GENERAL ASSEMBLY OF NORTH CAROLINA

 SESSION 2011

H                                                                                                                                                    1

HOUSE BILL 1188

Short Title:        Casino Night for Nonprofits.		(Public)
Sponsors:	Representative Owens (Primary Sponsor). For a complete list of Sponsors, see Bill Information on the NCGA Web Site.
Referred to:	Judiciary Subcommittee B.

May 30, 2012

A BILL TO BE ENTITLED

AN ACT TO AUTHORIZE NONPROFIT ORGANIZATIONS TO OPERATE "CASINO NIGHTS," to Provide for the regulation of nonprofit organizations holding casino nights, to allow for LICENSING and regulation of gaming table dealers, and allow the CONSUMPTION of alcoholic beverages at casino nights.

The General Assembly of North Carolina enacts:

SECTION 1.  Article 37 of Chapter 14 of the General Statutes is amended by adding a new Part to read:

"Part 2A. Casino Nights.

"§ 14-309.16. Definitions.

For purposes of this Part, the term:

(1) "Exempt organization" means an organization that has been in continuous existence in the county of operation of the casino night for at least one year and that is exempt from taxation under section 501(c)(3), 501(c)(4), 501(c)(8), 501(c)(10), 501(c)(19), or 501(d) of the Internal Revenue Code and is exempt under similar provisions of the General Statutes as a bona fide nonprofit charitable, civic, religious, fraternal, patriotic, or veterans' organization. (If the organization has local branches or chapters, the term "exempt organization" means the local branch or chapter operating the casino night);

(2) "Casino Night" means a specific night at which games of chance are played and at which prizes are awarded on the basis of the amount of play money, scrip, tokens, or chips won at any particular game by an authorized player or participant;

(3) "Local law enforcement agency" means any county or municipal law enforcement agency that has territorial and subject matter jurisdiction over the location at which the casino night is being held; and

(4) "Licensed exempt organization" means an exempt organization which possesses a currently valid license."

"§ 14-309-16A.  Casino nights.

(a) The purpose of conducting a casino night is to insure a maximum availability of the net proceeds exclusively for application to the charitable, nonprofit causes and undertakings specified herein; that the only justification for this Part is to support such charitable, nonprofit causes; and such purpose should be carried out to prevent the operation of casino nights by professionals for profit, prevent commercialized gambling, prevent the disguise of casino nights and other game forms or promotional schemes, prevent participation by criminal and other undesirable elements, and prevent the diversion of funds for the purpose herein authorized.

(b) It is lawful for an exempt organization to conduct casino nights in accordance with the provisions of this Part. Any licensed exempt organization who conducts a casino night in violation of any provision of this Part shall be guilty of a Class 1 misdemeanor. Upon conviction such person shall not conduct a casino night for a period of one year. It is lawful to participate in a casino night conducted pursuant to this Part. It shall be a Class I felony for any person (i) to operate a casino night without a license; (ii) to operate a casino night while license is suspended or revoked; (iii) to willfully misuse or misapply any moneys received in connection with any casino night; (iv) allow a game of bingo to be played during the casino night, (v) to allow the operation of or the possession of a slot machine as defined in G.S. 14-306; or (vi) to contract with or provide consulting services to any licensee. It shall not constitute a violation of any State law to advertise a casino night conducted in accordance with this Part.

"§ 14-309.16B.  Licensing procedure.

(a) An exempt organization may not operate a casino night at a location without a license. Application for a casino night license shall be made to the Department of Crime Control and Public Safety on a form prescribed by the Department. The Department shall charge an annual application fee of four hundred dollars ($400.00) to defray the cost of issuing casino night licenses and handling casino night audit reports. The fees collected shall be deposited in the General Fund of the State. This license shall expire one year after the granting of the license. This license may be renewed yearly, if the applicant pays the application fee and files an audit with the Department pursuant to G.S. 14-309.16F. A copy of the application and license shall be furnished to the local law enforcement agency in the county or municipality in which the licensee intends to operate before a casino night is conducted by the licensee.

(b) Each application and renewal application shall contain the following information:

(1) The name and address of the applicant and if the applicant is a corporation, association, or other similar legal entity, the name and home address of each of the officers of the organization as well as the name and address of the directors, or other persons similarly situated, of the organization.

(2) The name and home address of each of the members of the special committee established pursuant to G.S. 14-309.16E.

(3) A copy of the application for recognition of exemptions and a determination letter from the Internal Revenue Service and the Department of Revenue that indicates that the organization is an exempt organization and stating the section under which that exemption is granted; except that if the organization is a State or local branch, lodge, post, or chapter of a national organization, a copy of the determination letter of the national organization satisfies this requirement.

(4) The location at which the applicant will conduct the casino nights and if the premises are leased, a copy of the lease or rental agreement.

(c) In order for an exempt organization to have a member familiar with the operation of a casino night present on the premises at all times when casino games are being played and for this member to be responsible for the receiving, reporting, and depositing of all revenues received, the exempt organization may pay one member for conducting a casino night. Such pay shall be on an hourly basis only for the time casino games are actually being played and shall not exceed one and one-half times the existing minimum wage in North Carolina. The member paid under this provision shall be a member in good standing of the exempt organization for at least one year and shall not be the lessor or an employee or agent of the lessor. No other person may be compensated for conducting a casino night from funds derived from any activities occurring in, or simultaneously with, the playing of casino games, including funds derived from concessions. An exempt organization shall not contract with any person for the purpose of conducting a casino night. Except as provided in subsection (e) of this section, an exempt organization may hold a casino night only in or on property owned (either legally or equitably and the buildings must be of a permanent nature with approved plumbing for bathrooms and not movable or of a temporary nature such as a tent or lean-to) or leased by the organization from the owner or bona fide property management agent (no subleasing is permitted) at a total monthly rental in an amount not to exceed one and one-fourth percent (1 1/4%) of the total assessed ad valorem tax value of the portion of the building actually used for the casino night and the land value on which the building is located (not to exceed two acres) for all activities conducted therein, including the playing of casino games for a period of not less than one year and actually occupied and used by that organization on a regular basis for purposes other than casino nights for at least six months before the game; and all equipment used by the exempt organization in conducting the casino games must be owned by the organization. Unless the exempt organization leases the property in accordance with this subsection, an exempt organization may conduct a casino night only in or on property that is exempt from property taxes levied under Subchapter II of Chapter 105 of the General Statutes, or that is classified and not subject to any property taxes levied under Subchapter II of Chapter 105 of the General Statutes.

(d) Conduct of a casino night under this Part on such property shall not operate to defeat an exemption or classification under Subchapter II of Chapter 105 of the General Statutes.

(e) An exempt organization that wants to conduct only an annual or semiannual casino night may apply to the Department of Crime Control and Public Safety for a limited occasion permit. The Department of Crime Control and Public Safety may require such information as is reasonable and necessary to determine that the casino games are conducted in accordance with the provisions of this Part but may not require more information than previously specified in this section for application of a regular license. The application shall be made to the Department on prescribed forms at least 30 days prior to the scheduled date of the casino night. In lieu of the reporting requirements of G.S. 14-309.16F(b), the exempt organization shall file with the licensing agency and local law enforcement a report on prescribed forms no later than 30 days following the conduct of the casino night for which the permit was obtained. Such report may require such information as is reasonable and necessary to determine that the casino night was conducted in accordance with the provisions of this Part but may not require more information than specified in G.S. 14-309.16F(b). Any licensed exempt organization may donate or loan its equipment or use of its premises to an exempt organization which has secured a limited occasion permit provided such arrangement is disclosed in the limited occasion permit application and is approved by the Department of Crime Control and Public Safety. Except as stated above, all provisions of this Part shall apply to any exempt organization operating a casino night under this provision.

"§ 14-309.16C.  Limit on sessions.

The number of sessions of casino nights conducted or sponsored by an exempt organization shall be limited to four sessions per year, and such sessions must not exceed a period of five hours each per session. No more than one session of a casino night may be held in any quarter of a calendar year that begins January 1. No more than two sessions of a casino night shall be operated or conducted in any one building, hall, or structure during any one calendar week, and if two sessions are held, they must be held by different exempt organizations on different nights of the week. There shall be no operation of a casino night between the hours of 2:00A.M. and 12:00 Noon Monday through Saturday. There shall be no casino nights held on any Sunday.

"§ 14-309.16D.  Casino night prizes.

The maximum prize in merchandise that may be offered or paid for any one casino game winner is five hundred dollars ($500.00). The maximum aggregate amount of prizes, in merchandise, that may be offered or paid at any one session is one thousand five hundred dollars ($1,500).

"§ 14-309.16E.  Operation of casino nights.

The operation of the casino night and the casino games shall be the direct responsibility of, and controlled by, a special committee selected by the governing body of the exempt organization in the manner provided by the rules of the exempt organization. The following games are the only games that may be played at a casino night:

(1) Roulette.

(2) Blackjack.

(3) Poker.

(4) Pull tabs.

(5) Craps.

(6) Chuck-a-luck.

(7) Keno.

(8) Merchandise wheel of fortune.

"§ 14-309.16F.  Accounting and use of proceeds.

(a) All funds received in connection with a casino night shall be placed in a separate bank account. No funds may be disbursed from this account except the exempt organization may expend proceeds for prizes, advertising, utilities, and the purchase of supplies and equipment used in conducting the casino games, taxes and license fees related to the casino night and the payment of compensation as authorized by G.S. 14-309.16B(c) and for the purposes set forth below for the remaining proceeds. Such payments shall be made by consecutively numbered checks. Any proceeds available in the account after payment of the above expenses shall inure to the exempt organization to be used for religious, charitable, civic, scientific, testing, public safety, literary, or educational purposes or for purchasing, constructing, maintaining, operating or using equipment or land or a building or improvements thereto owned by and for the exempt organization and used for civic purposes or made available by the exempt organization for use by the general public from time to time, or for fostering amateur sports competition, or for preventing cruelty to children or animals, provided that no proceeds shall be used or expended for social functions for the members of the exempt organization.

(b) An audit of the account required by subsection (a) of this section shall be prepared annually for the period of January 1 through December 31 or otherwise as directed by the Department of Crime Control and Public Safety and shall be filed with the Department of Crime Control and Public Safety and the local law enforcement agency at a time directed by the Department of Crime Control and Public Safety. The audit shall be prepared on a form approved by the Department of Crime Control and Public Safety and shall include the following information:

(1) The number of casino nights conducted or sponsored by the exempt organization;

(2) The location and date at which each casino night was conducted and the prize awarded;

(3) The gross receipts of each casino night;

(4) The cost or amount of any prize given at each casino night;

(5) The amount paid in prizes at each session;

(6) The net return to the exempt organization; and

(7) The disbursements from the separate account and the purpose of those disbursements, including the date of each transaction and the name and address of each payee.

(c) Any person who shall willfully furnish, supply, or otherwise give false information in any audit or statement filed pursuant to this section shall be guilty of a Class 1 misdemeanor.

(d) All books, papers, records, and documents relevant to determining whether an organization has acted or is acting in compliance with this section shall be open to inspection by the law enforcement agency or its designee, or the district attorney or his designee, or the Department of Crime Control and Public Safety at reasonable times and during reasonable hours.

"§ 14-309.16G.  Violation is gambling.

A casino night conducted other than in accordance with the provisions of this Part is "gambling" within the meaning of G.S. 14-292 and G.S. 19-1, et seq., and proceedings against such casino night may be instituted as provided for in Chapter 19 of the General Statutes.

"§ 14-309.16H.  Regulation and licensing of gaming table dealers.

(a) It shall be unlawful for any person who is not a licensed Gaming Table Dealer to possess, keep, store, operate, offer for sale, sell, rent, or lease any gaming tables or casino games except for the purpose of selling such games to a nonprofit organization purchasing such games to own for use at a casino night authorized by G.S. 14-309.16A. These games may only be sold by a person that holds a valid license from the Department of Crime Control and Public Safety and may only be sold to a nonprofit organization that is licensed to hold casino nights from the Department of Crime Control and Public Safety. A violation of this section is punishable as a Class I felony.

(b) Application for a Gaming Table Dealer's License shall be made to the Department of Crime Control and Public Safety on a form prescribed by the Department. The Department shall charge an annual application fee of one thousand dollars ($1,000) to defray the cost of issuing Gaming Table Dealer's Licenses and handling dealer audit reports. The fees collected shall be deposited in the General Fund of the State. This license shall expire one year after the granting of the license. This license may be renewed yearly, if the applicant pays the application fee and files an audit with the Department pursuant to G.S. 14-309.16F. A copy of the application and license shall be furnished to the local law enforcement agency in the county or municipality in which the licensee intends to operate before any sale is conducted by the licensee.

(c) Each application and renewal application shall contain the following information:

(1) The name and address of the applicant and if the applicant is a corporation, association, or other similar legal entity, the name and home address of each of the officers of the organization as well as the name and address of the directors, or other persons similarly situated, of the organization.

(2) A copy of the application for recognition of exemptions and a determination letter from the Internal Revenue Service and the Department of Revenue that indicates that the organization is an exempt organization and stating the section under which that exemption is granted; except that if the organization is a State or local branch, lodge, post, or chapter of a national organization, a copy of the determination letter of the national organization satisfies this requirement.

(3) The location at which the applicant will conduct the gaming tables sales and if the premises are leased, a copy of the lease or rental agreement."

SECTION 2.  Chapter 18B of the General Statutes is amended by adding a new section to read:

"§ 18B-1002.1.  Special one-time permits for casino nights.

(a) Casino Night Special One-Time Permit. - A Special One-Time permit may be issued to a licensed exempt organization as defined in G.S. 14-309.16A(6) to allow the retail sale, possession,or consumption of malt beverages, unfortified wine, fortified wine, or mixed beverages, at a single casino night fund-raising event of that organization pursuant to G.S. 14-309.16. A permit for this purpose shall not be issued for the sale, possession, or consumption of any kind of alcoholic beverage in a jurisdiction where the sale of that alcoholic beverage is not lawful. The fee for this permit is five hundred dollars ($500.00). The application shall require documentation from the applicant that the organization is a licensed exempt organization pursuant to G.S. 14-309.16(4). An application for this permit shall be made for each casino night event being held by a licensed exempt organization that seeks to allow the retail sale, possession, or consumption of alcoholic beverages at a casino night.

(b) Intent. - Permits under this section are to be issued only for the limited circumstances listed in subsection (a) of this section and not as substitutes for other permits required by this Chapter.

(c) Conditions of Permit. - A permit issued under this section shall be valid only for the single transaction or the kind of activity specified in the permit and shall be subject to any conditions the Commission may impose as to the time, place, and manner of the authorized activity.

(d) Administrative Procedure. - Denial or revocation of a permit under this section shall not entitle the applicant or permittee to a hearing under Chapter 150B.

(e) Violations. - Any administrative action by the Commission for any violation of the provisions of this Chapter that occur during an event held under this permit automatically disqualifies the licensed exempt organization from applying for or receiving another permit under this section for a period of one year."

SECTION 3.  This act becomes effective July 1, 2012.