EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1159*
HOUSE BILL 1159
C7 4lr2631
By: Delegate Ebersole
Introduced and read first time: February 7, 2024
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
State Lottery – Instant Ticket Lottery Machines – Veterans’ and Fraternal 2
Organizations 3
FOR the purpose of authorizing the Director of the State Lottery and Gaming Control 4
Agency to issue certain fraternal organizations a license for not more than a certain 5
number of instant ticket lottery machines; altering the distribution of proceeds from 6
certain instant ticket lottery machine sales by veterans’ organizations; providing for 7
the distribution of proceeds from certain instant ticket lottery machine sales by 8
fraternal organizations; authorizing, instead of requiring, the Director to consider 9
certain information before issuing certain licenses; repealing a requirement that 10
certain veterans’ organizations purchase or lease certain instant ticket lottery 11
machines; prohibiting certain fraternal organizations from operating an instant 12
ticket lottery machine in certain locations; and generally relating to the operation of 13
instant ticket lottery machines in the State. 14
BY repealing and reenacting, with amendments, 15
Article – State Government 16
Section 9–112 17
Annotated Code of Maryland 18
(2021 Replacement Volume and 2023 Supplement) 19
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
That the Laws of Maryland read as follows: 21
Article – State Government 22
9–112. 23
(a) (1) In this section[, “veterans’] THE FOLLOWING WORDS HAVE THE 24
MEANINGS INDICATED . 25 2 HOUSE BILL 1159
(2) “ACTIVE MEMBERS ” MEANS INDIVIDUALS WH O ARE RECOGNIZED 1
BY A FRATERNAL ORGANIZATI ON AS DUES –PAYING MEMBERS OR LIFETIME 2
MEMBERS. 3
(3) (I) “FRATERNAL ORGANIZATIO N” MEANS A NONPROFIT 4
ORGANIZATION THAT : 5
1. A. IS TAX EXEMPT AND OR GANIZED AS A 6
FRATERNAL OR SORORAL ORGANIZATION UNDER § 501(C)(7) OF THE INTERNAL 7
REVENUE CODE; 8
B. OWNS OR LEASES A PRO PERTY; AND 9
C. HAS A BONA FIDE M EMBERSHIP OF AT LEAS T 300 10
ACTIVE MEMBERS OR HA S BEEN LOCATED IN A CO UNTY IN WHICH SUBSECTION (D) 11
OF THIS SECTION APPLIES FOR AT LEAST 5 YEARS BEFORE THE ORG ANIZATION 12
APPLIES FOR A LICENS E UNDER SUBSECTION (D) OF THIS SECTION; OR 13
2. IS INDEPENDENT AND THE MEMBERSHIP OF WHICH 14
COMPRISES SOLELY GRADUATE MEMB ERS OF A NATIONWIDE FRATERNITY OR 15
SORORITY THAT IS TAX EXEMPT UNDER § 501(C)(7) OF THE INTERNAL REVENUE 16
CODE. 17
(II) “FRATERNAL ORGANIZATIO N” DOES NOT INCLUDE : 18
1. ANY COLLEGE OR HIGH SCHOOL FRATERNITY OR 19
SORORITY; OR 20
2. ANY OTHER FRATERNITY OR SORORI TY THE 21
MEMBERSHIP OF WHICH IS RESTRICTED IN WHO LE OR IN PART TO STU DENTS OR 22
GRADUATES OF AN EDUC ATIONAL INSTITUTION OR A PROFESSIONAL SC HOOL. 23
(4) “VETERANS’ organization” means an organization that is tax exempt 24
and organized as a veterans’ organization under § 501(c)(19) or § 501(c)(4) of the Internal 25
Revenue Code. 26
(b) Except as provided in subsection (d) of this section, in accordance with the 27
regulations of the Agency and this subtitle, the Director shall issue licenses to the persons 28
and governmental units that will best serve the public convenience and promote the sale of 29
State lottery tickets or shares. 30
(c) Before issuing a license to an applicant, the Director [shall] MAY consider 31
such factors as: 32 HOUSE BILL 1159 3
(1) the financial responsibility and security of the applicant and the 1
business or activity of the applicant; 2
(2) the accessibility of the place of business or activity to the public; 3
(3) the sufficiency of existing licenses to serve the public convenience; and 4
(4) the volume of expected sales. 5
(d) (1) This subsection does not apply in: 6
(i) Caroline County; 7
(ii) Cecil County; 8
(iii) Dorchester County; 9
(iv) Kent County; 10
(v) Queen Anne’s County; 11
(vi) Somerset County; 12
(vii) Talbot County; 13
(viii) Wicomico County; and 14
(ix) Worcester County. 15
(2) (i) Subject to subparagraph (ii) of this paragraph, the Director may 16
issue a license under this subtitle for not more than five instant ticket lottery machines to 17
an applicant that is a veterans’ organization OR FRATERNAL ORGANIZ ATION. 18
(ii) A veterans’ organization OR FRATERNAL ORGANIZ ATION that 19
is issued a license under this subsection shall locate and operate its instant ticket lottery 20
machines at its principal meeting hall in the county in which the veterans’ organization OR 21
FRATERNAL ORGANIZATI ON is located. 22
(3) (I) After deduction of any [commission and] validation prize payout 23
as provided under § 9–117 of this subtitle, a veterans’ organization issued a license under 24
this subsection shall credit the remaining receipts from the sale of tickets from instant 25
ticket lottery machines to the State Lottery Fund established under § 9–118 of this subtitle. 26
(II) ON A PROPERLY APPROVED TR ANSMITTAL, THE AGENCY 27
SHALL PAY THE FOLLOW ING AMOUNTS FROM THE NET PROCEEDS OF SALE S OF 28 4 HOUSE BILL 1159
TICKETS FROM INSTANT TICKET LOTTERY MACHI NES OPERATED BY A VE TERANS’ 1
ORGANIZATION : 2
1. 50% TO VETERANS’ ORGANIZATIONS ; 3
2. TO THE AGENCY, AN AMOUNT NECESSARY T O PAY FOR 4
THE PURCHASE OR LEAS E OF THE INSTANT TIC KET LOTTERY MACHINES AND 5
AGENCY ADMINISTRATION FEES FOR THE PROGRAM ; AND 6
3. ANY REMAINING AMOUNT TO THE EDUCATION TRUST 7
FUND ESTABLISHED UNDE R § 9–1A–30 OF THIS TITLE. 8
(III) AFTER DEDUCTION OF A VALIDATION PRIZE PAY OUT, A 9
FRATERNAL ORGANIZATI ON ISSUED A LICENSE UNDER THIS SUBSECTIO N SHALL 10
REMIT THE PROCEEDS F ROM THE SALE OF TICK ETS FROM INSTANT TIC KET LOTTERY 11
MACHINES TO THE AGENCY TO BE DISTRIBU TED AS PROVIDED IN S UBPARAGRAPH 12
(IV) OF THIS PARAGRAPH . 13
(IV) ON A PROPERLY APPROVE D TRANSMITTAL , THE AGENCY 14
SHALL PAY THE FOLLOW ING AMOUNTS FROM THE NET PROCEEDS OF SALE S OF 15
TICKETS FROM INSTANT TICKET LOTTERY MACHINES OPE RATED BY A FRATERNAL 16
ORGANIZATION : 17
1. 20% TO THE HOMELESSNESS SOLUTIONS PROGRAM 18
IN THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT , TO BE USED, 19
IN CONSULTATION WITH THE DEPARTMENT OF VETERANS AFFAIRS, TO ASSIST 20
VETERANS AND FAMILIE S OF VETERANS, WITH PRIORITY GIVEN TO: 21
A. WOMEN VETERANS WHO A RE HOMELES S OR AT RISK 22
OF HOMELESSNESS ; 23
B. SINGLE–PARENT VETERAN FAMIL IES; AND 24
C. VETERANS WHO ARE VIC TIMS OF DOMESTIC 25
VIOLENCE; AND 26
2. FROM THE REMAINING P ROCEEDS OF SALES OF 27
TICKETS FROM INSTANT TICKET LOTTERY MACHI NES OPERATED BY A FR ATERNAL 28
ORGANIZATION: 29
A. 25% TO THE FRATERNAL ORG ANIZATION TO BE USED 30
FOR UNDERGRADUATE OR GRADUATE SCHOOL SCHO LARSHIPS; 31
HOUSE BILL 1159 5
B. TO THE AGENCY, AN AMOUNT NECESSARY TO PAY FOR 1
THE PURCHASE OR LEAS E OF THE INSTANT TIC KET LOTTERY MACHINES AND 2
AGENCY ADMINISTRATION FEES FOR THE PROGRAM ; AND 3
C. ANY REMAINING AMOUNT TO THE EDUCATION TRUST 4
FUND ESTABLISHED UNDE R § 9–1A–30 OF THIS TITLE. 5
(4) [(i) Subject to subparagraph (ii) of this paragraph, a veterans’ 6
organization issued a license under this subsection shall purchase or lease the instant 7
ticket lottery machines to be used by the veterans’ organization. 8
(ii)] An organization may not use receipts from the sale of tickets 9
from instant ticket lottery machines that would otherwise be [credited to the State Lottery 10
Fund] DISTRIBUTED AS REQUI RED UNDER PARAGRAPH (3) OF THIS SUBSECTION for 11
the costs of purchasing or leasing instant ticket lottery machines. 12
(5) (I) The Director may adopt regulations to implement the provisions 13
of this subsection that include restricting the location of instant ticket lottery machines in 14
areas of a veterans’ organization’s OR A FRATERNAL ORGAN IZATION’S public meeting 15
hall that is accessible to the public. 16
(II) A FRATERNAL ORGANIZATI ON MAY NOT LOCATE OR 17
OPERATE ITS INSTANT TICKET LOTTERY MACHI NES IN A MEETING HAL L THAT IS: 18
1. LOCATED ON OR AFFILIATED WITH THE CAMPUS OF 19
AN INSTITUTION OF HI GHER EDUCATION ; OR 20
2. LOCATED IN A BUILDIN G WHERE STUDENTS OF AN 21
INSTITUTION OF HIGHE R EDUCATION RESIDE . 22
(6) The Agency shall ensure that the element of chance in the conduct of 23
the gaming through the instant ticket lottery machines established under this subsection 24
is consistent with the holding in the case of Chesapeake Amusements Inc. v. Riddle, 363 25
Md. 16 (2001), in that the element of chance must be wholly within the pre–printed instant 26
lottery ticket, and that player enhancements in an instant ticket lottery machine may not 27
affect the element of chance being wholly within the pre–printed instant lottery ticket. 28
(e) The Director may not issue a license to: 29
(1) a person or governmental unit to engage in business primarily as a 30
licensed agent; or 31
(2) an individual who is under the age of 21 years. 32
(f) The Commission may hear and decide an appeal of a denial of a license. 33 6 HOUSE BILL 1159
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2024. 2