EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb1013*
SENATE BILL 1013
C7 4lr2189
By: Senator Charles
Introduced and read first time: February 2, 2024
Assigned to: Budget and Taxation
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; and generally relating to the operation of instant ticket lottery machines 12
in the State. 13
BY repealing and reenacting, with amendments, 14
Article – State Government 15
Section 9–112 16
Annotated Code of Maryland 17
(2021 Replacement Volume and 2023 Supplement) 18
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
Article – State Government 21
9–112. 22
(a) (1) In this section[, “veterans’] THE FOLLOWING WORDS HAVE THE 23
MEANINGS INDICATED . 24
2 SENATE BILL 1013
(2) “ACTIVE MEMBERS ” MEANS INDIVIDUALS WH O ARE RECOGNIZED 1
BY A FRATERNAL ORGANIZATION 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 ORGAN IZED AS A 6
FRATERNAL OR SORORAL ORGANIZATION UNDER § 501(C)(7) OF THE INTERNAL 7
REVENUE CODE; 8
B. OWNS OR LEASES PROPE RTY; AND 9
C. HAS A BONA FIDE MEMBERSH IP OF AT LEAST 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 WH ICH IS 14
COMPOSED SOLELY OF GRADUATE M EMBERS OF A NATIONWI DE 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
SENATE BILL 1013 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 FRATER NAL ORGANIZATION . 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 APPROVE D TRANSMITTAL , THE AGENCY 27
SHALL PAY THE FOLLOW ING AMOUNTS FROM THE NET PROCEEDS OF SALES OF 28
TICKETS FROM INSTANT TICKET LOTTERY MACHI NES OPERATED BY A VETERANS’ 29 4 SENATE BILL 1013
ORGANIZATION : 1
1. 50% TO THE VETERANS’ ORGANIZATION ; 2
2. TO THE AGENCY, AN AMOUNT NECESSARY TO PAY FOR 3
THE PURCHASE OR LEAS E OF THE INSTANT TIC KET LOTTERY MACHINES AND 4
AGENCY ADMINISTRATION FEES FOR THE PROGRAM; AND 5
3. ANY REMAINING AMOUNT TO THE EDUCATION TRUST 6
FUND ESTABLISHED UNDE R § 9–1A–30 OF THIS TITLE. 7
(III) AFTER DEDUCTION OF A NY VALIDATION PRIZE PAY OUT, A 8
FRATERNAL ORGANIZATI ON ISSUED A LICENSE UND ER THIS SUBSECTION S HALL 9
REMIT THE PROCEEDS FROM THE SALE OF TIC KETS FROM INSTANT TI CKET LOTTERY 10
MACHINES TO THE AGENCY TO BE DISTRIBU TED AS PROVIDED IN S UBPARAGRAPH 11
(IV) OF THIS PARAGRAPH . 12
(IV) ON A PROPERLY APPROVE D TRANSMITTAL , THE AGENCY 13
SHALL PAY THE FOLLOW ING AMOUNTS FROM THE NET PROCEEDS OF SALES OF 14
TICKETS FROM INSTANT TICKET LOTTERY MACHINES OPE RATED BY A FRATERNAL 15
ORGANIZATION : 16
1. 20% TO THE HOMELESSNESS SOLUTIONS PROGRAM 17
IN THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT , TO BE USED, 18
IN CONSULTATION WITH THE DEPARTMENT OF VETERANS AFFAIRS, TO ASSIST 19
VETERANS AND FAM ILIES OF VETERANS , WITH PRIORITY GIVEN TO: 20
A. WOMEN VETERANS WHO A RE HOMELESS OR AT RI SK 21
OF HOMELESSNESS ; 22
B. SINGLE–PARENT VETERAN FAMIL IES; AND 23
C. VETERANS WHO ARE VIC TIMS OF DOMESTIC 24
VIOLENCE; AND 25
2. FROM THE REMAINING P ROCEEDS OF SAL ES OF 26
TICKETS FROM INSTANT TICKET LOTTERY MACHI NES OPERATED BY A FR ATERNAL 27
ORGANIZATION : 28
A. 25% TO THE FRATERNAL ORG ANIZATION; 29
B. TO THE AGENCY, AN AMOUNT NECESSARY TO PAY FOR 30
THE PURCHASE OR LEAS E OF THE INSTANT TIC KET LOTTERY MACHINES AND 31 SENATE BILL 1013 5
AGENCY ADMINISTRATION FEE S FOR THE PROGRAM ; AND 1
C. ANY REMAINING AMOUNT TO THE EDUCATION TRUST 2
FUND ESTABLISHED UNDE R § 9–1A–30 OF THIS TITLE. 3
(4) [(i) Subject to subparagraph (ii) of this paragraph, a veterans’ 4
organization issued a license under this subsection shall purchase or lease the instant 5
ticket lottery machines to be used by the veterans’ organization. 6
(ii)] An organization may not use receipts from the sale of tickets 7
from instant ticket lottery machines that would otherwise be [credited to the State Lottery 8
Fund] DISTRIBUTED AS REQUI RED UNDER PARAGRAPH (3) OF THIS SUBSECTION for 9
the costs of purchasing or leasing instant ticket lottery machines. 10
(5) The Director may adopt regulations to implement the provisions of this 11
subsection that include restricting the location of instant ticket lottery machines in areas 12
of a veterans’ organization’s OR A FRATERNAL ORGANIZATI ON’S public meeting hall that 13
is accessible to the public. 14
(6) The Agency shall ensure that the element of chance in the conduct of 15
the gaming through the instant ticket lottery machines established under this subsection 16
is consistent with the holding in the case of Chesapeake Amusements Inc. v. Riddle, 363 17
Md. 16 (2001), in that the element of chance must be wholly within the pre–printed instant 18
lottery ticket, and that player enhancements in an instant ticket lottery machine may not 19
affect the element of chance being wholly within the pre–printed instant lottery ticket. 20
(e) The Director may not issue a license to: 21
(1) a person or governmental unit to engage in business primarily as a 22
licensed agent; or 23
(2) an individual who is under the age of 21 years. 24
(f) The Commission may hear and decide an appeal of a denial of a license. 25
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 26
1, 2024. 27