HB 1493

1	A bill to be entitled
2	An act relating to gaming; creating s. 849.088, F.S.;
3	providing for slot machines to be operated in certain
4	pari-mutuel facilities by the Division of Pari-mutuel
5	Wagering of the Department of Business and Professional
6	Regulation; providing purpose and intent; providing for
7	implementation of s. 23, Art. X of the State Constitution;
8	providing definitions; providing responsibility and
9	authority of the division; providing for adoption of
10	rules; providing for a program to address economic and
11	social problems associated with gambling; providing for
12	vendors, disclosure, and contract requirements; providing
13	for application by pari-mutuel permitholders seeking to
14	offer slot machine gaming; prohibiting certain
15	manufacturers and distributors and officers, directors,
16	and employees of such manufacturers and distributors from
17	having any ownership or financial interest in a pari-
18	mutuel facility or pari-mutuel permitholder offering slot
19	machine gaming; providing exceptions; providing for
20	suspension of operations for violation; providing for the
21	division to enter into contracts for the acquisition of
22	slot machines and other goods or services; providing for
23	contracts with the division for installation and operation
24	of slot machines; providing for employee records check;
25	providing conditions for slot machine operations;
26	providing for inspection of facilities; providing for
27	method of wagers; providing limitation on amount wagered;
28	prohibiting fee for participation; providing authorization
29	to participate in slot machine game play; providing for
30	refusal of access for certain reasons; prohibiting slot
31	machine game play by minors; prohibiting interference with
32	the operation of a slot machine to avoid payment or
33	manipulate the outcome of play; providing penalties;
34	providing for seizure and destruction of any object used
35	for such interference; providing for distribution of
36	moneys collected; providing for actions upon certain
37	violations; providing criminal penalties; providing for
38	injunction restraining violations; providing for
39	administrative procedures relating to rules and contracts;
40	providing for application; amending s. 550.0251, F.S.;
41	authorizing the division to adopt emergency rules;
42	providing an effective date.
43
44	Be It Enacted by the Legislature of the State of Florida:
45
46	Section 1.  Section 849.088, Florida Statutes, is created
47	to read:
48	849.088  Slot machines.--
49	(1)  PURPOSE AND INTENT.--The purpose of this section is to
50	implement the provisions of s. 23, Art. X of the State
51	Constitution. It is the intent of the Legislature to provide for
52	operation by the state of slot machines that are to be located
53	within pari-mutuel facilities in a county that, pursuant to s.
54	23, Art. X of the State Constitution, has approved by referendum
55	authorization of slot machines. The Legislature finds that slot
56	machine play of authorized games as defined in this section is
57	considered to be lottery style games and not casino gaming
58	because the winners share in the total amount played less a
59	percentage for the state.
60	(2)  DEFINITIONS.--As used in this section:
61	(a)  "Authorized game" means a game or series of games that
62	are played in a qualified pari-mutuel facility using a slot
63	machine as defined in this subsection. The term "series of
64	games" means a game that offers a continuation of play with a
65	chance to win requiring an additional payment for each
66	continuation in the series.
67	(b)  "Department" means the Department of Business and
68	Professional Regulation.
69	(c)  "Division" means the Division of Pari-mutuel Wagering
70	of the department.
71	(d)  "Qualified pari-mutuel facility" means a thoroughbred
72	and harness racing, greyhound racing, or jai-alai pari-mutuel
73	facility that has conducted live racing or jai-alai games during
74	each of the last 2 calendar years before November 2004 located
75	in a county that, pursuant to s. 23, Art. X of the State
76	Constitution, has approved by referendum the authorization of
77	slot machines within pari-mutuel facilities.
78	(e)  "Slot machine" or "game machine" means a gaming
79	device, either mechanical or electronic or a combination of
80	both, that offers class II gaming as defined in 25 U.S.C. s.
81	2703.
82	(3)  RESPONSIBILITY AND AUTHORITY OF THE DIVISION.--
83	(a)  The division shall administer this section and shall
84	provide and operate slot machines under this section and the
85	rules adopted under this section and s. 23, Art. X of the State
86	Constitution. In carrying out the provisions of this section,
87	the division shall:
88	1.  Perform all administrative functions related to the
89	receipt and distribution of moneys collected from slot machine
90	operations.
91	2.  Monitor and verify the cash flow and collect all moneys
92	derived from play of the slot machine.
93	3.  Adopt rules necessary for the implementation of this
94	section and s. 23, Art. X of the State Constitution, including,
95	but not limited to:
96	a.  Security.
97	b.  Public safety, including the safety of players.
98	c.  The number of machines allowed within a facility or
99	specific area within the facility.
100	d.  The operation of slot machines, including game play and
101	hours of operation.
102	e.  Consumption of alcohol within any area where slot
103	machines are located.
104	f.  Slot machine game play, including the cost to play,
105	methods of payment to play, prize payout amounts, and prize
106	payout procedures.
107	g.  Collection of moneys paid for the cost of playing the
108	slot machines by players.
109	h.  Recordkeeping and accounting procedures.
110	i.  Payment of compensation to the pari-mutuel facility.
111	j.  Minimum physical criteria for the areas where slot
112	machines are placed within a facility.
113	k.  Electronic banking machines such as automated teller
114	machines.
115	l.  Public notice and signage within the area where the
116	machines are located.
117	m.  Procedures for the handling of patron disputes and
118	complaints by the public relating to slot machine operations.
119	(b)  In addition, the division is hereby authorized to:
120	1.  Purchase, lease, or lease-purchase slot machines for
121	installation onto the premises of qualified pari-mutuel
122	facilities.
123	2.  Contract with pari-mutuel permitholders for
124	installation, operation, and security of slot machines at
125	qualified pari-mutuel facilities.
126	3.  Install and operate slot machines on the premises of
127	qualified pari-mutuel facilities.
128	4.  Collect and distribute all moneys derived from slot
129	machine operations.
130	5.  Monitor game play on the slot machines.
131	6.  Contract with the pari-mutuel permitholder for
132	incidental services and equipment related to operation of the
133	slot machines.
134	7.  Conduct investigations and monitor the operation of
135	slot machines and the playing of authorized games thereon.
136	8.  Suspend operation of any or all slot machines at a
137	facility, after hearing, for any violation of the provisions of
138	this section or the administrative rules adopted pursuant to
139	this section or s. 23, Art. X of the State Constitution.
140	(c)  The division shall establish by rule a program to
141	address economic and social problems associated with gambling,
142	including, but not limited to, addiction, crime, and poverty
143	related to or caused by gambling. The program may include, but
144	is not limited to, increasing public awareness of the economic
145	and social problems related to gambling, requiring by rule
146	placement of signs in areas where slot machines are located
147	warning of the risks and dangers of gambling and showing the
148	odds of winning, and offering a toll-free telephone number for
149	referral of individuals for counseling for gambling-related
150	problems.
151	(4)  VENDORS; DISCLOSURE AND CONTRACT REQUIREMENTS.--
152	(a)  The department may enter into contracts for the
153	purchase, lease, or lease-purchase of such goods or services as
154	are necessary for effectuating the purposes of this section. The
155	department may not contract with any person or entity for the
156	total operation and administration of the state slot machine
157	operation established under this section but may make
158	procurements that integrate functions such as game design,
159	supply of goods and services, and advertising. In all
160	procurement decisions, the department shall take into account
161	the particularly sensitive nature of slot machine operations and
162	shall consider the competence, quality of product, experience,
163	and timely performance of the vendors in order to promote and
164	ensure security, honesty, fairness, and integrity in the
165	operation and administration of slot machine operations and the
166	objective of raising net revenues for the benefit of the public.
167	(b)  The department shall investigate the financial
168	responsibility, security, and integrity of each vendor with
169	which it intends to negotiate a contract for major procurement.
170	(c)  The department may require disclosure of the
171	information required by s. 24.111(2) from any vendor if the
172	department finds that such disclosure is necessary to protect
173	the dignity and integrity of slot machine operations and in the
174	best interests of the state.
175	(d)  Each vendor in a major procurement in excess of
176	$25,000, and any other vendor if the department deems it
177	necessary to protect the state's financial interest, shall, at
178	the time of executing the contract with the department, post an
179	appropriate bond with the department in an amount determined by
180	the department to be adequate to protect the state's interests,
181	but not higher than the full amount estimated to be paid
182	annually to the vendor under the contract. In lieu of the bond,
183	a vendor may, to ensure the faithful performance of its
184	obligations, file with the department an irrevocable letter of
185	credit acceptable to the department in an amount determined by
186	the department to be adequate to protect the state's interests
187	or deposit and maintain with the Chief Financial Officer
188	securities that are interest bearing or accruing and that meet
189	all requirements under s. 24.111(5).
190	(e)  Every contract in excess of $25,000 entered into by
191	the department pursuant to this section shall contain a
192	provision for payment of liquidated damages to the department
193	for any breach of contract by the vendor. The department may
194	require a liquidated damages provision in any contract if the
195	department deems it necessary to protect the state's financial
196	interest.
197	(f)  Each vendor shall be qualified to do business in this
198	state and shall file appropriate tax returns as provided by the
199	laws of this state, and all contracts shall be governed by the
200	laws of this state.
201	(5)  APPLICATION FOR SLOT MACHINES.--A pari-mutuel
202	permitholder seeking to offer slot machine games to the public
203	within the premises of a qualified pari-mutuel facility shall
204	make application on forms prescribed by the division. The
205	applicant shall submit a nonrefundable application fee of
206	$1,000. The application shall contain all of the information the
207	division, by rule, may determine is required to ensure
208	eligibility.
209	(6)  PROHIBITED RELATIONSHIPS.--
210	(a)  No manufacturer or distributor of slot machines or any
211	equipment necessary for the operation of slot machines or
212	officer, director, or employee of any such manufacturer or
213	distributor shall have any ownership or financial interest,
214	directly or indirectly, in the establishment or business of any
215	qualified pari-mutuel facility or pari-mutuel permitholder under
216	contract with the division to offer slot machine games to the
217	public under this section. The prohibition in this paragraph
218	does not apply to holding stock in a publicly traded mutual fund
219	or institutional investments made for a class of employees for
220	retirement purposes.
221	(b)  The division shall not enter into any contract under
222	this section with any pari-mutuel permitholder or facility,
223	manufacturer, or distributor that is in violation of paragraph
224	(a). The division shall suspend all slot machine operations at
225	any pari-mutuel facility in violation of paragraph (a) for as
226	long as such violation continues.
227	(7)  CONTRACTS FOR SLOT MACHINES.--Upon determination that
228	the pari-mutuel facility is qualified, the division shall
229	contract with the pari-mutuel permitholder for the provision and
230	operation by the division of slot machines. Terms of the
231	contract shall provide for:
232	(a)  Use of the pari-mutuel facility by the division for
233	the provision of the game machines.
234	(b)  Payment to the pari-mutuel permitholder for use of the
235	facility and reimbursement of costs as agreed to by the
236	department and the pari-mutuel permitholder.
237	(c)  Provision and maintenance of the area within the pari-
238	mutuel facility where the game machines shall be located.
239	(d)  Personnel to be employed by the pari-mutuel facility
240	that are deemed necessary by the division for the operation of
241	the slot machines.
242	(e)  Provision and maintenance of ancillary equipment and
243	furnishings necessary for the operation and security of the game
244	machines.
245	(f)  Location, installation, and maintenance of the game
246	machines.
247	(g)  Operation, oversight, and monitoring of the game
248	machines by the division.
249	(h)  Collection and distribution by the division of moneys
250	paid into the game machines.
251	(i)  Security related to all aspects of the operation of
252	the game machines.
253	(j)  Enforcement of laws and department rules relating to
254	the slot machines and game play.
255	(k)  Reasons for any suspension or termination of the
256	contract by the division, including, but not limited to:
257	1.  Commission of a violation of this section or rules
258	adopted under this section or s. 23, Art. X of the State
259	Constitution.
260	2.  Commission of any fraud, deceit, or misrepresentation.
261	3.  Conduct prejudicial to public confidence in slot
262	machine operations.
263	4.  Any change in ownership of the facility or permitholder
264	in violation of subsection (6).
265	5.  Any material change in any matter considered by the
266	department in executing the contract with the pari-mutuel
267	permitholder.
268	(l)  Any other provisions deemed necessary by the division
269	to maintain the integrity and security of slot machine
270	operations and to ensure the financial viability of the
271	operations.
272	(8)  EMPLOYEE RECORDS CHECK.--The division may by rule
273	require a criminal records check of all employees responsible
274	for onsite monitoring of slot machine game play, security
275	related to slot machine operations or play, or collection or
276	handling of any moneys derived from slot machine operations.
277	Fingerprints for all such employees shall be taken in a manner
278	approved by the division and then shall be submitted to the
279	Department of Law Enforcement and the Federal Bureau of
280	Investigation for a criminal records check upon initial
281	application and every 5 years thereafter. The cost of processing
282	fingerprints and conducting a records check shall be borne by
283	the division if the person is an employee of the division and by
284	the pari-mutuel facility if the person is an employee of the
285	facility.
286	(9)  CONDITIONS FOR SLOT MACHINE OPERATIONS.--
287	(a)  Slot machines may be operated only at the location
288	specified by contract with the division, and such location may
289	only be the location of the qualified pari-mutuel facility at
290	which the pari-mutuel permitholder is authorized to conduct
291	pari-mutuel wagering activities pursuant to such permitholder's
292	valid pari-mutuel permit or as otherwise authorized by law.
293	(b)  Slot machines may be operated at the facility only
294	when the facility is authorized to accept wagers on pari-mutuel
295	events during its authorized meet. Slot machines may operate
296	between the hours of 12 noon and 12 midnight on any day a pari-
297	mutuel event is conducted live as a part of its authorized meet.
298	(c)  No outcome of play or a continuation of play may be
299	intentionally manipulated, through programming or otherwise, to
300	display a result that appears to be a near win, gives the
301	impression that the player is getting close to a win, or in any
302	way gives a false impression that the chance to win is improved
303	by another play; however, this paragraph does not apply to
304	general promotional enticements such as graphic displays and
305	sound effects that do not falsely imply that the chance of
306	winning improves by continued play.
307	(10)  INSPECTION OF FACILITIES.--The pari-mutuel facility
308	shall be subject to inspection by the division or any law
309	enforcement agency during the licensee's regular business hours.
310	The inspection will specifically encompass slot machine
311	operations and those areas where the slot machines are located.
312	(11)  METHOD OF WAGERS; LIMITATION.--
313	(a)  No slot machine game play may be conducted using money
314	or other negotiable currency. Games may only be played utilizing
315	a system whereby all players' money is first converted by the
316	facility to tokens or other instruments that shall be used for
317	slot machine game play. The division shall by rule provide for
318	methods for payment of the cost of playing a slot machine and
319	redemption of tokens and prize payouts.
320	(b)  The division may limit by rule the amount wagered in
321	any game or series of games, but the maximum amount to play a
322	game or to continue play in a series of games may not exceed $2
323	in value. The total amount to complete a series may not exceed
324	$8 in value.
325	(12)  FEE FOR PARTICIPATION.--The pari-mutuel facility may
326	not charge a fee for the right to play slot machine games except
327	a general admission fee charged to the general public for
328	admission to the facility and reported under s. 550.125(2) or
329	charged for entrance to a cardroom facility under s. 849.086.
330	(13)  AUTHORIZATION TO PARTICIPATE.--Notwithstanding any
331	other provision of law, it is not a crime for a person to
332	participate in an authorized game at a qualified pari-mutuel
333	facility licensed under this section if such game is provided
334	strictly in accordance with the provisions of this section.
335	(14)  REFUSAL OF ACCESS.--A pari-mutuel facility or the
336	division may refuse entry to or refuse to allow to play any
337	person who is objectionable, undesirable, or disruptive, but
338	such refusal shall not be on the basis of race, creed, color,
339	religion, sex, national origin, marital status, physical
340	handicap, or age, except as provided in this section.
341	(15)  PLAY BY MINOR PROHIBITED.--A person who has not
342	attained 18 years of age may not be permitted to play any slot
343	machine game.
344	(16)  INTERFERENCE WITH OPERATION OF SLOT MACHINES
345	PROHIBITED; SEIZURE AND DESTRUCTION OF OBJECTS.--
346	(a)  No person shall use any instrument, object, device,
347	slug or counterfeit token, or token-like object for the purpose
348	of avoiding payment of the cost to play a game or series of
349	games on a slot machine. Any person who violates this paragraph
350	commits a misdemeanor of the second degree, punishable as
351	provided in s. 775.082 or s. 775.083.
352	(b)  No person shall, while entering or on the premises of
353	any pari-mutuel facility offering operation of slot machines,
354	possess any object, instrument, or device, whether mechanical,
355	electrical, magnetic, or otherwise, that may be used for the
356	purpose of interfering with or manipulating the outcome of a
357	game or series of games on any slot machine. A person who
358	violates this paragraph commits a misdemeanor of the second
359	degree, punishable as provided in s. 775.082 or s. 775.083.
360	(c)  No person shall use any object, instrument, or device,
361	whether mechanical, electrical, magnetic, or otherwise, for the
362	purpose of manipulating the outcome of a game or series of games
363	on a slot machine. A person who violates this paragraph commits
364	a misdemeanor of the first degree, punishable as provided in s.
365	775.082 or s. 775.083.
366	(d)  The enforcing agency making an arrest for a violation
367	of paragraph (a), paragraph (b), or paragraph (c) shall seize
368	any instrument, object, device, slug or counterfeit token, or
369	token-like object that was used or is capable of being used for
370	the purpose of interfering in any way with the operation of any
371	slot machine to avoid payment of the cost of play or to
372	manipulate the outcome of play. Any such seized instrument,
373	object, device, slug or counterfeit token, or token-like object
374	is contraband and shall forfeit to the state and, after all
375	judicial proceedings at trial or appeal in which it may be
376	required as evidence, shall be destroyed.
377	(17)  DISTRIBUTION OF MONEYS COLLECTED.--All of the moneys
378	derived from slot machine operations shall be deposited in the
379	Administrative Trust Fund of the department.
380	(a)  As nearly as practical, at least 50 percent of the
381	gross revenue from slot machine play shall be returned to the
382	players in the form of prizes. Variable prize payout percentages
383	may be determined by the division based on type of machine or
384	game or other criteria as determined by the division provided
385	the total payout is consistent with this paragraph.
386	(b)  Each fiscal year, at least 39 percent of the gross
387	revenue from slot machine play shall be deposited into the
388	General Revenue Fund to be used for the benefit of public
389	education in this state. The department shall transfer moneys to
390	the General Revenue Fund at least once each quarter.
391	(c)  The funds from slot machine play remaining in the
392	Administrative Trust Fund after transfers to the General Revenue
393	Fund shall be used for the payment of expenses of the division's
394	slot machine operations. These expenses shall include all costs
395	incurred in the acquisition, operation, and administration of
396	the slot machines and all costs resulting from any contracts
397	entered into for the purchase or lease of goods or services
398	required for the operation of slot machines, including, but not
399	limited to:
400	1.  The compensation paid to the pari-mutuel facility
401	permitholder.
402	2.  The costs of supplies, materials, tokens, independent
403	audit services, independent studies, data transmission,
404	advertising, promotion, incentives, public relations,
405	communications, security, bonding for employees, printing, and
406	distribution of tokens.
407	3.  The costs of any other goods and services necessary for
408	effectuating the purposes of this section.
409	(d)  The unencumbered balance of funds from slot machine
410	play that remains in the Administrative Trust Fund at the end of
411	each fiscal year shall be transferred to the General Revenue
412	Fund to be used for education purposes.
413	(18)  ACTIONS FOR VIOLATIONS.--
414	(a)  The division may make void or deny the renewal of any
415	contract for slot machine operations when the pari-mutuel
416	permitholder has:
417	1.  Violated or failed to comply with the provisions of
418	this section or any rules adopted pursuant to this section or s.
419	23, Art. X of the State Constitution;
420	2.  Knowingly caused, aided, abetted, or conspired with
421	another to cause any person to violate this section or any rules
422	adopted pursuant to this section or s. 23, Art. X of the State
423	Constitution;
424	3.  Obtained a license or permit by fraud,
425	misrepresentation, or concealment; or
426	4.  Become no longer eligible under this section for slot
427	machine operations.
428	(b)  If a pari-mutuel permitholder's pari-mutuel permit or
429	license is suspended or revoked by the division pursuant to
430	chapter 550, the division may, but is not required to, suspend
431	or terminate the facility's slot machine operation.
432	(c)  Notwithstanding any other provision of this section,
433	the division may impose an administrative fine not to exceed
434	$1,000 for each violation against any person who has violated or
435	failed to comply with the provisions of this section or any
436	rules adopted pursuant to this section or s. 23, Art. X of the
437	State Constitution.
438	(19)  CRIMINAL PENALTY; INJUNCTION.--
439	(a)1.  Any person who operates any slot machine except as
440	provided in this section commits a felony of the third degree,
441	punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
442	2.  Any pari-mutuel permitholder who violates any provision
443	of this section commits a misdemeanor of the first degree,
444	punishable as provided in s. 775.082 or s. 775.083. Any pari-
445	mutuel permitholder who commits a second or subsequent violation
446	of the same paragraph or subsection within a period of 3 years
447	from the date of a prior conviction for a violation of such
448	paragraph or subsection commits a felony of the third degree,
449	punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
450	(b)  The division, any state attorney, the statewide
451	prosecutor, or the Attorney General may apply for a temporary or
452	permanent injunction restraining further violation of this
453	section, and such injunction shall issue without bond.
454	(20)  ADMINISTRATIVE PROCEDURE.--
455	(a)  The department may at any time adopt emergency rules
456	pursuant to s. 120.54. The Legislature finds that such emergency
457	rulemaking power is necessary for the preservation of the rights
458	and welfare of the people in order to provide additional funds
459	to benefit the public. The Legislature further finds that the
460	unique nature of state slot machine operations requires, from
461	time to time, that the department respond as quickly as is
462	practicable to changes in the marketplace. Therefore, in
463	adopting such emergency rules, the department need not make the
464	findings required by s. 120.54(4)(a). Emergency rules adopted
465	under this section are exempt from s. 120.54(4)(c) and shall
466	remain in effect until replaced by other emergency rules or by
467	rules adopted under the nonemergency rulemaking procedures of
468	the Administrative Procedure Act.
469	(b)  The provisions of s. 120.57(3) apply to the
470	department's contracting process, except that:
471	1.  A formal written protest of any decision, intended
472	decision, or other action subject to protest shall be filed
473	within 72 hours after receipt of notice of the decision,
474	intended decision, or other action.
475	2.  As an alternative to any provision in s. 120.57(3)(c),
476	the department may proceed with the bid solicitation or contract
477	award process when the secretary of the department sets forth in
478	writing particular facts and circumstances that require the
479	continuance of the bid solicitation process or the contract
480	award process in order to avoid a substantial loss of funding to
481	the state or to avoid substantial disruption of the timetable
482	for any scheduled slot machine operations.
483	(21)  APPLICATION.--This section shall apply to qualified
484	pari-mutuel facilities in a county that, pursuant to s. 23, Art.
485	X of the State Constitution, has approved by referendum
486	authorization of slot machines within qualified pari-mutuel
487	facilities.
488	Section 2.  Subsection (14) is added to section 550.0251,
489	Florida Statutes, to read:
490	550.0251  The powers and duties of the Division of Pari-
491	mutuel Wagering of the Department of Business and Professional
492	Regulation.--The division shall administer this chapter and
493	regulate the pari-mutuel industry under this chapter and the
494	rules adopted pursuant thereto, and:
495	(14)  The division shall have full authority and power to
496	make, adopt, amend, or repeal rules relating to slot machine
497	operations, to enforce and carry out the provisions of s.
498	849.088, and to operate and regulate the authorized slot machine
499	activities in the state. The division is authorized to adopt
500	emergency rules to implement the provisions of s. 849.088 and s.
501	23, Art. X of the State Constitution.
502	Section 3.  This act shall take effect July 1, 2005.

CODING: Words stricken are deletions; words underlined are additions.