House File 642 - Introduced HOUSE FILE 642 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 513) (SUCCESSOR TO HSB 148) A BILL FOR An Act concerning social and charitable gambling and making 1 penalties applicable. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1314HZ (2) 86 ec/nh
H.F. 642 DIVISION I 1 SOCIAL AND CHARITABLE GAMBLING 2 Section 1. Section 99B.1, subsection 1, Code 2015, is 3 amended by striking the subsection and inserting in lieu 4 thereof the following: 5 1. “Amusement concession” means a game of skill or 6 game of chance with an instant win possibility where, if 7 the participant completes a task, the participant wins a 8 prize. “Amusement concession” includes but is not limited to 9 carnival-style games that are conducted by a person for profit. 10 “Amusement concession” does not include casino-style games or 11 amusement devices required to be registered pursuant to section 12 99B.53. 13 Sec. 2. Section 99B.1, subsections 2, 3, 5, 6, 15, 16, 17, 14 20, 21, and 26, Code 2015, are amended to read as follows: 15 2. “Amusement device” means an electrical or mechanical 16 device possessed and used in accordance with section 99B.10 17 this chapter . When possessed and used in accordance with 18 that section this chapter , an amusement device is not a game of 19 skill or game of chance, and is not a gambling device. 20 3. “Applicant” means an individual or an organization 21 applying for a license under this chapter . 22 5. “Bingo” means a game, whether known as bingo or any other 23 name, in which each participant uses one or more cards each 24 of which is marked off into spaces arranged in horizontal and 25 vertical rows of spaces, with each space being designated by 26 number, letter, symbol, or picture, or combination of numbers , 27 and letters, no symbols, or pictures. No two cards being shall 28 be identical , with . In the game of bingo, players covering 29 shall cover spaces on the card or cards as the operator of the 30 game announces to the players the number, letter, symbol, or 31 picture, or combination of numbers , and letters , symbols, or 32 pictures, appearing on an object selected by chance, either 33 manually or mechanically, from a receptacle in which have 34 been placed objects bearing numbers, letters, symbols, or 35 -1- LSB 1314HZ (2) 86 ec/nh 1/ 63
H.F. 642 pictures, or combinations of numbers , and letters , symbols, 1 or pictures corresponding to the system used for designating 2 the spaces , with the . The winner of each game being is the 3 player or players first properly covering a predetermined and 4 announced pattern of spaces on a card being used by the player 5 or players . Each determination of a winner by the method 6 described in the preceding sentence this subsection is a single 7 bingo game at any bingo occasion. 8 6. “Bingo occasion” means a single gathering or session 9 at which successive a series of bingo games are is played. A 10 bingo occasion commences begins when the operator of the a 11 bingo game begins to announce the selects an object with a 12 number, letter, symbol, or picture, or combination of numbers , 13 or letters , symbols, or pictures through which the winner of a 14 single the first bingo game in a series of bingo games will be 15 determined. A bingo occasion ends when at least one hour has 16 elapsed since a bingo game is played or when an announcement by 17 the operator of the bingo game is made that the bingo occasion 18 is over, whichever first occurs. 19 15. “Game of chance” means a game whereby the result is 20 determined by chance and the player in order to win aligns 21 completes activities, such as aligning objects or balls in a 22 prescribed pattern or order or makes certain color patterns 23 appear and . “Game of chance” specifically includes but is not 24 limited to the game defined as bingo. Game of chance “Game of 25 chance” does not include a slot machine or amusement device . 26 16. “Game of skill” means a game whereby the result is 27 determined by the player player’s ability to do a task, such as 28 directing or throwing objects to designated areas or targets, 29 or by maneuvering water or an object into a designated area, or 30 by maneuvering a dragline device to pick up particular items, 31 or by shooting a gun or rifle. 32 17. “Gross receipts” means the total revenue received from 33 the sale of rights to participate in a game of skill, game of 34 chance, bingo, or raffle and admission fees or charges. 35 -2- LSB 1314HZ (2) 86 ec/nh 2/ 63
H.F. 642 20. “Merchandise” means goods or services that are bought 1 and sold in the regular course of business. “Merchandise” 2 includes lottery tickets or shares sold or authorized under 3 chapter 99G . The value of the lottery ticket or share is the 4 price of the lottery ticket or share as established by the 5 Iowa lottery authority pursuant to chapter 99G . “Merchandise” 6 includes a gift card if the gift card is not redeemable for 7 cash. 8 21. “Net receipts” means gross receipts less amounts awarded 9 as prizes and less state and local sales tax paid upon the 10 gross receipts. Reasonable expenses, charges, fees, taxes 11 other than the state and local sales tax, and deductions 12 allowed by the department shall not exceed twenty-five percent 13 of net receipts. 14 26. “Raffle” means a lottery in which each participant 15 buys a ticket an entry for a chance at a prize with the winner 16 determined by a random method and the winner is not required to 17 be present to win. “Raffle” does not include a slot machine. 18 Sec. 3. Section 99B.1, subsections 4, 10, 12, 13, 18, 19, 19 23, 24, 27, and 28, Code 2015, are amended by striking the 20 subsections. 21 Sec. 4. Section 99B.1, subsection 8, Code 2015, is amended 22 by striking the subsection and inserting in lieu thereof the 23 following: 24 8. “Bookmaking” means the determining of odds and receipt 25 and paying off of bets by an individual or publicly or 26 privately owned enterprise not present when the wager or bet 27 was undertaken. 28 Sec. 5. Section 99B.1, Code 2015, is amended by adding the 29 following new subsections: 30 NEW SUBSECTION . 8A. “Build-up or pyramid” means a raffle 31 or a game in which a prize must be returned in order to play 32 another game or to be eligible for another bigger prize, a game 33 in which a prize must be forfeited if a later game is lost, or a 34 raffle which is multi-step and requires the participant to win 35 -3- LSB 1314HZ (2) 86 ec/nh 3/ 63
H.F. 642 at multiple steps to win the grand prize. 1 NEW SUBSECTION . 8B. “Calendar raffle” means a raffle where 2 a single entry is entered in one raffle where winners will be 3 selected over multiple dates. 4 NEW SUBSECTION . 8C. “Casino-style games” means any house 5 banking game, including but not limited to casino-style card 6 games such as poker, baccarat, chemin de fer, blackjack, and 7 pai gow, and casino games such as roulette, craps, and keno. 8 “Casino-style games” does not include a slot machine. 9 NEW SUBSECTION . 8D. “Charitable uses” includes uses 10 benefiting a definite number of persons who are the victims of 11 loss of home or household possessions through explosion, fire, 12 flood, or storm when the loss is uncompensated by insurance, 13 and uses benefiting a definite number of persons suffering from 14 a seriously disabling disease or injury, causing severe loss of 15 income or incurring extraordinary medical expense when the loss 16 is uncompensated by insurance. 17 NEW SUBSECTION . 12A. “Educational, civic, public, 18 charitable, patriotic, or religious uses” includes uses 19 benefiting a society for the prevention of cruelty to animals 20 or animal rescue league; uses benefiting an indefinite 21 number of persons either by bringing them under the influence 22 of education or religion or relieving them from disease, 23 suffering, or constraint, or by erecting or maintaining 24 public buildings or works, or otherwise lessening the burden 25 of government; and uses benefiting any bona fide nationally 26 chartered fraternal or military veterans’ corporation or 27 organization which operates in Iowa a clubroom, post, dining 28 room, or dance hall, but does not include the erection, 29 acquisition, improvement, maintenance, or repair of real, 30 personal, or mixed property unless it is used for one or more 31 of the uses described in this subsection. 32 NEW SUBSECTION . 14A. “Gambling” means any activity where a 33 person risks something of value or other consideration for a 34 chance to win a prize. 35 -4- LSB 1314HZ (2) 86 ec/nh 4/ 63
H.F. 642 NEW SUBSECTION . 14B. “Game night” means an event at 1 which casino-style games may be conducted, in addition to 2 games of skill and games of chance, within one consecutive 3 twenty-four-hour period. 4 NEW SUBSECTION . 17A. “Licensed qualified organization” 5 means a qualified organization that is issued a license under 6 this chapter and that complies with the requirements for a 7 qualified organization issued a license under this chapter. 8 NEW SUBSECTION . 24A. “Public uses” specifically includes 9 dedication of net receipts to political parties as defined in 10 section 43.2. 11 Sec. 6. Section 99B.1, subsection 25, Code 2015, is amended 12 by striking the subsection and inserting in lieu thereof the 13 following: 14 25. “Qualified organization” means an organization that has 15 an active membership of not less than twelve persons, does not 16 have a self-perpetuating governing body and officers, and meets 17 any of the following requirements: 18 a. Is exempt from federal income taxes under section 19 501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6), 501(c)(7), 20 501(c)(8), 501(c)(10), or 501(c)(19) of the Internal Revenue 21 Code as defined in section 422.3. 22 b. Is an agency or instrumentality of the United States 23 government, this state, or a political subdivision of this 24 state. 25 c. Is a parent-teacher organization or booster club that 26 is recognized as a fund-raiser and supporter for a school 27 district organized pursuant to chapter 274 or for a school 28 within the school district, in a notarized letter signed by the 29 president of the board of directors, the superintendent of the 30 school district, or a principal of a school within that school 31 district. 32 d. Is a political party, as defined in section 43.2, or a 33 nonparty political organization that has qualified to place 34 a candidate as its nominee for statewide office pursuant to 35 -5- LSB 1314HZ (2) 86 ec/nh 5/ 63
H.F. 642 chapter 44, or to a candidate’s committee as defined in section 1 68A.102. 2 Sec. 7. Section 99B.3, Code 2015, is amended to read as 3 follows: 4 99B.3 Amusement concessions. 5 1. A game of skill or game of chance is lawful when 6 conducted by a person at an amusement concession, but only 7 A person may conduct an amusement concession if all of the 8 following are complied with conditions are met : 9 a. The location where the game is conducted by the person 10 has been authorized as provided in section 99B.4 . 11 b. The person conducting the game amusement concession has 12 submitted a license application and a fee of fifty dollars for 13 each game amusement concession , and has been issued a license 14 for the game amusement concession , and prominently displays the 15 license at the playing area of the game amusement concession . 16 A license is valid for a period of one year from the date of 17 issue. 18 c. Gambling other than the licensed game is not conducted or 19 engaged in at the amusement concession. 20 d. b. The game is rules of the amusement concession are 21 prominently posted and the visible from all playing positions. 22 c. The cost to play the game a single amusement concession 23 does not exceed three five dollars. 24 e. d. A prize is not displayed which cannot be won. 25 f. e. Cash prizes are not awarded and merchandise prizes 26 are not repurchased . 27 g. f. The game amusement concession is not operated on a 28 build-up or pyramid basis. 29 g. A pet, as defined in section 717E.1, is not awarded. 30 h. The actual retail value of any prize does not exceed 31 fifty one hundred dollars. If a prize consists of more than 32 one item, unit, or part, the aggregate retail value of all 33 items, units, or parts shall not exceed fifty one hundred 34 dollars. 35 -6- LSB 1314HZ (2) 86 ec/nh 6/ 63
H.F. 642 i. Merchandise prizes are not repurchased from the 1 participants. However, a participant may have the option, at 2 no additional cost to the participant, of trading multiple 3 smaller prizes for a single larger prize. 4 j. Concealed numbers or conversion charts are not used to 5 play the game and the game amusement concession. 6 k. The amusement concession is not designed or adapted with 7 any control device to permit manipulation of the game amusement 8 concession by the operator in order to prevent a player from 9 winning or to predetermine who the winner will be , and the 10 object target, block or . 11 l. The object of the game amusement concession must be 12 attainable and possible to perform under the rules stated from 13 the all playing position of the player positions . 14 j. m. The game amusement concession is conducted in a fair 15 and honest manner. 16 2. It is lawful for an An individual other than a person 17 conducting the game to amusement concession may participate in 18 a game of skill or game of chance conducted at an amusement 19 concession, whether or not the amusement concession is 20 conducted in compliance with subsection 1 this section . 21 Sec. 8. Section 99B.5A, subsection 1, paragraph b, Code 22 2015, is amended to read as follows: 23 b. “Community group” means an Iowa nonprofit, tax-exempt 24 organization which is open to the general public and 25 established for the promotion and development of the arts, 26 history, culture, ethnicity, historic preservation, tourism, 27 economic development, festivals, or municipal libraries. 28 “Community group” does not include a school, college, 29 university, political party, labor union, state or federal 30 government agency, fraternal organization, church, convention 31 or association of churches, or organizations operated primarily 32 for religious purposes, or which are operated, supervised, 33 controlled, or principally supported by a church, convention, 34 or association of churches. 35 -7- LSB 1314HZ (2) 86 ec/nh 7/ 63
H.F. 642 Sec. 9. Section 99B.5A, subsection 2, paragraphs a, c, and 1 e, Code 2015, are amended to read as follows: 2 a. Bingo is conducted by the sponsor of the fair or 3 community festival or a qualified organization licensed under 4 section 99B.7 99B.12B that has received permission from the 5 sponsor of the fair or community festival to conduct bingo. 6 c. The number of bingo occasions conducted by a licensee 7 under this section shall be limited to one for each day of the 8 duration of the fair or community festival. 9 e. Except as provided in this section , the provisions of 10 sections 99B.2 and 99B.7 this chapter related to bingo shall 11 apply. 12 Sec. 10. Section 99B.5A, subsection 4, Code 2015, is amended 13 to read as follows: 14 4. Bingo occasions held under a license under this section 15 shall not be counted in determining whether a qualified 16 organization has conducted more than fourteen fifteen bingo 17 occasions per month. In addition, bingo occasions held under 18 this license shall not be limited to four consecutive hours. 19 Sec. 11. Section 99B.6, Code 2015, is amended by striking 20 the section and inserting in lieu thereof the following: 21 99B.6 Social gambling in licensed alcohol establishments. 22 1. Social gambling is lawful on the premises of an 23 establishment for which a class “A”, class “B”, class “C”, 24 special class “C”, or class “D” liquor control license, or 25 class “B” beer permit has been issued pursuant to chapter 123 26 when, subject to the provisions of section 99B.42, all of the 27 following requirements are met: 28 a. The liquor control licensee or beer permittee has 29 submitted an application for a social gambling license and a 30 license fee of one hundred fifty dollars to the department, and 31 a license has been issued. 32 b. The license is prominently displayed on the premises of 33 the establishment. 34 c. The social gambling licensee or any agent or employee 35 -8- LSB 1314HZ (2) 86 ec/nh 8/ 63
H.F. 642 of the licensee does not participate in, sponsor, conduct, 1 promote, or act as cashier or banker for any social gambling, 2 except as a participant while playing on the same basis as 3 every other participant. 4 d. A person under the age of twenty-one years shall not 5 participate in the social games. A social gambling licensee 6 or an agent or employee of the licensee who knowingly allows 7 a person under the age of twenty-one to participate in the 8 gambling prohibited by this section or a person who knowingly 9 participates in gambling with a person under the age of 10 twenty-one, is subject to a penalty under section 99B.15. 11 2. A liquor control licensee or beer permittee with a social 12 gambling license issued pursuant to this section may conduct 13 a sports betting pool if all of the requirements of this 14 subsection are met. 15 a. The pool shall be publicly displayed and the rules of 16 the pool, including the cost per participant and the amount or 17 amounts that will be won, shall be conspicuously displayed on 18 or near the pool. 19 b. A participant shall not wager more than five dollars in 20 the pool. 21 c. The maximum winnings awarded to all participants in the 22 pool shall not exceed five hundred dollars. 23 d. The provisions of section 99B.42, except section 99B.42, 24 subsection 1, paragraphs “a” and “h” , are applicable to pools 25 conducted under this subsection. 26 e. The use of concealed numbers in the pool is permissible. 27 If the pool involves the use of concealed numbers, the numbers 28 shall be selected by a random method and no person shall be 29 aware of the numbers at the time wagers are made in the pool. 30 f. All moneys wagered in the pool shall be awarded as 31 winnings to participants. 32 3. An establishment issued a social gambling license under 33 this section that is required to obtain a new liquor license 34 or permit under chapter 123 due to a change in ownership shall 35 -9- LSB 1314HZ (2) 86 ec/nh 9/ 63
H.F. 642 be required to obtain a new social gambling license under this 1 section to conduct social gambling. 2 Sec. 12. Section 99B.7A, Code 2015, is amended by striking 3 the section and inserting in lieu thereof the following: 4 99B.7A Manufacturers and distributors —— bingo equipment and 5 supplies —— electronic raffle systems —— transfer or use. 6 1. As used in this section, unless the context otherwise 7 requires, “manufacturer or distributor” means a person engaged 8 in business in this state who originally produces, or purchases 9 from a business that originally produces, equipment or supplies 10 which are specifically used in the conduct of a bingo occasion 11 or an electronic raffle. 12 2. A person shall not engage in business in this state as a 13 manufacturer or distributor without first obtaining a license 14 from the department. 15 a. Upon receipt of an application and a fee of one thousand 16 dollars for a manufacturer or distributor license, the 17 department may issue an annual license. 18 b. A license may be renewed annually upon submission of an 19 application, payment of the annual license fee, and compliance 20 with this section and the rules adopted pursuant to this 21 section. 22 3. A licensed manufacturer or distributor may sell bingo 23 equipment or supplies or an electronic raffle system directly 24 to a licensed qualified organization. 25 4. A licensed qualified organization under this chapter 26 may dispose of, transfer, or sell excess bingo equipment or 27 supplies on a nonroutine basis to another licensed qualified 28 organization. 29 5. A licensed qualified organization shall not sublease, 30 rent, borrow, or otherwise use another qualified organization’s 31 electronic raffle system. 32 Sec. 13. Section 99B.7B, subsection 1, Code 2015, is amended 33 to read as follows: 34 1. As used in this section , unless the context otherwise 35 -10- LSB 1314HZ (2) 86 ec/nh 10/ 63
H.F. 642 requires: 1 a. “Card game” means only includes but is not limited to 2 poker, pinochle, pitch, gin rummy, bridge, euchre, hearts, or 3 cribbage. 4 b. “Qualified organization representing veterans” means any 5 licensed qualified organization representing which represents 6 veterans, which is a post, branch, or chapter of a national 7 association of veterans of the armed forces of the United 8 States which is a federally chartered corporation, dedicates 9 the net receipts of a game of skill, game of chance, or raffle 10 as provided in section 99B.7 99B.14A , and is exempt from 11 federal income taxes under section 501(c)(19) of the Internal 12 Revenue Code as defined in section 422.3 , has an active 13 membership of not less than twelve persons, and does not have a 14 self-perpetuating governing body and officers . 15 Sec. 14. Section 99B.7B, subsection 2, Code 2015, is amended 16 by adding the following new paragraph: 17 NEW PARAGRAPH . 0a. The qualified organization representing 18 veterans has been issued a license pursuant to section 99B.12B. 19 The license application shall identify the premises where the 20 card game tournaments are to be conducted and the occupancy 21 limit of the premises, and shall include documentation that 22 the qualified organization representing veterans has conducted 23 regular meetings of the organization at the premises during the 24 previous eight months. 25 Sec. 15. Section 99B.7B, subsection 2, paragraphs a, b, c, 26 d, e, and g, Code 2015, are amended to read as follows: 27 a. The qualified organization conducting the card game 28 tournament has been issued a license pursuant to subsection 4 29 and representing veterans prominently displays that the license 30 in the playing area of the card game tournament. 31 b. The card games to be conducted during a card game 32 tournament, including the rules of each card game and how 33 winners are determined, shall be displayed prominently in the 34 playing area of the card game tournament. 35 -11- LSB 1314HZ (2) 86 ec/nh 11/ 63
H.F. 642 0c. Each card game shall be conducted in a fair and honest 1 manner and . 2 00c. Each card game shall not be operated on a build-up or 3 pyramid basis. 4 000c. Every participant in a card game tournament must be 5 given the same chances of winning the tournament and shall not 6 be allowed any second chance entries or multiple entries in the 7 card game tournament. 8 c. Participation in a card game tournament conducted by 9 a qualified organization representing veterans shall only be 10 open to members of the qualified organization representing 11 veterans and guests of members of the qualified organization 12 participating in the tournament, subject to the requirements of 13 this section . 14 0d. The total number of members and guests participating in 15 a card game tournament shall not exceed the occupancy limit of 16 the premises where the card game tournament is being conducted. 17 00d. Participants in a card game tournament shall be at 18 least twenty-one years of age. 19 d. (1) If the card game tournament is limited to one guest 20 for each member of the qualified organization representing 21 veterans participating in the tournament, then the requirements 22 of this subparagraph (1) shall apply. The cost to participate 23 in a card game tournament under this subparagraph (1) shall be 24 limited to one hundred dollars and shall be the same for every 25 participant in the card game tournament. Cash or merchandise 26 prizes may be awarded during a card game tournament under this 27 subparagraph (1) and shall not exceed one thousand dollars and 28 no participant shall win more than a total of five hundred 29 dollars. 30 (2) If the card game tournament is not limited to one guest 31 for each member of the qualified organization representing 32 veterans participating in the tournament, then the requirements 33 of this subparagraph (2) shall apply. The cost to participate 34 in a card game tournament under this subparagraph (2) shall be 35 -12- LSB 1314HZ (2) 86 ec/nh 12/ 63
H.F. 642 limited to twenty-five dollars and shall be the same for every 1 participant in the card game tournament. Cash or merchandise 2 prizes may be awarded during a card game tournament under this 3 subparagraph (2) and shall not exceed three hundred dollars 4 and no participant shall win more than a total of two hundred 5 dollars. 6 (3) 0e. A qualified organization representing veterans 7 shall distribute amounts awarded as prizes on the day they 8 are won and merchandise prizes shall not be repurchased. An 9 organization conducting a card game tournament shall only 10 display prizes in the playing area of the card game tournament 11 that can be won. 12 e. The qualified organization representing veterans shall 13 conduct each card game tournament and any card game conducted 14 during the tournament and shall not contract with or permit 15 another person to conduct the card game tournament or any card 16 game during the tournament. In addition, the 17 0f. The card game tournament and any card game conducted 18 during the tournament shall be conducted only on the premises 19 of the qualified organization representing veterans as 20 identified in the license application pursuant to as required 21 by this subsection 4 . 22 g. A qualified organization representing veterans licensed 23 under this section shall not hold more than two card game 24 tournaments per month and shall not hold a card game tournament 25 within seven calendar days of another card game tournament 26 conducted by that qualified organization representing veterans. 27 Card game tournaments held under an annual during a game night 28 license conducted pursuant to section 99B.26 shall not count 29 toward the limit of one card game tournament per week for a 30 license holder. A qualified organization representing veterans 31 shall be allowed to hold only one card game tournament during 32 any period of twenty-four consecutive hours, starting from the 33 time the card game tournament begins. 34 Sec. 16. Section 99B.7B, subsection 2, paragraph h, Code 35 -13- LSB 1314HZ (2) 86 ec/nh 13/ 63
H.F. 642 2015, is amended by striking the paragraph. 1 Sec. 17. Section 99B.7B, subsection 3, Code 2015, is amended 2 to read as follows: 3 3. The qualified organization representing veterans 4 licensed to hold card game tournaments under this section 5 shall keep a journal of all dates of events, amount of gross 6 receipts, amount given out as prizes, expenses, amount 7 collected for taxes, and the amount collected as revenue. 8 a. The qualified organization representing veterans shall 9 dedicate and distribute the net receipts from each card 10 game tournament as provided in section 99B.7, subsection 3, 11 paragraph “b” 99B.14A . 12 b. Each qualified organization representing veterans shall 13 withhold that portion of the gross receipts subject to taxation 14 pursuant to section 423.2, subsection 4 , which shall be kept 15 in a separate account and sent to the state along with the 16 organization’s annual report required by section 99B.2 99B.16A . 17 c. A qualified organization representing veterans licensed 18 to conduct card game tournaments is allowed to may withhold no 19 more than five percent of the gross receipts from each card 20 game tournament for qualified expenses. Qualified expenses 21 include but are not limited to the purchase of supplies and 22 materials used in conducting card games. Any money collected 23 for expenses and not used by the end of the state fiscal year 24 shall be donated for educational, civic, public, charitable, 25 patriotic, or religious uses as described in section 99B.7, 26 subsection 3 , paragraph “b” . The qualified organization 27 representing veterans shall attach a receipt for any donation 28 made to the annual report required to be submitted pursuant to 29 section 99B.2 99B.16A . 30 d. Each qualified organization representing veterans 31 licensed under this section shall make recordkeeping and all 32 deposit receipts available as provided in section 99B.2, 33 subsection 2 99B.16A . 34 Sec. 18. Section 99B.7B, subsection 4, Code 2015, is amended 35 -14- LSB 1314HZ (2) 86 ec/nh 14/ 63
H.F. 642 by striking the subsection. 1 Sec. 19. Section 99B.9, Code 2015, is amended by striking 2 the section and inserting in lieu thereof the following: 3 99B.9 Social gambling in public places. 4 Social gambling in a public place is lawful, subject to 5 the provisions of section 99B.42, if all of the following 6 requirements are met: 7 1. The social gambling is conducted at any public place 8 owned, leased, rented, or otherwise occupied by the licensee. 9 2. The person occupying the premises of the public place as 10 an owner or tenant has submitted an application for a license 11 and a fee of one hundred dollars to the department, and a 12 license has been issued. 13 3. The license is prominently displayed on the premises of 14 the public place. 15 4. The licensee or any agent or employee of the licensee 16 does not participate in, sponsor, conduct, promote, or act 17 as cashier or banker for any gambling activities, except as 18 a participant while playing on the same basis as every other 19 participant. 20 Sec. 20. Section 99B.10A, Code 2015, is amended to read as 21 follows: 22 99B.10A Electrical and or mechanical amusement device 23 manufacturers, distributors, and for-profit owners —— 24 registration. 25 1. A person engaged in business in this state as a 26 manufacturer, manufacturer’s representative, distributor, or 27 for-profit owner of electrical and or mechanical amusement 28 devices required to be registered as provided in section 29 99B.10, subsection 1, paragraph “f” 99B.53 , shall register with 30 the department. Each person who registers with the department 31 under this section shall pay an annual registration fee in an 32 amount as provided in subsection 2 . Registration shall be 33 submitted on application forms designated by the department 34 that shall contain the information required by the department 35 -15- LSB 1314HZ (2) 86 ec/nh 15/ 63
H.F. 642 by rule. The department shall adopt rules establishing the 1 criteria for approval or denial of a registration application 2 and providing for the submission of information to the 3 department by a person registered pursuant to this section if 4 information in the initial registration is changed, including 5 discontinuing the business in this state. 6 2. For purposes of this section , the annual registration fee 7 shall be as follows: 8 a. For a manufacturer or manufacturer’s representative , two 9 thousand five hundred dollars. 10 b. For a distributor, five thousand dollars. 11 c. For an owner of no more than two four electrical and or 12 mechanical amusement devices registered as provided in section 13 99B.10, subsection 1, paragraph “f” 99B.53 , at a single location 14 or premises that is not an a qualified organization that meets 15 the requirements of section 99B.7, subsection 1 , paragraph “m” , 16 two thousand five hundred dollars. 17 Sec. 21. Section 99B.10B, Code 2015, is amended to read as 18 follows: 19 99B.10B Revocation of registration —— electrical and or 20 mechanical amusement devices —— suspension of liquor license or 21 beer permit. 22 1. a. The department may deny, suspend, or revoke a 23 registration issued pursuant to section 99B.10 or 99B.10A or 24 99B.53 , if the department finds that an applicant, registrant, 25 or an agent of a registrant violated or permitted a violation 26 of a provision of section 99B.10, 99B.10A , or 99B.10C , 99B.52, 27 or 99B.53, or a departmental rule adopted pursuant to chapter 28 17A , or for any other cause for which the director of the 29 department would be or would have been justified in refusing to 30 issue a registration, or upon the conviction of a person of a 31 violation of this chapter or a rule adopted under this chapter 32 which occurred on the premises where the registered amusement 33 device is or is to be located. However, the 34 b. The denial, suspension, or revocation of a registration 35 -16- LSB 1314HZ (2) 86 ec/nh 16/ 63
H.F. 642 for one amusement device does not require, but may result in, 1 the denial, suspension, or revocation of the registration for 2 a different amusement device held by the same distributor or 3 owner. 4 b. c. However, a A person who commits an offense of failing 5 to include a security mechanism on an amusement device as 6 required pursuant to section 99B.10, subsection 1, paragraph 7 “m” 99B.52, subsection 4 , shall be subject to a civil penalty in 8 the amount of two hundred fifty dollars. A person who commits, 9 within two years, a second offense of failing to include a 10 security mechanism on an amusement device shall be subject to 11 the provisions of paragraph “a” . 12 2. a. A person who commits an offense of awarding a cash 13 prize of fifty dollars or less in violation of section 99B.10, 14 subsection 1, paragraph “b” 99B.52, subsection 3 , pursuant 15 to rules adopted by the department, shall be subject to a 16 civil penalty in the amount of two hundred fifty dollars. 17 Additional sanctions beyond the civil penalty prescribed by 18 this paragraph, including but not limited to the suspension or 19 revocation of any liquor control license issued pursuant to 20 chapter 123 or registration issued pursuant to section 99B.10A 21 or 99B.53, shall not be applicable. 22 b. A person who commits, within two years, a second offense 23 of awarding a cash prize of fifty dollars or less in violation 24 of section 99B.10, subsection 1, paragraph “b” 99B.52, 25 subsection 3 , or a person who commits an offense of awarding a 26 cash prize of more than fifty dollars in violation of section 27 99B.10, subsection 1, paragraph “b” 99B.52, subsection 3 , 28 pursuant to rules adopted by the department, shall be subject 29 to revocation of the person’s registration and the following: 30 (1) If the person whose registration is revoked under this 31 paragraph “b” , is a person for which a class “A”, class “B”, 32 class “C”, special class “C”, or class “D” liquor control 33 license has been issued pursuant to chapter 123 , the person’s 34 liquor control license shall be suspended for a period of 35 -17- LSB 1314HZ (2) 86 ec/nh 17/ 63
H.F. 642 fourteen days in the same manner as provided in section 123.50, 1 subsection 3 , paragraph “a” . 2 (2) If the person whose registration is revoked under this 3 paragraph “b” , is a person for which only a class “B” or class 4 “C” beer permit has been issued pursuant to chapter 123 , the 5 person’s class “B” or class “C” beer permit shall be suspended 6 for a period of fourteen days in the same manner as provided in 7 section 123.50, subsection 3 , paragraph “a” . 8 (3) If a person owning or employed by an establishment 9 having a class “A”, class “B”, class “C”, special class “C”, 10 or class “D” liquor control license issued pursuant to chapter 11 123 commits an offense as provided in this paragraph “b” , the 12 liquor control license of the establishment shall be suspended 13 for a period of fourteen days in the same manner as provided in 14 section 123.50, subsection 3 , paragraph “a” . 15 (4) If a person owning or employed by an establishment 16 having a class “B” or class “C” beer permit issued pursuant to 17 chapter 123 commits an offense as provided in this paragraph 18 “b” , the beer permit of the establishment shall be suspended 19 for a period of fourteen days in the same manner as provided in 20 section 123.50, subsection 3 , paragraph “a” . 21 3. a. The process for denial, suspension, or revocation of 22 a registration issued pursuant to section 99B.10 or 99B.10A , 23 or 99B.53, shall commence by delivering to the applicant or 24 registrant by certified mail, return receipt requested, or 25 by personal service a notice , by means authorized by section 26 17A.18, setting forth the proposed action and the particular 27 reasons for such action. 28 b. (1) If a written request for a hearing is not received 29 within thirty days after the mailing or service of the the 30 delivery of notice as provided by paragraph “a” , the denial, 31 suspension, or revocation of a registration shall become 32 effective pending a final determination by the department. The 33 proposed action in the notice may be affirmed, modified, or set 34 aside by the department in a written decision. 35 -18- LSB 1314HZ (2) 86 ec/nh 18/ 63
H.F. 642 (2) If a request for a hearing is timely received by 1 the department, the applicant or registrant shall be given 2 an opportunity for a prompt and fair hearing before the 3 department and the denial, suspension, or revocation shall 4 be deemed suspended until the department makes a final 5 determination. However, the director of the department may 6 suspend a registration prior to a hearing if the director 7 finds that the public integrity of the registered activity 8 is compromised or there is a risk to public health, safety, 9 or welfare. In addition, at any time during or prior to the 10 hearing, the department may rescind the notice of the denial, 11 suspension, or revocation upon being satisfied that the reasons 12 for the denial, suspension, or revocation have been or will 13 be removed. On the basis of any such hearing, the proposed 14 action in the notice may be affirmed, modified, or set aside by 15 the department in a written decision. The procedure governing 16 hearings authorized by this paragraph shall be in accordance 17 with the rules promulgated by the department and chapter 17A . 18 c. A copy of the final decision of the department shall 19 be sent by electronic mail or certified mail, with return 20 receipt requested, or served personally upon the applicant or 21 registrant. The applicant or registrant may seek judicial 22 review in accordance with the terms of the Iowa administrative 23 procedure Act, chapter 17A . 24 d. If the department finds cause for denial of a 25 registration issued pursuant to section 99B.10 or 99B.10A , 26 or 99B.53, the applicant shall not reapply for the same 27 registration for a period of two years. If the department 28 finds cause for a suspension or revocation, the registration 29 shall be suspended or revoked for a period not to exceed two 30 years. 31 Sec. 22. Section 99B.10C, Code 2015, is amended to read as 32 follows: 33 99B.10C Electrical and Registered electrical or mechanical 34 amusement devices —— persons under twenty-one —— penalties. 35 -19- LSB 1314HZ (2) 86 ec/nh 19/ 63
H.F. 642 1. A person under the age of twenty-one years shall not 1 participate in the operation of an a registered electrical and 2 or mechanical amusement device. A person who violates this 3 subsection commits a scheduled violation under section 805.8C, 4 subsection 4 . 5 2. A person owning or leasing an a registered electrical 6 and or mechanical amusement device, or an employee of a person 7 owning or leasing an a registered electrical and or mechanical 8 amusement device, who knowingly allows a person under the age 9 of twenty-one years to participate in the operation of an a 10 registered electrical and or mechanical amusement device, or 11 a person who knowingly participates in the operation of an a 12 registered electrical and or mechanical amusement device with a 13 person under the age of twenty-one years, is guilty of a simple 14 misdemeanor. 15 3. For purposes of this section , an electrical and 16 mechanical amusement device “registered electrical or mechanical 17 amusement device” means an electrical and or mechanical 18 amusement device required to be registered as provided in 19 section 99B.10, subsection 1, paragraph “f” 99B.53 . 20 Sec. 23. Section 99B.10D, Code 2015, is amended to read as 21 follows: 22 99B.10D Electrical and or mechanical amusement devices —— 23 special fund. 24 Fees collected by the department pursuant to sections 25 99B.10 and 99B.10A and 99B.53 shall be deposited in a special 26 fund created in the state treasury. Moneys in the fund are 27 appropriated to the department of inspections and appeals 28 and the department of public safety for administration and 29 enforcement of sections 99B.10 , 99B.10A , 99B.10B , and 99B.10C 30 this subchapter , including employment of necessary personnel. 31 The distribution of moneys in the fund to the department of 32 inspections and appeals and the department of public safety 33 shall be pursuant to a written policy agreed upon by the 34 departments. Notwithstanding section 12C.7, subsection 2 , 35 -20- LSB 1314HZ (2) 86 ec/nh 20/ 63
H.F. 642 interest or earnings on moneys deposited in the fund shall be 1 credited to the fund. Notwithstanding section 8.33 , moneys 2 remaining in the fund at the end of a fiscal year shall not 3 revert to the general fund of the state. 4 Sec. 24. Section 99B.11, Code 2015, is amended to read as 5 follows: 6 99B.11 Bona fide contests. 7 1. It is lawful for a A person to may conduct , without a 8 license, any of the contests specified in subsection 2 , and to 9 may offer and pay awards to persons winning in those contests 10 whether or not entry fees, participation fees, or other charges 11 are assessed against or collected from the participants, but 12 only if all of the following requirements are complied with 13 met : 14 a. The contest is not held at an amusement concession. 15 b. No A gambling device is not used in conjunction with, or 16 incident to the contest. 17 c. b. The contest is not conducted in whole or in part 18 on or in any property subject to chapter 297 , relating to 19 schoolhouses and schoolhouse sites, unless the contest and the 20 person conducting the contest has the express written approval 21 of the governing body of that school district. 22 d. c. The contest is conducted in a fair and honest manner. 23 d. A contest shall not be designed or adapted to permit the 24 operator of the contest to prevent a participant from winning 25 or to predetermine who the winner will be , and the . 26 e. The object of the contest must be attainable and possible 27 to perform under the rules stated. 28 f. If the contest is a tournament, the tournament operator 29 shall prominently display all tournament rules. 30 2. A contest , including a contest in a league or tournament, 31 is not lawful unless only if it is falls into one of the 32 following contests event categories : 33 a. Athletic or sporting events. Athletic or sporting 34 contests, leagues or tournaments, Events in this category 35 -21- LSB 1314HZ (2) 86 ec/nh 21/ 63
H.F. 642 include basketball, volleyball, football, baseball, softball, 1 soccer, wrestling, swimming, track and field, racquetball, 2 tennis, squash, badminton, table tennis, rodeos, horse shows, 3 golf, bowling, trap or skeet shoots, fly casting, tractor 4 pulling, rifle, pistol, musket, or muzzle-loader shooting , pool 5 billiards , darts, archery, and horseshoe contests, leagues, or 6 tournaments horseshoes . 7 b. Racing and skill-type events. Horse Events in this 8 category include horse races, harness racing, ski, airplane, 9 snowmobile, raft, boat, bicycle , and motor vehicle races. 10 c. Arts and crafts-type events. Contests or exhibitions 11 of Events in this category include cooking, horticulture, 12 livestock, poultry, fish or other animals, artwork, hobbywork 13 or , and craftwork, except those prohibited by chapter 717A . 14 d. Card game-type and board game-type events. Cribbage, 15 Events in this category include cribbage, bridge, euchre, 16 chess, checkers, dominoes, and pinochle and similar contests, 17 leagues or tournaments . The provisions of this paragraph are 18 retroactive to August 15, 1975. 19 e. Trivia and trading card events. 20 f. Video game-type and video sporting-type events. A video 21 machine golf tournament game which is an interactive bona fide 22 contest. A player operates a video machine golf tournament 23 game with a trackball assembly which acts as the golfer’s swing 24 and determines the results of play and tournament scores. A 25 video machine golf tournament game is capable of receiving 26 program and data information from an off-site location. A 27 tournament operator shall prominently display all tournament 28 rules. Events in this category include pinball games, video 29 games, and video machine golf tournament games, where skill 30 is the predominant factor in determining the result of play 31 and tournament scores. To be lawful, a player shall operate a 32 video machine with a device which directly impacts the results 33 of the game. 34 3. A poker, blackjack, craps, keno, or roulette contest, 35 -22- LSB 1314HZ (2) 86 ec/nh 22/ 63
H.F. 642 league, or tournament shall not be considered a bona fide 1 contest under this section . 2 Sec. 25. NEW SECTION . 99B.11A Definitions. 3 As used in this subchapter and subchapter III, unless the 4 context otherwise requires: 5 1. “Electronic bingo equipment” means an electronic device 6 that assists an individual with a disability in the use of a 7 bingo card during a bingo game. 8 2. “Large raffle” means a raffle where the cumulative value 9 of cash and prizes is more than ten thousand dollars but not 10 more than one hundred thousand dollars. 11 3. “Small raffle” means a raffle where the cumulative value 12 of cash and prizes is more than one thousand dollars but not 13 more than ten thousand dollars. 14 4. “Very large raffle” means a raffle where the cumulative 15 value of cash and prizes is more than one hundred thousand 16 dollars but not more than two hundred thousand dollars or the 17 prize is real property. 18 5. “Very small raffle” means a raffle where the cumulative 19 value of the cash prize or prizes is one thousand dollars or 20 less and the value of all entries sold is one thousand dollars 21 or less, or the cumulative value of the donated merchandise 22 prize or prizes is five thousand dollars or less and the value 23 of all entries sold is five thousand dollars or less. 24 Sec. 26. Section 99B.12, Code 2015, is amended by striking 25 the section and inserting in lieu thereof the following: 26 99B.12 Social gambling between individuals. 27 1. An individual may participate in social gambling if, 28 subject to the requirements of section 99B.42, all of the 29 following requirements are met: 30 a. The gambling is not participated in, either wholly or in 31 part, on or in any schoolhouses, schoolhouse sites, or other 32 property subject to chapter 297. 33 b. All participants in the gambling are individuals. 34 c. A person shall not participate in any wager, bet, or 35 -23- LSB 1314HZ (2) 86 ec/nh 23/ 63
H.F. 642 pool which relates to an athletic event or contest and which 1 is authorized or sponsored by one or more schools, educational 2 institutions, or interscholastic athletic organizations, if 3 the person is a coach, official, player, or contestant in the 4 athletic event or contest. 5 d. In any game requiring a dealer or operator, the 6 participants must have the option to take their turn at dealing 7 or operating the game in a regular order according to the 8 standard rules of the game. 9 2. Social gambling allowed under this section is limited to 10 any of the following: 11 a. Games of skill and games of chance, except casino-style 12 games other than poker. 13 b. Wagers or bets between two or more individuals who are 14 physically in the presence of each other with respect to any 15 of the following: 16 (1) A contest specified in section 99B.11, except that no 17 individual shall win or lose more than a total of two hundred 18 dollars or equivalent consideration in one or more contests at 19 any time during any period of twenty-four consecutive hours or 20 over that entire period. 21 (2) Any other event or outcome which does not depend upon 22 gambling or the use of a gambling device that is unlawful in 23 this state. 24 Sec. 27. NEW SECTION . 99B.12B Qualified organization 25 licenses —— general provisions —— types of licenses. 26 1. General provisions. 27 a. A qualified organization shall submit an application for 28 a license, along with any required fees, to the department at 29 least thirty days in advance of the beginning of the gambling 30 activity, including the sale of entries or promotion of the 31 sale of entries for raffles. 32 b. For purposes of this section, a license is deemed to be 33 issued on the first day of the period for which the license is 34 issued. 35 -24- LSB 1314HZ (2) 86 ec/nh 24/ 63
H.F. 642 c. An applicant that has not submitted an annual report 1 required pursuant to section 99B.16A shall submit such report 2 prior to approval of the application. 3 d. A license shall not be issued to an applicant whose 4 previous license issued under this chapter or chapter 123 has 5 been revoked until the period of revocation or revocations has 6 elapsed. 7 e. The license fee is not refundable. 8 2. Two-year qualified organization license. 9 a. The license fee for a two-year qualified organization 10 license is one hundred fifty dollars. 11 b. An applicant for a license under this subsection shall 12 be a qualified organization that has been in existence for at 13 least five years, or is a local chapter or an affiliate of a 14 national tax-exempt organization that has been in existence 15 for at least two years and has provided written authorization 16 from the national organization to the department. The national 17 tax-exempt organization shall be exempt from federal income 18 taxes as described in section 99B.1, subsection 25, paragraph 19 “a” , and have been in existence at least five years. 20 c. A qualified organization issued a two-year qualified 21 organization license may conduct the following activities: 22 (1) Unlimited games of skill or games of chance except for 23 bingo. 24 (2) An unlimited number of very small raffles and an 25 unlimited number of small raffles, including electronic 26 raffles. 27 (3) One large raffle, including an electronic raffle, 28 each calendar year during the two-year period, subject to the 29 requirements of section 99B.24. 30 (4) Up to three bingo occasions per week and up to fifteen 31 bingo occasions per month. 32 (5) One game night each calendar year during the two-year 33 period, subject to the requirements of section 99B.26. 34 3. One-year qualified organization raffle license. 35 -25- LSB 1314HZ (2) 86 ec/nh 25/ 63
H.F. 642 a. The license fee for a one-year qualified organization 1 raffle license is one hundred fifty dollars. 2 b. A qualified organization issued a one-year qualified 3 organization raffle license may conduct the following 4 activities: 5 (1) An unlimited number of very small raffles and an 6 unlimited number of small raffles. 7 (2) Up to eight large raffles with each large raffle 8 conducted in a different county during the one-year period, 9 subject to the requirements of section 99B.24. 10 (3) One game night during the one-year period, subject to 11 the requirements of section 99B.26. 12 4. One hundred eighty-day qualified organization raffle 13 license. 14 a. The license fee for a one hundred eighty-day qualified 15 organization raffle license is seventy-five dollars. 16 b. A qualified organization issued a one hundred eighty-day 17 qualified organization raffle license may conduct the following 18 activities: 19 (1) An unlimited number of very small raffles and an 20 unlimited number of small raffles. 21 (2) One large raffle during the period of one hundred eighty 22 days, subject to the requirements of section 99B.24. 23 (3) One game night during the period of one hundred eighty 24 days, subject to the requirements of section 99B.26. 25 5. Ninety-day qualified organization raffle license. 26 a. The license fee for a ninety-day qualified organization 27 raffle license is forty dollars. 28 b. A qualified organization issued a ninety-day qualified 29 organization raffle license may conduct the following 30 activities: 31 (1) An unlimited number of very small raffles and an 32 unlimited number of small raffles. 33 (2) One large raffle during the period of ninety days, 34 subject to the requirements of section 99B.24. 35 -26- LSB 1314HZ (2) 86 ec/nh 26/ 63
H.F. 642 (3) One game night during the period of ninety days, subject 1 to the requirements of section 99B.26. 2 6. Fourteen-day qualified organization license. 3 a. The license fee for a fourteen-day qualified organization 4 license is fifteen dollars. 5 b. A qualified organization issued a fourteen-day qualified 6 organization license may conduct the following activities: 7 (1) Unlimited games of skill or games of chance except for 8 bingo. 9 (2) An unlimited number of very small raffles and an 10 unlimited number of small raffles. 11 (3) One large raffle during the period of fourteen days, 12 subject to the requirements of section 99B.24. 13 (4) Two bingo occasions during the period of fourteen days 14 with no limit on the number of bingo games or the number of 15 hours played during each designated bingo day. Bingo occasions 16 conducted pursuant to a fourteen-day qualified organization 17 license do not count toward the fifteen bingo occasions per 18 month authorized for a two-year qualified organization license. 19 (5) One game night during the period of fourteen days, 20 subject to the requirements of section 99B.26. 21 7. Qualified organizations —— school provisions. A school 22 district or a public or nonpublic school may be issued a 23 qualified organization license under this section subject to 24 the following additional restrictions: 25 a. The application for a license shall be authorized by 26 the board of directors of a school district for public schools 27 within that district, or the policymaking body of a nonpublic 28 school for a nonpublic school. 29 b. Activities authorized by the license may be held at 30 bona fide school functions such as carnivals, fall festivals, 31 bazaars, and similar events. 32 c. Each school shall obtain a license pursuant to this 33 section prior to permitting the games or activities on the 34 premises of that school. 35 -27- LSB 1314HZ (2) 86 ec/nh 27/ 63
H.F. 642 d. The board of directors of a public school district 1 may also be issued a license under this section. A board 2 of directors of a public school district shall not spend or 3 authorize the expenditure of public funds for the purpose of 4 purchasing a license. 5 e. Upon written approval by the board of directors of a 6 school district for public schools within that district or 7 the policymaking body of a nonpublic school, the license may 8 be used by any school group or parent support group in the 9 district or at the nonpublic school to conduct activities 10 authorized by this section. The board of directors or 11 policymaking body shall not authorize a school group or parent 12 support group to use the license to conduct more than two 13 events in a calendar year. 14 8. Qualified organizations —— miscellaneous provisions. A 15 political party or party organization may contract with other 16 qualified organizations to conduct the games of skill, games 17 of chance, and raffles which may lawfully be conducted by the 18 political party or party organization. A licensed qualified 19 organization may promote the games of skill, games of chance, 20 and raffles which it may lawfully conduct. 21 Sec. 28. NEW SECTION . 99B.13A Licensed qualified 22 organizations —— general requirements. 23 A qualified organization licensed pursuant to section 24 99B.12B shall, as a condition of licensure under section 25 99B.12B, comply with the requirements of this section. 26 1. Authorized gambling activities —— display of license. A 27 licensed qualified organization may only conduct gambling 28 activities as authorized by the license and shall prominently 29 display the license in the playing area where the gambling 30 activities are conducted. 31 2. Location requirements. 32 a. Gambling activities, as authorized by the type of 33 license, may be conducted on premises owned, leased, or rented 34 by the licensee. The amount imposed and collected for rental 35 -28- LSB 1314HZ (2) 86 ec/nh 28/ 63
H.F. 642 or lease of such premises shall not be a percentage of, or 1 otherwise related to, the amount of the receipts for the 2 authorized gambling activities. 3 b. A gambling activity shall not take place on a gaming 4 floor, as defined in section 99F.1, licensed by the state 5 racing and gaming commission created in section 99D.5. 6 3. Participation requirements. 7 a. A person shall not receive or have any fixed or 8 contingent right to receive, directly or indirectly, any 9 profit, remuneration, or compensation from or related to a 10 gambling activity conducted by a licensee, except any amount 11 which the person may win as a participant on the same basis as 12 the other participants. 13 b. The price to participate in a gambling activity, 14 including any discounts for the gambling activity, shall be the 15 same for each participant during the course of the gambling 16 activity. 17 c. The person conducting the gambling activity shall not 18 participate in the game. 19 4. Gambling activity requirements. 20 a. A gambling activity shall not be operated on a build-up 21 or pyramid basis. 22 b. Bookmaking shall not be allowed. 23 c. Concealed numbers or conversion charts shall not be used 24 in conducting any gambling activity. 25 d. A gambling activity shall not be adapted with any control 26 device to permit manipulation of the gambling activity by 27 the operator in order to prevent a player from winning or to 28 predetermine who the winner will be. 29 e. The object of the gambling activity must be attainable 30 and possible to perform under the rules stated from the playing 31 position of the player. 32 f. The gambling activity shall be conducted in a fair and 33 honest manner. 34 g. Rules for each gambling activity shall be posted. 35 -29- LSB 1314HZ (2) 86 ec/nh 29/ 63
H.F. 642 h. Casino-style games shall only be allowed during a game 1 night as specified under section 99B.26 or during card game 2 tournaments under section 99B.7B. 3 Sec. 29. Section 99B.14, Code 2015, is amended to read as 4 follows: 5 99B.14 License denial, suspension, and revocation. 6 1. The department may deny, suspend, or revoke a license 7 if the department finds that an applicant, licensee, or an 8 agent of the licensee violated or permitted a violation of 9 a provision of this chapter or a departmental rule adopted 10 pursuant to chapter 17A , or for any other cause for which 11 the director of the department would be or would have 12 been justified in refusing to issue a license, or upon the 13 conviction of a person of a violation of this chapter or a 14 rule adopted under this chapter which occurred on the licensed 15 premises. However, the denial, suspension, or revocation of 16 one type of gambling license does not require, but may result 17 in, the denial, suspension, or revocation of a different type 18 of gambling license held by the same licensee. In addition, a 19 2. A person whose license is revoked under this section who 20 is a person for which whom a class “A”, class “B”, class “C”, 21 or class “D” liquor control license has been issued pursuant 22 to chapter 123 shall have the person’s liquor control license 23 suspended for a period of fourteen days in the same manner as 24 provided in section 123.50, subsection 3 , paragraph “a” . In 25 addition, a 26 3. A person whose license is revoked under this section 27 who is a person for which whom only a class “B” or class “C” 28 beer permit has been issued pursuant to chapter 123 shall have 29 the person’s class “B” or class “C” beer permit suspended for 30 a period of fourteen days in the same manner as provided in 31 section 123.50, subsection 3 , paragraph “a” . 32 2. 4. The process for denial, suspension, or revocation 33 of a license shall commence by delivering to the applicant 34 or licensee by certified mail, return receipt requested, or 35 -30- LSB 1314HZ (2) 86 ec/nh 30/ 63
H.F. 642 by personal service a notice , by means authorized by section 1 17A.18, setting forth the particular reasons for such action. 2 a. If a written request for a hearing is not received within 3 thirty days after the mailing or service of the delivery of 4 notice as provided in this subsection , the denial, suspension, 5 or revocation of a license shall become effective pending a 6 final determination by the department. The determination 7 involved in the notice may be affirmed, modified, or set aside 8 by the department in a written decision. 9 b. If a request for a hearing is timely received by the 10 department, the applicant or licensee shall be given an 11 opportunity for a prompt and fair hearing before the department 12 and the denial, suspension, or revocation shall be deemed 13 suspended until the department makes a final determination. 14 However, the director may suspend a license prior to a hearing 15 if the director finds that the public integrity of the licensed 16 activity is compromised or there is a risk to public health, 17 safety, or welfare. In addition, at any time during or prior 18 to the hearing the department may rescind the notice of the 19 denial, suspension, or revocation upon being satisfied that the 20 reasons for the denial, suspension, or revocation have been 21 or will be removed. On the basis of any such hearing, the 22 determination involved in the notice may be affirmed, modified, 23 or set aside by the department in a written decision. 24 3. 5. A copy of the final decision of the department shall 25 be sent by electronic mail or certified mail, with return 26 receipt requested, or served personally upon the applicant 27 or licensee. The applicant or licensee may seek judicial 28 review in accordance with the terms of the Iowa administrative 29 procedure Act, chapter 17A . 30 4. 6. The procedure governing hearings authorized by this 31 section shall be in accordance with the rules promulgated by 32 the department and chapter 17A . 33 5. 7. If the department finds cause for denial of a 34 license, the applicant may not reapply for the same license 35 -31- LSB 1314HZ (2) 86 ec/nh 31/ 63
H.F. 642 for a period of two years. If the department finds cause 1 for suspension, the license shall be suspended for a period 2 determined by the department. If the department finds cause 3 for revocation, the license shall be revoked for a period not 4 to exceed two years. 5 Sec. 30. NEW SECTION . 99B.14A Distribution of proceeds —— 6 licensed qualified organizations. 7 1. A licensed qualified organization shall certify 8 that the receipts from all charitable gambling conducted 9 by the organization under this chapter, less reasonable 10 expenses, charges, fees, taxes, and deductions, either will 11 be distributed as prizes to participants or will be dedicated 12 and distributed for educational, civic, public, charitable, 13 patriotic, or religious uses. Reasonable expenses, charges, 14 fees, taxes other than the state and local sales tax, and 15 deductions allowed by the department shall not exceed forty 16 percent of net receipts. 17 2. A licensed qualified organization shall dedicate and 18 distribute the balance of the net receipts received within 19 a calendar year and remaining after deduction of reasonable 20 expenses, charges, fees, taxes, and deductions allowed by 21 this chapter, before the annual report required under section 22 99B.16A is due. 23 a. A person desiring to hold the net receipts for a period 24 longer than permitted under this subsection shall apply to the 25 department for special permission and upon good cause shown the 26 department may grant the request. 27 b. If permission is granted to hold the net receipts, 28 the person shall, as a part of the annual report required by 29 section 99B.16A, report the amount of money being held and all 30 expenditures of the funds. This report shall be filed even if 31 the person no longer holds a gambling license. 32 3. Proceeds coming into the possession of a person under 33 this section are deemed to be held in trust for payment 34 of expenses and dedication to educational, civic, public, 35 -32- LSB 1314HZ (2) 86 ec/nh 32/ 63
H.F. 642 charitable, patriotic, or religious uses as required by this 1 section. 2 4. A licensed qualified organization or agent of the 3 organization who willfully fails to dedicate the required 4 amount of proceeds to educational, civic, public, charitable, 5 patriotic, or religious uses as required by this section 6 commits a fraudulent practice under chapter 714. 7 5. Proceeds distributed to another charitable organization 8 to satisfy the sixty percent dedication requirement shall not 9 be used by the donee to pay any expenses in connection with the 10 conducting of any gambling activity by the donor organization, 11 or for any use that would not constitute a valid dedication 12 under this section. 13 Sec. 31. Section 99B.15, Code 2015, is amended by striking 14 the section and inserting in lieu thereof the following: 15 99B.15 Penalties. 16 In addition to any other penalty specified in this chapter, 17 the following penalties shall apply: 18 1. A person who knowingly fails to comply with the 19 requirements of this chapter and the rules adopted pursuant to 20 chapter 17A commits a serious misdemeanor. 21 2. A person who intentionally files a false or fraudulent 22 report or application as required by this chapter commits a 23 fraudulent practice under chapter 714. 24 Sec. 32. NEW SECTION . 99B.15A Prizes awarded by licensed 25 qualified organizations. 26 1. Unless otherwise provided, a prize awarded by a licensed 27 qualified organization shall comply with the following 28 requirements: 29 a. Only merchandise prizes whose value does not exceed ten 30 thousand dollars may be awarded for games of skill and games 31 of chance. If a prize consists of more than one item, unit, or 32 part, the aggregate value of all items, units, or parts shall 33 not exceed ten thousand dollars. 34 b. A merchandise prize shall not be repurchased. 35 -33- LSB 1314HZ (2) 86 ec/nh 33/ 63
H.F. 642 c. No prize shall be displayed which cannot be won. 1 d. A cash prize may only be awarded in bingo and raffles. 2 e. A prize shall be distributed on the day the prize is won, 3 except that if the winner is not present, notification to the 4 winner shall be made as soon as practical. 5 2. A licensed qualified organization awarding a prize 6 for bingo is subject to the restrictions provided in section 7 99B.21A. A licensed qualified organization awarding a prize 8 for a raffle is subject to the restrictions provided in section 9 99B.24. 10 Sec. 33. NEW SECTION . 99B.16A Records and reports —— 11 licensed qualified organization. 12 1. A qualified organization licensed pursuant to section 13 99B.12B, unless otherwise provided, shall maintain proper 14 books of account and records showing, in addition to any other 15 information required by the department, the following: 16 a. Gross receipts and the amount of the gross receipts 17 taxes collected or accrued with respect to gambling activities 18 conducted by the licensed qualified organization. 19 b. All expenses, charges, fees, and other deductions. 20 c. The cash amounts, or the cost to the licensee of goods 21 or other noncash valuables, distributed to participants in the 22 licensed activity. 23 d. The amounts dedicated and the date and name and address 24 of each person to whom distributed. 25 2. The books of account and records shall be made available 26 to the department or a law enforcement agency for inspection at 27 reasonable times, with or without notice. A failure to permit 28 inspection is a serious misdemeanor. 29 3. A licensed qualified organization required to maintain 30 records shall submit an annual report to the department on 31 forms furnished by the department. The annual report shall be 32 submitted by January 31 of each year for the prior calendar 33 year period of January 1 through December 31. 34 Sec. 34. Section 99B.17, Code 2015, is amended by striking 35 -34- LSB 1314HZ (2) 86 ec/nh 34/ 63
H.F. 642 the section and inserting in lieu thereof the following: 1 99B.17 Allowable forms for payment. 2 1. Social gambling, registered amusement devices, and 3 amusement concessions not at a permanent location, require 4 payment solely by cash. 5 2. Except as provided by subsection 1, a participant in 6 an activity authorized by this chapter may make payment by 7 cash, personal check, money order, bank check, cashier’s check, 8 electronic check, or debit card. 9 3. The department shall adopt rules setting minimum 10 standards to ensure compliance with applicable federal law and 11 for the protection of personal information consistent with 12 payment card industry compliance regulations. 13 Sec. 35. Section 99B.21, Code 2015, is amended to read as 14 follows: 15 99B.21 Tax on prizes. 16 All prizes awarded pursuant to a gambling activity under 17 this chapter are Iowa earned income and are subject to state 18 and federal income tax laws. A person conducting a game of 19 skill, game of chance, bingo, or a raffle shall deduct state 20 income taxes, pursuant to section 422.16, subsection 1 , from a 21 cash prize awarded to an individual. An amount deducted from 22 the prize for payment of a state tax shall be remitted to the 23 department of revenue on behalf of the prize winner. 24 Sec. 36. NEW SECTION . 99B.21A Bingo. 25 A licensed qualified organization shall comply with the 26 requirements of this section for the purposes of conducting 27 bingo at a bingo occasion. 28 1. Operational requirements. 29 a. A bingo occasion shall not last for longer than four 30 consecutive hours. 31 b. Only one licensed qualified organization may conduct 32 bingo occasions within the same structure or building. 33 c. A licensed qualified organization shall not conduct or 34 offer free bingo games. 35 -35- LSB 1314HZ (2) 86 ec/nh 35/ 63
H.F. 642 d. A licensed qualified organization shall not conduct bingo 1 within a building or structure that is licensed pursuant to 2 chapter 99D or 99F. 3 2. Prize requirements. 4 a. A cash or merchandise prize may be awarded in the game of 5 bingo. 6 b. A cash prize shall not exceed two hundred fifty dollars 7 per game of bingo. 8 c. A merchandise prize may be awarded in the game of bingo, 9 but the actual retail value of the prize, or if the prize 10 consists of more than one item, unit, or part, the aggregate 11 retail value of all items, units, or parts, shall not exceed 12 two hundred fifty dollars in value. 13 d. A jackpot bingo game may be conducted twice during any 14 twenty-four-hour period in which the prize may begin at not 15 more than five hundred dollars in cash or actual retail value 16 of merchandise prizes and may be increased by not more than two 17 hundred dollars after each bingo occasion to a maximum prize 18 of one thousand dollars for the first jackpot bingo game and 19 two thousand five hundred dollars for the second jackpot bingo 20 game. 21 3. Equipment requirements. 22 a. A licensed qualified organization conducting bingo shall 23 purchase bingo equipment and supplies only from a manufacturer 24 or distributor licensed by the department. 25 b. A licensed qualified organization may lease electronic 26 bingo equipment from a manufacturer or distributor licensed 27 by the department for the purposes of aiding individuals with 28 disabilities during a bingo occasion. 29 4. Accounting requirements. A qualified organization 30 conducting bingo occasions under a two-year qualified 31 organization license and expecting annual gross receipts of 32 more than ten thousand dollars shall establish and maintain one 33 regular checking account designated the “bingo account” and may 34 also maintain one or more interest-bearing savings accounts 35 -36- LSB 1314HZ (2) 86 ec/nh 36/ 63
H.F. 642 designated as “bingo savings account” . The accounts shall be 1 maintained in a financial institution in Iowa. 2 a. Funds derived from the conduct of bingo, less the 3 amount awarded as cash prizes, shall be deposited in the bingo 4 account. 5 (1) No other funds except limited funds of the organization 6 deposited to pay initial or unexpected emergency expenses shall 7 be deposited in the bingo account. 8 (2) Deposits shall be made no later than the next business 9 day following the day of the bingo occasion on which the 10 receipts were obtained. 11 b. Payments shall be paid from the bingo account only for 12 the following purposes: 13 (1) The payment of reasonable expenses permitted under 14 section 99B.14A, subsection 1, incurred and paid in connection 15 with the conduct of bingo. 16 (2) The disbursement of net proceeds derived from the 17 conduct of bingo for educational, civic, public, charitable, 18 patriotic, or religious uses as required by section 99B.14A, 19 subsection 1. 20 (3) The transfer of net proceeds derived from the conduct 21 of bingo to a bingo savings account pending disbursement for 22 educational, civic, public, charitable, patriotic, or religious 23 uses. 24 (4) To withdraw initial or emergency funds deposited under 25 paragraph “a” . 26 (5) To pay prizes if the qualified organization decides to 27 pay prizes by check rather than cash. 28 c. Except as permitted by paragraph “a” , gross receipts 29 derived from the conduct of bingo shall not be commingled with 30 other funds of the licensed qualified organization. Except as 31 permitted by paragraph “b” , subparagraphs (3) and (4), gross 32 receipts shall not be transferred to another account maintained 33 by the licensed qualified organization. 34 Sec. 37. NEW SECTION . 99B.24 Raffles. 35 -37- LSB 1314HZ (2) 86 ec/nh 37/ 63
H.F. 642 1. General provisions. A licensed qualified organization 1 may conduct a raffle as permitted by the applicable license and 2 in accordance with the following requirements: 3 a. The winner of a raffle shall not be required to be 4 present to win. 5 b. If the winner is not present to win, notification to the 6 winner shall be made as soon as practical. 7 c. A cash or merchandise prize may be awarded in a raffle. 8 If a merchandise prize is awarded, the actual retail value of 9 the prize, or if the prize consists of more than one item, 10 unit, or part, the aggregate retail value of all items, units, 11 or parts, shall not exceed the maximum value allowed for that 12 raffle. 13 d. Calendar raffles and build-up or pyramid raffles are 14 prohibited. 15 e. If a raffle is conducted at a fair, the licensed 16 qualified organization shall receive written permission from 17 the sponsor of the fair to conduct the raffle. 18 f. A licensed qualified organization shall, regardless of 19 the number of licenses issued, only conduct one large raffle 20 per calendar year. However, a licensed qualified organization 21 issued a one-year qualified organization raffle license may 22 conduct up to eight large raffles with each large raffle 23 conducted in a different county during the one-year period. 24 2. Very large raffles. A licensed qualified organization 25 may conduct one very large raffle per calendar year subject to 26 the provisions of this subsection. 27 a. The licensed qualified organization shall submit a very 28 large raffle license application and a fee of one hundred 29 dollars to the department and be issued a license. 30 b. The licensed qualified organization shall prominently 31 display the license at the drawing area of the raffle. 32 c. If the raffle prize is real property, the real property 33 shall be acquired by gift or donation or shall have been owned 34 by the licensed qualified organization for a period of at least 35 -38- LSB 1314HZ (2) 86 ec/nh 38/ 63
H.F. 642 five years. 1 d. The department shall conduct a special audit of a 2 very large raffle to verify compliance with the applicable 3 requirements of this chapter concerning raffles and very large 4 raffles. 5 e. The licensed qualified organization shall submit to the 6 department within sixty days of the very large raffle drawing a 7 cumulative report for the raffle on a form determined by the 8 department and one percent of the gross receipts from the very 9 large raffle. The one percent of the gross receipts shall be 10 retained by the department to pay for the cost of the special 11 audit. 12 3. Very small raffles. A qualified organization may conduct 13 one very small raffle per calendar year without obtaining a 14 qualified organization license. A qualified organization 15 conducting a very small raffle as authorized by this subsection 16 shall comply with the requirements for conducting a raffle 17 by a licensed qualified organization, including payment of 18 applicable sales tax. However, a qualified organization 19 holding only one very small raffle per calendar year shall be 20 exempt from the reporting requirements in section 99B.16A. 21 Sec. 38. NEW SECTION . 99B.25 Electronic raffles. 22 1. A qualified organization with a two-year qualified 23 organization license may conduct a raffle using an electronic 24 raffle system, if the qualified organization complies with the 25 requirements of section 99B.24 and this section. 26 2. The licensed qualified organization shall only use 27 an electronic raffle system purchased from a manufacturer or 28 distributor licensed pursuant to section 99B.7A and certified 29 by an entity approved by the department. The electronic raffle 30 system may include stationary and portable or wireless raffle 31 sales units. 32 3. A licensed qualified organization shall hold only one 33 raffle using an electronic raffle system per calendar day. A 34 licensed qualified organization shall not hold a very large 35 -39- LSB 1314HZ (2) 86 ec/nh 39/ 63
H.F. 642 raffle using an electronic raffle system and may hold only one 1 large raffle using an electronic raffle system per calendar 2 year. A large raffle conducted using an electronic raffle 3 system counts toward the limit of one large raffle per calendar 4 year under section 99B.24, subsection 1, paragraph “f” . 5 4. Except for a large raffle conducted using an electronic 6 raffle system, the prize for an electronic raffle shall be 7 limited to the amount allowed for a small raffle. 8 5. Entries for a raffle using an electronic raffle system 9 shall not be preprinted and shall be provided to the purchaser 10 at the time of sale. 11 6. The electronic raffle receipt shall contain the 12 following information: 13 a. The name of the licensed qualified organization. 14 b. The license identification number of the qualified 15 organization. 16 c. The location, date, and time of the corresponding raffle 17 drawing. 18 d. The unique printed entry number, or multiple entry 19 numbers, of the raffle entry. 20 e. The price of the raffle entry. 21 f. An explanation of the prize to be awarded. 22 g. The statement, “Need not be present to win”, and the 23 contact information, including name, telephone number, and 24 electronic mail address, of the individual from the qualified 25 organization responsible for prize disbursements. 26 h. The date by which the prize shall be claimed which shall 27 be no fewer than fourteen days following the drawing. 28 7. Each electronic raffle entry shall reflect a single 29 unique printed entry number on the entry. 30 8. The licensed qualified organization shall use a manual 31 draw procedure for the electronic raffle which ensures a draw 32 number is randomly selected as a winner from the entries sold. 33 a. The winning entry shall be verified as a sold and valid 34 entry prior to awarding the prize. 35 -40- LSB 1314HZ (2) 86 ec/nh 40/ 63
H.F. 642 b. The drawing of the winning entry shall be done in such 1 manner as to allow the purchasers to observe the drawing. 2 9. If the prize is not claimed, the licensed qualified 3 organization shall donate the unclaimed prize to an 4 educational, civic, public, charitable, patriotic, or religious 5 use. 6 10. The department may determine any other requirements for 7 conducting an electronic raffle by rule. 8 Sec. 39. NEW SECTION . 99B.26 Game nights. 9 1. A licensed qualified organization may conduct one game 10 night per calendar year subject to the provisions of this 11 section. 12 2. A licensed qualified organization conducting a game 13 night may do any of the following during the game night: 14 a. Charge an entrance fee or a fee to participate in the 15 games. 16 b. Award cash or merchandise prizes in any games of 17 skill, games of chance, casino-style games, or card games in 18 an aggregate amount not to exceed ten thousand dollars and 19 no participant shall win more than a total of five thousand 20 dollars. 21 c. Allow participants at the game night that do not have 22 a bona fide social relationship with the sponsor of the game 23 night. 24 d. Allow participants to wager their own funds and pay an 25 entrance or other fee for participation, but participants shall 26 not be allowed to expend more than a total of two hundred fifty 27 dollars for all fees and wagers. 28 3. Except as provided by section 99B.62, a person or 29 organization that has not been issued a qualified organization 30 license under section 99B.12B shall not be authorized to 31 conduct a game night as authorized by this section. 32 Sec. 40. NEW SECTION . 99B.41 Definitions. 33 For purposes of this subchapter, unless the context 34 otherwise requires: 35 -41- LSB 1314HZ (2) 86 ec/nh 41/ 63
H.F. 642 1. “Public place” means an indoor or outdoor area, whether 1 privately or publicly owned, to which the public has access 2 by right or by invitation, expressed or implied, whether by 3 payment of money or not, but not a place when used exclusively 4 by one or more individuals for a private gathering or other 5 personal purpose. 6 2. “Social gambling” means an activity in which social games 7 are played between individuals for any sum of money or other 8 property of any value. 9 3. “Social games” or “social game” means card and parlor 10 games, including but not limited to poker, pinochle, pitch, gin 11 rummy, bridge, euchre, hearts, cribbage, dominoes, checkers, 12 chess, backgammon, pool, and darts. “Social games” do not 13 include casino-style games, except poker. 14 4. “Sports betting pool” or “pool” means a game in which a 15 participant wagers money for each chance to win based on the 16 outcome of a sports event or series of sports events where the 17 competitors in the sports event or series of sports events are 18 natural persons. 19 Sec. 41. NEW SECTION . 99B.42 Social gambling general 20 requirements. 21 1. Social gambling is lawful under section 99B.6, 99B.9, or 22 99B.12, when all of the following requirements are met: 23 a. The gambling occurs between two or more people who are 24 together for purposes other than social gambling. A social 25 relationship must exist beyond that apparent in the gambling 26 situation. 27 b. The gambling shall not take place on a gaming floor, 28 as defined in section 99F.1, licensed by the state racing and 29 gaming commission created in section 99D.5. 30 c. Concealed numbers or conversion charts are not used to 31 play any game. 32 d. A game is not adapted with any control device to permit 33 manipulation of the game by the operator in order to prevent a 34 player from winning or to predetermine who the winner will be. 35 -42- LSB 1314HZ (2) 86 ec/nh 42/ 63
H.F. 642 e. The object of the game is attainable and possible to 1 perform under the rules stated from the playing position of the 2 player. 3 f. The game must be conducted in a fair and honest manner. 4 g. A person shall not receive or have any fixed or 5 contingent right to receive, directly or indirectly, any amount 6 wagered or bet or any portion of amounts wagered or bet, except 7 an amount which the person wins as a participant while playing 8 on the same basis as every other participant. 9 h. A cover charge, participation charge, or other charge 10 shall not be imposed upon a person for the privilege of 11 participating in or observing the social gambling, and a 12 rebate, discount, credit, or other method shall not be used 13 to discriminate between the charge for the sale of goods 14 or services to participants in the social gambling and the 15 charge for the sale of goods or services to nonparticipants. 16 Satisfaction of an obligation into which a member of an 17 organization enters to pay at regular periodic intervals a 18 sum fixed by that organization for the maintenance of that 19 organization is not a charge which is prohibited by this 20 paragraph. 21 i. A participant shall not win or lose more than a total 22 of two hundred dollars or equivalent consideration in one or 23 more games permitted by this subchapter at any time during any 24 period of twenty-four consecutive hours or over that entire 25 period. 26 j. A participant is not participating as an agent of another 27 person. 28 k. A representative of the department or a law enforcement 29 agency is immediately admitted, upon request, to the premises 30 with or without advance notice. 31 l. A person shall not engage in bookmaking on the premises. 32 2. The social gambling licensee is strictly accountable for 33 compliance with this section. Proof of an act constituting 34 a violation is grounds for revocation of the license issued 35 -43- LSB 1314HZ (2) 86 ec/nh 43/ 63
H.F. 642 pursuant to section 99B.6 or 99B.9 if the licensee permitted 1 the violation to occur when the licensee knew or had reasonable 2 cause to know of the act constituting the violation. 3 3. A participant in a social game or pool which is not in 4 compliance with this section shall only be subject to a penalty 5 under section 99B.15 if the participant has knowledge of or 6 reason to know the facts constituting the violation. 7 4. The social gambling licensee, and every agent of the 8 licensee who is required by the licensee to exercise control 9 over the use of the premises, who knowingly permits or engages 10 in an act or omission which constitutes a violation of this 11 subchapter is subject to a penalty under section 99B.15. A 12 licensee has knowledge of an act or omission if any agent of 13 the licensee has knowledge of the act or omission. 14 Sec. 42. NEW SECTION . 99B.51 Definitions. 15 As used in this subchapter, unless the context otherwise 16 requires: 17 1. “Distributor” means a person who owns an electrical or 18 mechanical amusement device registered as provided in section 19 99B.53 that is offered for use at more than a single location 20 or premise. 21 2. “Manufacturer” means a person who originally produces, 22 or purchases an originally produced amusement device or 23 an originally produced motherboard that will be installed 24 into, an amusement device required to be registered under 25 this subchapter for the purposes of reselling such device or 26 motherboard. 27 3. “Owner” means a person who owns an operable amusement 28 device required to be registered under section 99B.53 at no 29 more than a single location or premise. 30 Sec. 43. NEW SECTION . 99B.52 Electrical or mechanical 31 amusement devices. 32 1. A person may own, possess, and offer for use at any 33 location an electrical or mechanical amusement device, except 34 for an amusement device required to be registered pursuant to 35 -44- LSB 1314HZ (2) 86 ec/nh 44/ 63
H.F. 642 section 99B.53. If the provisions of this section and other 1 applicable provisions of this subchapter are complied with, the 2 use of an electrical or mechanical amusement device shall not 3 be deemed gambling. All electrical or mechanical amusement 4 devices shall comply with this section. 5 2. A prize of merchandise not exceeding fifty dollars in 6 value shall be awarded for use of an electrical or mechanical 7 amusement device. An electrical or mechanical amusement device 8 may be designed or adapted to award a prize of one or more 9 free games or portions of games without payment of additional 10 consideration by the participant. 11 3. A prize of cash shall not be awarded for use of an 12 electrical or mechanical amusement device. 13 4. An amusement device shall not be designed or adapted to 14 cause or to enable a person to cause the release of free games 15 or portions of games when designated as a potential award for 16 use of the device, and shall not contain any meter or other 17 measurement device for recording the number of free games or 18 portions of games which are awarded. 19 5. An amusement device shall not be designed or adapted to 20 enable a person using the device to increase the chances of 21 winning free games or portions of games by paying more than is 22 ordinarily required to play the game. 23 6. An award given for the use of an amusement device shall 24 only be redeemed on the premises where the device is located 25 and only for merchandise sold in the normal course of business 26 for the premises. 27 7. The department may determine any other requirements 28 by rule. Rules adopted pursuant to this section shall be 29 formulated in consultation with affected state agencies and 30 industry and consumer groups. 31 Sec. 44. NEW SECTION . 99B.53 Electrical or mechanical 32 amusement devices —— registration required. 33 1. In addition to the requirements of section 99B.52, 34 an electrical or mechanical amusement device in operation 35 -45- LSB 1314HZ (2) 86 ec/nh 45/ 63
H.F. 642 or distributed in this state that awards a prize where the 1 outcome is not primarily determined by skill or knowledge of 2 the operator shall be registered by the department as provided 3 in this section. 4 2. Except as provided in subsection 3, an electrical or 5 mechanical amusement device requiring registration may be 6 located on premises for which a class “A”, class “B”, class 7 “C”, special class “C”, or class “D” liquor control license has 8 been issued pursuant to chapter 123. 9 3. a. An electrical or mechanical amusement device 10 requiring registration may be located on premises for which a 11 class “B” or class “C” beer permit has been issued pursuant to 12 chapter 123, but the department shall not initially register 13 an electrical or mechanical amusement device to an owner or 14 distributor for a location for which a class “B” or class “C” 15 beer permit has been issued pursuant to chapter 123 on or after 16 April 28, 2004. 17 b. A distributor that owns an amusement device at a location 18 for which only a class “B” or class “C” beer permit has been 19 issued pursuant to chapter 123 shall not relocate an amusement 20 device registered as provided in this section to a location 21 other than a location for which a class “A”, class “B”, class 22 “C”, special class “C”, or class “D” liquor license has been 23 issued and shall not transfer, assign, sell, or lease an 24 amusement device registered as provided in this section to 25 another person for which only a class “B” or class “C” beer 26 permit has been issued pursuant to chapter 123 after April 28, 27 2004. 28 c. If ownership of the location changes, the class “B” 29 or class “C” beer permit does not lapse, and the device is 30 not removed from the location, the device may remain at the 31 location. 32 4. An electrical or mechanical amusement device required to 33 be registered and at a location for which only a class “B” or 34 class “C” beer permit has been issued pursuant to chapter 123 35 -46- LSB 1314HZ (2) 86 ec/nh 46/ 63
H.F. 642 shall include on the device a security mechanism which prevents 1 the device from being operated by a person until action is 2 taken by the owner or owner’s designee to allow the person to 3 operate the device. 4 5. No more than four electrical or mechanical amusement 5 devices registered as provided in this section shall be 6 permitted or offered for use in any single location or premises 7 meeting the requirements of this section. 8 6. The total number of electrical or mechanical amusement 9 devices registered by the department under this section shall 10 not exceed six thousand nine hundred twenty-eight. 11 7. Each person owning an electrical or mechanical amusement 12 device in this state shall submit annually an application 13 form designated by the department that shall contain the 14 information required by the department by rule and a fee of 15 twenty-five dollars for each device required to be registered. 16 If approved, the department shall issue an annual registration 17 tag. 18 8. A new amusement device registration tag shall be 19 obtained if electronic or mechanical components have been 20 adapted, altered, or replaced and such adaptation, alteration, 21 or replacement changes the operational characteristics of 22 the amusement device including but not limited to the game 23 being changed. The amusement device shall not be placed 24 into operation prior to obtaining a new amusement device 25 registration tag. 26 9. An electrical or mechanical amusement device required 27 to be registered under this section shall only be leased or 28 purchased from a manufacturer or distributor registered with 29 the department under section 99B.10A. 30 10. A person owning or leasing an electrical or mechanical 31 amusement device required to be registered by this section 32 shall display the registration tag as required by rules adopted 33 by the department. 34 11. A person owning or leasing an electrical or mechanical 35 -47- LSB 1314HZ (2) 86 ec/nh 47/ 63
H.F. 642 amusement device required to be registered by this section 1 shall not allow the electrical or mechanical amusement device 2 to be operated or made available for operation with an expired 3 registration. 4 12. A person or employee of a person owning or leasing 5 an electrical or mechanical amusement device required to be 6 registered by this section shall not advertise or promote the 7 availability of the device to the public as anything other than 8 an electrical or mechanical amusement device pursuant to rules 9 adopted by the department. 10 13. A person owning or leasing an electrical or mechanical 11 amusement device required to be registered by this section 12 shall not relocate and place into operation an amusement device 13 in any location other than a location which has been issued 14 an appropriate liquor control license in good standing and to 15 which the device has been appropriately registered with the 16 department. 17 14. A counting mechanism which establishes the volume of 18 business of the electrical or mechanical amusement device shall 19 be included on each device required to be registered by this 20 section. The department and the department of public safety 21 shall have immediate access to the information provided by the 22 counting mechanism. 23 15. An electrical or mechanical amusement device required 24 to be registered as provided by this section shall not be a 25 gambling device, as defined in section 725.9, or a device that 26 plays poker, blackjack, or keno. 27 Sec. 45. NEW SECTION . 99B.54 Electrical or mechanical 28 amusement devices —— criminal penalties. 29 1. A person who violates any provision of section 99B.52 or 30 99B.53, except as specified in subsection 2, commits a serious 31 misdemeanor. 32 2. A person who violates any provision of section 99B.52, 33 subsection 2 or 6; or section 99B.53, subsection 4, 8, 10, 11, 34 12, or 13, shall be subject to the following: 35 -48- LSB 1314HZ (2) 86 ec/nh 48/ 63
H.F. 642 a. For a first offense under an applicable subsection, the 1 person commits a simple misdemeanor, punishable as a scheduled 2 violation pursuant to section 805.8C, subsection 4, paragraph 3 “b” . 4 b. For a second or subsequent offense under the same 5 applicable subsection, the person commits a serious 6 misdemeanor. 7 3. Notwithstanding any provision of section 99B.52 or 8 99B.53 to the contrary, the following shall apply: 9 a. An individual other than an owner or distributor of an 10 amusement device may operate an amusement device, whether or 11 not the amusement device is owned, possessed, or offered for 12 use in compliance with section 99B.52 or 99B.53. 13 b. A distributor shall not be liable for a violation of 14 section 99B.52 or 99B.53 unless the distributor or an employee 15 of the distributor intentionally violates a provision of 16 section 99B.52 or 99B.53. 17 Sec. 46. NEW SECTION . 99B.62 Game nights —— licensing 18 exceptions. 19 1. A person other than a qualified organization may lawfully 20 conduct a game night without a license, and may award cash or 21 merchandise prizes, under the following conditions: 22 a. A bona fide social, employment, or trade or professional 23 association relationship exists between the sponsors and the 24 participants. 25 b. The participants pay no consideration of any nature, 26 either directly or indirectly, to participate in the games. 27 c. All money, play money, or other items of no intrinsic 28 value which may be wagered are provided to the participant 29 free, and the sponsor conducting the game receives no 30 consideration, either directly or indirectly, other than 31 goodwill. 32 d. The games may be conducted at any location, except at a 33 fair or a location for which a license is required pursuant to 34 section 99B.3. 35 -49- LSB 1314HZ (2) 86 ec/nh 49/ 63
H.F. 642 e. During the entire time activities permitted by this 1 subsection are being engaged in, no other gambling is engaged 2 in at the same location. 3 2. A person or an organization may sponsor one or more game 4 nights using play money for participation by students without 5 the person or organization obtaining a license otherwise 6 required by this chapter if the person or organization obtains 7 prior approval for the game night from the board of directors 8 of the accredited public school or the authorities in charge of 9 the nonpublic school accredited by the state board of education 10 for whose students the game night is to be held. 11 3. A gambling device intended for use or used as provided in 12 this section is exempt from the provisions of section 725.9, 13 subsection 2. 14 Sec. 47. REPEAL. Sections 99B.2, 99B.4, 99B.5, 99B.7, 15 99B.8, 99B.9A, 99B.10, 99B.16, and 99B.18, Code 2015, are 16 repealed. 17 Sec. 48. LICENSED QUALIFIED ORGANIZATION —— INITIAL 18 ANNUAL REPORT. Notwithstanding any provision of section 19 99B.16A, subsection 3, to the contrary, the first annual 20 report submitted by a licensed qualified organization to the 21 department of inspections and appeals after July 1, 2015, shall 22 be submitted by January 31, 2017, and shall cover the period of 23 July 1, 2015, through December 31, 2016. 24 DIVISION II 25 COORDINATING AMENDMENTS 26 Sec. 49. Section 99.1A, unnumbered paragraph 2, Code 2015, 27 is amended to read as follows: 28 The provisions of this section do not apply to games of 29 skill, games of chance, or raffles social and charitable 30 gambling conducted pursuant to chapter 99B or to devices lawful 31 under section 99B.10 99B.52 or 99B.53 . 32 Sec. 50. Section 99D.8, unnumbered paragraph 1, Code 2015, 33 is amended to read as follows: 34 A qualifying organization, as defined in section 35 -50- LSB 1314HZ (2) 86 ec/nh 50/ 63
H.F. 642 513(d)(2)(C) of the Internal Revenue Code, as defined in 1 section 422.3 , exempt from federal income taxation under 2 sections 501(c)(3), 501(c)(4), or 501(c)(5) of the Internal 3 Revenue Code or a nonprofit corporation organized under the 4 laws of this state, whether or not it is exempt from federal 5 income taxation, which is organized to promote those purposes 6 enumerated in section 99B.7, subsection 3 , paragraph “b” 7 distribute funds for educational, civic, public, charitable, 8 patriotic, or religious uses, as defined in section 99B.1 , 9 or which regularly conducts an agricultural and educational 10 fair or exposition for the promotion of the horse, dog, or 11 other livestock breeding industries of the state, or an agency, 12 instrumentality, or political subdivision of the state, may 13 apply to the commission for a license to conduct horse or dog 14 racing. The application shall be filed with the administrator 15 of the commission at least sixty days before the first day 16 of the horse race or dog race meeting which the organization 17 proposes to conduct, shall specify the day or days when and 18 the exact location where it proposes to conduct racing, and 19 shall be in a form and contain information as the commission 20 prescribes. 21 Sec. 51. Section 99F.5, subsection 1, Code 2015, is amended 22 to read as follows: 23 1. A qualified sponsoring organization may apply to the 24 commission for a license to conduct gambling games on an 25 excursion gambling boat or gambling structure as provided in 26 this chapter . A person may apply to the commission for a 27 license to operate an