 26 license to conduct games under this section.
3 27 2. The qualified organization licensed to hold card game
3 28 tournaments under this section shall keep a journal of all
3 29 dates of events, amount of gross receipts, amount given out as
3 30 prizes, expenses, amount collected for taxes, and the amount
3 31 collected as revenue.
3 32 a. The amount collected by the qualified organization as
3 33 revenue is limited to ten percent of the gross receipts
3 34 collected from each event.
3 35 b. Each qualified organization shall withhold that portion
4 1 of the gross receipts subject to taxation pursuant to section
4 2 423.2, subsection 4, which shall be kept in a separate account
4 3 and sent to the state along with the organization's quarterly
4 4 report.
4 5 c. A qualified organization licensed to conduct card game
4 6 tournaments is allowed to withhold no more than five percent
4 7 of the gross receipts from each card game tournament for
4 8 qualified expenses. Qualified expenses include but are not
4 9 limited to hired staff to run the event and the purchase of
4 10 supplies and materials used in conducting card games. Any
4 11 money collected for expenses and not used by the end of the
4 12 calendar year shall be donated for educational, civic, public,
4 13 charitable, patriotic, or religious uses as described in
4 14 section 99B.7, subsection 3, paragraph "b". The qualified
4 15 organization shall attach a receipt for any donation made to
4 16 the fourth quarter quarterly report required to be submitted
4 17 pursuant to section 99B.2.
4 18 d. Each qualified organization licensed under this section
4 19 shall make recordkeeping and all deposit receipts available as
4 20 provided in section 99B.2, subsection 2.
4 21 3. An organization wishing to conduct card game
4 22 tournaments pursuant to this section as a qualified
4 23 organization shall submit an application and annual license
4 24 fee of two hundred dollars to the department.
4 25 Sec. 6. Section 99B.8, Code Supplement 2005, is amended by
4 26 adding the following new subsection:
4 27 NEW SUBSECTION. 6. Notwithstanding any provision of
4 28 section 99B.7 to the contrary, if the games are conducted by a
4 29 qualified organization issued a license pursuant to subsection
4 30 3, the sponsor may award cash or merchandise prizes in any
4 31 game of skill, game of chance, or card game lawfully conducted
4 32 during the annual game night in an amount not to exceed five
4 33 thousand dollars.
4 34 Sec. 7. Section 99B.9, subsection 1, unnumbered paragraph
4 35 1, Code 2005, is amended to read as follows:
5 1 Except as otherwise permitted by section 99B.3, 99B.5,
5 2 99B.6, 99B.7, 99B.7B, 99B.8, 99B.11, or 99B.12A, it is
5 3 unlawful to permit gambling on any premises owned, leased,
5 4 rented, or otherwise occupied by a person other than a
5 5 government, governmental agency, or governmental subdivision,
5 6 unless all of the following are complied with:
5 7 Sec. 8. Section 99B.12, subsection 1, unnumbered paragraph
5 8 1, Code 2005, is amended to read as follows:
5 9 Except in instances where because of the location of the
5 10 game or the circumstances of the game section 99B.3, section
5 11 99B.5, section 99B.6, section 99B.7, section 99B.7B, section
5 12 99B.8, or section 99B.9 is applicable, individuals may
5 13 participate in gambling specified in subsection 2, but only if
5 14 all of the following are complied with:
5 15 Sec. 9. Section 423.2, subsection 4, Code Supplement 2005,
5 16 is amended to read as follows:
5 17 4. A tax of five percent is imposed upon the sales price
5 18 derived from the operation of all forms of amusement devices
5 19 and games of skill, games of chance, raffles, and bingo games
5 20 as defined in chapter 99B, and card game tournaments conducted
5 21 under section 99B.7B, that are operated or conducted within
5 22 the state, the tax to be collected from the operator in the
5 23 same manner as for the collection of taxes upon the sales
5 24 price of tickets or admission as provided in this section.
5 25 Nothing in this subsection shall legalize any games of skill
5 26 or chance or slot=operated devices which are now prohibited by
5 27 law.
5 28 The tax imposed under this subsection covers the total
5 29 amount from the operation of games of skill, games of chance,
5 30 raffles, and bingo games as defined in chapter 99B, card game
5 31 tournaments conducted under section 99B.7B, and musical
5 32 devices, weighing machines, shooting galleries, billiard and
5 33 pool tables, bowling alleys, pinball machines, slot=operated
5 34 devices selling merchandise not subject to the general sales
5 35 taxes and on the total amount from devices or systems where
6 1 prizes are in any manner awarded to patrons and upon the
6 2 receipts from fees charged for participation in any game or
6 3 other form of amusement, and generally upon the sales price
6 4 from any source of amusement operated for profit, not
6 5 specified in this section, and upon the sales price from which
6 6 tax is not collected for tickets or admission, but tax shall
6 7 not be imposed upon any activity exempt from sales tax under
6 8 section 423.3, subsection 78. Every person receiving any
6 9 sales price from the sources described in this section is
6 10 subject to all provisions of this subchapter relating to
6 11 retail sales tax and other provisions of this chapter as
6 12 applicable.
6 13 EXPLANATION
6 14 This bill provides for the operation of card game
6 15 tournaments by qualified organizations.
6 16 The bill defines card game to include cribbage, bridge,
6 17 pinochle, hearts, spades, euchre, poker, and other similar
6 18 games.
6 19 The bill establishes new Code section 99B.7B providing for
6 20 card game tournaments conducted by a qualified organization.
6 21 The bill provides that only qualified organizations can
6 22 conduct a card game tournament and provides for a $200 annual
6 23 license fee. The bill requires the organization to display
6 24 the card games to be conducted during a tournament, including
6 25 the rules and manner of determining winners for each game.
6 26 The bill provides that participation in a tournament shall be
6 27 open to the public and the cost to participate shall not be
6 28 more than $50. A person under 18 cannot participate. The
6 29 bill provides that cash or merchandise of up to $1,000 can be
6 30 awarded at a tournament. The bill also provides that an
6 31 organization holding a license can hold no more than 15
6 32 tournaments a month and no more than three tournaments a week.
6 33 Only one tournament can be conducted by a qualified
6 34 organization in a calendar day. Card game tournaments held
6 35 under an annual game night license shall not count toward the
7 1 number of tournaments allowed. The bill also provides that
7 2 the qualified organization licensed to conduct card game
7 3 tournaments shall keep records of the dates of events, the
7 4 amount of gross receipts, the amount of prizes awarded,
7 5 expenses, amount collected for taxes, and revenue collected
7 6 for conducting card game tournaments. The bill allows
7 7 qualified organizations to collect up to 10 percent of gross
7 8 receipts as revenue and up to 5 percent of gross receipts for
7 9 expenses incurred in holding card game tournaments. Of the
7 10 amount withheld for expenses, any amounts collected but unused
7 11 for expenses by the end of a calendar year shall be donated
7 12 for charitable purposes. Any amounts donated shall be
7 13 indicated on the quarterly reports required to be submitted to
7 14 the department of inspection and appeals pursuant to Code
7 15 section 99B.2.
7 16 Code section 99B.8, concerning annual game nights, is also
7 17 amended to allow cash or merchandise prizes of up to $5,000.
7 18 The bill further amends Code section 423.2, concerning
7 19 sales taxes, to specifically provide that sales taxes shall be
7 20 imposed on card game tournaments in the same manner as for
7 21 other games as defined in Code chapter 99B.
7 22 LSB 5903SS 81
7 23 ec:nh/sh/8.3