Bill Text: MI HB5393 | 2021-2022 | 101st Legislature | Engrossed
Bill Title: Gaming: bingo and charitable gaming; operation of online raffle games by certain charitable organizations; allow. Amends secs. 2, 3, 3a, 4, 4a, 5d, 9, 12, 13, 14, 15 & 16 of 1972 PA 382 (MCL 432.102 et seq.).
Spectrum: Slight Partisan Bill (Republican 14-5)
Status: (Engrossed - Dead) 2022-10-13 - Referred To Committee On Regulatory Reform [HB5393 Detail]
Download: Michigan-2021-HB5393-Engrossed.html
Substitute For
HOUSE BILL NO. 5393
A bill to amend 1972 PA 382, entitled
"Traxler-McCauley-Law-Bowman bingo act,"
by amending sections 2, 3, 3a, 4, 4a, 5d, 9, 12, 13, 14, 15, and 16 (MCL 432.102, 432.103, 432.103a, 432.104, 432.104a, 432.105d, 432.109, 432.112, 432.113, 432.114, 432.115, and 432.116), sections 2, 3a, 4, 4a, 9, 12, 13, 14, 15, and 16 as amended by 2019 PA 159, section 3 as amended by 2021 PA 92, and section 5d as added by 1999 PA 108.
the people of the state of michigan enact:
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(a) "Active service" and "active state service" mean those terms as defined in section 105 of the Michigan military act, 1967 PA 150, MCL 32.505.
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(b) "Advertising" means all printed matter, handouts, flyers, radio broadcasts, television broadcasts, signs, billboards, and other media used to promote an event.
(c) "Bingo" means a game of chance commonly known as bingo in which prizes are awarded on the basis of designated numbers or symbols conforming to numbers or symbols selected at random.
(d) "Board" means the Michigan gaming control board created by section 4 of the Michigan gaming control and revenue act, Gaming Control and Revenue Act, 1996 IL 1, MCL 432.204.
(e) "Bureau" means the bureau of state lottery as created by section 5 of the McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.5.
(f) "Charity game" means the random resale of a series of charity game tickets.
(g) "Charity game ticket" means a ticket commonly referred to as a break-open ticket or pull-tab that is approved and acquired by the bureau and is distributed and sold by the bureau or a supplier to a qualified organization, a portion of which is removed to discover whether the ticket is a winning ticket.
(h) "Commissioner" means the commissioner of state lottery appointed under section 7 of the McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.7.
(i) "Coverall pattern" means a pattern required to win a bingo game in which all numbers on a bingo card are required to be called.
(j) "Drawing date" means a single calendar day on which a raffle drawing or drawings may be conducted in accordance with a license issued by the board.
(k) (j) "Educational organization" means an organization in
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this state that is organized not for pecuniary profit, whose primary purpose is educational in nature and designed to develop the capabilities of individuals by instruction in any public or private elementary or secondary school that complies with the revised school code, 1976 PA 451, MCL 380.1 to 380.1852, or any private or public college or university that is organized not for pecuniary profit and that is approved by the state board of education.
(l) (k) "Equipment" means the objects and mechanical, electromechanical, or electronic devices used to determine or assist in determining the winners of prizes at an event.
(m) (l) "Event" means, in article 1, an occasion of bingo games, a raffle, a charity game, or a numeral game conducted under a license issued under article 1, and in article 2, an occasion of a millionaire party conducted under a license issued under article 2.
(n) (m) "Executive director" means the executive director of the board, appointed under section 4 of the Michigan gaming control and revenue act, Gaming Control and Revenue Act, 1996 IL 1, MCL 432.204.
(o) (n) "Fraternal organization" means an organization in this state, other than a college fraternity or sorority, that meets all of the following criteria:
(i) Is organized not for pecuniary profit.
(ii) Is a branch, lodge, or chapter of a national or state organization or, only for the purpose of conducting a small raffle or a large raffle under this act, if not a branch, lodge, or chapter of a national or state organization, is exempt from taxation under section 501(c) of the internal revenue code of 1986,
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26 USC 501.
(iii) Exists for the common purpose, brotherhood, or other interests of its members.
(p) "Internet" means the international computer network of interoperable packet-switched data networks, inclusive of such additional technological platforms as mobile, satellite, and other electronic distribution channels.
(a) "Large bingo" means a series of bingo occasions that occur on a regular basis during which the total value of all prizes awarded for bingo games at a single occasion does not exceed $3,500.00 and the total value of all prizes awarded for 1 bingo game does not exceed $1,100.00, except that a prize awarded through a Michigan progressive jackpot bingo game is not subject to these limitations.
(b) "Large raffle" means an event at which the total value of all prizes awarded through raffle drawings exceeds $500.00 per occasion.
(c) "Licensee" means a person, including a qualified organization, licensed under this act.
(d) "Location" means a building, enclosure, part of a building or enclosure, or a distinct portion of real property that is located in this state and is used for the purpose of conducting an event. Location includes all components or buildings that compose 1 architectural entity or that serve a unified functional purpose.
(e) "Manufacturer" means a person licensed under section 11c that manufactures numeral game tickets for sale to suppliers for use in an event.
(f) "Member" means an individual who qualified for membership
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in a qualified organization under its bylaws, articles of incorporation, charter, rules, or other written statement.
(g) "Michigan national guard" and "military" mean those terms as defined in section 105 of the Michigan military act, 1967 PA 150, MCL 32.505.
(h) "Michigan progressive jackpot" means a bingo game conducted in conjunction with a licensed large bingo occasion in which the value of the prize is carried forward to the next bingo occasion if no player wins in a predetermined number of allowable calls. Michigan progressive jackpot may include bingo games conducted by more than 1 licensee that are linked together for the purpose of a common jackpot prize and consolation prize as prescribed by the commissioner.
(i) "Millionaire party" means an event at which wagers are placed on games of chance customarily associated with a gambling casino through the use of imitation money or chips that have a nominal value equal to or greater than the value of the currency for which they can be exchanged.
(j) "Numeral game" means the random resale of a series of numeral game tickets.
(k) "Numeral game ticket" means a paper strip on which preprinted numerals are covered by folding the strip and banding the folded strip with a separate piece of paper, so that on breaking the paper that bands the folded strip the purchaser discovers whether the ticket is a winning ticket.
(l) "Occasion" means the hours of the day for which a license is issued.
(a) "Person" means an individual, firm, association,
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corporation, or other legal entity.
(b) "Principal officer" means the highest ranking officer of the qualified organization according to its written constitution, charter, articles of incorporation, or bylaws.
(c) "Prize" means anything of value, including, but not limited to, money or merchandise that is given to a player for attending or winning a game at an event. A nonmonetary item is valued at its retail value. Prize does not include advertising any of the following:
(i) Advertising given away by a qualified organization in accordance with rules promulgated under this act.
(ii) For purposes of a raffle for which tickets are sold in part or entirely through the internet, prize does not include money or cash equivalent, including, but not limited to, a debit card or other card that may be redeemed for cash. This subparagraph does not apply to a gift certificate or gift card issued by a retail establishment if the combined value of the gift certificates or gift cards does not exceed $250.00 for each drawing date.
(d) "Qualified organization" means, subject to subdivision (e), either of the following:
(i) A bona fide religious, educational, service, senior citizens, fraternal, or veterans' organization that operates without profit to its members and that either has been in existence continuously as an organization for a period of 5 years or is exempt from taxation under section 501(c) of the internal revenue code of 1986, 26 USC 501(c).
(ii) Only for the purpose of conducting a small raffle or a large raffle under this act, a component of the military or the Michigan national guard whose members are in active service or
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active state service.
(e) "Qualified organization" does not include a candidate committee, political committee, political party committee, ballot question committee, independent committee, or any other committee as defined by, and organized under, the Michigan campaign finance act, 1976 PA 388, MCL 169.201 to 169.282.
(f) "Raffle" means an any of the following:
(i) An event for which raffle tickets are sold and at which a winner or winners are determined, either by randomly selecting stubs from all of the raffle tickets sold for an event or by an alternative method that is approved in writing by the bureau, board, and a preannounced prize is awarded.
(ii) The sale of raffle tickets to which all of the following apply:
(A) The sale is through the internet.
(B) Each winner is determined by a member of the qualified organization while the member is physically present at the location.
(C) The member of the qualified organization determines the winner by randomly selecting stubs or tickets from all raffle tickets sold for the raffle.
(D) The tickets are contained in a single physical receptacle that affords each stub and ticket equal opportunity to be drawn.
(E) A preannounced prize does not include money or cash equivalent.
(g) "Religious organization" means any of the following:
(i) An organization, church, body of communicants, or group in this state that is organized not for pecuniary profit and that gathers in common membership for mutual support and edification in
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piety, worship, and religious observances.
(ii) A society of individuals in this state that is organized not for pecuniary profit and that unites for religious purposes at a definite place.
(iii) A church-related private school in this state that is organized not for pecuniary profit.
(h) "Senior citizens organization" means an organization in this state that is organized not for pecuniary profit, that consists of at least 15 members who are 60 years of age or older, and that exists for their mutual support and for the advancement of the causes of elderly or retired persons.
(i) "Service organization" means either of the following:
(i) A branch, lodge, or chapter in this state of a national or state organization that is organized not for pecuniary profit and that is authorized by its written constitution, charter, articles of incorporation, or bylaws to engage in a fraternal, civic, or service purpose in this state.
(ii) A local civic organization in this state that is organized not for pecuniary profit; that is not affiliated with a state or national organization; that is recognized by resolution adopted by the local governmental subdivision in which the organization conducts its principal activities; whose constitution, charter, articles of incorporation, or bylaws contain a provision for the perpetuation of the organization as a nonprofit organization; whose entire assets are used for charitable purposes; and whose constitution, charter, articles of incorporation, or bylaws contain a provision that all assets, real property, and personal property must revert to the benefit of the local governmental subdivision that granted the resolution or another nonprofit organization on
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dissolution of the organization.
(j) "Small bingo" means a series of bingo occasions that occur on a regular basis during which the total value of all prizes awarded for bingo games at a single occasion does not exceed $300.00 and the total value of all prizes awarded for a single bingo game does not exceed $25.00.
(k) "Small raffle" means an event during which the total value of all prizes awarded through raffle drawings does not exceed $500.00 during 1 per occasion.
(l) "Special bingo" means a single or consecutive series of bingo occasions during which the total value of all prizes awarded for bingo games at a single occasion does not exceed $3,500.00 and the total value of all prizes awarded for a single bingo game does not exceed $1,100.00.
(m) "Supplier" means a person licensed under this act to rent, sell, or lease equipment or to sell charity game or numeral game tickets to qualified organizations licensed under this act. Supplier does not include a person that provides only payment processor services to a licensee.
(n) "Veterans' organization" means an organization in this state, or a branch, lodge, or chapter in this state of a state organization or of a national organization chartered by the Congress of the United States, that is organized not for pecuniary profit, the membership of which consists of individuals who were members of the armed services or armed forces Armed Forces of the United States. Veterans' organization includes an auxiliary of a veterans' organization that is a national organization chartered by the Congress of the United States.
Sec. 4. (1) An applicant for a license to conduct a bingo,
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raffle, charity game, or numeral game event shall submit to the bureau a written application on a form prescribed by the commissioner.
(2) The application under subsection (1) must include all of the following:
(a) The name and address of the applicant organization.
(b) The name and address of each officer of the applicant organization.
(c) The location at which the applicant will conduct the event.
(d) The day or dates of the event.
(e) The member or members of the applicant organization who will be responsible for the conduct of the event.
(f) Sufficient facts relating to the applicant's incorporation or organization to enable the commissioner to determine whether the applicant is a qualified organization.
(g) A sworn statement attesting to the nonprofit status of the applicant organization, signed by the principal officer of the organization.
(h) Other information the commissioner considers necessary.
(3) An applicant for a license to conduct a raffle shall submit to the board a written application on a form prescribed by the board.
(4) The application under subsection (3) must include all of the following:
(a) The name and address of the applicant organization.
(b) The name of each officer of the applicant organization.
(c) The location at which the applicant will conduct the event.
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(d) The day or dates of the event.
(e) Sufficient facts relating to the applicant's incorporation or organization to the board to determine whether the applicant is a qualified organization.
(f) Other information the board determines is necessary.
Sec. 4a. (1) Except as provided in subsections (2) and (3), if the commissioner determines that an applicant under section 4 is a qualified organization, is not ineligible under section 18, and has paid to the bureau the appropriate fee, the commissioner may issue 1 or more of the following licenses:
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|
License |
|
Fee |
|
(a) |
Large bingo............................ |
$ |
150.00 |
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(b) |
Small bingo............................ |
$ |
55.00 |
|
(c) |
Special bingo.......................... |
$ |
25.00 |
|
(d) |
Large raffle........................... |
$ |
50.00 per drawing date |
|
(e) |
Small raffle........................... |
$ |
15.00 |
|
(i) |
One to 3 drawing dates................. |
$ |
15.00 |
|
(ii) |
Four or more drawing dates............. |
$ |
5.00 per drawing date |
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(d) (f) |
Annual charity game.................... |
$ |
200.00 |
|
(e) (g) |
Special charity game................... |
$ |
15.00 per day |
|
(f) (h) |
Numeral game........................... |
$ |
15.00 per day |
(2) Under extreme hardship conditions as determined by the commissioner, the commissioner may waive 1 or more requirements for a person to be a qualified organization under section 3a(d) to permit the licensing of a special bingo or raffle event, if all of the following conditions are met:
(a) The organization applying for the license is a nonprofit
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organization.
(b) The entire proceeds of the event, less the actual reasonable expense of conducting the event, are donated or used for a charitable purpose, organization, or cause.
(c) None of the individuals connected with the conduct of the event is compensated in any manner for his or her participation.
(d) The organization complies with all other applicable provisions of this article and rules promulgated under this article.
(3) Under extreme hardship conditions as determined by the commissioner, the commissioner may allow an individual or a group of individuals to obtain a license to conduct a special bingo event or raffle if all of the following conditions are met:
(a) The entire proceeds of the event, less the actual reasonable expense of conducting the event, are donated or used for a charitable purpose, organization, or cause.
(b) None of the individuals connected with the conduct of the event is compensated in any manner for his or her participation.
(c) The individual or group of individuals complies with all other applicable provisions of this article and the rules promulgated under this article.
(4) Except as provided in subsections (5) and (6), if the board determines that an applicant under section 4 is a qualified organization, is not ineligible under section 18, and has paid to the board the appropriate fee, the board may issue 1 or more of the following licenses:
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|
License |
|
Fee |
|
(a) |
Large raffle.......................... |
$ |
50.00 per drawing date |
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(b) |
Small raffle.......................... |
$ |
15.00 |
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(i) |
One to 3 drawing dates................ |
$ |
15.00 |
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(ii) |
Four or more drawing dates............ |
$ |
5.00 per drawing date |
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(c) |
Internet raffle....................... |
$ |
75.00 |
(5) Under extreme hardship conditions as determined by the board, the board may waive 1 or more requirements for a person to be a qualified organization under section 3a(d) to permit the licensing of a raffle event, if all of the following conditions are met:
(a) The organization applying for the license is a nonprofit organization.
(b) The entire proceeds of the event, less the actual reasonable expense of conducting the event, are donated or used for a charitable purpose, organization, or cause.
(c) None of the individuals connected with the conduct of the event is compensated in any manner for his or her participation.
(d) None of the raffle tickets are sold through the internet.
(e) The organization complies with all other applicable provisions of this article and rules promulgated under this article.
(6) Under extreme hardship conditions as determined by the board, the board may allow an individual or a group of individuals to obtain a license to conduct a raffle if all of the following conditions are met:
(a) The entire proceeds of the event, less the actual reasonable expense of conducting the event, are donated or used for a charitable purpose, organization, or cause.
(b) None of the individuals connected with the conduct of the
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event is compensated in any manner for his or her participation.
(c) None of the raffle tickets are sold through the internet.
(d) The individual or group of individuals complies with all other applicable provisions of this article and the rules promulgated under this article.
(7) (4) Each event license issued to a qualified organization under this section is valid for only the location included on the license.
(8) (5) A license issued under this section is not assignable or transferable.
(9) (6) A licensee shall ensure that the events conducted under a license issued under this section are conducted in compliance with the applicable provisions of this article and rules promulgated under this article.
(10) (7) Except as otherwise provided in this section, a licensee shall only conduct events licensed under this section during the hours and on the date or dates stated on the license.
(11) (8) In connection with an application for a small raffle license or a large raffle license, in determining whether a fraternal organization that is not a branch, lodge, or chapter of a national or state organization is a qualified organization, the commissioner board shall only consider only whether the organization meets requirements that are applicable under this article that are unrelated to whether the organization is a branch, lodge, or chapter of a national or state organization.
Sec. 5d. (1) A Except as otherwise provided in subsection (2), a qualified organization may apply for an unlimited number of small and large raffle licenses.
(2) The board shall not issue to a qualified organization more
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than 2 raffle licenses per calendar year for a raffle in which the tickets are sold in part or entirely through the internet. A raffle license described in this subsection may authorize a raffle for only 1 drawing date. For purposes of this subsection, each chapter of a statewide or national qualified organization is considered a single qualified organization.
(3) The holder of a raffle license shall not use a payment processor to process payments unless the payment processor is approved by the board. A payment processor shall not issue tickets or determine, or be used to determine, the winner of a raffle.
(4) Raffle tickets must not be sold or distributed through a kiosk, machine, or similar physical device. If raffle tickets are sold before the raffle event, the raffle tickets must be printed before the sale. Raffle tickets sold through the internet may be purchased only by persons located in this state.
(5) (2) Only 1 small raffle license may be issued for a location each day.
(6) (3) All drawing locations shall must be the same if a small raffle license is issued for more than 1 date.
(7) A qualified organization shall use a location to conduct a raffle only during the time periods set forth on the license.
(8) The board shall not issue a raffle license that would permit the conduct of a raffle by more than 1 qualified organization at the same location at the same time.
(9) The board shall not issue a raffle license that would permit the conduct of a raffle at the same time and location of a millionaire party event.
(10) Only a qualified organization issued a raffle license described in subsection (2) may advertise a raffle in which tickets
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are sold through the internet.
(11) (4) A qualified organization is excused from the requirements of obtaining a license under this act if the qualified organization is sponsoring a single gathering and conducts a raffle before which there is no presale of tickets and the total aggregate retail value of the prize or prizes to be awarded that day is $100.00 or less.
Sec. 9. (1) Except as provided in subsection (2), the entire net proceeds of an event conducted under a license issued under this article must be devoted exclusively to the lawful purposes of the licensee. A licensee shall not incur or pay an item of expense in connection with holding, operating, or conducting an event except the following expenses in amounts that the commissioner or, for a raffle event, the board determines to be reasonable:
(a) The purchase or rental of equipment necessary for conducting an event and payment of services reasonably necessary for the repair of equipment.
(b) Cash prizes or the purchase of prizes of merchandise.
(c) Rental of the location at which the event is conducted.
(d) Janitorial services.
(e) The fee required for issuance or reissuance of a license to conduct the event.
(f) Other reasonable expenses incurred by the licensee, not inconsistent with this article, as permitted by rule of the commissioner or board, as applicable.
(g) Payment processor fees for raffles.
(2) A qualified organization described in section 3a(d)(ii) shall use the entire net proceeds of an event, after paying items of expense incurred in reasonable amounts in connection with the
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holding, operating, or conducting of the event and listed in subsection (1), only for the expense of training or purchasing goods or services for the support of the activities of the component.
Sec. 12. (1) The Except as otherwise provided in subsection (3), the bureau shall enforce and supervise the administration of this article. The Except as otherwise provided in subsection (3), the commissioner shall employ personnel as necessary to implement this article.
(2) The Except as otherwise provided in subsection (3), the bureau may select fraternal organizations that are not a branch, lodge, or chapter of a national or state organization to audit to ensure that the organizations are in compliance with this article.
(3) For raffles, all of the following apply:
(a) The board shall enforce and supervise the administration of this article.
(b) The board shall employ personnel as necessary to implement this article.
(c) The board may audit qualified organizations to ensure that the qualified organizations are in compliance with this article.
Sec. 13. (1) The Except as otherwise provided in subsection (2), the commissioner shall promulgate rules pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to implement this article.
(2) For raffles, not later than 6 months after the effective date of the amendatory act that added this subsection, the board shall promulgate rules pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to implement this article.
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Sec. 14. (1) A Except as otherwise provided in this section, a licensee under this article shall keep a record of each event as required by the commissioner. A Except as otherwise provided in this section, a licensee shall allow a representative authorized by the bureau to inspect a record kept under this subsection and all financial accounts into which proceeds from events are deposited or transferred during reasonable business hours.
(2) A Except as otherwise provided in this section, a licensee under this article shall file with the commissioner a financial statement signed by the principal officer of the qualified organization of receipts and expenses related to the conduct of each event as required by rule promulgated under this article. If the revenue from a bingo, raffle, numeral game, or charity game event is represented to be used or applied by a licensee under this article for a charitable purpose, the licensee shall file a copy of the financial statement with the attorney general under the supervision of trustees for charitable purposes act, 1961 PA 101, MCL 14.251 to 14.266.
(3) A Except as otherwise provided in this section, a licensee under this article shall allow an authorized representative of the bureau or the department of state police or a law enforcement officer of a political subdivision of this state to inspect the location or an intended location during business hours.
(4) A raffle licensee under this article shall keep a record of each event as required by the board. A raffle licensee shall allow a representative authorized by the board to inspect during reasonable business hours a record kept under this subsection and all financial accounts into which proceeds from events are deposited or transferred during reasonable business hours.
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(5) A raffle licensee under this article shall file with the board a financial statement signed by the principal officer of the qualified organization of receipts and expenses related to the conduct of each event as required by rule promulgated under this article. If the revenue from a raffle event is represented to be used or applied by a licensee under this article for a charitable purpose, the internet raffle licensee shall file a copy of the financial statement with the attorney general under the supervision of trustees for charitable purposes act, 1961 PA 101, MCL 14.251 to 14.266.
(6) A raffle licensee under this article shall allow an authorized representative of the board or the department of state police or a law enforcement officer of a political subdivision of this state to inspect the location or an intended location during business hours.
Sec. 15. (1) The Except as otherwise provided in subsection (2), the commissioner shall report annually to the governor and the legislature about the operation of events licensed under this article, abuses that the bureau may have encountered, and recommendations for changes in this act.
(2) The board shall report annually to the governor and the legislature about the operation of raffle events licensed under this article, abuses that the board may have encountered, and recommendations for changes in this act.
Sec. 16. (1) The Except as otherwise provided in subsection (2), the commissioner may deny, suspend, summarily suspend, or revoke a license issued under this article if the licensee or an officer, director, agent, member, or employee of the licensee violates this article or a rule promulgated under this article. The
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Except as otherwise provided in subsection (2), the commissioner may summarily suspend a license for a period of not more than 60 days pending prosecution, investigation, or public hearing.
(2) The board may deny, suspend, summarily suspend, or revoke a supplier license or raffle license issued under this article if the licensee or an officer, director, agent, member, or employee of the licensee violates this article or a rule promulgated under this article. The board may summarily suspend a raffle license for a period of not more than 60 days pending prosecution, investigation, or public hearing.
(3) (2) A proceeding to suspend or revoke a license under this article is a contested case governed by the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(4) (3) On petition of the commissioner, or for raffles, on petition of the board, the circuit court after a hearing may issue subpoenas to compel the attendance of witnesses and the production of documents, papers, books, records, and other evidence before it in a matter over which it has jurisdiction, control, or supervision. If a person subpoenaed to attend in any such proceeding or hearing fails to obey the command of the subpoena without reasonable cause, or if a person in attendance in any such proceeding or hearing refuses, without lawful cause, to be examined or to answer a legal or pertinent question or to exhibit a book, account, record, or other document when ordered to do so by the court, that person may be punished as being in contempt of the court.
(5) (4) With approval of the commissioner, a bingo hall licensee, in lieu of a suspension of its license, may elect to pay a fine equal to the amount of rent that would have been paid by
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bingo licensees during the period of the suspension. The bingo hall licensee shall pay this fine to the bureau on or before the date agreed to in the suspension agreement entered into by the bureau and the bingo hall licensee.
