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AN ACT
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IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
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To amend, on an emergency basis, due to congressional review, Title 25 of the District of
Columbia Official Code to authorize, define, and regulate games of skill.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
act may be cited as the Revised Game of Skill Machines Consumer Protections Congressional
Review Emergency Amendment Act of 2021.
Sec. 2. The Law to Legalize Lotteries, Daily Numbers Games, and Bingo and Raffles for
Charitable Purposes in the District of Columbia, effective March 10, 1981 (D.C. Law 3-172;
D.C. Official Code 22-1716 to 22-1718 and 36-601.01 et seq.), is amended as follows:
(a) Section 4 (D.C. Official Code 36-601.12) is amended as follows:
(1) The section heading is amended to read as follows:
Sec. 4. Lottery, Gambling, and Gaming Fund..
(2) Subsection (a) is amended to read as follows:
(a) There is established as an enterprise fund the Lottery, Gambling, and Gaming Fund
(Fund), which shall be administered by the Chief Financial Officer. Revenue from the
following sources shall be deposited into the Fund or a division of the Fund, as established by the
Chief Financial Officer:
(1) All funds generated by gambling activities operated or licensed by the Chief
Financial Officer; and
(2) All fees collected pursuant to sections 406 through 408..
(3) Subsection (c) is amended by striking the word gambling and inserting the
phrase gambling and gaming in its place.
(b) A new Title IV is added to read as follows:
TITLE IV. GAME OF SKILL MACHINES.
Sec. 401. Definitions
For purposes of this title, the term:
(1) ABC Board means the Alcoholic Beverage Control Board, established by
D.C. Official Code 25-201.
(2) ABRA means the Alcoholic Beverage Regulation Administration,
established by D.C. Official Code 25-202.
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(3) CFO means the Chief Financial Officer of the District of Columbia.
(4) Centralized accounting system means the accounting system linked by a
communications network as described in sections 409 and 413.
(5) Distributor means a person licensed under this title to:
(A) Buy or lease game of skill machines, or any major components or
parts of a game of skill machine, from manufacturers for sale or lease and distribution to
retailers; or
(B) To maintain or service a retailers game of skill machine, or any
major component or part of a game of skill machine.
(6) Game of skill machine means a mechanical or electronic gaming device
that rewards the winning player or players with cash, a gift card, or a voucher that can be
redeemed for cash. A mechanical or electronic gaming device shall not be considered a game of
skill machine if:
(A) The ability of a player to succeed at the game is impacted by the
number or ratio of prior wins to prior losses of players playing the game;
(B) The outcome of the game can be controlled by a source other than a
player playing the game;
(C) The success of a player is or may be determined by a chance event
that cannot be altered by the players actions;
(D) The ability of a player to succeed at the game is impacted by game
features not visible or known to a reasonable player; or
(E) The ability of a player to succeed at the game is impacted by the
exercise of skill that no reasonable player could exercise.
(7) Game of skill machine gross revenue means the total of cash or cash
equivalents received from a game of skill machine minus the total of:
(A) Cash or cash equivalents paid to players as a result of a game of skill
machine;
(B) Cash or cash equivalents paid to purchase annuities to fund prizes
payable to players over a period of time as a result of a game of skill machine; and
(C) The actual cost paid by the license holder for personal property
distributed to a player as a result of a game of skill machine, excluding travel expenses, food,
refreshments, lodging, and services.
(8) Licensed establishment means an on-premises retail establishment licensed
by the ABC Board to sell, serve, and allow for the consumption of alcoholic beverages.
(9) Licensed premises means the physical location of a licensed establishment
that is authorized by the Office to offer game of skill machines.
(10) Licensee means a person who possesses a game of skill manufacturer,
distributor, or retailer license issued by the Office.
(11) Manufacturer means a person that is licensed under this title that
manufactures or assembles game of skill machines for sale or lease to distributors or provides to
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distributors major components or parts of game of skill machines for the repair or maintenance
of game of skill machines.
(12) Office means the Office of Lottery and Gaming.
(13) Retailer means a person that is licensed under this title to offer game of
skill machines on its licensed premises.
Sec. 402. Authorization of game of skill machines.
The operation of game of skill machines shall be lawful in the District if conducted in
accordance with this title and the rules issued pursuant to this title.
Sec. 403. Game of skill machine license requirements; prohibition.
(a) No person may carry out a function of a manufacturer, distributor, or retailer after
March 31, 2021, unless the person has obtained the applicable license or licenses required by this
title, or by rules issued pursuant to this title.
(b)(1) The Office shall issue the following categories of game of skill machine licenses:
(A) Manufacturer;
(B) Distributor; and
(C) Retailer.
(2) The Office shall not grant a license listed in paragraph (1) of this subsection
until it has determined that each person that possesses 10% or greater beneficial or proprietary
interest in the applicant has been approved for licensure in accordance with this title and rules
issued pursuant to this title; provided, that the Office shall not be required to make such a
determination with respect to a person that is an institutional investor unless the institutional
investor possesses 25% or greater beneficial or proprietary interest in the applicant.
(c)(1) An applicant for an initial manufacturer or distributor license shall be subject to
District and national criminal history background checks.
(2) The applicant shall submit an application to the Office, in a form determined
by the Office, for fingerprints for a national criminal records check by the Metropolitan Police
Department and the Federal Bureau of Investigation of all individuals required to be named in
the application and a signed authorization of each individual submitting fingerprints for the
release of information by the Metropolitan Police Department and the Federal Bureau of
Investigation.
(3) In the case of an application for license renewal, the Office may require
additional background checks.
(d) The Office shall require proof of good standing pursuant to D.C. Official Code 29-
102.08 of an applicant for a license pursuant to this title and may, in addition, require
certification that the Citywide Clean Hands Database indicates that the proposed licensee is
current with its District taxes.
(e) Proprietary information, trade secrets, financial information, and personal
information about a person in an application submitted to the Office pursuant to this title shall
not be a public record and shall not be made available under the Freedom of Information Act of
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1976, effective March 29, 1977 (D.C. Law 1-96; D.C. Official Code 2-531 et seq.), or any
other law.
(f)(1) A retailer shall display its license as required by section 410(e) and shall make the
license immediately available for inspection upon request by an employee of the Office, the
Metropolitan Police Department, or ABRA.
(2) When present at a licensed establishment, an employee of a distributor shall
carry a copy of its license and make it readily available for inspection by an employee of the
Office, the Metropolitan Police Department, or ABRA.
Sec. 404. License prohibitions; suspensions and revocation of licenses.
(a) An applicant convicted of a disqualifying offense shall not be licensed. The Office
shall define disqualifying offenses by a rule issued pursuant to this title.
(b) No employee of the Office or ABRA or member of the ABC Board, or immediate
family member of an employee of the Office or ABRA or member of the ABC Board, may be an
applicant for, have an interest in, or obtain a license issued pursuant to this title.
(c) Failure of an applicant or licensee to notify the Office of a change to the information
provided in its application for license or renewal within 10 days after the change may result in
the Office suspending or revoking the licensees license, denying the applicants license, and
issuing a fine.
(d)(1) The Office shall not grant a license pursuant to this title, and shall revoke a
license previously granted, if evidence satisfactory to the Office exists that the applicant or
licensee has:
(A) Knowingly made a false statement of a material fact to the Office;
(B) Had a license revoked by a governmental authority responsible for
regulation of games of skill;
(C) Been convicted of a felony and has not received a pardon or been
released from parole or probation for at least 5 years; or
(D) Been convicted of a gambling-related offense or a theft or fraud
offense.
(2) The Office may deny a license to an applicant or suspend or revoke a license
of a licensee if the applicant or licensee:
(A) Has not demonstrated, to the satisfaction of the Office, financial
responsibility sufficient to adequately meet the requirement of the proposed activity;
(B) Is not the true owner of the licensed business or has not disclosed the
existence or identity of another individual or entity that has an ownership interest in the business;
or
(C) Is an entity that sells more than 10% of a licensees voting interests,
more than 10% of the voting interests of an entity that controls the licensee, or sells a licensees
assets to an individual or entity not already determined by the Office to have met the
qualifications of a licensee pursuant to this title.
Sec. 405. Conflicts of interest.
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(a) Before issuing, authorizing the transfer to a new owner of, or renewing a license, the
Office shall determine that the applicant is not disqualified because of a conflicting interest in
another license.
(b) In making a determination regarding a conflicting interest, the following standards
shall apply:
(1) No licensee under a distributors license shall hold a license in another
license issued under this title; except, that the holder of a distributors license may also hold a
manufacturers license.
(2) No licensee under a manufacturers license shall hold another license issued
under this title; except, that the holder of a manufacturers license may also hold a distributors
license.
Sec. 406. Manufacturer licensure.
(a)(1) A person may not, after March 31, 2021, manufacture a game of skill machine in
the District or manufacture and cause to be delivered into the District a game of skill machine,
unless the person has a valid manufacturers license issued under this title.
(2) A manufacturer may, after March 31, 2021, only sell or lease game of skill
machines for use in the District to persons having a valid distributors license.
(b) A person applying for a manufacturers license shall do so on a form prescribed by
the Office. The form shall require:
(1) The name of the applicant;
(2) The mailing address of the applicant and, if the applicant is a corporation, the
name of the state in which it is incorporated, the location of its principal place of business, and
the names and addresses of its directors;
(3) A report of the applicants financial activities, including evidence of financial
stability, such as bank statements, business and personal income and disbursement schedules,
and tax returns; and
(4) Such other information as the Office may require by rule.
(c) In considering whether to approve an application for a manufacturers license, the
Office may consider, among such other evidence as may come before the Office, evidence of the
applicants licensure, conduct, and activities in another jurisdiction.
(d) An applicant for a manufacturers license shall pay a nonrefundable application fee
of $10,000 with the application.
(e) A manufacturers license shall be renewed annually; provided, that the licensee has
continued to comply with all statutory and regulatory requirements and pays upon submission of
its renewal application a $5,000 renewal fee.
Sec. 407. Distributor licensure.
(a) A person may not, after March 31, 2021, engage in any of the following activities
unless the person has a valid distributors license issued by the Office:
(1) Buy or lease from a manufacturer a game of skill machine for distribution in
the District;
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(2) Sell, lease, or distribute a game of skill machine in the District or market for
sale, lease, or distribution a game of skill machine in the District; or
(3) Repair, replace, maintain, or service a game of skill machine or a major
component or part of a game of skill machine in the District or market the repair, replacement, or
maintenance of a game of skill machine or a major component or part of a game of skill machine
in the District.
(b) A licensed distributor may sell, lease, or distribute a game of skill machine, or repair,
replace, maintain, or service a game of skill machine or any major component or part of a game
of skill machine in the District to a licensed establishment that possesses a game of skill machine
endorsement from the ABC Board pursuant to D.C. Official Code 25-113.01(e), and after
March 31, 2021, a retailers license from the Office. No distributor may give anything of value,
including a loan or financing agreement, to a licensed establishment as an incentive or
inducement to locate a game of skill machine in the establishment; provided, that a distributor
may provide funding to a licensed establishment for the payment of winnings to players of the
distributors game of skill machines in the licensed establishment.
(c) A person applying for a distributors license shall do so on a form prescribed by the
Office. The form shall require:
(1) The name of the applicant;
(2) The mailing address of the applicant and, if the applicant is a corporation, the
name of the state in which it is incorporated, the location of its principal place of business, and
the names and addresses of its directors;
(3) A report of the applicants financial activities, including evidence of financial
stability, such as bank statements, business and personal income and disbursement schedules,
and tax returns; and
(4) Such other information as the Office may require by rule.
(d) In considering whether to approve an application for a distributors license, the
Office may consider, among such other evidence that may come before the Office, evidence of
the applicants licensure, conduct, and activities in another jurisdiction.
(e) An applicant for a distributors license shall demonstrate that the equipment, system,
or device that the applicant plans to offer to retailers conforms to standards established pursuant
to this title, the rules issued pursuant to this title, and other applicable law.
(f) An applicant for a distributors license shall pay a nonrefundable application fee of
$10,000 with the application.
(g) A distributors license shall be renewed annually; provided, that the licensee has
continued to comply with all statutory and regulatory requirements and pays upon submission of
its renewal application a $5,000 renewal fee.
(h) A distributor shall submit to the Office, at such times as are established by the Office
by rule, a list of all models and versions of game of skill machines sold, delivered, or offered to a
retailer. All such equipment shall be tested and approved by an independent testing laboratory
approved as provided in section 409.
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Sec. 408. Retailer licensure.
(a) A person may not offer or allow for play a game of skill machine at the location in
the District unless the location:
(1) Is a licensed establishment;
(2) Possesses a game of skill machine endorsement from ABRA in accordance
with D.C. Official Code 25-113.01(e), and, after March 31, 2021, a retailers license from the
Office; and
(3) Has entered into a written use agreement with a licensed distributor (or
before April 1, 2021, with a distributor) for the placement or installation of a game of skill
machine or machines on the licensed premises.
(b) A person shall apply for a retailers license on a form prescribed by the Office. The
form shall require:
(1) The name of the applicant;
(2) The mailing address of the applicant and, if the applicant is a corporation, the
name of the state in which it is incorporated, the location of its principal place of business, and
the names and addresses of its directors;
(3) At the discretion of the Office, a report of the applicants financial activities,
including evidence of financial stability, such as bank statements, business and personal income
and disbursement schedules, and tax returns; and
(4) Any other information the Office considers necessary.
(c) An applicant for a retailers license shall pay a nonrefundable application fee of $300
with the application.
(d) A retailers license shall be renewed annually; provided, that the licensee continued
to co