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Tuesday, March 13, 2012

Navada poker bill 258 passed March 10th 2012

REQUIRES TWO-THIRDS MAJORITY VOTE (§§ 7, 13)
A.B. 258
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ASSEMBLY BILL NO. 258–COMMITTEE ON JUDICIARY
MARCH 10, 2011
____________
Referred to Committee on Judiciary
SUMMARY—Enacts provisions governing the licensing and
operation of Internet poker. (BDR 41-657)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: Yes.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to gaming; requiring the Nevada Gaming
Commission to adopt regulations relating to the licensing
and operation of Internet poker; and providing other
matters properly relating thereto.
Legislative Counsel’s Digest:
1 Existing law authorizes certain gaming establishments to obtain a license to
2 operate interactive gaming. (NRS 463.750) This bill requires the Nevada Gaming
3 Commission to establish by regulation certain provisions authorizing the licensing
4 and operation of Internet poker under certain circumstances.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1 Section 1. Chapter 463 of NRS is hereby amended by adding
2 thereto the provisions set forth as sections 2 to 7, inclusive, of this
3 act.
4 Sec. 2. The Legislature hereby finds and declares that:
5 1. Internet poker is widely played throughout the world;
6 2. Laws governing Internet poker have been unclear;
7 3. Technology now exists to limit the conduct of Internet
8 poker to the State of Nevada and other jurisdictions where
9 Internet poker is not prohibited;
10 4. The use of such technology allows Internet poker to be
11 offered by licensees in Nevada in compliance with all applicable
12 laws; – 2 –
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1 5. As a leader in gaming regulation, the State of Nevada has
2 the capability to ensure that Internet poker is operated honestly
3 and competitively and in compliance with all applicable laws,
4 regulations and standards; and
5 6. Allowing licensed Internet poker sites to locate in and
6 operate from the State of Nevada will benefit the economy of this
7 State and assist in protecting consumers from criminal and
8 corruptive influences that may be present in unlicensed and
9 unregulated Internet poker sites.
10 Sec. 3. “Equipment associated with interactive gaming”
11 means any associated equipment used by an establishment or
12 interactive gaming service provider as part of an interactive
13 gaming system.
14 Sec. 4. “Interactive gaming service provider” means a
15 person who acts on behalf of an establishment licensed to operate
16 interactive gaming and:
17 1. Manages, administers or controls wagers that are initiated,
18 received or made on an interactive gaming system;
19 2. Manages, administers or controls the games with which
20 wagers that are initiated, received or made on an interactive
21 gaming system are associated;
22 3. Maintains or operates the software or hardware of an
23 interactive gaming system;
24 4. Provides the trademarks, trade names, service marks or
25 similar intellectual property under which an establishment
26 licensed to operate interactive gaming identifies its interactive
27 gaming system to patrons;
28 5. Provides information regarding persons to an
29 establishment licensed to operate interactive gaming via a
30 database or customer list; or
31 6. Provides products, services, information or assets to an
32 establishment licensed to operate interactive gaming, and receives
33 therefor a percentage of gaming revenue from the establishment’s
34 interactive gaming system.
35 Sec. 5. “Interactive gaming system” means the hardware,
36 software, firmware, communications technology and other
37 equipment that allows a patron to bet or wager via interactive
38 gaming, including, without limitation, Internet poker, and
39 corresponding equipment related to the display of a game, game
40 outcomes or other similar information necessary to facilitate play
41 of the game. The term does not include computer equipment or
42 communications technology used by a player to access the
43 interactive gaming system unless such equipment is provided by
44 the establishment and is involved in determining game outcomes. – 3 –
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1 Sec. 6. “Internet poker” means any of the card games
2 commonly referred to as poker which is played by two or more
3 persons who wager against each other and not against the person
4 operating or offering the game and in which success over the long
5 term is determined by the skill of the player. The term includes,
6 without limitation, games which use community cards that any
7 player may use to make his or her hand and which are played on
8 the Internet with an interactive gaming system that simulates a
9 deck of cards.
10 Sec. 7. 1. The Commission shall adopt regulations and
11 shall, to the extent that the applicants are suitable, grant licenses
12 to operators of Internet poker and to manufacturers of interactive
13 gaming systems, manufacturers of equipment associated with
14 interactive gaming and interactive gaming service providers who
15 provide services, software or equipment to operators of Internet
16 poker.
17 2. The regulations adopted by the Commission must include:
18 (a) Appropriate safeguards to ensure, to a reasonable degree
19 of certainty, that the person placing a bet or wager is at least 21
20 years of age;
21 (b) Appropriate safeguards to ensure, to a reasonable degree
22 of certainty, that players of Internet poker are located in the State
23 of Nevada or another jurisdiction where Internet poker is not
24 prohibited by law;
25 (c) Appropriate safeguards to encourage responsible gaming;
26 (d) Technical standards applicable to Internet poker;
27 (e) Accounting and internal control standards to ensure
28 accurate calculation of state license fees and taxes imposed by this
29 chapter;
30 (f) Standards to encourage compliance with applicable laws
31 relating to money laundering and terrorist financing;
32 (g) Standards to assist in protecting the privacy and security of
33 patrons;
34 (h) Appropriate safeguards against cheating, fraud or
35 collusion and the use of cheating devices;
36 (i) Standards governing the location, surveillance and security
37 of hardware, software and other equipment used as part of
38 Internet poker; and
39 (j) Such other requirements as the Commission may deem
40 appropriate.
41 3. Applications for licenses to operate Internet poker must be
42 filed, investigated and processed in the same manner and are
43 subject to the same application and investigative fees as other
44 applications. The Board shall not recommend denial of, and the
45 Commission shall not deny, a license to an operator of Internet – 4 –
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1 poker or to a manufacturer of interactive gaming systems, a
2 manufacturer of equipment associated with interactive gaming
3 systems or an interactive gaming service provider solely because
4 the operator, manufacturer or interactive gaming service provider,
5 before the effective date of this act, operates, operated or was
6 associated with, in interstate or foreign commerce and while
7 licensed by another jurisdiction, one or more Internet poker
8 operations which were unlicensed in the United States or the State
9 of Nevada and in which bets or wagers were initiated, received or
10 otherwise made by persons located in the United States.
11 Sec. 8. NRS 463.013 is hereby amended to read as follows:
12 463.013 As used in this chapter, unless the context otherwise
13 requires, the words and terms defined in NRS 463.0133 to
14 463.01967, inclusive, and sections 3 to 6, inclusive, of this act have
15 the meanings ascribed to them in those sections.
16 Sec. 9. NRS 463.0148 is hereby amended to read as follows:
17 463.0148 “Establishment” means [any] :
18 1. Any premises wherein or whereon any gaming is done [.] ,
19 or
20 2. The location or locations from which interactive gaming is
21 conducted pursuant to the regulations adopted pursuant to section
22 7 of this act.
23 Sec. 10. NRS 463.016425 is hereby amended to read as
24 follows:
25 463.016425 1. “Interactive gaming” means the conduct of
26 gambling games through the use of communications technology that
27 allows a person, utilizing money, checks, electronic checks,
28 electronic transfers of money, credit cards, debit cards or any other
29 instrumentality, to transmit to a computer information to assist in
30 the placing of a bet or wager and corresponding information related
31 to the display of the game, game outcomes or other similar
32 information. The term [does] :
33 (a) Includes, without limitation, Internet poker.
34 (b) Does not include the operation of a race book or sports pool
35 that uses communications technology approved by the Board
36 pursuant to regulations adopted by the Commission to accept wagers
37 originating within this state for races, or sporting events or other
38 events.
39 2. As used in this section, “communications technology”
40 means any method used and the components employed by an
41 establishment to facilitate the transmission of information,
42 including, without limitation, transmission and reception by systems
43 based on wire, cable, radio, microwave, light, optics or computer
44 data networks, including, without limitation, the Internet and
45 intranets. – 5 –
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1 Sec. 11. NRS 463.160 is hereby amended to read as follows:
2 463.160 1. Except as otherwise provided in subsection 4 and
3 NRS 463.172, it is unlawful for any person, either as owner, lessee
4 or employee, whether for hire or not, either solely or in conjunction
5 with others:
6 (a) To deal, operate, carry on, conduct, maintain or expose for
7 play in the State of Nevada any gambling game, gaming device,
8 inter-casino linked system, mobile gaming system, slot machine,
9 race book or sports pool;
10 (b) To provide or maintain any information service;
11 (c) To operate a gaming salon; [or]
12 (d) To receive, directly or indirectly, any compensation or
13 reward or any percentage or share of the money or property played,
14 for keeping, running or carrying on any gambling game, slot
15 machine, gaming device, mobile gaming system, race book or sports
16 pool [,] ; or
17 (e) To operate, carry on, conduct, maintain or expose for play
18 in or from the State of Nevada any interactive gaming system,
19 without having first procured, and thereafter maintaining in
20 effect, all federal, state, county and municipal gaming licenses as
21 required by statute, regulation or ordinance or by the governing
22 board of any unincorporated town.
23 2. The licensure of an operator of an inter-casino linked system
24 is not required if:
25 (a) A gaming licensee is operating an inter-casino linked system
26 on the premises of an affiliated licensee; or
27 (b) An operator of a slot machine route is operating an inter-
28 casino linked system consisting of slot machines only.
29 3. Except as otherwise provided in subsection 4, it is unlawful
30 for any person knowingly to permit any gambling game, slot
31 machine, gaming device, inter-casino linked system, mobile gaming
32 system, race book or sports pool to be conducted, operated, dealt or
33 carried on in any house or building or other premises owned by the
34 person, in whole or in part, by a person who is not licensed pursuant
35 to this chapter, or that person’s employee.
36 4. The Commission may, by regulation, authorize a person to
37 own or lease gaming devices for the limited purpose of display or
38 use in the person’s private residence without procuring a state
39 gaming license.
40 5. As used in this section, “affiliated licensee” has the meaning
41 ascribed to it in NRS 463.430.
42 Sec. 12. NRS 463.750 is hereby amended to read as follows:
43 463.750 1. Except as otherwise provided in [subsections]
44 subsection 2 and [3,] section 7 of this act, the Commission may, – 6 –
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1 with the advice and assistance of the Board, adopt regulations
2 governing the licensing and operation of interactive gaming.
3 2. [The] Except as otherwise provided in section 7 of this act,
4 the Commission may not adopt regulations governing the licensing
5 and operation of interactive gaming until the Commission first
6 determines that:
7 (a) Interactive gaming can be operated in compliance with all
8 applicable laws;
9 (b) Interactive gaming systems are secure and reliable, and
10 provide reasonable assurance that players will be of lawful age and
11 communicating only from jurisdictions where it is lawful to make
12 such communications; and
13 (c) Such regulations are consistent with the public policy of the
14 State to foster the stability and success of gaming.
15 3. The regulations adopted by the Commission pursuant to this
16 section must [:
17 (a) Establish the investigation fees for:
18 (1) A license to operate interactive gaming;
19 (2) A license for a manufacturer of interactive gaming
20 systems; and
21 (3) A license for a manufacturer of equipment associated
22 with interactive gaming.
23 (b) Provide that:
24 (1) A] provide that a person must hold a license for a
25 manufacturer of interactive gaming systems to supply or provide
26 any interactive gaming system, including, without limitation, any
27 piece of proprietary software or hardware . [; and
28 (2) A person may be required by the Commission to hold a
29 license for a manufacturer of equipment associated with interactive
30 gaming.
31 (c) Set forth standards for the suitability of a person to be
32 licensed as a manufacturer of interactive gaming systems or
33 manufacturer of equipment associated with interactive gaming that
34 are as stringent as the standards for a nonrestricted license.
35 (d) Provide that gross revenue received by an establishment
36 from the operation of interactive gaming is subject to the same
37 license fee provisions of NRS 463.370 as the games and gaming
38 devices of the establishment.
39 (e) Set forth standards for the location and security of the
40 computer system and for approval of hardware and software used in
41 connection with interactive gaming.
42 (f) Define “equipment associated with interactive gaming,”
43 “interactive gaming system,” “manufacturer of equipment
44 associated with interactive gaming,” “manufacturer of interactive – 7 –
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1 gaming systems,” “operate interactive gaming” and “proprietary
2 hardware and software” as the terms are used in this chapter.]
3 4. Except as otherwise provided in [subsection 5,] subsections
4 5 and 6, the Commission shall not approve a license for an
5 establishment to operate interactive gaming unless:
6 (a) In a county whose population is 400,000 or more, the
7 establishment is a resort hotel that holds a nonrestricted license to
8 operate games and gaming devices.
9 (b) In a county whose population is more than 40,000 but less
10 than 400,000, the establishment is a resort hotel that holds a
11 nonrestricted license to operate games and gaming devices or the
12 establishment:
13 (1) Holds a nonrestricted license for the operation of games
14 and gaming devices;
15 (2) Has more than 120 rooms available for sleeping
16 accommodations in the same county;
17 (3) Has at least one bar with permanent seating capacity for
18 more than 30 patrons that serves alcoholic beverages sold by the
19 drink for consumption on the premises;
20 (4) Has at least one restaurant with permanent seating
21 capacity for more than 60 patrons that is open to the public 24 hours
22 each day and 7 days each week; and
23 (5) Has a gaming area that is at least 18,000 square feet in
24 area with at least 1,600 slot machines, 40 table games, and a sports
25 book and race pool.
26 (c) In all other counties, the establishment is a resort hotel that
27 holds a nonrestricted license to operate games and gaming devices
28 or the establishment:
29 (1) Has held a nonrestricted license for the operation of
30 games and gaming devices for at least 5 years before the date of its
31 application for a license to operate interactive gaming;
32 (2) Meets the definition of group 1 licensee as set forth in the
33 regulations of the Commission on the date of its application for a
34 license to operate interactive gaming; and
35 (3) Operates either:
36 (I) More than 50 rooms for sleeping accommodations in
37 connection therewith; or
38 (II) More than 50 gaming devices in connection
39 therewith.
40 5. The Commission may:
41 (a) Issue a license to operate interactive gaming to an affiliate of
42 an establishment if:
43 (1) The establishment satisfies the applicable requirements
44 set forth in subsection 4; and – 8 –
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1 (2) The affiliate is located in the same county as the
2 establishment; and
3 (b) Require an affiliate that receives a license pursuant to this
4 subsection to comply with any applicable provision of this chapter.
5 6. [It is unlawful for any person, either as owner, lessee or
6 employee, whether for hire or not, either solely or in conjunction
7 with others, to operate interactive gaming:
8 (a) Until the Commission adopts regulations pursuant to this
9 section; and
10 (b) Unless the person first procures, and thereafter maintains in
11 effect, all appropriate licenses as required by the regulations adopted
12 by the Commission pursuant to this section.
13 7. A person who violates subsection 6 is guilty of a category B
14 felony and shall be punished by imprisonment in the state prison for
15 a minimum term of not less than 1 year and a maximum term of not
16 more than 10 years or by a fine of not more than $50,000, or both.]
17 The Commission may issue a license as an operator of Internet
18 poker to a person or an affiliate of a person who has been licensed
19 to operate Internet poker by a recognized regulatory body of
20 another jurisdiction with licensing requirements that are similar to
21 the licensing requirements of this State and who has successfully
22 operated Internet poker pursuant to such a license for at least 2
23 years before the date on which the application for the license is
24 submitted.
25 7. The Commission is authorized to enter into compacts with
26 other jurisdictions where interactive gaming is not prohibited,
27 setting forth the manner in which the State of Nevada and such
28 other jurisdictions will regulate and share tax revenues from
29 interactive gaming operations between such jurisdictions and
30 enforce criminal laws related to cheating, tax evasion or
31 unlicensed interactive gaming, and authorizing the commingling
32 of games and pots between such jurisdictions. Such compacts may
33 be limited to Internet poker.
34 Sec. 13. NRS 463.770 is hereby amended to read as follows:
35 463.770 1. [All] Except as otherwise provided in
36 subsections 4 and 5, all gross revenue from operating interactive
37 gaming received by an establishment licensed to operate interactive
38 gaming, regardless of whether any portion of the revenue is shared
39 with another person, must be attributed to the licensee and counted
40 as part of the gross revenue of the licensee for the purpose of
41 computing the license fee required by NRS 463.370.
42 2. A manufacturer of interactive gaming systems who is
43 authorized by an agreement to receive a share of the revenue from
44 an interactive gaming system from an establishment licensed to
45 operate interactive gaming is liable to the establishment for a – 9 –
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1 portion of the license fee paid pursuant to subsection 1. The portion
2 for which the manufacturer of interactive gaming systems is liable is
3 6.75 percent of the amount of revenue to which the manufacturer of
4 interactive gaming systems is entitled pursuant to the agreement.
5 3. For the purposes of subsection 2, the amount of revenue to
6 which the manufacturer of interactive gaming systems is entitled
7 pursuant to an agreement to share the revenue from an interactive
8 gaming system:
9 (a) Includes all revenue of the manufacturer of interactive
10 gaming systems that is the manufacturer of interactive gaming
11 systems’ share of the revenue from the interactive gaming system
12 pursuant to the agreement; and
13 (b) Does not include revenue that is the fixed purchase price for
14 the sale of a component of the interactive gaming system.
15 4. Notwithstanding anything to the contrary in this chapter,
16 to the extent that players of Internet poker are located in
17 jurisdictions other than this State, the licensee shall pay the
18 license fee based on gross revenue at the rate of 4 percent on the
19 gross revenue resulting from the play of players located in such
20 other jurisdictions.
21 5. As used in this section, “gross revenue” does not include:
22 (a) Advertising revenue; or
23 (b) Any other revenue that an operator of Internet poker
24 receives which is not the result of the participation of players in,
25 or the play of, Internet poker.
26 Sec. 14. The Nevada Gaming Commission shall, on or before
27 December 31, 2011, adopt regulations to carry out the amendatory
28 provisions of this act.
29 Sec. 15. This act becomes effective upon passage and
30 approval.