| Old | New | Differences | |
|---|---|---|---|
| 1 | 1 | GENERAL ASSEMBLY OF NORTH CAROLINA | |
| 2 | 2 | SESSION 2025 | |
| 3 | - | H 1 | |
| 4 | - | HOUSE BILL 999 | |
| 3 | + | H D | |
| 4 | + | HOUSE BILL DRH40330-BAxfa-10 | |
| 5 | + | ||
| 5 | 6 | ||
| 6 | 7 | ||
| 7 | 8 | Short Title: Regulation of Video Gaming Terminals. (Public) | |
| 8 | - | Sponsors: Representatives Warren and Loftis (Primary Sponsors). | |
| 9 | - | For a complete list of sponsors, refer to the North Carolina General Assembly web site. | |
| 10 | - | Referred to: Rules, Calendar, and Operations of the House | |
| 11 | - | April 14, 2025 | |
| 12 | - | *H999 -v-1* | |
| 9 | + | Sponsors: Representative Warren. | |
| 10 | + | Referred to: | |
| 11 | + | ||
| 12 | + | *DRH40330 -BAxfa -10* | |
| 13 | 13 | A BILL TO BE ENTITLED 1 | |
| 14 | 14 | AN ACT TO AUTHORIZE REGULATED PLAY OF VIDEO GAMING TERMINALS IN 2 | |
| 15 | 15 | THIS STATE. 3 | |
| 16 | 16 | The General Assembly of North Carolina enacts: 4 | |
| 17 | 17 | SECTION 1. Chapter 18C of the General Statutes is amended by adding a new 5 | |
| 18 | 18 | Article to read: 6 | |
| 19 | 19 | "Article 11. 7 | |
| 20 | 20 | "Video Gaming Terminals. 8 | |
| 21 | 21 | "Part 1. General Provisions. 9 | |
| 22 | 22 | "§ 18C-1100. Definitions. 10 | |
| 23 | 23 | In addition to the definitions in Article 1 of this Chapter, the following definitions apply in 11 | |
| 24 | 24 | this Article: 12 | |
| 25 | 25 | (1) Associated equipment. – Any hardware that is connected to the video gaming 13 | |
| 26 | 26 | terminal or to the central monitoring system for the purpose of 14 | |
| 27 | 27 | communication, validation, play, or other functions of the video gaming 15 | |
| 28 | 28 | terminal. 16 | |
| 29 | 29 | (2) Central monitoring system. – The system that maintains on a real-time basis 17 | |
| 30 | 30 | the financial, integrity, and security controls on video gaming terminals and 18 | |
| 31 | 31 | associated equipment and provides administrative services for its operation. 19 | |
| 32 | 32 | (3) Independent testing laboratory. – A nationally recognized testing laboratory 20 | |
| 33 | 33 | that is not otherwise subject to control by others and is approved by the 21 | |
| 34 | 34 | Commission for use in testing whether a video gaming game or video gaming 22 | |
| 35 | 35 | terminal complies with the standards set forth in this Article. 23 | |
| 36 | 36 | (4) Local law enforcement. – A municipal police department, a county police 24 | |
| 37 | 37 | department, or a sheriff's office. 25 | |
| 38 | 38 | (5) Manufacturer. – A person licensed by the Commission who manufactures, 26 | |
| 39 | 39 | assembles, services, or produces video gaming terminals or associated 27 | |
| 40 | 40 | equipment. 28 | |
| 41 | 41 | (6) Net machine revenue. – Gross revenue minus prizes actually paid per 29 | |
| 42 | 42 | machine. For purposes of this subdivision, prizes do not include a player 30 | |
| 43 | 43 | reward system, player tracking system, marketing, or promotional prizes or 31 | |
| 44 | 44 | credits. Unclaimed prizes shall not be included in the calculation of net 32 | |
| 45 | - | machine revenue unless redeemed by the player. 33 General Assembly Of North Carolina Session 2025 | |
| 46 | - | Page 2 House Bill 999-First Edition | |
| 47 | - | (7) Off-premises ABC permit. – An off-premises malt beverage permit, or 1 | |
| 48 | - | off-premises unfortified or fortified wine permit issued pursuant to Chapter 2 | |
| 49 | - | 18B of the General Statutes. 3 | |
| 50 | - | (8) On-premises ABC permit. – An on-premises malt beverage permit, 4 | |
| 51 | - | on-premises unfortified or fortified wine permit, or mixed beverages permit 5 | |
| 52 | - | issued pursuant to Chapter 18B of the General Statutes. 6 | |
| 53 | - | (9) Operator. – A person licensed by the Commission who owns, leases, or 7 | |
| 54 | - | otherwise controls a video gaming terminal for which a video gaming terminal 8 | |
| 55 | - | permit has been issued by the Commission. 9 | |
| 56 | - | (10) Video gaming games. – Electronically simulated games of chance approved 10 | |
| 57 | - | by the Commission that are displayed and played on permitted video gaming 11 | |
| 45 | + | machine revenue unless redeemed by the player. 33 | |
| 46 | + | (7) Off-premises ABC permit. – An off-premises malt beverage permit, or 34 | |
| 47 | + | off-premises unfortified or fortified wine permit issued pursuant to Chapter 35 | |
| 48 | + | 18B of the General Statutes. 36 | |
| 49 | + | H.B. 999 | |
| 50 | + | Apr 10, 2025 | |
| 51 | + | HOUSE PRINCIPAL CLERK General Assembly Of North Carolina Session 2025 | |
| 52 | + | Page 2 DRH40330-BAxfa-10 | |
| 53 | + | (8) On-premises ABC permit. – An on-premises malt beverage permit, 1 | |
| 54 | + | on-premises unfortified or fortified wine permit, or mixed beverages permit 2 | |
| 55 | + | issued pursuant to Chapter 18B of the General Statutes. 3 | |
| 56 | + | (9) Operator. – A person licensed by the Commission who owns, leases, or 4 | |
| 57 | + | otherwise controls a video gaming terminal for which a video gaming terminal 5 | |
| 58 | + | permit has been issued by the Commission. 6 | |
| 59 | + | (10) Video gaming games. – Electronically simulated games of chance approved 7 | |
| 60 | + | by the Commission that are displayed and played on permitted video gaming 8 | |
| 61 | + | terminals. 9 | |
| 62 | + | (11) Video gaming merchant. – A person that meets all of the following criteria: 10 | |
| 63 | + | a. Is not primarily engaged in the business of offering video gaming 11 | |
| 58 | 64 | terminals. 12 | |
| 59 | - | (11) Video gaming merchant. – A person that meets all of the following criteria: 13 | |
| 60 | - | a. Is not primarily engaged in the business of offering video gaming 14 | |
| 61 | - | terminals. 15 | |
| 62 | - | b. Holds a valid on-premises or an off-premises ABC permit issued by 16 | |
| 63 | - | the Alcohol Beverage Commission, or a certificate of authority issued 17 | |
| 64 | - | by the Commission under Article 5 of this Chapter for areas that have 18 | |
| 65 | - | not approved the issuance of permits under Chapter 18B of the General 19 | |
| 66 | - | Statutes. 20 | |
| 67 | - | c. Is licensed by the Commission under this Article. 21 | |
| 68 | - | d. With whom an operator has contracted to do the following: 22 | |
| 69 | - | 1. Provide video gaming terminals for the placing of wagers and 23 | |
| 70 | - | payment of winnings in accordance with this Article. 24 | |
| 71 | - | 2. Pay cash prizes for video gaming games in accordance with 25 | |
| 72 | - | this Article. 26 | |
| 73 | - | (12) Video gaming terminal. – A device operated under the authority of the 27 | |
| 74 | - | Commission that shall be exempt under G.S. 14-306.1A and is any electronic 28 | |
| 75 | - | computerized video game machine that, upon the insertion of cash or a lottery 29 | |
| 76 | - | share, is available to play a video gaming game authorized by the Commission 30 | |
| 77 | - | and which uses a video display and microprocessors in which, by chance, the 31 | |
| 78 | - | player may receive free games or credits that can be redeemed for cash. The 32 | |
| 79 | - | term does not include a device that directly dispenses coins, cash, or tokens. 33 | |
| 80 | - | (13) Video gaming terminal permit. – A permanently affixed tag or other device 34 | |
| 81 | - | issued to a licensed operator for each video gaming terminal approved by and 35 | |
| 82 | - | registered with the Commission. 36 | |
| 83 | - | (14) Wager. – A sum of cash, or a redeemable share, risked on an uncertain 37 | |
| 84 | - | occurrence on any video gaming game. 38 | |
| 85 | - | "§ 18C-1101. Reserved for future codification purposes. 39 | |
| 86 | - | "§ 18C-1102. Video gaming. 40 | |
| 87 | - | (a) The Commission shall determine that video gaming games are a type of lottery game 41 | |
| 88 | - | in this State and shall license operators and video gaming merchants to operate video gaming 42 | |
| 89 | - | games for play by the public. Play of video gaming games shall be deemed a share for purposes 43 | |
| 90 | - | of this Chapter, shall be exempt from G.S. 18C-131(c), and shall be played only on video gaming 44 | |
| 91 | - | terminals with a valid video gaming terminal permit. Except as otherwise provided in this Article, 45 | |
| 92 | - | the provisions of this Chapter shall apply to operation and play of video gaming games in this 46 | |
| 93 | - | State. 47 | |
| 94 | - | (b) No video gaming terminals may be placed on any property owned or controlled by a 48 | |
| 95 | - | governmental entity. 49 | |
| 96 | - | (c) Video gaming terminals and associated equipment shall be connected to a central 50 | |
| 97 | - | monitoring system at all times during play and as otherwise determined by the Commission. 51 General Assembly Of North Carolina Session 2025 | |
| 98 | - | House Bill 999-First Edition Page 3 | |
| 99 | - | (d) The Commission shall allow each video gaming operator to operate up to three video 1 | |
| 100 | - | gaming terminals per location and may allow up to an additional three video gaming terminals 2 | |
| 101 | - | per location based upon a net machine revenue benchmark established by the Commission. 3 | |
| 102 | - | Nothing in this subsection shall limit the Commission from reducing the number of video gaming 4 | |
| 103 | - | terminals allowed based upon the net machine revenue benchmark. 5 | |
| 104 | - | (e) Each video gaming terminal for the placing of wagers and payment of winnings shall 6 | |
| 105 | - | comply with all of the following: 7 | |
| 106 | - | (1) Have affixed a valid video gaming terminal permit. 8 | |
| 107 | - | (2) Be located in a building that is more than 1,000 feet of any of the following: 9 | |
| 108 | - | a. A church. 10 | |
| 109 | - | b. A public school. 11 | |
| 110 | - | c. Any nonpublic school as defined by Part 1 or 2 of Article 39 of Chapter 12 | |
| 111 | - | 115C of the General Statutes. 13 | |
| 112 | - | (3) Be located in plain view of the following: 14 | |
| 113 | - | a. Other patrons and customers of the video gaming merchant. 15 | |
| 114 | - | b. A surveillance camera that is operated continuously. 16 | |
| 115 | - | (4) Be located within the premises of the video gaming merchant as identified in 17 | |
| 116 | - | their ABC license. 18 | |
| 117 | - | (f) Subdivision (e)(2) of this section shall not apply if the church, public school, or 19 | |
| 118 | - | nonpublic school locates within 1,000 feet of the video gaming merchant after the video gaming 20 | |
| 119 | - | merchant began using the premises for video gaming terminals. 21 | |
| 120 | - | (g) Operators placing video gaming terminals for play in this State may only do the 22 | |
| 121 | - | following: 23 | |
| 122 | - | (1) Purchase, lease, or otherwise obtain video gaming terminals and associated 24 | |
| 123 | - | equipment from manufacturers licensed under this Article. 25 | |
| 124 | - | (2) Contract with licensed video gaming merchants for placement of video 26 | |
| 125 | - | gaming terminals for play by the public with the contract being in a form 27 | |
| 126 | - | approved by the Commission. 28 | |
| 127 | - | (h) Prizes for play of video gaming terminals shall be issued by a share that is redeemable 29 | |
| 128 | - | in accordance with the contract between the operator and the video gaming merchant. 30 | |
| 129 | - | "§ 18C-1103. Allocation of revenues. 31 | |
| 130 | - | The Commission shall determine the procedures for the monitoring, collecting, and remitting 32 | |
| 131 | - | of net machine revenues from video gaming terminals. The portion of net machine revenues 33 | |
| 132 | - | allocated to the Commission in subdivisions (1) and (2) of this section shall be transferred before 34 | |
| 133 | - | any other allocations are made from the net machine revenues and deposited into an account as 35 | |
| 134 | - | directed by the Commission. The net machine revenues shall be distributed by the Commission 36 | |
| 135 | - | in conformity with the following: 37 | |
| 136 | - | (1) Thirty-two percent (32%) of the total net machine revenues shall be 38 | |
| 137 | - | transferred to the Commission. The Commission shall transfer amounts 39 | |
| 138 | - | allocated under this subdivision to the North Carolina Video Gaming Fund 40 | |
| 139 | - | established under G.S. 18C-1104. 41 | |
| 140 | - | (2) Eight percent (8%) of the total net revenues shall be transferred to the 42 | |
| 141 | - | Commission to be credited in the following priority: 43 | |
| 142 | - | a. Costs of the Commission associated with administering this Article. 44 | |
| 143 | - | b. Costs associated with the central monitoring system. 45 | |
| 144 | - | c. Costs of the Department of Public Safety, Alcohol Law Enforcement 46 | |
| 145 | - | Division, associated with enforcement of this Article, which shall 47 | |
| 146 | - | include a transfer of at least three million dollars ($3,000,000) 48 | |
| 147 | - | annually. 49 | |
| 148 | - | d. One million dollars ($1,000,000) annually to the Department of Public 50 | |
| 149 | - | Safety for grants to local law enforcement to combat illegal gaming, 51 General Assembly Of North Carolina Session 2025 | |
| 150 | - | Page 4 House Bill 999-First Edition | |
| 151 | - | to be awarded upon recommendation by the Governor's Crime 1 | |
| 152 | - | Commission. 2 | |
| 153 | - | e. Two hundred twenty-five thousand dollars ($225,000) annually to the 3 | |
| 154 | - | Conference of District Attorneys for an attorney position dedicated to 4 | |
| 155 | - | the prosecution of illegal gambling activities. 5 | |
| 156 | - | f Remaining proceeds to the North Carolina Video Gaming Fund 6 | |
| 157 | - | established under G.S. 18C-1104. 7 | |
| 158 | - | (3) Thirty percent (30%) of the net machine revenues shall be allocated to 8 | |
| 159 | - | operators. 9 | |
| 160 | - | (4) Thirty percent (30%) of the net machine revenues shall be allocated to video 10 | |
| 161 | - | gaming merchants. 11 | |
| 162 | - | "§ 18C-1104. North Carolina Video Gaming Fund. 12 | |
| 163 | - | (a) An enterprise fund, to be known as the North Carolina Video Gaming Fund, is created 13 | |
| 164 | - | within the State treasury consisting of the transfer of net machine revenues by the Commission 14 | |
| 165 | - | under this Article, unclaimed prizes deemed abandoned under G.S. 18C-1115(e), licensing fees 15 | |
| 166 | - | collected by the Commission under this Article, and any interest earned on those funds. 16 | |
| 167 | - | (b) The General Assembly shall appropriate the monies in the North Carolina Video 17 | |
| 168 | - | Gaming Fund annually in the Current Operations Appropriations Act based upon estimates of 18 | |
| 169 | - | the net machine revenue from video gaming terminals to the North Carolina Video Gaming Fund. 19 | |
| 170 | - | (c) A security interest shall not be granted in any funds appropriated pursuant to this 20 | |
| 171 | - | section. 21 | |
| 172 | - | (d) Unclaimed prizes deemed abandoned under G.S. 18C-1115(e) shall be transferred to 22 | |
| 173 | - | the Commission who shall transfer the amount to the North Carolina Video Gaming Fund. 23 | |
| 174 | - | Unclaimed prize money allocated to the North Carolina Video Gaming Fund under this 24 | |
| 175 | - | subsection shall be considered separate from, and shall not reduce, the allocations made to the 25 | |
| 176 | - | Commission under G.S. 18C-1103. 26 | |
| 177 | - | "§§ 18C-1105 through 18C-1109. Reserved for future codification purposes. 27 | |
| 178 | - | "Part 2. Licenses and Permits. 28 | |
| 179 | - | "§ 18C-1110. Video gaming permit required on video gaming terminals. 29 | |
| 180 | - | (a) Every video gaming terminal shall have affixed to it a video gaming terminal permit 30 | |
| 181 | - | prior to play in the manner set forth by the Commission. The placement of the video gaming 31 | |
| 182 | - | terminal permit represents that the machine has been registered, inspected, and approved for 32 | |
| 183 | - | operation in the State. 33 | |
| 184 | - | (b) The Commission shall issue the video gaming terminal permit based on the number 34 | |
| 185 | - | of approved video gaming terminals registered with the Commission. The initial video gaming 35 | |
| 186 | - | terminal permit issued for each machine shall be valid for two years, and each successive permit 36 | |
| 187 | - | shall be issued annually thereafter. 37 | |
| 188 | - | (c) It shall be unlawful for a person other than authorized Commission personnel to affix 38 | |
| 189 | - | or remove a video gaming permit. No video gaming terminal may be transported out of this State 39 | |
| 190 | - | until the video gaming permit has been removed. 40 | |
| 191 | - | (d) Operators and video gaming merchants must make video gaming terminals and 41 | |
| 192 | - | associated equipment available for inspection by the Commission. No video gaming terminal 42 | |
| 193 | - | shall be issued a video gaming permit unless the software and hardware of the video gaming 43 | |
| 194 | - | terminal and associated equipment are compatible with the Commission's central monitoring 44 | |
| 195 | - | system and all games installed on the video gaming terminal are approved by the Commission. 45 | |
| 196 | - | (e) Any video gaming terminal that does not display a current and valid video gaming 46 | |
| 197 | - | terminal permit as required by this Article is subject to G.S. 14-298. 47 | |
| 198 | - | "§§ 18C-1111 through 18C-1113. Reserved for future codification purposes. 48 | |
| 199 | - | "§ 18C-1114. Minimum qualifications for all licensees. 49 | |
| 200 | - | (a) Except as provided in subsection (b) of this section, an applicant whom the 50 | |
| 201 | - | Commission determines is qualified to receive a license under this Article shall be issued a 51 General Assembly Of North Carolina Session 2025 | |
| 202 | - | House Bill 999-First Edition Page 5 | |
| 203 | - | license. A person shall not engage in the manufacture, operation, service, or placement for play 1 | |
| 204 | - | by the public of any video gaming terminal without a license issued by the Commission under 2 | |
| 205 | - | this Article. 3 | |
| 206 | - | (b) The Commission shall not approve an applicant for licensure if any of the following 4 | |
| 207 | - | apply at the time of license: 5 | |
| 208 | - | (1) The applicant meets one or more of the following: 6 | |
| 209 | - | a. Has been convicted of a felony in any state or federal court of the 7 | |
| 210 | - | United States within 10 years of issuance of the license. 8 | |
| 211 | - | b. Employs officers or directors who have been convicted of a felony in 9 | |
| 212 | - | any state or federal court of the United States within 10 years of 10 | |
| 213 | - | issuance of the license. 11 | |
| 214 | - | c. Has completed a sentence for a felony in any state or federal court of 12 | |
| 215 | - | the United States within 10 years of issuance of the license. 13 | |
| 216 | - | d. Employs officers or directors who have completed a sentence for a 14 | |
| 217 | - | felony in any state or federal court of the United States within 10 years 15 | |
| 218 | - | of issuance of the license. 16 | |
| 219 | - | (2) The applicant is less than 21 years of age. 17 | |
| 220 | - | (3) The applicant has falsified the application. 18 | |
| 221 | - | (4) The applicant is not current in filing all applicable tax returns to the State and 19 | |
| 222 | - | in payment of all taxes, interest, and penalties owed to the State, excluding 20 | |
| 223 | - | items under formal appeal under applicable statutes. Upon request of the 21 | |
| 224 | - | Director, the Department of Revenue shall provide this information about a 22 | |
| 225 | - | specific person to the Commission. 23 | |
| 226 | - | (5) The applicant fails to provide all information and documentation requested by 24 | |
| 227 | - | the Commission. 25 | |
| 228 | - | (6) The Commission is not satisfied that the applicant is all of the following: 26 | |
| 229 | - | a. A person of good character, honesty, and integrity. 27 | |
| 230 | - | b. A person whose background, including criminal record, reputation, 28 | |
| 231 | - | and associations, does not pose a threat to the public interest of the 29 | |
| 232 | - | State or to the security and integrity of the Commission. 30 | |
| 233 | - | c. A person who, either individually or through employees, demonstrates 31 | |
| 234 | - | business ability and experience to establish, operate, and maintain the 32 | |
| 235 | - | business for the type of license for which the application is made. 33 | |
| 236 | - | d. A person who demonstrates adequate financing for the business 34 | |
| 237 | - | proposed under the type of license for which the application is made. 35 | |
| 238 | - | (7) The applicant resides in the same household as a member or employee of the 36 | |
| 239 | - | Commission. 37 | |
| 240 | - | (8) The applicant is an employee, director, officer, partner, or proprietor of 38 | |
| 241 | - | another manufacturer, operator, or video gaming merchant. 39 | |
| 242 | - | (c) The applicant shall furnish all information, documents, certifications, consents, 40 | |
| 243 | - | waivers, individual history forms, and other materials required or requested by the Commission 41 | |
| 244 | - | for purposes of determining qualification for that type of license. If the applicant is a public 42 | |
| 245 | - | company, the applicant shall file with the Commission a copy of any disclosure statement 43 | |
| 246 | - | involving ownership of the public company required to be filed with the United States Securities 44 | |
| 247 | - | and Exchange Commission. 45 | |
| 248 | - | (d) The applicant shall submit to a background investigation, including each partner, 46 | |
| 249 | - | director, officer, and all stockholders of five percent (5%) or more of any business entity, except 47 | |
| 250 | - | for institutional investors. The application shall be accompanied by a fee to cover the cost of the 48 | |
| 251 | - | criminal and financial record check conducted by the Commission. 49 | |
| 252 | - | (e) The burden of proof for establishing qualification under this section shall be on the 50 | |
| 253 | - | applicant. 51 General Assembly Of North Carolina Session 2025 | |
| 254 | - | Page 6 House Bill 999-First Edition | |
| 65 | + | b. Holds a valid on-premises or an off-premises ABC permit issued by 13 | |
| 66 | + | the Alcohol Beverage Commission, or a certificate of authority issued 14 | |
| 67 | + | by the Commission under Article 5 of this Chapter for areas that have 15 | |
| 68 | + | not approved the issuance of permits under Chapter 18B of the General 16 | |
| 69 | + | Statutes. 17 | |
| 70 | + | c. Is licensed by the Commission under this Article. 18 | |
| 71 | + | d. With whom an operator has contracted to do the following: 19 | |
| 72 | + | 1. Provide video gaming terminals for the placing of wagers and 20 | |
| 73 | + | payment of winnings in accordance with this Article. 21 | |
| 74 | + | 2. Pay cash prizes for video gaming games in accordance with 22 | |
| 75 | + | this Article. 23 | |
| 76 | + | (12) Video gaming terminal. – A device operated under the authority of the 24 | |
| 77 | + | Commission that shall be exempt under G.S. 14-306.1A and is any electronic 25 | |
| 78 | + | computerized video game machine that, upon the insertion of cash or a lottery 26 | |
| 79 | + | share, is available to play a video gaming game authorized by the Commission 27 | |
| 80 | + | and which uses a video display and microprocessors in which, by chance, the 28 | |
| 81 | + | player may receive free games or credits that can be redeemed for cash. The 29 | |
| 82 | + | term does not include a device that directly dispenses coins, cash, or tokens. 30 | |
| 83 | + | (13) Video gaming terminal permit. – A permanently affixed tag or other device 31 | |
| 84 | + | issued to a licensed operator for each video gaming terminal approved by and 32 | |
| 85 | + | registered with the Commission. 33 | |
| 86 | + | (14) Wager. – A sum of cash, or a redeemable share, risked on an uncertain 34 | |
| 87 | + | occurrence on any video gaming game. 35 | |
| 88 | + | "§ 18C-1101. Reserved for future codification purposes. 36 | |
| 89 | + | "§ 18C-1102. Video gaming. 37 | |
| 90 | + | (a) The Commission shall determine that video gaming games are a type of lottery game 38 | |
| 91 | + | in this State and shall license operators and video gaming merchants to operate video gaming 39 | |
| 92 | + | games for play by the public. Play of video gaming games shall be deemed a share for purposes 40 | |
| 93 | + | of this Chapter, shall be exempt from G.S. 18C-131(c), and shall be played only on video gaming 41 | |
| 94 | + | terminals with a valid video gaming terminal permit. Except as otherwise provided in this Article, 42 | |
| 95 | + | the provisions of this Chapter shall apply to operation and play of video gaming games in this 43 | |
| 96 | + | State. 44 | |
| 97 | + | (b) No video gaming terminals may be placed on any property owned or controlled by a 45 | |
| 98 | + | governmental entity. 46 | |
| 99 | + | (c) Video gaming terminals and associated equipment shall be connected to a central 47 | |
| 100 | + | monitoring system at all times during play and as otherwise determined by the Commission. 48 | |
| 101 | + | (d) The Commission shall allow each video gaming operator to operate up to three video 49 | |
| 102 | + | gaming terminals per location and may allow up to an additional three video gaming terminals 50 | |
| 103 | + | per location based upon a net machine revenue benchmark established by the Commission. 51 General Assembly Of North Carolina Session 2025 | |
| 104 | + | DRH40330-BAxfa-10 Page 3 | |
| 105 | + | Nothing in this subsection shall limit the Commission from reducing the number of video gaming 1 | |
| 106 | + | terminals allowed based upon the net machine revenue benchmark. 2 | |
| 107 | + | (e) Each video gaming terminal for the placing of wagers and payment of winnings shall 3 | |
| 108 | + | comply with all of the following: 4 | |
| 109 | + | (1) Have affixed a valid video gaming terminal permit. 5 | |
| 110 | + | (2) Be located in a building that is more than 1,000 feet of any of the following: 6 | |
| 111 | + | a. A church. 7 | |
| 112 | + | b. A public school. 8 | |
| 113 | + | c. Any nonpublic school as defined by Part 1 or 2 of Article 39 of Chapter 9 | |
| 114 | + | 115C of the General Statutes. 10 | |
| 115 | + | (3) Be located in plain view of the following: 11 | |
| 116 | + | a. Other patrons and customers of the video gaming merchant. 12 | |
| 117 | + | b. A surveillance camera that is operated continuously. 13 | |
| 118 | + | (4) Be located within the premises of the video gaming merchant as identified in 14 | |
| 119 | + | their ABC license. 15 | |
| 120 | + | (f) Subdivision (e)(2) of this section shall not apply if the church, public school, or 16 | |
| 121 | + | nonpublic school locates within 1,000 feet of the video gaming merchant after the video gaming 17 | |
| 122 | + | merchant began using the premises for video gaming terminals. 18 | |
| 123 | + | (g) Operators placing video gaming terminals for play in this State may only do the 19 | |
| 124 | + | following: 20 | |
| 125 | + | (1) Purchase, lease, or otherwise obtain video gaming terminals and associated 21 | |
| 126 | + | equipment from manufacturers licensed under this Article. 22 | |
| 127 | + | (2) Contract with licensed video gaming merchants for placement of video 23 | |
| 128 | + | gaming terminals for play by the public with the contract being in a form 24 | |
| 129 | + | approved by the Commission. 25 | |
| 130 | + | (h) Prizes for play of video gaming terminals shall be issued by a share that is redeemable 26 | |
| 131 | + | in accordance with the contract between the operator and the video gaming merchant. 27 | |
| 132 | + | "§ 18C-1103. Allocation of revenues. 28 | |
| 133 | + | The Commission shall determine the procedures for the monitoring, collecting, and remitting 29 | |
| 134 | + | of net machine revenues from video gaming terminals. The portion of net machine revenues 30 | |
| 135 | + | allocated to the Commission in subdivisions (1) and (2) of this section shall be transferred before 31 | |
| 136 | + | any other allocations are made from the net machine revenues and deposited into an account as 32 | |
| 137 | + | directed by the Commission. The net machine revenues shall be distributed by the Commission 33 | |
| 138 | + | in conformity with the following: 34 | |
| 139 | + | (1) Thirty-two percent (32%) of the total net machine revenues shall be 35 | |
| 140 | + | transferred to the Commission. The Commission shall transfer amounts 36 | |
| 141 | + | allocated under this subdivision to the North Carolina Video Gaming Fund 37 | |
| 142 | + | established under G.S. 18C-1104. 38 | |
| 143 | + | (2) Eight percent (8%) of the total net revenues shall be transferred to the 39 | |
| 144 | + | Commission to be credited in the following priority: 40 | |
| 145 | + | a. Costs of the Commission associated with administering this Article. 41 | |
| 146 | + | b. Costs associated with the central monitoring system. 42 | |
| 147 | + | c. Costs of the Department of Public Safety, Alcohol Law Enforcement 43 | |
| 148 | + | Division, associated with enforcement of this Article, which shall 44 | |
| 149 | + | include a transfer of at least three million dollars ($3,000,000) 45 | |
| 150 | + | annually. 46 | |
| 151 | + | d. One million dollars ($1,000,000) annually to the Department of Public 47 | |
| 152 | + | Safety for grants to local law enforcement to combat illegal gaming, 48 | |
| 153 | + | to be awarded upon recommendation by the Governor's Crime 49 | |
| 154 | + | Commission. 50 General Assembly Of North Carolina Session 2025 | |
| 155 | + | Page 4 DRH40330-BAxfa-10 | |
| 156 | + | e. Two hundred twenty-five thousand dollars ($225,000) annually to the 1 | |
| 157 | + | Conference of District Attorneys for an attorney position dedicated to 2 | |
| 158 | + | the prosecution of illegal gambling activities. 3 | |
| 159 | + | f Remaining proceeds to the North Carolina Video Gaming Fund 4 | |
| 160 | + | established under G.S. 18C-1104. 5 | |
| 161 | + | (3) Thirty percent (30%) of the net machine revenues shall be allocated to 6 | |
| 162 | + | operators. 7 | |
| 163 | + | (4) Thirty percent (30%) of the net machine revenues shall be allocated to video 8 | |
| 164 | + | gaming merchants. 9 | |
| 165 | + | "§ 18C-1104. North Carolina Video Gaming Fund. 10 | |
| 166 | + | (a) An enterprise fund, to be known as the North Carolina Video Gaming Fund, is created 11 | |
| 167 | + | within the State treasury consisting of the transfer of net machine revenues by the Commission 12 | |
| 168 | + | under this Article, unclaimed prizes deemed abandoned under G.S. 18C-1115(e), licensing fees 13 | |
| 169 | + | collected by the Commission under this Article, and any interest earned on those funds. 14 | |
| 170 | + | (b) The General Assembly shall appropriate the monies in the North Carolina Video 15 | |
| 171 | + | Gaming Fund annually in the Current Operations Appropriations Act based upon estimates of 16 | |
| 172 | + | the net machine revenue from video gaming terminals to the North Carolina Video Gaming Fund. 17 | |
| 173 | + | (c) A security interest shall not be granted in any funds appropriated pursuant to this 18 | |
| 174 | + | section. 19 | |
| 175 | + | (d) Unclaimed prizes deemed abandoned under G.S. 18C-1115(e) shall be transferred to 20 | |
| 176 | + | the Commission who shall transfer the amount to the North Carolina Video Gaming Fund. 21 | |
| 177 | + | Unclaimed prize money allocated to the North Carolina Video Gaming Fund under this 22 | |
| 178 | + | subsection shall be considered separate from, and shall not reduce, the allocations made to the 23 | |
| 179 | + | Commission under G.S. 18C-1103. 24 | |
| 180 | + | "§§ 18C-1105 through 18C-1109. Reserved for future codification purposes. 25 | |
| 181 | + | "Part 2. Licenses and Permits. 26 | |
| 182 | + | "§ 18C-1110. Video gaming permit required on video gaming terminals. 27 | |
| 183 | + | (a) Every video gaming terminal shall have affixed to it a video gaming terminal permit 28 | |
| 184 | + | prior to play in the manner set forth by the Commission. The placement of the video gaming 29 | |
| 185 | + | terminal permit represents that the machine has been registered, inspected, and approved for 30 | |
| 186 | + | operation in the State. 31 | |
| 187 | + | (b) The Commission shall issue the video gaming terminal permit based on the number 32 | |
| 188 | + | of approved video gaming terminals registered with the Commission. The initial video gaming 33 | |
| 189 | + | terminal permit issued for each machine shall be valid for two years, and each successive permit 34 | |
| 190 | + | shall be issued annually thereafter. 35 | |
| 191 | + | (c) It shall be unlawful for a person other than authorized Commission personnel to affix 36 | |
| 192 | + | or remove a video gaming permit. No video gaming terminal may be transported out of this State 37 | |
| 193 | + | until the video gaming permit has been removed. 38 | |
| 194 | + | (d) Operators and video gaming merchants must make video gaming terminals and 39 | |
| 195 | + | associated equipment available for inspection by the Commission. No video gaming terminal 40 | |
| 196 | + | shall be issued a video gaming permit unless the software and hardware of the video gaming 41 | |
| 197 | + | terminal and associated equipment are compatible with the Commission's central monitoring 42 | |
| 198 | + | system and all games installed on the video gaming terminal are approved by the Commission. 43 | |
| 199 | + | (e) Any video gaming terminal that does not display a current and valid video gaming 44 | |
| 200 | + | terminal permit as required by this Article is subject to G.S. 14-298. 45 | |
| 201 | + | "§§ 18C-1111 through 18C-1113. Reserved for future codification purposes. 46 | |
| 202 | + | "§ 18C-1114. Minimum qualifications for all licensees. 47 | |
| 203 | + | (a) Except as provided in subsection (b) of this section, an applicant whom the 48 | |
| 204 | + | Commission determines is qualified to receive a license under this Article shall be issued a 49 | |
| 205 | + | license. A person shall not engage in the manufacture, operation, service, or placement for play 50 General Assembly Of North Carolina Session 2025 | |
| 206 | + | DRH40330-BAxfa-10 Page 5 | |
| 207 | + | by the public of any video gaming terminal without a license issued by the Commission under 1 | |
| 208 | + | this Article. 2 | |
| 209 | + | (b) The Commission shall not approve an applicant for licensure if any of the following 3 | |
| 210 | + | apply at the time of license: 4 | |
| 211 | + | (1) The applicant meets one or more of the following: 5 | |
| 212 | + | a. Has been convicted of a felony in any state or federal court of the 6 | |
| 213 | + | United States within 10 years of issuance of the license. 7 | |
| 214 | + | b. Employs officers or directors who have been convicted of a felony in 8 | |
| 215 | + | any state or federal court of the United States within 10 years of 9 | |
| 216 | + | issuance of the license. 10 | |
| 217 | + | c. Has completed a sentence for a felony in any state or federal court of 11 | |
| 218 | + | the United States within 10 years of issuance of the license. 12 | |
| 219 | + | d. Employs officers or directors who have completed a sentence for a 13 | |
| 220 | + | felony in any state or federal court of the United States within 10 years 14 | |
| 221 | + | of issuance of the license. 15 | |
| 222 | + | (2) The applicant is less than 21 years of age. 16 | |
| 223 | + | (3) The applicant has falsified the application. 17 | |
| 224 | + | (4) The applicant is not current in filing all applicable tax returns to the State and 18 | |
| 225 | + | in payment of all taxes, interest, and penalties owed to the State, excluding 19 | |
| 226 | + | items under formal appeal under applicable statutes. Upon request of the 20 | |
| 227 | + | Director, the Department of Revenue shall provide this information about a 21 | |
| 228 | + | specific person to the Commission. 22 | |
| 229 | + | (5) The applicant fails to provide all information and documentation requested by 23 | |
| 230 | + | the Commission. 24 | |
| 231 | + | (6) The Commission is not satisfied that the applicant is all of the following: 25 | |
| 232 | + | a. A person of good character, honesty, and integrity. 26 | |
| 233 | + | b. A person whose background, including criminal record, reputation, 27 | |
| 234 | + | and associations, does not pose a threat to the public interest of the 28 | |
| 235 | + | State or to the security and integrity of the Commission. 29 | |
| 236 | + | c. A person who, either individually or through employees, demonstrates 30 | |
| 237 | + | business ability and experience to establish, operate, and maintain the 31 | |
| 238 | + | business for the type of license for which the application is made. 32 | |
| 239 | + | d. A person who demonstrates adequate financing for the business 33 | |
| 240 | + | proposed under the type of license for which the application is made. 34 | |
| 241 | + | (7) The applicant resides in the same household as a member or employee of the 35 | |
| 242 | + | Commission. 36 | |
| 243 | + | (8) The applicant is an employee, director, officer, partner, or proprietor of 37 | |
| 244 | + | another manufacturer, operator, or video gaming merchant. 38 | |
| 245 | + | (c) The applicant shall furnish all information, documents, certifications, consents, 39 | |
| 246 | + | waivers, individual history forms, and other materials required or requested by the Commission 40 | |
| 247 | + | for purposes of determining qualification for that type of license. If the applicant is a public 41 | |
| 248 | + | company, the applicant shall file with the Commission a copy of any disclosure statement 42 | |
| 249 | + | involving ownership of the public company required to be filed with the United States Securities 43 | |
| 250 | + | and Exchange Commission. 44 | |
| 251 | + | (d) The applicant shall submit to a background investigation, including each partner, 45 | |
| 252 | + | director, officer, and all stockholders of five percent (5%) or more of any business entity, except 46 | |
| 253 | + | for institutional investors. The application shall be accompanied by a fee to cover the cost of the 47 | |
| 254 | + | criminal and financial record check conducted by the Commission. 48 | |
| 255 | + | (e) The burden of proof for establishing qualification under this section shall be on the 49 | |
| 256 | + | applicant. 50 General Assembly Of North Carolina Session 2025 | |
| 257 | + | Page 6 DRH40330-BAxfa-10 | |
| 255 | 258 | (f) An operator shall not give anything of value, including a loan or a financing 1 | |
| 256 | 259 | arrangement, to any video gaming merchant as an incentive or inducement to locate video gaming 2 | |
| 257 | 260 | terminals in a specific location. The Commission shall adopt additional rules governing the 3 | |
| 258 | 261 | exchange of gifts, loans and other financing arrangements, gratuities, special discounts, favors, 4 | |
| 259 | 262 | hospitality, or service between licensees. 5 | |
| 260 | 263 | (g) In addition to the requirements provided in subsection (b) of this section, the 6 | |
| 261 | 264 | Commission shall not approve an application for an operator's license unless at least one of the 7 | |
| 262 | 265 | following applies: 8 | |
| 263 | 266 | (1) If an individual, the applicant has been (i) a resident of this State and (ii) an 9 | |
| 264 | 267 | amusement or game operator in this State for at least two years immediately 10 | |
| 265 | 268 | preceding the application, without interruption. 11 | |
| 266 | 269 | (2) If a business entity, the applicant meets all of the following criteria: 12 | |
| 267 | 270 | a. The applicant has (i) maintained a physical office location and (ii) has 13 | |
| 268 | 271 | legally been an amusement or game operator in this State for at least 14 | |
| 269 | 272 | two years immediately preceding the application, without interruption. 15 | |
| 270 | 273 | b. The applicant has been either of the following: 16 | |
| 271 | 274 | 1. Incorporated or organized in this State for at least two years 17 | |
| 272 | 275 | immediately preceding the application, without interruption. 18 | |
| 273 | 276 | 2. Registered to do business in this State for at least two years 19 | |
| 274 | 277 | immediately preceding the application, without interruption. 20 | |
| 275 | 278 | (h) In addition to the requirements provided in subsection (g) of this section, the 21 | |
| 276 | 279 | Commission shall not approve an application for an operator's license if, within two years of 22 | |
| 277 | 280 | submitting an application, a change of control of the applicant has occurred such that a foreign 23 | |
| 278 | 281 | individual or foreign business entity acquired a majority ownership of the applicant or otherwise 24 | |
| 279 | 282 | gained effective control of the applicant. For the purposes of this subsection, the term "foreign 25 | |
| 280 | 283 | individual" means an individual who does not meet the requirements of subdivision (1) of 26 | |
| 281 | 284 | subsection (g) of this section and the term "foreign business entity" means a business entity that 27 | |
| 282 | 285 | does not meet the requirements of subdivision (2) of subsection (g) of this section. 28 | |
| 283 | 286 | (i) The Commission, for cause, may revoke any license issued under this Article. For 29 | |
| 284 | 287 | purposes of this section, for cause includes any change in circumstances that would have resulted 30 | |
| 285 | 288 | in the licensee being ineligible for approval of a license at the time of application. 31 | |
| 286 | 289 | "§ 18C-1115. Advertising, marketing, and prizes. 32 | |
| 287 | 290 | (a) All advertisement of video gaming games and video gaming terminals is prohibited. 33 | |
| 288 | 291 | This prohibition includes: 34 | |
| 289 | 292 | (1) The placement of signage on a building advertising that video gaming 35 | |
| 290 | 293 | terminals are located within the building. 36 | |
| 291 | 294 | (2) Websites, social media posts, or other internet-based statements by a licensee. 37 | |
| 292 | 295 | (3) Online ads. 38 | |
| 293 | 296 | (4) Television, radio, satellite television, cable television, or any similar 39 | |
| 294 | 297 | mediums. 40 | |
| 295 | 298 | (5) Mailings, emails, texts, phone calls, or other direct contact methods, unless 41 | |
| 296 | 299 | the individual has explicitly consented to the contact. 42 | |
| 297 | 300 | (6) Any other advertising medium. 43 | |
| 298 | 301 | (b) Notwithstanding subsection (a) of this section, every video gaming merchant shall 44 | |
| 299 | 302 | post a sign visible prior to entry that video gaming terminals are at the location. The Commission 45 | |
| 300 | 303 | shall provide a standard sign to be used by all video gaming merchants and shall establish policies 46 | |
| 301 | 304 | regarding posting of the standard sign. 47 | |
| 302 | 305 | (c) Each video gaming merchant must make gaming materials readily available to players 48 | |
| 303 | 306 | and other patrons within the building where video gaming terminals are located. The materials 49 | |
| 304 | 307 | shall provide information about, or links to, resources for responsible gaming and gambling 50 | |
| 305 | 308 | addiction and prevention. 51 General Assembly Of North Carolina Session 2025 | |
| 306 | - | ||
| 309 | + | DRH40330-BAxfa-10 Page 7 | |
| 307 | 310 | (d) The payment of winnings from the placing of wagers on video gaming games shall 1 | |
| 308 | 311 | be a paid to the player winning the prize by either of the following means: 2 | |
| 309 | 312 | (1) Cash at the location of the video gaming terminal generating the prize. 3 | |
| 310 | 313 | (2) A redeemable share that may be inserted into video gaming terminals at the 4 | |
| 311 | 314 | same location of the video gaming terminal generating the prize for credits for 5 | |
| 312 | 315 | the play of video gaming games. Such share shall be used by the player 6 | |
| 313 | 316 | winning the prize only. 7 | |
| 314 | 317 | (e) No cash award on any individual wager shall exceed one thousand one hundred 8 | |
| 315 | 318 | ninety-nine dollars ($1,199). 9 | |
| 316 | 319 | (f) For the purposes of marketing, promotional credits may be issued solely to be used 10 | |
| 317 | 320 | on a lawful video gaming terminal. 11 | |
| 318 | 321 | (g) All winnings are subject to the State income tax. 12 | |
| 319 | 322 | "§§ 18C-1116 through 18C-1119. Reserved for future codification purposes. 13 | |
| 320 | 323 | "§ 18C-1120. Fees. 14 | |
| 321 | 324 | (a) All applications for licensure under this section shall be accompanied by an 15 | |
| 322 | 325 | application fee of two hundred fifty dollars ($250.00) plus any cost determined by the 16 | |
| 323 | 326 | Commission for the criminal and financial record checks required under this Article. The 17 | |
| 324 | 327 | Commission shall use the fees collected under this subsection to cover the costs associated with 18 | |
| 325 | 328 | reviewing the application. 19 | |
| 326 | 329 | (b) The Commission shall charge fees for an initial license as follows: 20 | |
| 327 | 330 | (1) Manufacturers. – One hundred fifty thousand dollars ($150,000). 21 | |
| 328 | 331 | (2) Operators. – Two hundred fifty thousand dollars ($250,000), plus one hundred 22 | |
| 329 | 332 | fifty dollars ($150.00) per video gaming terminal in each retail location. 23 | |
| 330 | 333 | (3) Video gaming merchants. – One thousand five hundred dollars ($1,500) per 24 | |
| 331 | 334 | retail location. 25 | |
| 332 | 335 | (c) The Commission shall charge fees for renewal of a license as follows: 26 | |
| 333 | 336 | (1) Manufacturers. – One hundred thousand dollars ($100,000). 27 | |
| 334 | 337 | (2) Operators. – One hundred thousand dollars ($100,000), plus one hundred fifty 28 | |
| 335 | 338 | dollars ($150.00) per video gaming terminal in each retail location. 29 | |
| 336 | 339 | (3) Video gaming merchants. – One thousand dollars ($1,000) per retail location. 30 | |
| 337 | 340 | (d) The initial license issued by the Commission shall be valid for two years unless the 31 | |
| 338 | 341 | license is canceled or terminated. All renewals shall be valid for one year. 32 | |
| 339 | 342 | (e) A license issued by the Commission may be transferred or assigned, provided the new 33 | |
| 340 | 343 | license holder submits a new application and associated fees required under subsection (a) of this 34 | |
| 341 | 344 | section and is approved for licensure by the Commission. 35 | |
| 342 | 345 | (f) All license fees collected pursuant to this section shall be transferred to the North 36 | |
| 343 | 346 | Carolina Video Gaming Fund established under G.S. 18C-1104. 37 | |
| 344 | 347 | "§ 18C-1121. Reserved for future codification purposes. 38 | |
| 345 | 348 | "§ 18C-1122. Multiple types of licenses. 39 | |
| 346 | 349 | (a) A manufacturer, or any affiliate company, employee, beneficiary, stockholder, 40 | |
| 347 | 350 | officer, director, member, partner, or immediate family member of a manufacturer, shall be 41 | |
| 348 | 351 | ineligible for a license to be a video gaming merchant or operator. An operator, or any affiliate 42 | |
| 349 | 352 | company, employee, beneficiary, stockholder, officer, director, member, partner, or immediate 43 | |
| 350 | 353 | family member of an operator, shall be ineligible for a license to be a manufacturer or video 44 | |
| 351 | 354 | gaming merchant. A video gaming merchant, or any affiliate company, employee, beneficiary, 45 | |
| 352 | 355 | stockholder, officer, director, member, partner, or immediate family member of a video gaming 46 | |
| 353 | 356 | merchant, shall be ineligible for a license to be a manufacturer or operator. 47 | |
| 354 | 357 | (b) When contracting for a central monitoring system under Part 3 of this Article, the 48 | |
| 355 | 358 | Commission may contract with a manufacturer if the Commission is satisfied that the 49 | |
| 356 | 359 | manufacturer shall not use any knowledge or control of the central monitoring system to 50 General Assembly Of North Carolina Session 2025 | |
| 357 | - | Page 8 | |
| 360 | + | Page 8 DRH40330-BAxfa-10 | |
| 358 | 361 | advantage that manufacturer, an operator associated with that manufacturer, or a video gaming 1 | |
| 359 | 362 | merchant with whom that manufacturer's video gaming terminals are placed. 2 | |
| 360 | 363 | (c) The Commission shall strive to have (i) no fewer than five manufacturers licensed in 3 | |
| 361 | 364 | this State at all times and (ii) no fewer than 12 operators licensed in this State at all times. 4 | |
| 362 | 365 | "§ 18C-1123. Reserved for future codification purposes. 5 | |
| 363 | 366 | "§ 18C-1124. General duties of licensees. 6 | |
| 364 | 367 | All licensees under this Article shall do all of the following: 7 | |
| 365 | 368 | (1) Promptly report to the Commission any factors or circumstances related to 8 | |
| 366 | 369 | video gaming games operated under this Article that constitute a violation of 9 | |
| 367 | 370 | this Article or any other State or federal law. 10 | |
| 368 | 371 | (2) Promptly report to the Commission if the licensee or any of the licensee's 11 | |
| 369 | 372 | officers or directors have been convicted of a felony or any gambling offense 12 | |
| 370 | 373 | in any state or federal court of the United States at any time following 13 | |
| 371 | 374 | submission of an application or receipt of a license under this Article. 14 | |
| 372 | 375 | (3) Conduct all video gaming activities and functions in a manner that does not 15 | |
| 373 | 376 | pose a threat to the public health, safety, or welfare of the citizens of this State 16 | |
| 374 | 377 | and that does not adversely affect the security and integrity of the lottery or 17 | |
| 375 | 378 | harm video gaming games. 18 | |
| 376 | 379 | (4) Hold the Commission and the State of North Carolina harmless from and 19 | |
| 377 | 380 | defend and pay for the defense of any and all claims that may be asserted 20 | |
| 378 | 381 | against a license holder, this State, or the Commission and its employees 21 | |
| 379 | 382 | arising from the license holder's participation in or operation of video gaming 22 | |
| 380 | 383 | games. 23 | |
| 381 | 384 | (5) Assist the Commission in maximizing video gaming games revenue to the 24 | |
| 382 | 385 | State. 25 | |
| 383 | 386 | (6) Maintain all records required by the Commission. 26 | |
| 384 | 387 | (7) Keep current in all payments and obligations to the Commission. 27 | |
| 385 | 388 | (8) Provide access to the Commission and law enforcement officers when 28 | |
| 386 | 389 | required under Part 4 of this Article. 29 | |
| 387 | 390 | "§§ 18C-1125 through 18C-1129. Reserved for future codification purposes. 30 | |
| 388 | 391 | "Part 3. Video Gaming Terminals. 31 | |
| 389 | 392 | "§ 18C-1130. Possession; permitting. 32 | |
| 390 | 393 | (a) Every video gaming terminal shall have a video gaming terminal permit prior to play 33 | |
| 391 | 394 | in this State and shall be placed with a video gaming merchant for play. 34 | |
| 392 | 395 | (b) Operators shall file with the Commission the location of each permitted video gaming 35 | |
| 393 | 396 | terminal and the name and address of the video gaming merchant where each video gaming 36 | |
| 394 | 397 | terminal for public play is located. 37 | |
| 395 | 398 | (c) No video gaming terminal shall be issued a permit unless the game software is 38 | |
| 396 | 399 | certified by an independent testing laboratory. The game software, and any other component 39 | |
| 397 | 400 | required by the Commission, for all video gaming terminals shall be submitted by the 40 | |
| 398 | 401 | manufacturer to an independent testing laboratory to test for compliance with Commission rules 41 | |
| 399 | 402 | and regulations, which shall include compatibility with the central monitoring system. 42 | |
| 400 | 403 | (d) Any alterations made to the game software shall receive prior approval from the 43 | |
| 401 | 404 | Commission and recertification from the independent testing laboratory prior to being made. 44 | |
| 402 | 405 | Failure to receive prior approval of any alterations from the Commission and recertification from 45 | |
| 403 | 406 | the independent testing laboratory is grounds for revocation of licensure. 46 | |
| 404 | 407 | (e) The Commission shall not limit licensure or connection to the central monitoring 47 | |
| 405 | 408 | system to one type of video gaming terminal, one manufacturer, or one operator. 48 | |
| 406 | 409 | "§ 18C-1131. Reserved for future codification purposes. 49 | |
| 407 | 410 | "§ 18C-1132. Central monitoring system. 50 General Assembly Of North Carolina Session 2025 | |
| 408 | - | ||
| 411 | + | DRH40330-BAxfa-10 Page 9 | |
| 409 | 412 | The Commission shall contract for a central monitoring system from a supplier of central 1 | |
| 410 | 413 | monitoring systems. All of the following shall apply to the central monitoring system used by 2 | |
| 411 | 414 | the Commission for video gaming terminals: 3 | |
| 412 | 415 | (1) The central monitoring system shall be linked by a communications network 4 | |
| 413 | 416 | through which all video gaming terminals shall connect to a single point of 5 | |
| 414 | 417 | commerce. 6 | |
| 415 | 418 | (2) All video gaming terminals shall be linked by a communications network to 7 | |
| 416 | 419 | the central monitoring system for purposes of monitoring and reading device 8 | |
| 417 | 420 | activities as provided in this section. 9 | |
| 418 | 421 | (3) The Commission shall routinely assess and inspect the operation of the central 10 | |
| 419 | 422 | monitoring system and shall notify licensees of any deficiencies. 11 | |
| 420 | 423 | (4) The video gaming terminal shall comply with the standards adopted by the 12 | |
| 421 | 424 | Commission with regard to the hardware and software requirements of the 13 | |
| 422 | 425 | central monitoring system. 14 | |
| 423 | 426 | (5) The central monitoring system shall be designed and operated to allow the 15 | |
| 424 | 427 | monitoring and reading of video gaming terminals for all of the following: 16 | |
| 425 | 428 | a. Compliance play. 17 | |
| 426 | 429 | b. Revenues to the State. 18 | |
| 427 | 430 | (6) The Commission may contract for the administration of the central monitoring 19 | |
| 428 | 431 | system but shall be responsible for oversight of that administration. 20 | |
| 429 | 432 | (7) The central monitoring system shall not provide for the monitoring or reading 21 | |
| 430 | 433 | of personal or financial information concerning patrons of video gaming 22 | |
| 431 | 434 | terminals. 23 | |
| 432 | 435 | "§ 18C-1133. Reserved for future codification purposes. 24 | |
| 433 | 436 | "§ 18C-1134. Play and posting of odds. 25 | |
| 434 | 437 | (a) Notwithstanding G.S. 18C-131(d), no person shall sell a share for play of a video 26 | |
| 435 | 438 | gaming terminal to a person under the age of 21 years. No person under the age of 21 years shall 27 | |
| 436 | 439 | purchase a share for play of a video gaming terminal or otherwise play a video gaming terminal. 28 | |
| 437 | 440 | (b) Video gaming terminals shall not allow more than the amount established by the 29 | |
| 438 | 441 | Commission to be played on a single wager. The odds of winning each video gaming game shall 30 | |
| 439 | 442 | be posted on or near each video gaming terminal. The manner in which the odds are calculated 31 | |
| 440 | 443 | and how the odds are posted shall be established by the Commission. 32 | |
| 441 | 444 | "§ 18C-1135. Voluntary exclusion program for video gaming. 33 | |
| 442 | 445 | (a) The Commission shall establish a voluntary exclusion program for any individual to 34 | |
| 443 | 446 | voluntarily exclude themselves from playing video gaming games. Licensees under this Article 35 | |
| 444 | 447 | shall use reasonable means to comply with the exclusion of individuals participating in the 36 | |
| 445 | 448 | voluntary exclusion program by the Commission. 37 | |
| 446 | 449 | (b) The voluntary exclusion program shall be exempt from Chapter 132 of the General 38 | |
| 447 | 450 | Statutes and shall be treated as confidential by each licensee under this Article. Licensees under 39 | |
| 448 | 451 | this Article conducting video gaming games in another state may share the information provided 40 | |
| 449 | 452 | under this section with its agents and affiliates in other states for excluding individuals 41 | |
| 450 | 453 | participating in the voluntary exclusion program. 42 | |
| 451 | 454 | "§ 18C-1136. Transportation between licensed video gaming merchant's establishments in 43 | |
| 452 | 455 | the State. 44 | |
| 453 | 456 | Any person transporting a video gaming terminal from one video gaming merchant's 45 | |
| 454 | 457 | establishment to another location, other than for servicing or repair, shall notify the Commission, 46 | |
| 455 | 458 | in the manner and form established by the Commission, prior to the transportation of the video 47 | |
| 456 | 459 | gaming terminal. 48 | |
| 457 | 460 | "§§ 18C-1137 through 18C-1139. Reserved for future codification purposes. 49 | |
| 458 | 461 | "Part 4. Enforcement. 50 | |
| 459 | 462 | "§ 18C-1140. Enforcement. 51 General Assembly Of North Carolina Session 2025 | |
| 460 | - | Page 10 | |
| 463 | + | Page 10 DRH40330-BAxfa-10 | |
| 461 | 464 | (a) The Commission shall have sole regulatory and administrative authority. The 1 | |
| 462 | 465 | Department of Public Safety, Alcohol Law Enforcement Division, and local law enforcement 2 | |
| 463 | 466 | shall provide criminal enforcement under this Article. 3 | |
| 464 | 467 | (b) The Commission shall coordinate with the Department of Public Safety, Alcohol Law 4 | |
| 465 | 468 | Enforcement Division, and local law enforcement to establish the confidential searchable 5 | |
| 466 | 469 | database required by G.S. 18C-114(d). The Commission shall strive to provide timely notices to 6 | |
| 467 | 470 | local law enforcement of convictions, arrests, and other charges against licensees in their 7 | |
| 468 | 471 | respective jurisdictions. 8 | |
| 469 | 472 | "§ 18C-1141. Inspection of premises, records, activities. 9 | |
| 470 | 473 | (a) The Commission, or designated Commission staff, may inspect any video gaming 10 | |
| 471 | 474 | merchant, operator, or manufacturer. The inspection may include the examination of records, 11 | |
| 472 | 475 | equipment, and proceeds related to the video gaming games. 12 | |
| 473 | 476 | (b) In addition to any authority under G.S. 18B-502, the Department of Public Safety, 13 | |
| 474 | 477 | Alcohol Law Enforcement Division, and local law enforcement shall have authority to 14 | |
| 475 | 478 | investigate the operation of each licensee under this Article, to make inspections that include 15 | |
| 476 | 479 | viewing the entire premises, and to examine the books and records of the licensee to procure 16 | |
| 477 | 480 | evidence of violations of this Chapter or Chapter 18B of the General Statutes. After each 17 | |
| 478 | 481 | inspection, a report shall be submitted to the Commission, on a form developed by the 18 | |
| 479 | 482 | Commission, detailing the results of the inspection and any potential violations noted during the 19 | |
| 480 | 483 | inspection. 20 | |
| 481 | 484 | (c) Refusal by a licensee or by any employee of a licensee to permit law enforcement 21 | |
| 482 | 485 | officers or Commission staff to enter the premises to make an inspection authorized by this 22 | |
| 483 | 486 | section shall be cause for revocation, suspension, or other action against the licensee. 23 | |
| 484 | 487 | (d) Every video gaming merchant and operator shall provide access to any law 24 | |
| 485 | 488 | enforcement officer or Commission staff requesting access to the surveillance camera footage of 25 | |
| 486 | 489 | any video gaming terminal. The Commission shall establish policies regarding custody, security, 26 | |
| 487 | 490 | and the length of time the surveillance camera footage shall be kept. 27 | |
| 488 | 491 | (e) Inspections authorized by this section may be made at any time it reasonably appears 28 | |
| 489 | 492 | that someone is on the premises. 29 | |
| 490 | 493 | "§ 18C-1142. Criminal offenses. 30 | |
| 491 | 494 | (a) A person is guilty of a Class 1 misdemeanor for the first offense, a Class H felony for 31 | |
| 492 | 495 | a second offense, and a Class G felony for a third or subsequent offense for any of the following: 32 | |
| 493 | 496 | (1) Possession of a video gaming terminal not explicitly authorized by this 33 | |
| 494 | 497 | Article. 34 | |
| 495 | 498 | (2) Tampering with a video gaming terminal, software, or associated equipment 35 | |
| 496 | 499 | with intent to interfere with the proper operation of the video gaming terminal. 36 | |
| 497 | 500 | (b) A person is guilty of a Class G felony for the first offense and a Class F felony for 37 | |
| 498 | 501 | any subsequent offense for any of the following: 38 | |
| 499 | 502 | (1) Intent to manipulate the outcome, payoff, or operation of a video gaming 39 | |
| 500 | 503 | terminal by physical tampering or any other means. 40 | |
| 501 | 504 | (2) Falsely reporting, or failing to report, the amount due as required by the 41 | |
| 502 | 505 | Commission, as a video gaming merchant or operator. 42 | |
| 503 | 506 | (3) Payment or acceptance of any incentive or inducement prohibited by rule or 43 | |
| 504 | 507 | policy of the Commission. 44 | |
| 505 | 508 | (c) Any video gaming merchant who pays a prize to any person in the amount less than 45 | |
| 506 | 509 | the specified prize won is guilty of a Class G felony. 46 | |
| 507 | 510 | (d) A person is guilty of a Class 2 misdemeanor for resisting, obstructing, or delaying an 47 | |
| 508 | 511 | officer attempting to make a lawful inspection under G.S. 18C-1141. 48 | |
| 509 | 512 | (e) It shall be unlawful to do any of the following: 49 | |
| 510 | 513 | (1) Sell a redeemable share. 50 General Assembly Of North Carolina Session 2025 | |
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| 512 | 515 | (2) Sell a share for play of a video gaming terminal to a person under the age of 1 | |
| 513 | 516 | 21 in violation of G.S. 18C-1134(a). 2 | |
| 514 | 517 | (3) Purchase a share for play of a video gaming terminal, or otherwise play a video 3 | |
| 515 | 518 | gaming terminal, by a person under the age of 21 in violation of 4 | |
| 516 | 519 | G.S. 18C-1134(a). 5 | |
| 517 | 520 | (4) Substitute in-kind merchandise, goods, services, or other thing of value for the 6 | |
| 518 | 521 | payment of prizes or winnings under this Article. 7 | |
| 519 | 522 | (5) Cheat while playing or operating a video gaming terminal. 8 | |
| 520 | 523 | (6) Claim, collect, or take, or attempt to claim, collect, or take money or anything 9 | |
| 521 | 524 | of value in or from a video gaming game, with intent to defraud, without 10 | |
| 522 | 525 | having made a wager contingent on winning the video gaming game. 11 | |
| 523 | 526 | (7) Claim, collect, or take an amount of money or thing of value greater than the 12 | |
| 524 | 527 | amount won on a lawfully placed wager on a video gaming terminal. 13 | |
| 525 | 528 | (8) Possess any key or device designed for the purpose of opening, entering, or 14 | |
| 526 | 529 | affecting the operation of a video gaming terminal, or an electronic or 15 | |
| 527 | 530 | mechanical device connected with the video gaming terminal or for the 16 | |
| 528 | 531 | removing wagers or other contents of a video gaming terminal. This 17 | |
| 529 | 532 | subdivision shall not apply to a licensee under this Article or an employee of 18 | |
| 530 | 533 | a licensee under this Article acting in furtherance of the employee's 19 | |
| 531 | 534 | employment. 20 | |
| 532 | 535 | (f) Unless a different punishment is otherwise expressly stated, any person who violates 21 | |
| 533 | 536 | any provision of this Article shall be guilty of a Class 1 misdemeanor. The Commission may 22 | |
| 534 | 537 | terminate any license issued under this Chapter upon conviction of any crime under this Chapter 23 | |
| 535 | 538 | or Article 37 of Chapter 14 of the General Statutes. 24 | |
| 536 | 539 | "§ 18C-1143. Conduct on licensed premises. 25 | |
| 537 | 540 | (a) It shall be unlawful for a licensee or any employee of the licensee to knowingly allow 26 | |
| 538 | 541 | any of the following conduct to occur on the licensed premises: 27 | |
| 539 | 542 | (1) Any violation of this Chapter. 28 | |
| 540 | 543 | (2) Any violation of Chapter 14 of the General Statutes. 29 | |
| 541 | 544 | (3) Any violation of Chapter 90 of the General Statutes. 30 | |
| 542 | 545 | (4) Any other unlawful act. 31 | |
| 543 | 546 | (b) It shall be unlawful for a licensee to fail to superintend the business for which a license 32 | |
| 544 | 547 | is issued in person or through an employee of the licensee." 33 | |
| 545 | 548 | SECTION 2.(a) G.S. 18C-103(4) reads as rewritten: 34 | |
| 546 | 549 | "(4) "Game" or "lottery game" means any procedure or amusement authorized by 35 | |
| 547 | 550 | the Commission where prizes are distributed among persons who have paid, 36 | |
| 548 | 551 | or unconditionally agreed to pay, for tickets or shares that provide the 37 | |
| 549 | 552 | opportunity to win those prizes and does not utilize a video gaming machine 38 | |
| 550 | 553 | as defined in G.S. 14-306.1(c).prizes." 39 | |
| 551 | 554 | SECTION 2.(b) G.S. 18C-113(b) reads as rewritten: 40 | |
| 552 | 555 | "(b) Records of the Commission shall be open and available to the public in accordance 41 | |
| 553 | 556 | with Chapter 132 of the General Statutes, except as provided in this Article Chapter or unless 42 | |
| 554 | 557 | disclosure could be used to potentially (i) provide an unfair advantage to a player or (ii) impair 43 | |
| 555 | 558 | or adversely impact the security or integrity of the operation of the Lottery, any of its games, 44 | |
| 556 | 559 | games or gaming activities regulated by the Commission under this Chapter, or investigations 45 | |
| 557 | 560 | into lottery contractors, potential contractors, licensees, or applicants for licensure under this 46 | |
| 558 | 561 | Chapter, or potentially fraudulent or other activities in violations of any laws, Lottery laws or 47 | |
| 559 | 562 | Commission rules, regulations, and policies." 48 | |
| 560 | 563 | SECTION 2.(c) G.S. 18C-114 reads as rewritten: 49 | |
| 561 | 564 | "§ 18C-114. Powers and duties of the Commission. 50 | |
| 562 | 565 | (a) The Commission shall have the following powers and duties: 51 General Assembly Of North Carolina Session 2025 | |
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| 564 | 567 | … 1 | |
| 565 | 568 | (8) To charge a fee of potential contractors, of lottery contractors, of lottery 2 | |
| 566 | 569 | retailers, and of licensees and potential licensees and their key persons not to 3 | |
| 567 | 570 | exceed the cost of the criminal history record check.check, credit check, and 4 | |
| 568 | 571 | other background checks. 5 | |
| 569 | 572 | … 6 | |
| 570 | 573 | (15) To establish requirements for linking all video gaming terminals under a 7 | |
| 571 | 574 | central monitoring system in accordance with Article 11 of this Chapter, 8 | |
| 572 | 575 | including creating and maintaining a central monitoring system, which shall 9 | |
| 573 | 576 | accommodate connection to the central monitoring system by video gaming 10 | |
| 574 | 577 | terminals of each manufacturer. 11 | |
| 575 | 578 | (16) To establish criteria for information systems, operating procedures, reporting, 12 | |
| 576 | 579 | and accounting criteria for video gaming games consistent with Article 11 of 13 | |
| 577 | 580 | this Chapter. 14 | |
| 578 | 581 | (17) To establish dispute resolution policies for all licensees under Articles 9, 10, 15 | |
| 579 | 582 | and 11 of this Chapter, which shall be exhausted prior to any claim being filed 16 | |
| 580 | 583 | in the courts. 17 | |
| 581 | 584 | … 18 | |
| 582 | 585 | (c) The Commission and the Department of Revenue may agree to exchange any data 19 | |
| 583 | 586 | necessary to enforce and administer Articles 9 and 10 9, 10, and 11 of this Chapter and Article 20 | |
| 584 | 587 | 2E of Chapter 105 of the General Statutes, including information deemed necessary to perform 21 | |
| 585 | 588 | an audit of a licensee or taxpayer under those Articles." 22 | |
| 586 | 589 | SECTION 2.(d) G.S. 18C-120(b) reads as rewritten: 23 | |
| 587 | 590 | "(b) The Director shall have the following powers and duties, under the supervision of the 24 | |
| 588 | 591 | Commission: 25 | |
| 589 | 592 | … 26 | |
| 590 | 593 | (7) To confer with the Commission on the operation and administration of the 27 | |
| 591 | 594 | Lottery this Chapter and make available for inspection by the Commission all 28 | |
| 592 | 595 | books, records, files, documents, and other information of the 29 | |
| 593 | 596 | Lottery.maintained under this Chapter. 30 | |
| 594 | 597 | … 31 | |
| 595 | 598 | (12) To engage an independent firm experienced in security procedures, including 32 | |
| 596 | 599 | computer security and systems security, to conduct a comprehensive study 33 | |
| 597 | 600 | and evaluation of all aspects of security in the operation of the video gaming 34 | |
| 598 | 601 | terminals. At a minimum, such a security assessment is to include a review of 35 | |
| 599 | 602 | network vulnerability, application vulnerability, application code review, 36 | |
| 600 | 603 | wireless security, security policy and processes, security and privacy program 37 | |
| 601 | 604 | management, technology infrastructure and security controls, security 38 | |
| 602 | 605 | organization and governance, and operational effectiveness." 39 | |
| 603 | 606 | SECTION 2.(e) G.S. 18C-161(3) reads as rewritten: 40 | |
| 604 | 607 | "(3) All other funds credited or appropriated to the Commission from any source, 41 | |
| 605 | 608 | except as provided in Articles 9 and 10 9, 10, and 11 of this Chapter." 42 | |
| 606 | 609 | SECTION 3.(a) Article 2 of Chapter 18C of the General Statutes is amended by 43 | |
| 607 | 610 | adding a new section to read: 44 | |
| 608 | 611 | "§ 18C-117. Gifts. 45 | |
| 609 | 612 | (a) A prohibited giver shall not pay, give, or make any economic opportunity, gift, loan, 46 | |
| 610 | 613 | gratuity, special discount, favor, hospitality, or service, including food and beverages, having an 47 | |
| 611 | 614 | aggregate value not exceeding one hundred dollars ($100.00) in any calendar year to the Director, 48 | |
| 612 | 615 | to any member or employee of the Commission or any member of the immediate family residing 49 | |
| 613 | 616 | in the same household as one of these individuals. 50 General Assembly Of North Carolina Session 2025 | |
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| 615 | 618 | (b) The Director, any member or employee of the Commission, or any member of the 1 | |
| 616 | 619 | immediate family residing in the same household as one of these individuals shall not accept the 2 | |
| 617 | 620 | offer of any economic opportunity, gift, loan, gratuity, special discount, favor, hospitality, or 3 | |
| 618 | 621 | service, including food and beverages having an aggregate value not exceeding one hundred 4 | |
| 619 | 622 | dollars ($100.00) in any calendar year from a prohibited giver. 5 | |
| 620 | 623 | (c) For purposes of this section, a prohibited giver is any of the following: 6 | |
| 621 | 624 | (1) A lottery retailer. 7 | |
| 622 | 625 | (2) A licensee or applicant to be a licensee under this Chapter. 8 | |
| 623 | 626 | (3) A lottery contractor or potential contractor. 9 | |
| 624 | 627 | (4) A lottery supplier." 10 | |
| 625 | 628 | SECTION 3.(b) G.S. 18C-143(e) is repealed. 11 | |
| 626 | 629 | SECTION 3.(c) G.S. 18C-151(f) is repealed. 12 | |
| 627 | 630 | SECTION 4.(a) Chapter 105 of the General Statutes is amended by adding a new 13 | |
| 628 | 631 | Article to read: 14 | |
| 629 | 632 | "Article 2F. 15 | |
| 630 | 633 | "Unauthorized Gaming Machine Tax. 16 | |
| 631 | 634 | "§ 105-113.150. Purpose. 17 | |
| 632 | 635 | The purpose of this Article is to levy an excise tax to generate revenue for State and local law 18 | |
| 633 | 636 | enforcement agencies and for the General Fund. Nothing in this Article may in any manner 19 | |
| 634 | 637 | provide immunity from criminal prosecution for a person who possesses an illegal gaming 20 | |
| 635 | 638 | machine. 21 | |
| 636 | 639 | "§ 105-113.151. Definitions. 22 | |
| 637 | 640 | The following definitions apply in this Article: 23 | |
| 638 | 641 | (1) Operator. – A person who places an unauthorized gaming machine for play 24 | |
| 639 | 642 | by the public or who owns an establishment where an unauthorized gaming 25 | |
| 640 | 643 | machine is placed for play by the public. 26 | |
| 641 | 644 | (2) Unauthorized gaming machine. – Any of the following: 27 | |
| 642 | 645 | a. A video gaming terminal without a valid video gaming terminal permit 28 | |
| 643 | 646 | under Article 11 of Chapter 18C of the General Statutes. 29 | |
| 644 | 647 | b. A gaming table prohibited to be used by G.S. 14-289 through 30 | |
| 645 | 648 | G.S. 14-300. 31 | |
| 646 | 649 | c. Any illegal punchboard or illegal slot machine. 32 | |
| 647 | 650 | d. Any video game machine prohibited to be used by G.S. 14-306 or 33 | |
| 648 | 651 | G.S. 14-306.1A. 34 | |
| 649 | 652 | e. Any game terminal described in G.S. 14-306.3(b). 35 | |
| 650 | 653 | f. Any electronic machine or device using an entertaining display in 36 | |
| 651 | 654 | violation of G.S. 14-306.4. 37 | |
| 652 | 655 | "§ 105-113.152. Excise tax on unauthorized gaming machines. 38 | |
| 653 | 656 | (a) Tax. – An excise tax is levied on each unauthorized gaming machine at a rate of ten 39 | |
| 654 | 657 | thousand dollars ($10,000) per machine. 40 | |
| 655 | 658 | (b) Payment of Tax. – The tax imposed by this Article is payable by an operator on each 41 | |
| 656 | 659 | unauthorized gaming machine in this State for which the tax has not been paid, as evidenced by 42 | |
| 657 | 660 | a stamp. The tax is payable within 48 hours after a non-tax-paid unauthorized gaming machine 43 | |
| 658 | 661 | is placed by the operator for play by the public, exclusive of Saturdays, Sundays, and legal 44 | |
| 659 | 662 | holidays of this State, in which case the tax is payable on the next working day. Upon payment 45 | |
| 660 | 663 | of the tax, the operator shall permanently affix the appropriate stamps to the unauthorized gaming 46 | |
| 661 | 664 | machine. Once the tax due on an unauthorized gaming machine has been paid, no additional tax 47 | |
| 662 | 665 | is due under this Article even though the unauthorized gaming machine may be handled by other 48 | |
| 663 | 666 | operators. 49 | |
| 664 | 667 | "§ 105-113.153. Revenue stamps; reports. 50 General Assembly Of North Carolina Session 2025 | |
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| 666 | 669 | (a) Revenue Stamps. – The Secretary shall issue stamps to affix to unauthorized gaming 1 | |
| 667 | 670 | machines to indicate payment of the tax required by this Article. Operators shall report the taxes 2 | |
| 668 | 671 | payable under this Article at the time and on the return prescribed by the Secretary. 3 | |
| 669 | 672 | Notwithstanding any other provision of law, operators are not required to give their name, 4 | |
| 670 | 673 | address, social security number, or other identifying information on the return, and the return is 5 | |
| 671 | 674 | not required to be verified by oath or affirmation. Upon payment of the tax, the Secretary shall 6 | |
| 672 | 675 | issue stamps in an amount equal to the amount of the tax paid. Taxes may be paid and stamps 7 | |
| 673 | 676 | may be issued either by mail or in person. 8 | |
| 674 | 677 | (b) Reports. – Every local law enforcement agency and every State law enforcement 9 | |
| 675 | 678 | agency must report to the Department within 48 hours of charging an operator for a violation 10 | |
| 676 | 679 | related to an unauthorized gaming machine upon which a valid revenue stamp has not been 11 | |
| 677 | 680 | affixed or seizing an unauthorized gaming machine upon which a valid revenue stamp has not 12 | |
| 678 | 681 | been affixed. The report must be in the form prescribed by the Secretary, and it must include the 13 | |
| 679 | 682 | time and place of the charge or seizure, the amount and location of the unauthorized gaming 14 | |
| 680 | 683 | machines, the identification of any operators charged or associated with the seizure and their 15 | |
| 681 | 684 | social security numbers, and any other information prescribed by the Secretary. The report must 16 | |
| 682 | 685 | be made when the charge or seizure involves an unauthorized gaming machine upon which a 17 | |
| 683 | 686 | stamp has not been affixed as required by this Article. 18 | |
| 684 | 687 | "§ 105-113.154. Assessments. 19 | |
| 685 | 688 | Notwithstanding any other provision of law, an assessment against an operator for an 20 | |
| 686 | 689 | unauthorized gaming machine to which a stamp has not been affixed as required by this Article 21 | |
| 687 | 690 | shall be made as provided in this section. The Secretary shall assess a tax, applicable penalties, 22 | |
| 688 | 691 | and interest based on personal knowledge or information available to the Secretary. The Secretary 23 | |
| 689 | 692 | shall notify the operator in writing of the amount of the tax, penalty, and interest due and demand 24 | |
| 690 | 693 | its immediate payment. The notice and demand shall be either mailed to the operator at the 25 | |
| 691 | 694 | operator's last known address or served on the operator in person. If the operator does not pay 26 | |
| 692 | 695 | the tax, penalty, and interest immediately upon receipt of the notice and demand, the Secretary 27 | |
| 693 | 696 | shall collect the tax, penalty, and interest pursuant to the jeopardy collection procedures in 28 | |
| 694 | 697 | G.S. 105-241.23 or the general collection procedures in G.S. 105-242, including causing 29 | |
| 695 | 698 | execution to be issued immediately against the personal property of the operator, unless the 30 | |
| 696 | 699 | operator files with the Secretary a bond in the amount of the asserted liability for the tax, penalty, 31 | |
| 697 | 700 | and interest. The Secretary shall use all means available to collect the tax, penalty, and interest 32 | |
| 698 | 701 | from any property in which the operator has a legal, equitable, or beneficial interest. The operator 33 | |
| 699 | 702 | may seek review of the assessment as provided in Article 9 of this Chapter. If the Secretary 34 | |
| 700 | 703 | assesses more than one operator for the tax on an unauthorized gaming machine, each operator 35 | |
| 701 | 704 | assessed is jointly and severally liable for the tax. 36 | |
| 702 | 705 | "§ 105-113.155. Confidentiality of information. 37 | |
| 703 | 706 | (a) Information obtained by the Department in the course of administering the tax 38 | |
| 704 | 707 | imposed by this Article, including information on whether the Department has issued a revenue 39 | |
| 705 | 708 | stamp to a person, is confidential tax information and is subject to the provisions of G.S. 105-259. 40 | |
| 706 | 709 | (b) Information obtained by the Department from the taxpayer in the course of 41 | |
| 707 | 710 | administering the tax imposed by this Article, including information on whether the Department 42 | |
| 708 | 711 | has issued a revenue stamp to a person, may not be used as evidence, as defined in G.S. 15A-971, 43 | |
| 709 | 712 | by a prosecutor in a criminal prosecution of the taxpayer for an offense related to the possession 44 | |
| 710 | 713 | or operation of the unauthorized gaming machine. Under this prohibition, no officer, employee, 45 | |
| 711 | 714 | or agent of the Department may testify about this information in a criminal prosecution of the 46 | |
| 712 | 715 | taxpayer for an offense related to the possession or operation of the unauthorized gaming 47 | |
| 713 | 716 | machine. This subsection implements the protections against double jeopardy and 48 | |
| 714 | 717 | self-incrimination set out in Amendment V of the United States Constitution and the restrictions 49 | |
| 715 | 718 | in it apply regardless of whether information may be disclosed under G.S. 105-259. An officer, 50 General Assembly Of North Carolina Session 2025 | |
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| 717 | 720 | employee, or agent of the Department who provides evidence or testifies in violation of this 1 | |
| 718 | 721 | subsection is guilty of a Class 1 misdemeanor. 2 | |
| 719 | 722 | "§ 105-113.156. Use of tax proceeds. 3 | |
| 720 | 723 | (a) Special Account. – The Unauthorized Gaming Machine Tax Account is established 4 | |
| 721 | 724 | as a special nonreverting account. The Secretary shall credit the proceeds of the tax levied by this 5 | |
| 722 | 725 | Article to the Account. 6 | |
| 723 | 726 | (b) Distribution. – The Secretary shall distribute unencumbered tax proceeds in the 7 | |
| 724 | 727 | Unauthorized Gaming Machine Tax Account on a quarterly or more frequent basis. Tax proceeds 8 | |
| 725 | 728 | in the Account are unencumbered when they are collectible under G.S. 105-241.22. The 9 | |
| 726 | 729 | Secretary shall distribute seventy-five percent (75%) of the unencumbered tax proceeds in the 10 | |
| 727 | 730 | Account that were collected by assessment to the State or local law enforcement agency that 11 | |
| 728 | 731 | conducted the investigation of an operator that led to the assessment. If more than one State or 12 | |
| 729 | 732 | local law enforcement agency conducted the investigation, the Secretary shall determine the 13 | |
| 730 | 733 | equitable share for each agency based on the contribution each agency made to the investigation. 14 | |
| 731 | 734 | The Secretary shall credit the remaining unencumbered tax proceeds in the Account to the 15 | |
| 732 | 735 | General Fund. 16 | |
| 733 | 736 | (c) Refunds. – The refund of a tax that has already been distributed shall be drawn 17 | |
| 734 | 737 | initially from the Unauthorized Gaming Machine Tax Account. The amount of refunded taxes 18 | |
| 735 | 738 | that were distributed to a law enforcement agency under this section and any interest shall be 19 | |
| 736 | 739 | subtracted from succeeding distributions from the Account to that law enforcement agency. The 20 | |
| 737 | 740 | amount of refunded taxes that were credited to the General Fund under this section and any 21 | |
| 738 | 741 | interest shall be subtracted from succeeding credits to the General Fund from the Account. 22 | |
| 739 | 742 | (d) Use. – Funds provided to State and local law enforcement agencies pursuant to this 23 | |
| 740 | 743 | section shall be used for expenses incurred by the agency for enforcing the laws of this State and 24 | |
| 741 | 744 | carrying out other duties set by law. Such funds are supplemental to, and shall not supplant, local 25 | |
| 742 | 745 | or State funding received by the law enforcement agency." 26 | |
| 743 | 746 | SECTION 4.(b) This section becomes effective December 1, 2025, and applies to 27 | |
| 744 | 747 | taxes due on unauthorized gaming machines on or after that date. 28 | |
| 745 | 748 | SECTION 5. G.S. 14-306.1A is amended by adding a new subsection to read: 29 | |
| 746 | 749 | "(g) Nothing in this section shall be construed to make illegal any activity conducted 30 | |
| 747 | 750 | pursuant to Article 11 of Chapter 18C of the General Statutes." 31 | |
| 748 | 751 | SECTION 6. G.S. 14-306.4 is amended by adding a new subsection to read: 32 | |
| 749 | 752 | "(d1) Nothing in this section shall be construed to make illegal any activity conducted 33 | |
| 750 | 753 | pursuant to Article 11 of Chapter 18C of the General Statutes." 34 | |
| 751 | 754 | SECTION 7. G.S. 105-259(b)(33) reads as rewritten: 35 | |
| 752 | 755 | "(33) To provide to the North Carolina State Lottery Commission the information 36 | |
| 753 | 756 | required under G.S. 18C-141 and G.S. 18C-1114 or agreed upon under 37 | |
| 754 | 757 | G.S. 18C-114(c)." 38 | |
| 755 | 758 | SECTION 8.(a) G.S. 14-298 reads as rewritten: 39 | |
| 756 | 759 | "§ 14-298. Seizure of illegal gaming items. 40 | |
| 757 | 760 | Upon a determination that probable cause exists to believe that any gaming table prohibited 41 | |
| 758 | 761 | to be used by G.S. 14-289 through G.S. 14-300, any illegal punchboard or illegal slot machine, 42 | |
| 759 | 762 | any video game machine prohibited to be used by G.S. 14-306 or G.S. 14-306.1A, any game 43 | |
| 760 | 763 | terminal described in G.S. 14-306.3(b), or any electronic machine or device using an entertaining 44 | |
| 761 | 764 | display in violation of G.S. 14-306.4 is in the illegal possession or use of any person within the 45 | |
| 762 | 765 | limits of their jurisdiction, all sheriffs and law enforcement officers are authorized to seize the 46 | |
| 763 | 766 | items in accordance with applicable State law. Any law enforcement agency in possession of that 47 | |
| 764 | 767 | item shall retain the item pending a disposition order from a district or superior court judge. Upon 48 | |
| 765 | 768 | application by the law enforcement agency, district attorney, or owner, and after notice and 49 | |
| 766 | 769 | opportunity to be heard by all parties, if the court determines that the item is unlawful to possess, 50 | |
| 767 | 770 | it shall enter an order releasing the item to the law enforcement agency for destruction or for 51 General Assembly Of North Carolina Session 2025 | |
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| 769 | 772 | training purposes. purposes and shall order the owner to pay the reasonable costs of storage and 1 | |
| 770 | 773 | disposal incurred by the seizing law enforcement agency. If the item was seized for use as 2 | |
| 771 | 774 | evidence in a criminal action or proceeding against the owner of the item, upon any plea of guilty 3 | |
| 772 | 775 | or nolo contendere in that action or proceeding by the owner of the item, the court shall order the 4 | |
| 773 | 776 | owner to pay the reasonable costs of storage and disposal incurred by the seizing law enforcement 5 | |
| 774 | 777 | agency. If the court determines that the item is not unlawful to possess and will not be used in 6 | |
| 775 | 778 | violation of the law, the item shall be ordered released to its owner upon satisfactory proof of 7 | |
| 776 | 779 | ownership. The foregoing procedures for release shall not apply, however, with respect to an 8 | |
| 777 | 780 | item seized for use as evidence in any criminal action or proceeding until after entry of final 9 | |
| 778 | 781 | judgment." 10 | |
| 779 | 782 | SECTION 8.(b) G.S. 14-299 reads as rewritten: 11 | |
| 780 | 783 | "§ 14-299. Property exhibited by gamblers to be seized; disposition of same. 12 | |
| 781 | 784 | Except as provided in Chapter 18C of the General Statutes or in G.S. 14-292, all moneys or 13 | |
| 782 | 785 | other property or thing of value exhibited for the purpose of alluring persons to bet on any game, 14 | |
| 783 | 786 | or used in the conduct of any such game, including any motor vehicle (i) used in the conduct of 15 | |
| 784 | 787 | a lottery within the purview of G.S. 14-291.1, G.S. 14-291.1 or (ii) used to transport any video 16 | |
| 785 | 788 | game machine prohibited by G.S. 14-306 or G.S. 14-306.1A, or any electronic machine or device 17 | |
| 786 | 789 | prohibited by G.S. 14-306.4, shall be liable to be seized by any court of competent jurisdiction 18 | |
| 787 | 790 | or by any person acting under its warrant. Moneys so seized shall be turned over to and paid to 19 | |
| 788 | 791 | the treasurer of the county wherein they are seized, and placed in the general fund of the county. 20 | |
| 789 | 792 | Any property seized which is used for and is suitable only for gambling shall be destroyed, and 21 | |
| 790 | 793 | all other property so seized shall be sold in the manner provided for the sale of personal property 22 | |
| 791 | 794 | by execution, and the proceeds derived from said sale shall (after deducting the expenses of 23 | |
| 792 | 795 | keeping the property and the costs of the sale and after paying, according to their priorities all 24 | |
| 793 | 796 | known prior, bona fide liens which were created without the lienor having knowledge or notice 25 | |
| 794 | 797 | that the motor vehicle or other property was being used or to be used in connection with the 26 | |
| 795 | 798 | conduct of such game or lottery) be turned over and paid to the treasurer of the county wherein 27 | |
| 796 | 799 | the property was seized, to be placed by said treasurer in the general fund of the county." 28 | |
| 797 | 800 | SECTION 8.(c) G.S. 14-306(a) reads as rewritten: 29 | |
| 798 | 801 | "(a) Any machine, apparatus or device is a slot machine or device within the provisions 30 | |
| 799 | 802 | of G.S. 14-296 through 14-309, if it is one that is adapted, or may be readily converted into one 31 | |
| 800 | 803 | that is adapted, for use in such a way that, as a result of the payment of any piece of money or 32 | |
| 801 | 804 | coin or token or any credit card, debit card, prepaid card, or any other method that requires 33 | |
| 802 | 805 | payment to activate play, whether directly into the slot machine or device or resulting in remote 34 | |
| 803 | 806 | activation, such machine or device is caused to operate or may be operated in such manner that 35 | |
| 804 | 807 | the user may receive or become entitled to receive any piece of money, credit, allowance or thing 36 | |
| 805 | 808 | of value, or any check, slug, token or memorandum, whether of value or otherwise, or which may 37 | |
| 806 | 809 | be exchanged for any money, credit, allowance or any thing of value, or which may be given in 38 | |
| 807 | 810 | trade, or the user may secure additional chances or rights to use such machine, apparatus or 39 | |
| 808 | 811 | device; or any other machine or device designed and manufactured primarily for use in 40 | |
| 809 | 812 | connection with gambling and which machine or device is classified by the United States as 41 | |
| 810 | 813 | requiring a federal gaming device tax stamp under applicable provisions of the Internal Revenue 42 | |
| 811 | 814 | Code. This definition is intended to embrace all slot machines and similar devices except slot 43 | |
| 812 | 815 | machines in which is kept any article to be purchased by depositing any coin or thing of value, 44 | |
| 813 | 816 | and for which may be had any article of merchandise which makes the same return or returns of 45 | |
| 814 | 817 | equal value each and every time it is operated, or any machine wherein may be seen any pictures 46 | |
| 815 | 818 | or heard any music by depositing therein any coin or thing of value, or any slot weighing machine 47 | |
| 816 | 819 | or any machine for making stencils by the use of contrivances operated by depositing in the 48 | |
| 817 | 820 | machine any coin or thing of value, or any lock operated by slot wherein money or thing of value 49 | |
| 818 | 821 | is to be deposited, where such slot machines make the same return or returns of equal value each 50 | |
| 819 | 822 | and every time the same is operated and does not at any time it is operated offer the user or 51 General Assembly Of North Carolina Session 2025 | |
| 820 | - | ||
| 823 | + | DRH40330-BAxfa-10 Page 17 | |
| 821 | 824 | operator any additional money, credit, allowance, or thing of value, or check, slug, token or 1 | |
| 822 | 825 | memorandum, whether of value or otherwise, which may be exchanged for money, credit, 2 | |
| 823 | 826 | allowance or thing of value or which may be given in trade or by which the user may secure 3 | |
| 824 | 827 | additional chances or rights to use such machine, apparatus, or device, or in the playing of which 4 | |
| 825 | 828 | the operator does not have a chance to make varying scores or tallies. Each game console, play 5 | |
| 826 | 829 | station, or other access point allowing a person to operate a slot machine shall constitute a 6 | |
| 827 | 830 | separate machine or device." 7 | |
| 828 | 831 | SECTION 8.(d) This section becomes effective December 1, 2025, and applies to 8 | |
| 829 | 832 | offenses committed on or after that date. 9 | |
| 830 | 833 | SECTION 9. The North Carolina State Lottery Commission shall use sufficient 10 | |
| 831 | 834 | funds from the North Carolina State Lottery Fund to cover initial operating expenses of the 11 | |
| 832 | 835 | Commission to implement Article 9 of Chapter 18C of the General Statutes, as enacted by this 12 | |
| 833 | 836 | act, except that the total amount borrowed by the Commission shall not exceed fourteen million 13 | |
| 834 | 837 | dollars ($14,000,000). Of the borrowed funds, three million dollars ($3,000,000) shall be 14 | |
| 835 | 838 | transferred to the Department of Public Safety, Alcohol Law Enforcement Division, for 15 | |
| 836 | 839 | enforcement of this act; one million dollars ($1,000,000) shall be transferred to the Department 16 | |
| 837 | 840 | of Public Safety for grants to local law enforcement agencies to combat illegal gaming, to be 17 | |
| 838 | 841 | awarded upon recommendation by the Governor's Crime Commission; and the remainder shall 18 | |
| 839 | 842 | be available for expenditure for the purposes set forth in this act without further action by the 19 | |
| 840 | 843 | General Assembly. The Commission shall repay any funds used out of the North Carolina State 20 | |
| 841 | 844 | Lottery Fund pursuant to this section from amounts allocated to the Commission under 21 | |
| 842 | 845 | G.S. 18C-1103(1), as enacted by this act, within 24 months after the effective date of this act. 22 | |
| 843 | 846 | SECTION 10.(a) G.S. 18C-1103, as enacted by this act, reads as rewritten: 23 | |
| 844 | 847 | "§ 18C-1103. Allocation of revenues. 24 | |
| 845 | 848 | (a) The Commission shall determine the procedures for the monitoring, collection, and 25 | |
| 846 | 849 | distribution of net machine revenues from video gaming terminals. The portion of net machine 26 | |
| 847 | 850 | revenues allocated to the Commission in subdivisions (1) and (2) of this section shall be 27 | |
| 848 | 851 | transferred before any other allocations are made from the net machine revenues and deposited 28 | |
| 849 | 852 | into an account as directed by the Commission. The net machine revenues shall be distributed by 29 | |
| 850 | 853 | the Commission in conformity with the following: 30 | |
| 851 | 854 | (1) Thirty-two percent (32%) of the total net machine revenues shall be 31 | |
| 852 | 855 | transferred to the Commission. The Commission shall transfer amounts 32 | |
| 853 | 856 | allocated under this subdivision to the North Carolina Video Gaming Fund 33 | |
| 854 | 857 | established under G.S. 18C-1104. 34 | |
| 855 | 858 | (2) Eight percent (8%) of the total net revenues shall be transferred to the 35 | |
| 856 | 859 | Commission to be credited as required under this this subdivision. The 36 | |
| 857 | 860 | revenues allocated under this subdivision shall be credited in the following 37 | |
| 858 | 861 | priority: 38 | |
| 859 | 862 | a. Costs to the Commission associated with administering this Article. 39 | |
| 860 | 863 | b. Costs associated with the central monitoring system. 40 | |
| 861 | 864 | c. Costs associated with the Department of Public Safety, Alcohol Law 41 | |
| 862 | 865 | Enforcement Division, associated with enforcement of this Article, 42 | |
| 863 | 866 | which shall include a transfer of at least three million dollars 43 | |
| 864 | 867 | ($3,000,000) annually. 44 | |
| 865 | 868 | d. One million dollars ($1,000,000) annually to the Department of Public 45 | |
| 866 | 869 | Safety for grants to counties for sheriffs and municipal police 46 | |
| 867 | 870 | departments to combat illegal gaming, to be awarded upon 47 | |
| 868 | 871 | recommendation by the Governor's Crime Commission. 48 | |
| 869 | 872 | e. Two hundred twenty-five thousand dollars ($225,000) annually to the 49 | |
| 870 | 873 | Conference of District Attorneys for an attorney position dedicated to 50 | |
| 871 | 874 | the prosecution of illegal gambling activities. 51 General Assembly Of North Carolina Session 2025 | |
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| 875 | + | Page 18 DRH40330-BAxfa-10 | |
| 873 | 876 | e1. Two million dollars ($2,000,000) in each fiscal year to each of the 1 | |
| 874 | 877 | following institutions for improving graduation rates and student 2 | |
| 875 | 878 | success or sustainability of the institution: 3 | |
| 876 | 879 | 1. Elizabeth City State University. 4 | |
| 877 | 880 | 2. Fayetteville State University. 5 | |
| 878 | 881 | 3. North Carolina Agricultural and Technical State University. 6 | |
| 879 | 882 | 4. North Carolina Central University. 7 | |
| 880 | 883 | 5. Winston-Salem State University. 8 | |
| 881 | 884 | 6. University of North Carolina at Pembroke. 9 | |
| 882 | 885 | f. Remaining proceeds to the North Carolina Video Gaming Fund 10 | |
| 883 | 886 | established under G.S. 18C-1104. 11 | |
| 884 | 887 | (3) Thirty percent (30%) of the net machine revenues shall be allocated to 12 | |
| 885 | 888 | operators. 13 | |
| 886 | 889 | (4) Thirty percent (30%) of the net machine revenues shall be allocated to video 14 | |
| 887 | 890 | gaming merchants. 15 | |
| 888 | 891 | (b) Each of the constituent institutions receiving distributions or a grant under this section 16 | |
| 889 | 892 | shall annually report to the Joint Legislative Education Oversight Committee as to how that 17 | |
| 890 | 893 | institution has used the funds from the prior fiscal year, including the measures by which that 18 | |
| 891 | 894 | institution is gauging success of the programs and other uses of the funds." 19 | |
| 892 | 895 | SECTION 10.(b) This section becomes effective July 1, 2027, and applies to 20 | |
| 893 | 896 | transfers made on or after that date. 21 | |
| 894 | 897 | SECTION 11.(a) The North Carolina State Lottery Commission shall identify a date 22 | |
| 895 | 898 | upon which video gaming terminal play is authorized in this State and shall do all of the following 23 | |
| 896 | 899 | at least 90 days in advance of that date: 24 | |
| 897 | 900 | (1) Publish that date in the North Carolina Registry. 25 | |
| 898 | 901 | (2) Report that date to the Joint Lottery Oversight Committee. 26 | |
| 899 | 902 | SECTION 11.(b) The North Carolina State Lottery Commission may adopt rules to 27 | |
| 900 | 903 | facilitate the licensure authorized in this act prior to the date published in the North Carolina 28 | |
| 901 | 904 | Registry of the date identified by the North Carolina Lottery Commission under this section; 29 | |
| 902 | 905 | however, no rule may become effective until on or after that date. The Commission may accept 30 | |
| 903 | 906 | and issue applications for licensure in accordance with Article 11 of Chapter 18C of the General 31 | |
| 904 | 907 | Statutes, as enacted by this act, prior to the date published in the North Carolina Registry of the 32 | |
| 905 | 908 | date identified by the North Carolina Lottery Commission under this section, in order that 33 | |
| 906 | 909 | licensees may begin operations on that date; however, no license issued by the Commission shall 34 | |
| 907 | 910 | become effective prior to the date published in the North Carolina Registry of the date identified 35 | |
| 908 | 911 | by the North Carolina Lottery Commission under this section. 36 | |
| 909 | 912 | SECTION 12. Sections 1, 2, 3, 5, 6, and 7 of this act become effective December 1, 37 | |
| 910 | 913 | 2025, and, except as otherwise provided, the remainder of this act is effective when it becomes 38 | |
| 911 | 914 | law. The Lottery Commission may initiate requests for proposals for the central monitoring 39 | |
| 912 | 915 | system, as required by G.S. 18C-1132, as enacted by this act, prior to December 1, 2025, but may 40 | |
| 913 | 916 | not award any contract prior to that date. 41 |