1 SB294
2 218471-1
3 By Senator Albritton
4 RFD: Tourism
5 First Read: 03-MAR-22
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1 218471-1:n:03/03/2022:CMH/bm LSA2022-863
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8 SYNOPSIS: This bill would implement the constitutional
9 amendment proposed in Senate Bill __ of the 2022
10 Regular Session, which establishes the Alabama
11 Education Lottery and Gambling Commission and
12 authorizes certain gaming activities in the state
13 under the regulation of the commission.
14 This bill would further provide for the
15 powers, membership, and duties of the commission.
16 This bill would create the Gaming
17 Enforcement Division within the commission and
18 provide for its powers and duties.
19 This bill would establish the Alabama
20 Gambling Trust Fund the Alabama Education Lottery
21 Trust Fund and would provide for the administration
22 and distribution of the funds therein.
23 This bill would provide for the issuance of
24 casino gaming licenses, sports betting licenses,
25 lottery retailer licenses, charitable fundraising
26 licenses, and management contract service provider
27 licenses.
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1 This bill would authorize the commission to
2 assess civil penalties for violations and would
3 provide a process for hearings and appeals of a
4 violation.
5 This bill would provide criminal penalties
6 for certain violations.
7 This bill would levy a state tax on net
8 lottery and gaming revenues and would provide for
9 the distribution of license fees and tax proceeds.
10 This bill would further provide for criminal
11 penalties related to the unlawful activity
12 associated with gaming activities and sports
13 betting, and would repeal certain outdated gaming
14 provisions.
15 Amendment 621 of the Constitution of Alabama
16 of 1901, as amended by Amendment 890, now appearing
17 as Section 111.05 of the Official Recompilation of
18 the Constitution of Alabama of 1901, as amended,
19 prohibits a general law whose purpose or effect
20 would be to require a new or increased expenditure
21 of local funds from becoming effective with regard
22 to a local governmental entity without enactment by
23 a 2/3 vote unless: it comes within one of a number
24 of specified exceptions; it is approved by the
25 affected entity; or the Legislature appropriates
26 funds, or provides a local source of revenue, to
27 the entity for the purpose.
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1 The purpose or effect of this bill would be
2 to require a new or increased expenditure of local
3 funds within the meaning of the amendment. However,
4 the bill does not require approval of a local
5 governmental entity or enactment by a 2/3 vote to
6 become effective because it comes within one of the
7 specified exceptions contained in the amendment.
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9 A BILL
10 TO BE ENTITLED
11 AN ACT
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13 Relating to gaming activities; to add Chapter 30 to
14 Title 41 of the Code of Alabama 1975, to provide legislative
15 intent; to provide definitions; to establish and provide for
16 the powers, membership, and duties of the Alabama Education
17 Lottery and Gambling Commission; to provide for the personnel
18 of the commission; to create an enforcement division within
19 the commission; to provide for representation of the
20 commission by the Attorney General; to further provide for the
21 licensure of gaming and sports betting activities; to provide
22 for the licensure of lottery ticket retailers and the
23 regulation thereof; to provide certain license fees and the
24 distribution of the fees; to establish the Alabama Gambling
25 Trust Fund and provide for the administration thereof; to
26 provide for the licensure of management contract service
27 providers; to provide for the assessment of civil penalties;
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1 to provide for criminal penalties for certain violations; to
2 provide for a hearing and appeals process; to further provide
3 for the licensure of sports betting activities; to provide for
4 the licensure and regulation of lottery game activities; to
5 provide rulemaking authority; to provide for certain reporting
6 requirements by the commission; to levy a state tax on certain
7 lottery, gaming, and sports betting revenues and provide for
8 the distribution thereof; to establish the Alabama Education
9 Lottery Trust Fund; to amend Sections 13A-12-20, 13A-12-21,
10 13A-12-22, 13A-12-23, 13A-12-24, 13A-12-25, 13A-12-26,
11 13A-12-27, 13A-12-28, 13A-12-30, and 13A-11-9, Code of Alabama
12 1975, to update certain criminal penalties for unlawful gaming
13 activity associated with casino-style games and sports
14 betting; to add Sections 13A-12-32 through 13A-12-39,
15 inclusive, to the Code of Alabama 1975, to prescribe certain
16 activity relating to gaming as unlawful and to provide for
17 criminal penalties for violations; to repeal Section
18 11-47-111, Code of Alabama 1975, relating to prohibition of
19 gambling houses; to repeal Section 13A-12-29, Code of Alabama
20 1975, relating to lotteries drawn outside the state; to repeal
21 Divisions 2, 3, and 4 of Article 2 of Chapter 12 of Title 13A,
22 Code of Alabama 1975, relating to suppression of gambling
23 places, transportation of lottery paraphernalia, and the
24 federal waging occupational tax stamp; to provide for the
25 repeal of the act under certain specified conditions; and in
26 connection therewith would have as its purpose or effect the
27 requirement of a new or increased expenditure of local funds
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1 within the meaning of Amendment 621 of the Constitution of
2 Alabama of 1901, as amended by Amendment 890, now appearing as
3 Section 111.05 of the Official Recompilation of the
4 Constitution of Alabama of 1901, as amended.
5 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
6 Section 1. Chapter 30 is added to Title 41 of the
7 Code of Alabama 1975, to read as follows:
8 Chapter 30. Alabama Education Lottery and Gambling
9 Commission.
10 41-30-1. Definitions.
11 For the purposes of this chapter, the following
12 words shall have the following meanings:
13 (1) AUTHORIZED INTERNET SPORTS BETTING PLATFORMS. An
14 operator of an Internet-based platform who has been issued a
15 management service license by the commission to, and has
16 elected to, offer wagers pursuant to the terms of the license.
17 (2) COMMISSION. The Alabama Education Lottery and
18 Gambling Commission created by the proposed Senate Bill __ of
19 the 2022 Regular Session and further provided for in this act.
20 (3) DIRECTOR OF ENFORCEMENT. The Director of the
21 Gaming Enforcement Division.
22 (4) ENFORCEMENT DIVISION. The Gaming Enforcement
23 Division established by this chapter.
24 (5) EXECUTIVE DIRECTOR. The Executive Director of
25 the Alabama Education Lottery and Gambling Commission.
26 (6) GAMING ACTIVITY. Any casino game, activity, or
27 device approved by the commission, including, but not limited
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1 to: Slot machines; video lotteries; video lottery terminals;
2 pari-mutuel wagering games on live or simulcast races; card
3 games, including, but not limited to, poker, baccarat, chemin
4 de fer, and blackjack; dice games; roulette; bingo; electronic
5 bingo; table games and electronic representations of such
6 games; electronic sweepstakes games, terminals, or devices;
7 and electronic gaming devices used to play these games. The
8 term includes electronic representations of any game included
9 within this subdivision.
10 (7) LICENSED LOCATION. A location, physical or
11 virtual, for which the commission has issued a license to
12 authorize gaming activity to be conducted therein.
13 (8) LICENSED OPERATOR. The owner of an authorized
14 Internet sports betting platform or licensed location, or a
15 wholly owned subsidiary entity of the owner of a licensed
16 location.
17 (9) LOTTERY GAMES. Any lottery approved by the
18 commission. The term may include, but is not limited to, a
19 state lottery, a multistate lottery, instant tickets,
20 scratch-off tickets, or any other draw-based lottery when
21 approved by the commission.
22 (10) LOTTERY RETAILER LICENSE. A license issued by
23 the commission to authorize lottery tickets to be sold on the
24 premises of the location.
25 (11) MANAGEMENT SERVICES PROVIDER. A person that,
26 pursuant to Section 41-30-43, holds a license to operate
27 sports betting in person at a licensed location or through any
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1 authorized Internet sports betting platform on behalf of a
2 licensed operator holding a sports betting operator license as
3 authorized by the commission.
4 (12) NET GAMING REVENUE. The total amount of money
5 or value in any form received by a licensed operator as a
6 result of gaming activity, less the total money or value in
7 any form paid as prizes or winnings as a result of the play,
8 free play, or promotional play.
9 (13) NET GAMING REVENUE FOR SPORTS BETTING. The
10 total amount of money or value in any form received by a
11 licensed operator with respect to sports betting, excluding
12 free bets and promotional credits, less federal excise taxes
13 and the total money or value in any form paid as prizes or
14 winnings, including the cash equivalent of any merchandise or
15 thing of value awarded as a prize.
16 (14) POARCH BAND OF CREEK INDIANS. The federally
17 recognized Indian tribe within the State of Alabama known as
18 the Poarch Band of Creek Indians. The term includes a wholly
19 owned subsidiary of the tribe.
20 (15) SPORTS BETTING. The acceptance of wagers on
21 sporting events or portions of sports events, the individual
22 performance statistics of athletes in a sporting event, or a
23 combination of any of the same by any system or method of
24 betting authorized by the commission by rule.
25 41-30-2. Alabama Education Lottery and Gambling
26 Commission created.
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1 The Alabama Education Lottery and Gambling
2 Commission is created as a state agency to regulate the
3 conduct of all lottery games, sports betting, and gaming
4 activities conducted within this state, as authorized by the
5 Constitution of Alabama of 1901 and this chapter. The
6 commission shall be located in Montgomery County.
7 41-30-3. Commission board of directors.
8 (a) The commission shall be governed by a board of
9 directors, as constituted pursuant to Senate Bill __ of the
10 2022 Regular Session.
11 (b) Members of the board shall be subject to the
12 Ethics Law, Section 36-25-1, et seq., Code of Alabama 1975.
13 (c)(1) The board shall meet at least quarterly and
14 at other times as called by the chair or a majority of the
15 board.
16 (2) Members of the board may participate in a
17 meeting of the board in person, by means of telephone
18 conference, video conference, or other similar communications
19 equipment so that all individuals participating in the meeting
20 may hear each other at the same time. Participation by any
21 such means shall constitute presence in person at a meeting
22 for all purposes, including for purposes of establishing a
23 quorum, and the affirmative vote of a majority of the members
24 in attendance shall be necessary for any action of the board.
25 (3) Meetings of the board shall be subject to the
26 Alabama Open Meetings Act.
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1 (d)(1) A majority of board members shall constitute
2 a quorum for the transaction of any business and for the
3 exercise of any power or function of the board.
4 (2) Action may be taken on motions and resolutions
5 adopted by the board at any meeting of the board by an
6 affirmative vote of a majority of present and voting board
7 members, a quorum being present.
8 (e) No vacancy in the membership of the board shall
9 impair the right of the members to exercise all the powers and
10 perform all the duties of the board.
11 (k) The commission may take temporary action to
12 establish state control of and regulate existing gaming
13 activities prior to the ratification of Senate Bill __ of the
14 2022 Regular Session.
15 41-30-4. Compensation of board members.
16 Members of the board of directors of the commission
17 shall receive compensation equal to that of a member of the
18 Legislature, including per diem and travel allowances as
19 provided for state employees.
20 41-30-5. Emergency powers of the commission.
21 (a) The Legislature hereby finds and declares the
22 following:
23 (1) There are current gaming activities operating
24 within the State of Alabama.
25 (2) Such gaming activities are not regulated or
26 taxed in a centralized, uniform manner.
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1 (3) There are a number of local amendments to the
2 Constitution of Alabama of 1901, which purport to authorize
3 gaming activities.
4 (4) It is necessary to initiate action to capture,
5 control, limit, restrict, and govern all ongoing gaming
6 activities, in every forum, by every media or means, and under
7 any authority currently in existence.
8 (5) It is in the best interest of the State of
9 Alabama to protect its residents through appropriate
10 legislation, to regulate the gaming industry as it currently
11 exists, and to provide a centralized, uniform manner of
12 taxation of these activities to fund the needs of the people
13 of this state.
14 (b) Within 30 days of the effective date of this
15 act, the commission shall require any person engaged in any
16 gaming activity to do all of the following:
17 (1) Submit to the commission all of the following:
18 a. The business records and income tax statements of
19 the person from January 1, 2017, through December 31, 2021,
20 and any other reasonable evidence required by the commission
21 by rule.
22 b. Proof that the person and its principal employees
23 and managers have not been convicted of, or charged with, any
24 federal or state felony or misdemeanor property offense,
25 offense involving fraud, or offense involving moral turpitude.
26 c. The names and addresses of its principal owners
27 and investors, showing the ownership percentage of each; any
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1 business records required by the commission; and any other
2 information requested by the commission. For purposes of this
3 paragraph, the principal owners and investors of the person
4 means any person who owns 10 percent or more of the person.
5 d. In affidavit form, the gaming activities employed
6 in the person's operation, the methods of delivery of such
7 gaming activities, the number of machines or devices used to
8 conduct gaming activities, the degree of digitized data used,
9 the physical locations of its operations, and any other
10 information required by the commission.
11 e. A sworn statement of the person's willingness to
12 accept the reasonable regulation of the commission and the
13 State of Alabama.
14 (2) Pay a reasonable fee for the license, as
15 established by the commission, which shall be based upon the
16 size of operation within the state, the physical and digital
17 footprint of the entity, and the timeframe of the license.
18 (3) Establish to the satisfaction of the commission
19 that any gaming activities engaged in by the person from
20 January 1, 2017, through December 31, 2021, have been
21 conducted pursuant to lawful authority.
22 (c) Any person engaged in gaming activity shall meet
23 the requirements of subsection (b) no later than September 1,
24 2022.
25 (d) Nothing in this section authorizes the expansion
26 of gaming activities or methods of delivery thereof, the
27 increase in the number of machines or devices used to conduct
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1 gaming activities, or the increase in the number of physical
2 locations.
3 (e) Notwithstanding Section 41-22-5, Code of Alabama
4 1975, the commission may adopt emergency rules to implement
5 and administer this section. The emergency rules may be
6 adopted by the commission and shall expire 24 months following
7 the ratification of the constitutional amendment proposed
8 pursuant to the Senate Bill __ of the 2022 Regular Session.
9 Any emergency rule adopted pursuant to this section may not be
10 renewed.
11 41-30-6. Executive director and deputy director of
12 the commission.
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