Hawaii-2012-HB1825-Introduced

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

BINGO

§ -1 Definitions. As used in this chapter, unless the context otherwise requires:

"Bingo" means a game in which players pay a consideration to participate, in which seventy-five numbered objects are available for selection, and those objects actually selected are selected on a random basis, and in which each player participates by means of cards sold, rented, or used only at the time and place of the game, each card containing five rows of five spaces each, each space printed with a number from 1 to 75, except the central space, which is marked "FREE." Winners are determined and prizes awarded on the basis of possessing a bingo card on which some combination of numbers is printed and conforms to the numbered objects selected at random based on a predetermined winning arrangement. "Bingo", as used in this chapter, shall not include any game using free cards and donated prizes, if any, for which no payment of consideration is made by participants.

"Bingo card" means a nondisposable card issued to a person upon payment of the admission fee which affords a person the opportunity to participate in all bingo games played.

"Bingo game" means a bingo game in which a person, upon payment of an admission, is issued a bingo card and may purchase or rent extra bingo cards.

"Bingo supplies and equipment" means all cards, boards, sheets, markers, pads, or other supplies, devices, or equipment designed for use in the play of bingo.

"Commission" means the Hawaii bingo commission.

"Department" means the department of commerce and consumer affairs.

"Director" means the director of commerce and consumer affairs.

"Extra bingo card" means a nondisposable card that affords additional opportunities to play in a bingo game.

"Financial interest" or "financially interested" means any interest in investments, awarding of contracts, grants, loans, purchases, leases, sales, or similar matters under consideration or consummated by the commission or holding a one per cent or more ownership interest in an applicant or a licensee. For purposes of this definition, a member, employee, or agent of the commission shall be considered to have a financial interest in a matter under consideration if any of the following circumstances exist:

(1) The individual owns one per cent or more of any class of outstanding securities that are issued by a party to the matter under consideration or consummated by the commission; or

(2) The individual is employed by or is an independent contractor for a party to the matter under consideration or consummated by the commission.

"Gross receipts" means total receipts received from the conduct of bingo, including but not limited to receipts from admission and the sale, rental, or use of bingo cards, extra bingo cards, and bingo supplies.

§ -2 Hawaii bingo commission; established. (a) There is established a Hawaii bingo commission, which shall be a body corporate and a public instrumentality of the State for the purpose of implementing this chapter. The commission shall be placed administratively within the department of commerce and consumer affairs.

(b) The governor shall appoint five members of the commission pursuant to section 26-34. No person shall be appointed as a member of the commission or continue to be a member of the commission if the person:

(1) Is an elected state official;

(2) Is licensed by the commission pursuant to this chapter, or is an official of, has a financial interest in, or has a financial relationship with, any bingo operation subject to the jurisdiction of this commission pursuant to this chapter;

(3) Is related to any person within the second degree of consanguinity or affinity who is licensed by the commission pursuant to this chapter; or

(4) Has been under indictment, convicted, pled guilty or nolo contendere, or forfeited bail for a felony or a misdemeanor involving gambling or fraud under the laws of this State, any other state, or the United States within the ten years prior to appointment or a local ordinance in a state involving gambling or fraud that substantially corresponds to a misdemeanor in that state within the ten years prior to appointment.

(c) Each member shall serve five years. Vacancies shall be filled for the unexpired term in like manner as the original appointments.

(d) After due notice and public hearing, the governor may remove or suspend for cause any member of the commission.

(e) Members of the commission shall:

(1) Be a resident of the State;

(2) Serve part-time; and

(3) Be reimbursed for expenses, including travel expenses, incurred in the performance of official duties.

(f) Officers of the commission, including the chairperson, shall be selected by the members. Three members shall constitute a quorum, and a majority vote of the five members shall be required for any final determination by the commission.

(g) Before assuming the duties of office, each member of the commission shall take an oath that the member shall faithfully execute the duties of office according to the laws of the State and shall file and maintain with the director a bond in the sum of $25,000 with good and sufficient sureties. The cost of any bond for any member of the commission under this section shall be considered a part of the necessary expenses of the commission.

(h) The commission shall appoint an executive director who shall:

(1) Hold office at the will of the commission;

(2) Be exempt from chapters 76 and 89;

(3) Devote full time to the duties of the office;

(4) Not hold any other office or employment;

(5) Perform any and all duties that the commission assigns; and

(6) Receive an annual salary at an amount set by the commission, and shall be reimbursed for expenses actually and necessarily incurred in the performance of the executive director's duties.

(i) Except as otherwise provided by law, the executive director may hire assistants, other officers, and employees, who shall be exempt from chapters 76 and 89 and who shall serve at the will of the executive director; provided that no person shall be hired under this subsection who:

(1) Is an elected state official;

(2) Is licensed by the commission pursuant to this chapter or is an official of, has a financial interest in, or has a financial relationship with, any bingo operation subject to the jurisdiction of the commission pursuant to this chapter;

(3) Is related to any person within the second degree of consanguinity or affinity who is licensed by the commission pursuant to this chapter; or

(4) Has been under indictment, convicted, pled guilty or nolo contendere, or forfeited bail for a felony or misdemeanor concerning gambling or fraud under the laws of this State, any other state, or the United States within the last ten years, or a local ordinance in any state involving gambling or fraud that substantially corresponds to a misdemeanor in that state within the ten years prior to employment.

(j) The salaries of employees hired pursuant to subsection (i) shall be set by the executive director.

(k) The commission shall adopt rules in accordance with chapter 91 establishing a code of ethics for its employees that shall include a prohibition against participating in bingo games as players. The code of ethics shall be separate from and in addition to any standards of conduct set forth pursuant to chapter 84.

§ -3 Powers and duties of commission. (a) The commission shall:

(1) Regulate bingo established under this chapter;

(2) Establish the qualifications of any applicant for licensure to conduct bingo under this chapter; provided that an applicant shall be a nonprofit corporation properly incorporated in the State;

(3) Evaluate responsive and qualified applicants and award bingo operation licenses to the highest bid;

(4) Provide for the collection and distribution of all taxes imposed pursuant to this chapter, and to collect, receive, expend, and account for all revenues derived from bingo;

(5) Enter at any time without a warrant and without notice to the licensee, the premises, offices, bingo facility, or other places of business of the licensee, where evidence of the compliance or noncompliance with this chapter or rules is likely to be found. Entry is authorized to:

(A) Inspect and examine all premises wherein bingo is conducted, or where any records of the activities are prepared;

(B) Inspect, examine, audit, impound, seize, or assume physical control of, or summarily remove from the premises all books, ledgers, documents, writings, photocopies of correspondence records, videotapes, including electronically stored records, money receptacles, other containers and their contents, equipment in which the records are stored, or other bingo related equipment and supplies on or around the premises, including counting rooms;

(D) Investigate and deter alleged violations of this chapter or rules;

(6) Investigate alleged violations of this chapter and to take appropriate disciplinary action against a licensee for a violation or institute appropriate legal action for enforcement, or both;

(7) Be present, through its inspectors and agents, any time bingo is conducted for the purpose of certifying the bingo facility's revenue, receiving complaints from the public, and conducting other investigations into the conduct of the bingo and the maintenance of the equipment as from time to time the commission may deem necessary and proper;

(8) Require that records including financial or other statements of the licensee be kept in the manner prescribed by the commission and that the licensee submit to the commission an annual balance sheet and profit and loss statement, a list of the stockholders or other persons having a five per cent or greater beneficial interest in the bingo activities of the licensee, and any other information the commission deems necessary to effectively administer this chapter;

(9) Conduct hearings, issue subpoenas for the attendance of witnesses and subpoenas duces tecum for the production of books, records, and other pertinent documents, and to administer oaths and affirmations to the witnesses, when, in the judgment of the commission, it is necessary to administer or enforce this chapter. The executive director is also authorized to issue subpoenas and to administer oaths and affirmations to witnesses;

(10) Eject or exclude, or authorize the ejection or exclusion of, any person from the bingo facility where the person is in violation of this chapter or where the person's conduct or reputation is such that the person's presence within the bingo facility, in the opinion of the commission, may call into question the honesty and integrity of the bingo operation, interfere with the orderly conduct thereof, or any other action that, in the opinion of the commission, is a detriment or impediment to the bingo operation; provided that the propriety of that ejection or exclusion shall be subject to subsequent hearing by the commission;

(11) Suspend, revoke, or restrict a license, to require the removal of the licensee or an employee of the licensee for a violation of this chapter or a commission rule, or for engaging in a fraudulent practice; and

(12) Adopt rules in accordance with chapter 91 to implement this chapter.

§ -4 Authorized bingo licensees; application; nonrefundable fee. (a) Only a nonprofit corporation properly incorporated in the State may apply for a bingo license.

(b) Each applicant for a license to conduct bingo shall file with the Hawaii bingo commission an application on a form prescribed by the commission. The term of the license shall be ten years and shall be renewable for additional ten-year terms. The application shall include:

(1) The name, address, telephone number, social security number, and federal tax identification number of the applicant;

(2) The identity of any other corporation, partnership, or other business entity in which the applicant has an equity interest of more than five per cent, including, if applicable, the state of incorporation or registration;

(3) A statement whether any director, officer, or agent of the applicant has been indicted, convicted, pled guilty or nolo contendere, or forfeited bail for any felony or for a misdemeanor involving gambling, theft, or fraud. The statement shall include the date, the name and location of the court, arresting agency, prosecuting agency, the case caption, the docket number, the offense, the disposition, and the location and length of incarceration;

(4) A statement whether the applicant, or any director, officer, or agent of the applicant has ever been granted any gaming license or certificate issued by any other jurisdiction that has been restricted, revoked, or not renewed. The statement shall describe the facts and circumstances concerning that restriction, revocation, or nonrenewal, including the licensing authority, the date each action was taken, and the reason for each action;

(5) A statement whether the applicant, or any director, officer, or agent of the applicant, within the last ten years, has filed or had filed against it a civil or administrative action or proceeding in bankruptcy;

(6) A statement whether the applicant, or any director, officer, or agent of the applicant, within the last five tax years, has been adjudicated by a court or tribunal to have failed to pay any final amount of any income, sales, or gross receipts tax due and payable under federal, state, or local law, after exhaustion of all inter-agency appeals processes. This statement shall identify the party, amount of the tax, type of tax, time periods involved, and resolution;

(7) The approximate capacity of the premises in which bingo will be conducted; and

(8) Any other information the commission deems necessary to administer this chapter.

(c) A nonrefundable application fee of $ shall be paid to the commission by an applicant at the time of filing to defray the costs associated with an applicant's background investigation conducted by the commission. If the costs of the investigation exceed $ , the applicant shall pay the additional amount to the commission.

§ -5 Denial of application; hearing. If the commission denies a license to conduct bingo, within ten days after receiving written notification of the denial, an applicant may demand in writing a hearing before the commission. At the hearing, the burden of proof shall be on the applicant to establish the applicant's eligibility. If, after the hearing, the commission enters an order denying the application, the order shall set forth in detail the reasons for the denial. If the board approves the application, the commission shall issue the license within fourteen days after approval.

§ -6 Suspension or revocation. (a) Proceedings to suspend or revoke a license to conduct bingo shall be initiated by the commission pursuant to chapter 91. The notice shall state the alleged violations that constitute the grounds for the proceedings. The commission may temporarily suspend the license for a period of thirty days while any proceedings are pending and shall notify the licensee of the dates of the temporary suspension.

(b) The commission shall notify an officer or agent of the licensee of the time and place of the hearing by registered mail, return receipt requested, at least fifteen days before the hearing.

(c) The commission shall hold a hearing on a suspension or proposed revocation as soon as practicable. The commission shall issue in writing its findings and decision on suspension or revocation within thirty days after the hearing. A copy of the findings and decision shall be sent immediately to the licensee. If the commission suspends or revokes the license, the licensee shall be informed of the effective date of the suspension or revocation. The commission's decision under this section shall be subject to judicial review pursuant to section 91�14.

(d) When a license is suspended or revoked, the licensee shall immediately surrender the license. A licensee whose license has been revoked may reapply for a license one year after the effective date of the revocation. If a license has been suspended under subsection (c), the commission shall reinstate the license at the end of the period of suspension.

(e) A violation of any applicable law of this State or rule adopted thereunder shall constitute grounds for suspension or revocation.

§ -7 Conduct of bingo. For all bingo games:

(1) Purchase of a bingo card shall entitle each player to a place with sufficient room in which to play;

(2) Cash payment only shall be accepted for any bingo card;

(3) No person under age eighteen shall:

(A) Play any bingo game conducted by the licensee unless accompanied by that person's parent, legal guardian, or spouse; or

(B) Conduct or assist in the conduct of bingo;

(4) No person who is conducting or assisting in the conduct of bingo shall participate as a bingo player;

(5) Each bingo winner shall be determined and every prize shall be awarded and delivered on the same day on which the bingo game is conducted;

(6) Bingo cards and extra bingo cards shall be printed only on one side;

(7) The licensee shall keep an accurate, separate count of the number of bingo cards and extra bingo cards that are sold, rented, or used;

(8) Bingo cards and extra bingo cards shall each be assigned a specific price, and the price shall remain the same during a bingo game; provided that a card may be changed at no additional cost; and

(9) Bingo cards and extra bingo cards shall be sold or rented only on the premises at which bingo is being conducted. A price list shall be posted where the extra bingo cards are distributed, setting forth the price of each type of card. Only the posted price may be charged. The bingo cards and the extra bingo cards shall be readily distinguishable from each other;

§ -8 Method of play. (a) The method of play in any bingo game and the use of bingo supplies and equipment shall afford each player an equal opportunity to win.

(b) The objects to be drawn shall be essentially the same in size, color, shape, weight, balance, and all other characteristics, so that at all times during the conduct of bingo, each object possesses the capacity for equal agitation with any other object within the receptacle.

(d) The announcement of all numbers drawn shall be clearly audible to the players present.

(e) When more than one room is used for any one bingo game, the receptacle and caller and any assistant shall be in the room where the greatest number of players are present, and all numbers shall be announced in a manner clearly audible to the players in each room.

(f) Once removed, no object shall be returned to the receptacle until after the conclusion of the game.

(g) Immediately following the calling of each number in a bingo game, the caller shall turn that portion of the object that shows the number and letter to the players.

§ -9 Number arrangement announced; prizes announced and posted. The particular arrangement of numbers required to be covered to win and the amount of the prize for each game shall be clearly described and audibly announced to the players immediately before each game. The amount of the prize for each bingo game shall also be posted where the bingo cards and extra bingo cards are distributed.

§ -10 Verification of winner. (a) The numbers appearing on the winning card at the time a winner is determined shall be verified in the immediate presence of at least one disinterested player.

(b) At the time a winner is determined, any player may call for verification of all numbers and of the objects remaining in the receptacle and not yet drawn. This verification shall be made in the immediate presence of an employee of the licensee and at least one disinterested player.

§ -11 More than one winner. When more than one player is found to be the winner on the call of the same number in the same bingo game, a cash prize shall be divided equally among the winners. The licensee may elect to round off the prize to any amount between the next lower dollar and the next higher dollar.

§ -12 Bingo caller. No person may act as a caller in the conduct of any game of bingo unless the person:

(1) Is a bona fide employee of the licensee; and

(2) Has never been convicted of a felony or, if convicted, has been pardoned or released from probation or parole for at least five years.

§ -13 Tax on gross receipts. All gross receipts of the licensee that are derived from the conduct of bingo shall be subject to chapter 237 and taxed as provided in section 237�13(9).

§ -14 Report; payment of tax. (a) At the end of each month, the licensee shall submit to the commission a report on a form prescribed by the commission. Notwithstanding section 237-31, the report shall be accompanied by the payment of the tax due on gross receipts pursuant to section -13. The report shall include:

(1) An itemized statement of the gross receipts from bingo for the prior month, including gross receipts from sales of bingo cards, extra bingo cards, and sale of supplies; and

(2) An itemized statement of expenditures, including amounts paid for prizes, bingo supplies and equipment, license fees, and other expenses.

(b) The commission may suspend the licensee's license if the licensee:

(1) Fails to file a statement under subsection (a)(1) or (2) within five days after notification of delinquency; or

(2) Submits incomplete statements under subsection (a)(1) and (2).

(c) If the statements submitted under subsection (a)(1) and (2) are not full, accurate, and truthful, the commission may refuse to renew a license or may suspend a license until a statement in proper form has been filed.

§ -15 Duties of the attorney general. Whenever the attorney general files with a circuit court a statement that the attorney general believes that a violation of this chapter has occurred, the court shall issue a subpoena for any person requested or named by the attorney general.

§ -16 Violations a public nuisance. A violation of this chapter constitutes a public nuisance and may be enjoined or abated in the same manner as other public nuisances, irrespective of any criminal prosecution that may be or is commenced based on the same acts.

§ -17 Inspection for enforcement. (a) A police officer or prosecuting attorney, within their respective jurisdictions, an authorized employee of the commission, or the attorney general, at all reasonable hours, may enter the premises of the licensee and examine the books, papers, and records of the licensee to determine if all proper taxes or fees imposed have been paid.

(b) Any refusal to permit an examination of the premises by the licensee, its agent or an employee, or the person in charge of the premises to which the bingo license relates, constitutes sufficient grounds for the suspension or revocation of a license.

(c) A refusal constitutes sufficient grounds for any police officer or other persons authorized under this section within their respective jurisdictions or authority to employ whatever reasonable action is necessary to conduct inspections permitted by this section.

§ -18 Penalties. (a) Any person convicted of violating this chapter shall be guilty of a misdemeanor but shall be subject to a maximum term of imprisonment of nine months, or a maximum fine of $10,000, or both.

(b) The attorney general or the prosecuting attorney of the county in which the violation occurs may commence an action in the name of the State to recover a civil forfeiture to the State of not more than $10,000 for the violation of any provision of this chapter.

(c) The attorney general, the commission, or the prosecuting attorney of a county in which an actual or potential violation occurs, after informing the attorney general, may commence an action in the circuit court in the name of the State to restrain any violation of any provision of this chapter. The court, prior to entry of final judgment, may make such an order or judgment as necessary to restore to any person any pecuniary loss suffered because of the acts or practices involved in the violation; provided proof thereof is submitted to the court. The attorney general may subpoena persons, require the production of books and other documents, and request the board to exercise its authority to aid in the investigation of alleged violations of this section.

§ -19 Disposition of tax on gross receipts. Of the tax revenues assessed and paid under sections -13 and ‑14:

(1) One per cent shall be retained by the commission to fund a compulsive gamblers program and for public security at the bingo facility;

(2) Not more than four per cent shall be retained by the commission to fund the commission's administrative expenses; and

(3) The balance shall be deposited into the state general fund.

§ -20 Compulsive gambler program. The commission shall create and implement a program to assist individuals who are identified as compulsive gamblers."

SECTION 2. Section 712-1220, Hawaii Revised Statutes, is amended by amending the definition of "gambling" to read as follows:

"(4) "Gambling". A person engages in gambling if [he] the person stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under [~~his~~] the person's control or influence, upon an agreement or understanding that [he] the person or someone else will receive something of value in the event of a certain outcome. Gambling does not include bona fide business transactions valid under the law of contracts, including but not limited to contracts for the purchase or sale at a future date of securities or commodities, and agreements to compensate for loss caused by the happening of chance, including but not limited to contracts of indemnity or guaranty and life, health, or accident insurance. Gambling does not include the conduct of bingo pursuant to chapter ."

SECTION 3. In codifying the new section added by section 1 of this Act, the revisor of statutes shall substitute appropriate section number for the letter used in designating the new section in this Act.

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1825
TWENTY-SIXTH LEGISLATURE, 2012
STATE OF HAWAII