ARIZONA STATE SENATE
Phoenix, Arizona
Arizona gambling control act
Establishes
regulations for raffles conducted by nonprofit organizations where gambling
devices are used. Requires the
Department of Gaming (Department) to issue permits to entities conducting such
raffles and requires companies manufacturing or distributing gambling devices
for nonprofit raffles to obtain a license from the Department.
The
regulation of gambling in Arizona is generally under the jurisdiction of the
Arizona Department of Gaming (Department).
Raffles conducted by nonprofit organizations are currently authorized
under state gaming laws. One popular
type of raffle is a “casino night” raffle that allows the nonprofit to conduct
gambling-type games for the purpose of raising money. Two separate Attorney General opinions have ratified this type of
gambling as being legal and not subject to the general regulatory prohibitions
and restrictions on gambling (1987 Ariz. Op. Atty. Gen. 161 and 1990 Ariz. Op.
Atty. Gen. 57).
Some
manufacturers of gambling devices have recently developed devices that look
nearly identical to slot machines but are promoted as “electronically
formatted” raffles. These types of
gambling devices are not specifically prohibited under current state law as it
pertains to raffles conducted by nonprofit groups. The use of these devices in nonprofit organization raffles and
for charitable bingo have cropped up in other areas of the country as well as
here in Arizona. In the State of Ohio,
the State Supreme Court ruled in 1997 that liquor establishments could sell
instant bingo tickets for nonprofit organizations. As a result, a number of charity-sponsored gambling facilities
have begun offering video bingo across the state.
The issue of gambling device
use in nonprofit raffles came up in Arizona when a Phoenix restaurant owner
installed six pull-tab style slot machines for the purpose of conducting a
raffle for a nonprofit organization early in 2000. This incident, coupled with the experience in Ohio, has prompted
the Arizona Department of Gaming to seek a clear statutory resolution of how
gambling devices may be used in raffles held for nonprofit organizations.
S.B. 1535 limits the use of
gambling devices intended for use in raffles for nonprofit organizations by
establishing restrictions and specifying criteria to be met. Additionally, the bill requires the entity
conducting the raffle to be permitted by the Department and the companies
manufacturing or distributing gambling devices used in nonprofit raffles to be
licensed.
There is no anticipated
fiscal impact to the general fund.
1. Establishes the following requirements to be met by nonprofit organizations that use gambling devices for a raffle:
·
Obtain
a permit for the raffle from the Department.
·
Obtain
a special event license from the Department of Liquor Licenses and Controls.
·
Conduct
the raffle at a location owned or leased by the nonprofit organization.
·
Possess
a liquor license.
·
Hold
no more than three raffles using gambling devices in the previous 12 months.
·
Conduct no more than two raffles using gambling devices in a 12-month period.
·
Ensure
that players in the raffle only receive noncash prizes and that any winnings
returned to a player are to be used in the raffle only.
·
Costs
incurred by the nonprofit organization must be reasonable and not exceed 15
percent of the revenues.
2. Requires the Department to adopt rules for the time, place and manner of nonprofit organization raffles that use gambling devices.
3. Requires the Department to license manufacturers and distributors of gambling devices intended for use in raffles held or conducted by nonprofit organizations. Allows the Department to charge a license fee and grants emergency rulemaking authority to the agency for the purpose of implementing this licensing requirement. Exempts persons with state gaming certification from licensure.
4. Requires the Department to issue permits to nonprofit organizations that receive a gambling device from a licensed manufacturer or distributor of gambling devices for use in a nonprofit organization raffle. Allows the Department to charge a fee for this type of permit and grants emergency rulemaking authority to the agency for the purpose of implementing this permit requirement.
5. Defines “gambling device”.
6. Specifies that “regulated gambling” in this state includes Indian gaming pursuant to a tribal-state gaming compact, games conducted by the Arizona State Lottery, pari-mutuel wagering on races, nonprofit organization gambling and bingo.
7. Specifies that the housing of a nonprofit organization raffle that uses gambling devices by a social club is not to be considered when determining if the sale of liquor at the club is incidental to the main purpose of the club. (Statute prohibits the state from issuing a liquor license to a social club if the club was organized for the purpose of obtaining a liquor license.)
8. Specifies that this act is to be known as the Arizona Gambling Control Act.
9. Makes technical and conforming changes.
10. Provides for a general effective date.
Prepared
by Senate Staff
February 2, 2001