First Regular Session S.B. 1312
COMMITTEE ON JUDICIARY
SENATE AMENDMENTS TO S.B. 1312
(Reference to printed bill)
Strike everything after the enacting clause and insert:
"Section 1. Title 5, Arizona Revised Statutes, is amended by adding chapter 10, to read:
CHAPTER 10
STATE ELECTRONIC KENO
ARTICLE 1. GENERAL PROVISIONS
5-1201. Definitions
In this chapter, unless the context otherwise requires:
1. "Commission" means the Arizona state electronic keno commission.
2. "Director" means the executive director of the Arizona state ELECTRONIC keno commission.
3. "ELECTRONIC keno" or "state electronic keno" means electronic keno operated pursuant to this chapter.
5-1202. Arizona state electronic keno commission; membership; appointment; terms; chairperson; removal; compensation
A. The Arizona state electronic keno commission is established consisting of five members who are citizens and residents of this state and who are appointed by the governor pursuant to section 38‑211. Not more than three members may be from the same political party. The initial members shall assign Themselves by lot to terms of three, four and five years in office and the chairperson shall notify the governor's office on appointments of these terms. The term of all subsequent members appointed to the commission is five years. commission members shall annually elect one of the members to serve as chairperson of the commission.
B. At least one member of the commission shall have a minimum of five years' experience in law enforcement.
C. At least one member of the commission shall have a minimum of five years' experience as a certified public accountant.
D. At least one member of the commission shall have a minimum of five years' experience in marketing or advertising, or both.
E. At least one member of the commission shall have a minimum of five years' experience in convenience store, minimart or grocery retailing.
F. Any member of the commission may be removed from office by the governor for cause on notice and an opportunity to be heard at a public hearing.
G. Members of the commission are eligible to receive compensation pursuant to section 38‑611.
H. The commission shall hold at least one meeting each quarter.
I. A commission member may not have a pecuniary interest in any contract or agreement to which the commission is a party.
J. An action of the commission is not binding unless taken at a meeting with at least three members present voting in favor of the action in question.
5-1203. Executive director; appointment
A. An executive director appointed by the governor pursuant to section 38‑211 shall exercise immediate supervision over electronic keno. The director shall be a person qualified by training and experience to administer state electronic keno. The director shall be appointed by the governor and shall serve at the pleasure of the governor.
B. The director shall devote the director's entire time and attention to the administration of state electronic keno and may not be engaged in any other profession or occupation. The director is eligible to receive compensation pursuant to section 38‑611.
5-1204. Commission; director; powers and duties
A. The commission shall meet with the director not less than once each quarter to make recommendations and set policy, receive reports from the director and transact other business properly brought before the commission.
B. The commission shall oversee state electronic keno to produce the maximum amount of net revenue consonant with the dignity of this state. To achieve these ends, the commission shall authorize the director to adopt rules in accordance with title 41, chapter 6. Rules adopted by the director may include provisions relating to the following:
1. Subject to the approval of the commission, the types of electronic keno and the types of game play‑styles to be conducted.
2. The manner of payment of prizes to winning players, except that the commission staff shall examine claims and may not pay any prize based on claims that fail to meet established validation requirements, including rules stated in the published game rules, and confidential validation tests applied consistently by the commission staff. A particular prize in an electronic keno game may not be paid more than once, and in the event of a binding determination that more than one person is entitled to a particular prize, the sole remedy of the claimants is the award to each of them of an equal portion of the single prize.
3. The method to be used in paying for keno plays. The overall estimated odds of winning some prize or some cash prize, as appropriate, in a given game shall be printed at each licensed location.
4. The licensing of agents to provide keno games, except that a person who is under eighteen years of age may not be licensed as an agent.
5. The manner and amount of compensation to be paid licensed sales agents that is necessary to provide for the adequate availability to prospective electronic keno players and for the convenience of the public, including provision for variable compensation based on sales volume.
6. Matters that are necessary or desirable for the efficient and economical operation and administration of electronic keno and for the convenience of the players.
C. The commission shall authorize the director to issue orders and shall approve orders issued by the director for the necessary operation of state electronic keno. Orders issued under this subsection may include provisions relating to the following:
1. The prices of playing electronic keno games.
2. The themes, game play‑styles and names of electronic keno games and definitions of symbols and other characters used in ELECTRONIC keno games.
3. The participation in keno games at a discount for promotional purposes.
4. The prize structure of electronic keno games, including the number and size of prizes available. Available prizes may include free participation in electronic keno games and merchandise prizes.
5. The frequency of games, or other selections of winning, except that:
(a) All games shall be open to the public.
(b) The actual selection of winning numbers may not be performed by an employee or member of the commission.
6. Incentive and bonus programs designed to increase participation in electronic keno games and to produce the maximum amount of net revenue for this state.
7. The method used for the validation of a keno game win.
D. The commission shall maintain and make the following information available for public inspection at its offices during regular business hours:
1. a listing of the total number of keno games played and the number of prizes of each particular denomination awarded in each electronic keno game.
2. Definitions of all play symbols and other characters used in each electronic keno game and instructions on how to play and how to win each ELECTRONIC keno game.
E. Any information that is maintained by the commission and that would assist a person in locating or identifying a winner of a keno game or that would otherwise compromise the integrity of any electronic keno game is deemed confidential and is not subject to public inspection.
F. The commission or director may not establish or operate any ELECTRONIC keno game or any type of game play‑style, either individually or in combination, that uses gaming devices or video terminals as those terms are used in section 5‑601.02, including monitor games that produce or display outcomes or results more than once per hour.
G. The director shall print, in a prominent location at each electronic keno game location, a statement that help is available if a person has a problem with gambling and a toll-free telephone number where problem gambling assistance is available. The director shall require all licensed agents to post a sign with the statement that help is available if a person has a problem with gambling and the toll-free telephone number at the point of sale as prescribed and supplied by the director.
5-1205. Apportionment of revenue; appropriations
A. Not more than eighteen and one‑half percent of the total annual revenues accruing from electronic keno and from all other sources shall be deposited in the state electronic keno fund established by section 5‑1206 to be expended for the following:
1. The payment of costs incurred in the operation and administration of state electronic keno, including the expenses of the commission and the costs resulting from any contract or contracts entered into for consulting or operational services.
2. Independent audits, which shall be performed annually.
3. Incentive programs for electronic keno sales agents and electronic keno employees.
4. The payment of compensation to licensed sales agents that is necessary to provide for the adequate availability of keno games or services to prospective electronic keno players and for the convenience of the public. Except as otherwise provided in this subsection, compensation of licensed sales agents shall be at least five and one‑half percent but not more than eight percent of the price of play of each keno game that is played at the location of a licensed sales agent.
5. The payment of reasonable fees to redemption agents.
6. The purchase or lease of electronic keno equipment and materials.
B. Not less than fifty percent of the total annual revenues accruing from electronic keno shall be deposited in the state electronic keno fund established by section 5-1206 for payment of prizes to winners of electronic keno.
C. All other revenues accruing from electronic keno shall be deposited in the state general fund. The legislature shall annually appropriate twenty‑five percent of these monies to provide funding for full‑day kindergarten instruction in the public schools of this state and twenty‑five percent of these monies to the department of public safety to be used for any purpose specified by the director of the department of public safety. The remaining Fifty percent of these monies shall be retained in the state general fund and may be used for any purposes prescribed by law.
D. Monies expended under subsection A of this section shall be subject to legislative appropriation.
5-1206. State electronic keno fund
The state electronic keno fund is established consisting of monies deposited pursuant to section 5‑1205, subsections A and B. The commission shall administer the fund. Monies in the fund are subject to legislative APPROPRIATION.
5-1207. Powers and duties of director
In addition to other powers and duties prescribed in this chapter, the director shall:
1. Supervise and administer the operation of electronic keno in accordance with this chapter and the rules adopted under this chapter, subject to the continuous duty to take into account the particularly sensitive and responsible nature of the commission's functions.
2. Enforce this chapter and the rules adopted under this chapter. The director shall accept allegations of any violations of the laws of this state or rules pertaining to the conduct of ELECTRONIC keno.
3. Pursuant to this chapter and the rules adopted by the commission, license as agents to provide electronic keno games such persons as will best serve the public convenience.
4. Subject to title 41, chapter 4, article 4, hire such professional, clerical, technical and administrative personnel as may be necessary to carry out this chapter. The director shall conduct background checks of prospective employees, and, in all employment decisions, shall take into account the particularly sensitive and responsible nature of the operation of state ELECTRONIC keno.
5. Act as secretary and executive officer of the commission.
6. Confer regularly as necessary or desirable and not less than once every quarter with the commission on the operation and administration of state ELECTRONIC keno.
7. Make available for inspection by the commission, on request, all books, records, files and other information and documents of the commission.
8. Advise the commission and recommend matters as are necessary and advisable to improve the operation and administration of state electronic keno.
9. Suspend or revoke any license issued pursuant to this chapter or the rules adopted pursuant to this chapter, subject to appeal to the commission.
10. Within thirty days after receiving an allegation of a violation of the laws of this state or rules pertaining to the conduct of state electronic keno by a licensed agent and evidence substantiating the allegation, determine whether the agent has violated the rules or if a criminal investigation is warranted.
Sec. 2. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3027.01, to read:
41-3027.01. Arizona state electronic keno commission; termination July 1, 2027
A. The Arizona state electronic keno commission terminates on July 1, 2027.
B. Title 5, chapter 10 and this section are repealed on January 1, 2028.
Sec. 3. Purpose
Pursuant to section 41‑2955, subsection E, Arizona Revised Statutes, the Arizona state electronic keno commission is established to oversee state electronic keno to produce the maximum revenue for this state consonant with the dignity of this state."
Amend title to conform