AB633: Bill Text

The bill provides that the gaming commission may not permit the play of these video amusement devices at any location other than in a city or village on a premises issued a Class "B" or "Class B" alcohol beverage license. Under the bill, no more than 5 video amusement devices may be kept at any one premises issued a Class "B" or "Class B" license and the play of these amusement devices is prohibited during hours in which the premises is closed. The owner of a premises issued a Class "B" or "Class B" license, who permits the play of video amusement devices at his or her premises, is required to enter into a contract with the owner of the amusement devices and this contract must be kept on the premises at all times, available for inspection by persons authorized by the gaming commission. In addition, the bill prohibits the advertising of video amusement devices and the offering of any special inducement for playing such a device.

Under the bill, the gaming commission, on behalf of cities and villages, must charge an annual license fee of $1,000 for each amusement device that is set up for the purpose of play. The person charged this fee is required to pay the fee directly to the city or village in which the amusement device will be set up for the purpose of play. In addition, the gaming commission is required to charge an additional annual license fee of $500 for each amusement device to defray the costs incurred by the gaming commission in regulating video amusement devices, but the bill provides that no person may be charged more than a total of $10,000 in any one year. The gaming commission is also required to charge a manufacturer or distributor of amusement devices an annual license fee of $10,000 and each manufacturer and distributor is also required to pay the gaming commission a nonrefundable fee set by the commission to cover all costs of processing the person's application for a license. Finally, under the bill, an exemption from the sales tax is allowed for the value of the redeemable credits awarded by each video amusement device, other than credits used for free replays.

Under current law, it is unlawful to make a bet, set up for the purpose of play any gambling machine, permit the operation of a gambling place or conduct an illegal lottery. This bill provides that playing an amusement device that awards or is capable of awarding any redeemable credits is not a bet; that an amusement device that awards or is capable of awarding any redeemable credits or that is possessed by a person licensed by the gaming commission is not a gambling machine; that a lottery does not include the playing of an amusement device licensed by the gaming commission; and, that the premises on which an amusement device licensed by the gaming commission is located is not a gambling place.

This bill will be referred to the joint survey committee on tax exemptions for a detailed analysis, which will be printed as an appendix to this bill.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB633, s. 1 Section 1. 20.197 (1) (j) of the statutes, as created by 1995 Wisconsin Act 27, is amended to read:

AB633,3,7 20.197 (1) (j) (title) General program operations; charitable and crane games and amusement devices. The amounts in the schedule for general program operations under chs. 563 and 564. All moneys received by the gaming commission under ch. 563, except s. 563.80, and under s. 564.02 (2) ch. 564 shall be credited to this appropriation account.

AB633, s. 2 Section 2. 20.197 (1) (j) of the statutes, as affected by 1995 Wisconsin Acts 27, section 545m, and .... (this act), is repealed and recreated to read:

AB633,3,14 20.197 (1) (j) (title) General program operations; charitable and crane games and amusement devices. The amounts in the schedule for general program operations under chs. 563 and 564. All moneys received by the gaming board under ch. 563, except s. 563.80, and under ch. 564 shall be credited to this appropriation account.

AB633, s. 3 Section 3. 77.51 (4) (b) 7. of the statutes is created to read:

AB633,3,17 77.51 (4) (b) 7. The value of redeemable credits, except credits for replay, issued by an amusement device, as defined in s. 564.03 (1) (a).

AB633, s. 4 Section 4. 561.02 of the statutes is amended to read:

AB633,4,6 561.02 General powers and duties of commission. The commission shall coordinate and regulate all activities relating to, and promulgate all rules relating to, racing and pari-mutuel wagering conducted under ch. 562, bingo and raffles conducted under ch. 563, crane games conducted and amusement devices licensed under ch. 564 and the state lottery conducted under ch. 565, and shall perform its duties and functions under ch. 569 regarding Indian gaming.

AB633, s. 5 Section 5. 561.02 (1) of the statutes, as affected by 1995 Wisconsin Act 27, is repealed and recreated to read:

AB633,4,13 561.02 (1) The commission shall coordinate and regulate all activities relating to, and promulgate all rules relating to, racing and pari-mutuel wagering conducted under ch. 562, bingo and raffles conducted under ch. 563 and crane games conducted and amusement devices licensed under ch. 564, and shall perform its duties and functions under ch. 569 regarding Indian gaming.

AB633, s. 6 Section 6. 561.12 (title) of the statutes is amended to read:

AB633,4,16 561.12 (title) Charitable gaming and, crane games and amusement devices.

AB633, s. 7 Section 7. 561.12 (1) of the statutes is amended to read:

AB633,4,20 561.12 (1) Advise the commission on policy making and rule making relating to the conduct of bingo and raffles under ch. 563, and to the play and regulation of crane games and amusement devices under ch. 564.

AB633, s. 8 Section 8. Chapter 564 (title) of the statutes is amended to read:

AB633,4,22 CHAPTER 564

AB633,4,24 CRANE GAMES and amusement devices

AB633, s. 9 Section 9. 564.03 of the statutes is created to read:

AB633,5,2 564.03 Offering amusement devices for play; registration and licensing. (1) Definitions. In this section:

AB633,5,7 (a) "Amusement device" means any video amusement device if it awards or is capable of awarding the player with one or more redeemable free replays or credits for achieving certain scores or results and does not change the ratio of plays to free replays or credits so awarded. An amusement device set up for the purpose of play shall have a percentage of credits awarded to credits played of not less than 83%.

AB633,5,9 (b) "Set up for the purpose of play" means offer a person, for consideration, an opportunity to play an amusement device.

AB633,5,12 (1m) Gaming commission authority; local option. (a) Subject to pars. (b) and (c), the gaming commission, on behalf of all cities and villages, shall license and regulate amusement devices in the manner provided in this section.

AB633,5,18 (b) Electors of any city or village may determine, by ballot at the election held on the first Tuesday in April, the question of whether amusement devices shall be prohibited in the city or village. If the electors of any city or village determine that amusement devices shall be prohibited in the city or village, the gaming commission may not license any amusement device for the purpose of play or possession in the city or village.

AB633,5,25 (c) The gaming commission may not license any amusement device for the purpose of play or possession in a city or village that, before the effective date of this paragraph .... [revisor inserts date], enacted an ordinance that prohibited in the city or village the play and possession of any amusement device, unless that city or village, on or after the effective date of this paragraph .... [revisor inserts date], enacts a subsequent ordinance authorizing the play and possession of any amusement device in the city or village.

AB633,6,8 (2) Registration and licensing; fees. (a) No person may market, lease, service, repair, warehouse, transport or set up for the purpose of play in this state any amusement device or collect the proceeds from an amusement device set up for the purpose of play in this state unless the person has been a resident of this state during the year immediately prior to applying for a certificate of registration under this subsection, the person registers with the commission under this subsection and a license with an identification number issued by the commission is affixed to the amusement device.

AB633,6,13 (b) Any person who wishes to market, lease, service, repair, warehouse, transport or set up for the purpose of play in this state any amusement device or collect the proceeds from an amusement device set up for the purpose of play in this state shall file with the commission, on application forms prescribed by the commission, a signed application that includes all of the following information:

AB633,6,18 1. The name and address of the person. If the person is a corporation or other entity, the person shall also file with the commission the name and address of all officers, directors, agents and stockholders or other persons holding or controlling, either directly or indirectly, 5% or more of the ownership of the corporation or other entity.

AB633,6,20 2. The person's place or places of residence in this state, if any, during the year immediately prior to applying for a certificate of registration under this subsection.

AB633,6,22 3. The serial number and manufacturer of each amusement device that the person intends to set up for the purpose of play in this state.

AB633,6,24 4. The location of the premises at which the amusement devices shall be set up for the purpose of play.

AB633,7,4 (c) A nonrefundable fee, set by the commission to cover all costs of processing the application filed under par. (b), and the first year's license fees shall accompany the application under par. (b). If the commission does not approve the application under par. (b), the commission shall refund the license fees to the person.

AB633,7,8 (d) Upon receipt of the application under par. (b) and the fees specified under par. (c), but subject to pars. (e) to (f), the commission shall issue a certificate of registration to each applicant who has met the requirements of this subsection and a license with an identification number for each amusement device.

AB633,7,13 (e) The commission may not issue a certificate of registration under this subsection to any person who is a corporation or other entity unless at least 51% of the ownership in that corporation or other entity is held by one or more persons who have been residents of this state during the year immediately prior to applying for a certificate of registration.

AB633,7,17 (em) The commission may not issue a license with an identification number for an amusement device that is set up for the purpose of play at a location in a city or village other than a premises issued a Class "B" license under s. 125.26 or a "Class B" license under s. 125.51.

AB633,7,20 (f) Notwithstanding ss. 111.321, 111.322 and 111.335, the commission may not issue a certificate of registration under this subsection to any person to whom any of the following applies:

AB633,7,22 1. The person has been convicted of a misdemeanor, not involving chs. 340 to 349, at least 3 times.

AB633,7,23 2. The person has been convicted of a felony, unless pardoned.

AB633,7,24 3. The person is addicted to the use of a controlled substance under ch. 161.

AB633,7,25 4. The person has been convicted of 2 or more gambling offenses.

AB633,8,1 5. The person has been convicted of crimes relating to prostitution.

AB633,8,3 6. The person has been convicted of crimes relating to loaning money or anything of value to persons holding licenses or permits pursuant to ch. 125.

AB633,8,4 7. The person does not hold a permit under s. 77.52 (7), if the person is a retailer.

AB633,8,9 8. The person has been finally adjudged to be delinquent in the payment of taxes under ch. 71, 72, 76, 77, 78 or 139 or the person has been found delinquent in the payment of contributions to the unemployment reserve fund under s. 108.16 in a proceeding under s. 108.10 and the person remains so delinquent at the time of filing an application under par. (b).

AB633,8,13 (g) Upon denial of an application under par. (b), the commission shall immediately notify the person in writing and shall state the reasons for the denial. A denial of an application under par. (b) shall be subject to judicial review under ch. 227.

AB633,8,16 (h) 1. The commission shall charge, on behalf of a city or village, an annual license fee of $1,000 for each amusement device set up for the purpose of play. The person shall pay this fee directly to the city or village.

AB633,8,22 2. The commission shall charge an additional annual license fee of $500 for each amusement device set up for the purpose of play to defray the costs incurred by the commission in enforcing this subsection, but the commission may not charge any one person under this subdivision more than a total of $10,000 in license fees in any one year, regardless of the number of amusement devices that the person intends to set up for the purpose of play in this state.

AB633,8,23 3. Any license issued under this subsection shall remain in effect for one year.

AB633,9,2 (i) The certificate of registration issued under par. (d) shall remain in effect unless it is canceled by the commission, after consulting with the department of justice, or unless it is withdrawn by the person who is issued the certificate of registration.

AB633,9,5 (j) Every person registered under this section shall notify the commission of any change in the information provided under par. (b) by the 10th day of the first month following the change in information.

AB633,9,7 (k) The commission shall deposit all moneys received under this subsection in the appropriation account under s. 20.197 (1) (j).

AB633,9,10 (3) Prohibited practices relating to amusement devices. (a) No person may keep more than 5 amusement devices at any one premises operated under a Class "B" license under s. 125.26 or a "Class B" license under s. 125.51.

AB633,9,15 (b) No person may play, or permit another person to play, an amusement device at a premises operated under a Class "B" or "Class B" license in a city or village during hours in which the premises is closed or the sale of fermented malt beverages or intoxicating liquor is prohibited under s. 125.32 (3) (a) or (c) or 125.68 (4) (c) 1. or 4.

AB633,9,22 (c) No owner of a premises may set up for the purpose of play an amusement device at his or her premises unless he or she has entered into a written agreement with a person who owns the amusement device for the use of that amusement device at his or her premises and a copy of the agreement is kept on the premises and made available for inspection to any person authorized by the commission. This paragraph shall not apply to an owner of a premises who is also the owner of every amusement device kept at his or her premises.

AB633,9,25 (d) No person may engage in the advertising of any amusement device set up for the purpose of play or offer, or allow to be offered, to any other person any special inducement for playing an amusement device.

AB633,10,3 (e) No person registered under sub. (2) may purchase an amusement device from a person other than a person registered under sub. (2) or a distributor registered under sub. (4) (c).

AB633,10,6 (4) Manufacturers and distributors of amusement devices; registration and fees. (a) No person who is a manufacturer of amusement devices may do any of the following:

AB633,10,10 1. Do any business in this state related to amusement devices unless the person submits an application for registration with the commission under par. (c), pays the first year's annual license fee and the nonrefundable fee set by the commission to cover all costs of processing the application and is issued a manufacturer's license.

AB633,10,13 2. Sell an amusement device to any person other than a distributor of amusement devices with a valid distributor's license issued by the commission under par. (c).

AB633,10,15 3. Hold or control, either directly or indirectly, any ownership interest of a distributor with a valid distributor's license issued by the commission under par. (c).

AB633,10,16 4. Set up for the purpose of play any amusement device.

AB633,10,18 (b) No person who is a distributor of amusement devices may do any of the following:

AB633,10,23 1. Sell, repair, distribute, warehouse, transport, display or market an amusement device unless the person submits an application for registration with the commission under par. (c), pays the first year's annual license fee and the nonrefundable fee set by the commission to cover all costs of processing the application and is issued a distributor's license.

AB633,10,24 2. Set up for the purpose of play any amusement device.

AB633,11,2 3. Sell an amusement device to any person other than a person registered with the commission under sub. (2).

AB633,11,4 4. Hold or control, either directly or indirectly, any ownership interest of a person registered under sub. (2).

AB633,11,5 (c) The commission shall do all of the following:

AB633,11,14 1. Upon receipt of an application of registration from a person under par. (a) or (b), submission of the first year's license fee and payment of a nonrefundable fee set by the commission to cover all costs of processing the application, issue a manufacturer's license to each applicant under par. (a) and a distributor's license to each applicant under par. (b) who has met the requirements specified under sub. (2) (b) 1. and (f) for a person applying for a certificate of registration under sub. (2) and the requirements of this subsection. The license shall remain in effect unless it is canceled by the commission, after consulting with the department of justice, or unless it is withdrawn by the person who is issued the license.

AB633,11,16 2. Charge an annual fee for a manufacturer's license and distributor's license in the amount of $10,000. The license shall remain in effect for one year.

AB633,11,19 3. Upon denial of an application under subd. 1., immediately notify the person in writing and state the reasons for the denial. A denial of an application under subd. 1. shall be subject to review under ch. 227.

AB633,11,21 4. Deposit all moneys received under this subsection in the appropriation account under s. 20.197 (1) (j).

AB633,11,23 (4m) Rule making. The commission shall promulgate all rules necessary to administer this section.

AB633,12,3 (5) Conflicts of interest. No commission member or employe and no member of a commission member's or employe's immediate family, as defined in s. 19.42 (7), may, while that commission member or employe is serving as a commission member or employe or for 2 years following the termination of the membership or employment of that commission member or employe, do any of the following:

AB633,12,5 (a) Have any direct or indirect interest in any person who is registered or required to be registered under sub. (2) or (4).

AB633,12,7 (b) Accept or agree to accept money or any thing of value from any person who is registered or required to be registered under sub. (2) or (4).

AB633,12,9 (c) Directly or indirectly own or operate any amusement device licensed under sub. (2).

AB633,12,14 (6) Investigation and enforcement. (a) In response to a written complaint, the commission shall conduct an investigation of any person registered under sub. (2) or (4). The commission may conduct an inspection of a person registered under sub. (2) or (4), of the amusement device licensed to the person or of the premises on which the amusement device is played, at any time.

AB633,12,20 (am) The commission may conduct an investigation to determine if a person markets, leases, services, repairs, warehouses, transports or sets up for the purposes of play an amusement device or collects the proceeds of an amusement device which is set up for the purposes of play without being registered under sub. (2) or if a person sells, repairs, distributes, warehouses, displays or markets an amusement device without being registered under sub. (4).

AB633,12,24 (b) An action for violation of this section may be prosecuted in any circuit court of this state by the commission in the name of the state and, in any such action, the commission shall exercise all of the powers and perform all duties which the district attorney would otherwise be authorized to exercise or perform.

AB633,13,4 (7) Seizure and sale. The commission may seize any amusement device owned by a person who is convicted under sub. (8) and may sell the amusement device in the name of the state. The commission and its agents are exempt from all liability to the owner of the amusement device for the seizure or sale of the amusement device.

AB633,13,8 (8) Penalty. Any person who violates this section may be required to forfeit not less than $500 nor more than $5,000 for each offense. Each day of continued violation constitutes a separate offense. The period shall be measured by using the dates of the offenses which resulted in convictions.

AB633, s. 10 Section 10. 564.04 of the statutes is created to read:

AB633,13,10 564.04 Applicability. The requirements of ch. 565 do not apply to this chapter.