EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0541*
SENATE BILL 541
C7 5lr1241
HB 1159/24 – W&M CF HB 328
By: Senators Charles, Muse, and Ellis Ellis, M. Jackson, Lewis Young, and Salling
Introduced and read first time: January 23, 2025
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 18, 2025
CHAPTER ______
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; altering certain requirements concerning 13
the conduct of gaming through instant ticket lottery machines; and generally 14
relating to the operation of instant ticket lottery machines in the State. 15
BY repealing and reenacting, with amendments, 16
Article – State Government 17
Section 9–112 18
Annotated Code of Maryland 19
(2021 Replacement Volume and 2024 Supplement) 20
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
That the Laws of Maryland read as follows: 22
2 SENATE BILL 541
Article – State Government 1
9–112. 2
(a) (1) In this section[, “veterans’] THE FOLLOWING WORDS HAVE THE 3
MEANINGS INDICATED . 4
(2) “ACTIVE MEMBERS ” MEANS INDIVIDUALS WH O ARE RECOGNIZED 5
BY A FRATERNAL ORGAN IZATION AS DUES –PAYING MEMBERS OR LIFETIME 6
MEMBERS. 7
(3) (I) “FRATERNAL ORGANIZATIO N” MEANS A NONPROFIT 8
ORGANIZATION THAT : 9
1. A. IS TAX EXEMPT AND OR GANIZED AS A 10
FRATERNAL OR SORORAL ORGANIZATION UNDER § 501(C)(7) OR § 501(C)(8) OF THE 11
INTERNAL REVENUE CODE; 12
B. OWNS OR LEASES A PROPERTY ; AND 13
C. HAS A BONA FIDE MEMB ERSHIP OF AT LEAST 300 14
ACTIVE MEMBERS OR HA S BEEN LOCATED IN A COUNTY IN WHICH SUBS ECTION (D) 15
OF THIS SECTION APPL IES FOR AT LEAST 5 YEARS BEFORE THE ORG ANIZATION 16
APPLIES FOR A LICENS E UNDER SUBSECTION (D) OF THIS SECTION; OR 17
2. IS INDEPENDENT AND T HE MEMBERSHIP OF WHI CH 18
COMPRISES SOLELY GRA DUATE MEMBERS OF A N ATIONWIDE FRATERNITY OR 19
SORORITY THAT IS TAX EXEMPT UNDER § 501(C)(7) OR § 501(C)(8) OF THE 20
INTERNAL REVENUE CODE. 21
(II) “FRATERNAL ORGANIZATION ” DOES NOT INCLUDE : 22
1. ANY COLLEGE OR HIGH SCHOOL FRATERNITY OR 23
SORORITY; OR 24
2. ANY OTHER FRATERNITY OR SORORITY THE 25
MEMBERSHIP OF WHICH IS RESTRICTED IN WHO LE OR IN PART TO STU DENTS OR 26
GRADUATES OF AN EDUC ATIONAL INSTITUTION OR A PROFESSIONAL SCHOOL . 27
(4) “VETERANS’ organization” means an organization that is tax exempt 28
and organized as a veterans’ organization under § 501(c)(19) or § 501(c)(4) of the Internal 29
Revenue Code. 30
(b) Except as provided in subsection (d) of this section, in accordance with the 31
regulations of the Agency and this subtitle, the Director shall issue licenses to the persons 32 SENATE BILL 541 3
and governmental units that will best serve the public convenience and promote the sale of 1
State lottery tickets or shares. 2
(c) Before issuing a license to an applicant, the Director [shall] MAY consider 3
such factors as: 4
(1) the financial responsibility and security of the applicant and the 5
business or activity of the applicant; 6
(2) the accessibility of the place of business or activity to the public; 7
(3) the sufficiency of existing licenses to serve the public convenience; and 8
(4) the volume of expected sales. 9
(d) (1) This subsection does not apply in: 10
(i) Caroline County; 11
(ii) Cecil County; 12
(iii) Dorchester County; 13
(iv) Kent County; 14
(v) Queen Anne’s County; 15
(vi) Somerset County; 16
(vii) Talbot County; 17
(viii) Wicomico County; and 18
(ix) Worcester County. 19
(2) (i) Subject to subparagraph (ii) of this paragraph, the Director may 20
issue a license under this subtitle for: 21
1. not more than five instant ticket lottery machines to an 22
applicant that is a veterans’ organization OR FRATERNAL ORGANIZ ATION; AND 23
2. NOT MORE THAN THREE INSTANT TICKET LOTTE RY 24
MACHINES TO AN APPLI CANT THAT IS A FRATERNAL ORGANIZA TION. 25
(ii) A veterans’ organization OR FRATERNAL ORGANIZ ATION that 26
is issued a license under this subsection shall locate and operate its instant ticket lottery 27 4 SENATE BILL 541
machines at its principal meeting hall in the county in which the veterans’ organization OR 1
FRATERNAL ORGANIZATI ON is located. 2
(III) AS A RETAILER UNDER T HE INSTANT TICKET LO TTERY 3
MACHINE PROGRAM , A VETERANS’ ORGANIZATION OR FRAT ERNAL ORGANIZATION 4
SHALL BE COMPENSATED BASED ON A PERCENTAG E OF PROCEEDS . 5
(3) (I) After deduction of any [commission and] validation prize payout 6
as provided under § 9–117 of this subtitle, a veterans’ organization issued a license under 7
this subsection shall RETAIN 50% OF THE NET PROCEEDS AND credit the remaining 8
receipts NET PROCEEDS from the sale of tickets from instant ticket lottery machines to 9
the State Lottery Fund established under § 9–118 of this subtitle. 10
(II) ON A PROPERLY APPROVE D TRANSMITTAL , THE AGENCY 11
SHALL PAY THE FOLLOW ING AMOUNTS FROM THE NET PROCEEDS OF SALE S OF 12
TICKETS FROM INSTANT TICKET LOTTERY MACHI NES OPERATED BY A VE TERANS’ 13
ORGANIZATION : 14
1. 50% TO VETERANS ’ ORGANIZATIONS 5% TO THE 15
MARYLAND VETERANS TRUST FUND ESTABLISHED UNDE R § 9–913 OF THIS TITLE; 16
2. TO THE AGENCY, AN AMOUNT NECESSARY TO PAY FOR 17
THE PURCHASE OR LEASE OF THE INSTANT TICKE T LOTTERY MACHINES A ND 18
AGENCY ADMINISTRATION FEES FOR THE PROGRAM ; AND 19
3. ANY REMAINING AMOUNT TO THE EDUCATION TRUST 20
FUND ESTABLISHED UNDE R § 9–1A–30 OF THIS TITLE. 21
(III) AFTER DEDUCTION OF A VALIDATION PR IZE PAYOUT, A 22
FRATERNAL ORGANIZATI ON ISSUED A LICENSE UNDER THIS SUBSECTIO N SHALL 23
REMIT THE PROCEEDS F ROM THE SALE OF TICK ETS FROM INSTANT TIC KET LOTTERY 24
MACHINES: 25
1. RETAIN 25% OF THE NET PROCEEDS FOR 26
UNDERGRADUATE , GRADUATE, OR TRADE SCHOOL SCHO LARSHIPS OR CAPITAL 27
IMPROVEMENTS , CAPITAL OUTLAYS , ACQUISITIONS, OR EXISTING COMMUNIT Y 28
OUTREACH PROGRAMS AN D RESOURCES ; AND 29
2. REMIT THE REMAINDER TO THE AGENCY TO BE 30
DISTRIBUTED AS PROVIDED IN SUBPARAGRAPH (IV) OF THIS PARAGRAPH . 31
(IV) ON A PROPERLY APPROVE D TRANSMITTAL , THE AGENCY 32
SHALL PAY THE FOLLOW ING AMOUNTS FROM THE NET PROCEEDS OF SALE S OF 33 SENATE BILL 541 5
TICKETS FROM INSTANT TICKET LOTTERY MACHI NES OPERATED BY A FR ATERNAL 1
ORGANIZATION: 2
1. 20% TO THE HOMELESSNESS SOLUTIONS PROGRAM 3
IN THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT , TO BE USED, 4
IN CONSULTATION WITH THE DEPARTMENT OF VETERANS AND MILITARY 5
FAMILIES, TO ASSIST VETERANS A ND FAMILIES OF VETER ANS, WITH PRIORITY 6
GIVEN TO: 7
A. WOMEN VETERANS WHO A RE HOMELESS OR AT RI SK 8
OF HOMELESSNESS ; 9
B. SINGLE–PARENT VETERAN FAMIL IES; AND 10
C. VETERANS WHO ARE VIC TIMS OF DOMESTIC 11
VIOLENCE; AND 12
2. FROM THE REMAINING P ROCEEDS OF SALES OF 13
TICKETS FROM INSTANT TICKET LOTTERY MACHI NES OPERATED BY A FR ATERNAL 14
ORGANIZATION : 15
A. 25% TO THE FRATERNAL ORG ANIZATION TO BE USED 16
FOR UNDERGRADUATE , GRADUATE, OR TRADE SCHOOL SCHO LARSHIPS OR CAPITAL 17
IMPROVEMENTS , CAPITAL OUTLAY , ACQUISITIONS, OR EXISTING COMMUNIT Y 18
OUTREACH PROGRAMS AND RESO URCES; 19
2. 5% TO THE MARYLAND VETERANS TRUST FUND 20
ESTABLISHED UNDER § 9–913 OF THIS TITLE; 21
B. 3. TO THE AGENCY, AN AMOUNT NECESSARY TO PAY FOR 22
THE PURCHASE OR LEAS E OF THE INSTANT TIC KET LOTTERY MACHINES AND 23
AGENCY ADMINISTRATION FEES FOR THE PROGRAM ; AND 24
C. 4. ANY REMAINING AMOUNT TO THE EDUCATION TRUST 25
FUND ESTABLISHED UNDE R § 9–1A–30 OF THIS TITLE. 26
(4) [(i) Subject to subparagraph (ii) of this paragraph, a veterans’ 27
organization issued a license under this subsection shall purchase or lease the instant 28
ticket lottery machines to be used by the veterans’ organization. 29
(ii)] An organization may not use receipts NET PROCEEDS from the 30
sale of tickets from instant ticket lottery machines that would otherwise be [credited to the 31
State Lottery Fund] DISTRIBUTED AS REQUI RED UNDER PARAGRAPH (3) OF THIS 32
SUBSECTION for the costs of purchasing or leasing instant ticket lottery machines. 33 6 SENATE BILL 541
(5) (I) The Director may adopt regulations to implement the provisions 1
of this subsection that include restricting the location of instant ticket lottery machines in 2
areas of a veterans’ organization’s OR A FRATERNAL ORGAN IZATION’S public meeting 3
hall that is accessible to the public. 4
(II) A FRATERNAL ORGANIZATI ON MAY NOT LOCATE OR 5
OPERATE ITS INSTANT TICKET LOTTERY MACHI NES IN A MEETING HAL L THAT IS: 6
1. LOCATED ON OR AFFILI ATED WITH THE CAMPUS OF 7
AN INSTITUTION OF HI GHER EDUCATION ; OR 8
2. LOCATED IN A BUILDIN G WHERE STUDENTS OF AN 9
INSTITUTION OF HIGHE R EDUCATION RESIDE. 10
(6) The Agency shall ensure that the element of chance in the conduct of 11
the gaming through the instant ticket lottery machines established under this subsection 12
is consistent with the holding in the case of Chesapeake Amusements Inc. v. Riddle, 363 13
Md. 16 (2001), in that the element of chance must be CONTAINED wholly within the 14
pre–printed PREDETERMINED instant lottery ticket, and that player enhancements in an 15
instant ticket lottery machine may not affect the element of chance being wholly within the 16
pre–printed instant lottery ticket. 17
(e) The Director may not issue a license to: 18
(1) a person or governmental unit to engage in business primarily as a 19
licensed agent; or 20
(2) an individual who is under the age of 21 years. 21
(f) The Commission may hear and decide an appeal of a denial of a license. 22
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 23
1, 2025. 24
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.