EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0541*
SENATE BILL 541
C7 5lr1241
HB 1159/24 – W&M CF HB 328
By: Senators Charles, Muse, and Ellis
Introduced and read first time: January 23, 2025
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; 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 2024 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 SENATE BILL 541
(2) “ACTIVE MEMBERS ” MEANS INDIVIDUALS WH O ARE RECOGNIZED 1
BY A FRATERNAL ORGAN IZATION AS DUES–PAYING MEMBERS OR LI FETIME 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) OR § 501(C)(8) OF THE 7
INTERNAL REVENUE CODE; 8
B. OWNS OR LEASES A PRO PERTY; AND 9
C. HAS A BONA FIDE MEMB ERSHIP OF AT LEAST 300 10
ACTIVE MEMBERS OR HA S BEEN LOCATED IN A COUNTY IN WHICH SUBS ECTION (D) 11
OF THIS SECTION APPL IES 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 T HE MEMBERSHIP OF WHI CH 14
COMPRISES SOLELY GRA DUATE MEMBERS OF A N ATIONWIDE FRATERNITY OR 15
SORORITY THAT IS TAX EXEMPT UNDER § 501(C)(7) OR § 501(C)(8) OF THE 16
INTERNAL REVENUE CODE. 17
(II) “FRATERNAL ORGANIZATION ” DOES NOT INCLUDE : 18
1. ANY COLLEGE OR HIGH SCHOOL FRATERNITY OR 19
SORORITY; OR 20
2. ANY OTHER FRATERNITY OR SORORITY 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 541 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 APPROVE D TRANSMITTAL , THE AGENCY 27
SHALL PAY THE FOLLOW ING AMOUNTS FROM THE NET PROCEEDS OF SALE S OF 28 4 SENATE BILL 541
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 TO 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 UNDER § 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 MACHI NES OPERATED BY A FR ATERNAL 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 AND MILITARY 20
FAMILIES, TO ASSIST VETERANS A ND FAMILIES OF VETER ANS, WITH PRIORITY 21
GIVEN TO: 22
A. WOMEN VETERANS W HO ARE HOMELESS OR A T RISK 23
OF HOMELESSNESS ; 24
B. SINGLE–PARENT VETERAN FAMIL IES; AND 25
C. VETERANS WHO ARE VIC TIMS OF DOMESTIC 26
VIOLENCE; AND 27
2. FROM THE REMAINING P ROCEEDS OF SALES OF 28
TICKETS FROM INSTANT TICKET LOTTERY MACHI NES OPERATED BY A FR ATERNAL 29
ORGANIZATION : 30
A. 25% TO THE FRATERNAL ORG ANIZATION TO BE USED 31
FOR UNDERGRADUATE , GRADUATE, OR TRADE SCHOOL SCHOLARSHIPS OR CAPITAL 32 SENATE BILL 541 5
IMPROVEMENTS , CAPITAL OUTLAY , ACQUISITIONS, OR EXISTING COMMUNIT Y 1
OUTREACH PROGRAMS AN D RESOURCES ; 2
B. 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
C. ANY REMAINING AMOUNT TO THE EDUCATION TRUST 6
FUND ESTABLISHED UNDE R § 9–1A–30 OF THIS TITLE. 7
(4) [(i) Subject to subparagraph (ii) of this paragraph, a veterans’ 8
organization issued a license under this subsection shall purchase or lease the instant 9
ticket lottery machines to be used by the veterans’ organization. 10
(ii)] An organization may not use receipts from the sale of tickets 11
from instant ticket lottery machines that would otherwise be [credited to the State Lottery 12
Fund] DISTRIBUTED AS REQUI RED UNDER PARAGRAPH (3) OF THIS SUBSECTION for 13
the costs of purchasing or leasing instant ticket lottery machines. 14
(5) (I) The Director may adopt regulations to implement the provisions 15
of this subsection that include restricting the location of instant ticket lottery machines in 16
areas of a veterans’ organization’s OR A FRATERNAL ORGAN IZATION’S public meeting 17
hall that is accessible to the public. 18
(II) A FRATERNAL ORGANIZATI ON MAY NOT LOCATE OR 19
OPERATE ITS INSTANT TICKET LOTTERY MACHI NES IN A MEETING HAL L THAT IS: 20
1. LOCATED ON OR AFFILIATED WITH THE CAMPUS OF 21
AN INSTITUTION OF HI GHER EDUCATION ; OR 22
2. LOCATED IN A BUILDIN G WHERE STUDENTS OF AN 23
INSTITUTION OF HIGHE R EDUCATION RESIDE . 24
(6) The Agency shall ensure that the element of chance in the conduct of 25
the gaming through the instant ticket lottery machines established under this subsection 26
is consistent with the holding in the case of Chesapeake Amusements Inc. v. Riddle, 363 27
Md. 16 (2001), in that the element of chance must be wholly within the pre–printed instant 28
lottery ticket, and that player enhancements in an instant ticket lottery machine may not 29
affect the element of chance being wholly within the pre–printed instant lottery ticket. 30
(e) The Director may not issue a license to: 31
(1) a person or governmental unit to engage in business primarily as a 32
licensed agent; or 33
6 SENATE BILL 541
(2) an individual who is under the age of 21 years. 1
(f) The Commission may hear and decide an appeal of a denial of a license. 2
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effe ct July 3
1, 2025. 4