68th OREGON LEGISLATIVE ASSEMBLY--1995 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2813
Senate Bill 831
Sponsored by Senator DERFLER (at the request of Oregon Sports
Academy)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Increases prize allowed in bingo and lotto games. Limits prize
in bingo, lotto or raffle game under certain circumstances.
Increases limit on operating expenses in bingo, lotto and raffle
games. Requires minimum net income in bingo, lotto and raffle
games under certain circumstances. Requires that organization
conducting bingo, lotto or raffle games be state resident. Allows
one person in organization conducting games to work more than 30
hours per week under certain circumstances.
A BILL FOR AN ACT
Relating to gambling regulation; amending ORS 167.117, 167.118,
464.250, 464.270, 464.340 and 464.390.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 167.117 is amended to read:
167.117. As used in ORS 167.117 to 167.164, 464.270 to 464.420
and 464.450 to 464.530, unless the context requires otherwise:
(1) 'Bingo or lotto' means a game, played with cards bearing
lines of numbers, in which a player covers or uncovers a number
selected from a container, and which is won by a player who is
present during the game and who first covers or uncovers the
selected numbers in a designated combination, sequence or
pattern.
(2) 'Bookmaking' means promoting gambling by unlawfully
accepting bets from members of the public as a business, rather
than in a casual or personal fashion, upon the outcomes of future
contingent events.
(3) 'Casino game' means any of the traditional gambling-based
games commonly known as dice, faro, monte, roulette, fan-tan,
twenty-one, blackjack, Texas hold-'em, seven-and-a-half, big
injun, klondike, craps, poker, chuck-a-luck, Chinese chuck-a-luck
(dai shu), wheel of fortune, chemin de fer, baccarat, pai gow,
beat the banker, panquinqui, red dog, acey-deucey, slot machine,
or any other gambling-based game similar in form or content.
{ + (4) 'Charitable, fraternal or religious organization'
means any person organized and existing for charitable,
benevolent, eleemosynary, humane, patriotic, religious,
philanthropic, recreational, social, educational, civic,
fraternal or other nonprofit purposes, and who is also exempt
from payment of federal income taxes because of its charitable,
fraternal or religious purposes. The fact that contributions to
an organization profiting from the contest do not qualify for
charitable deduction for tax purposes or that the organization is
not otherwise exempt from payment of federal income taxes
pursuant to the Internal Revenue Code of 1986, as amended,
constitutes prima facie evidence that the organization is not a
bona fide charitable, fraternal or religious organization. + }
{ - (4) - } { + (5) + } 'Contest of chance' means any
contest, game, gaming scheme or gaming device in which the
outcome depends in a material degree upon an element of chance,
notwithstanding that skill of the contestants may also be a
factor therein.
{ - (5) - } { + (6) + } 'Gambling' means that a person
stakes or risks something of value upon the outcome of a contest
of chance or a future contingent event not under the control or
influence of the person, upon an agreement or understanding that
the person or someone else will receive something of value in the
event of a certain outcome. 'Gambling' does not include:
(a) Bona fide business transactions valid under the law of
contracts for the purchase or sale at a future date of securities
or commodities, and agreements to compensate for loss caused by
the happening of chance, including but not limited to contracts
of indemnity or guaranty and life, health or accident insurance.
(b) Engaging in contests of chance under the following
conditions:
(A) The contest is played for some token other than money;
(B) An individual contestant may not purchase more than $100
worth of tokens for use in the contest during any 24-hour period;
(C) The tokens may be exchanged only for property other than
money;
(D) Except when the tokens are exchanged for a beverage or
merchandise to be consumed on the premises, the tokens are not
redeemable on the premises where the contest is conducted or
within 50 miles thereof; and
(E) Except for charitable, fraternal or religious
organizations, no person who conducts the contest as owner, agent
or employee profits in any manner from operation of the contest.
(c) Social games.
(d) Bingo, lotto or raffles operated in compliance with ORS
167.118, by a charitable, fraternal or religious organization
licensed pursuant to ORS 167.118, 464.250 to 464.380, 464.420 and
464.450 to 464.530 to operate such games.
{ - As used in this section, 'charitable, fraternal or
religious organization' means any person organized and existing
for charitable, benevolent, eleemosynary, humane, patriotic,
religious, philanthropic, recreational, social, educational,
civic, fraternal or other nonprofit purposes, and who is also
exempt from payment of federal income taxes because of its
charitable, fraternal or religious purposes. The fact that
contributions to an organization profiting from the contest do
not qualify for charitable deduction for tax purposes or that the
organization is not otherwise exempt from payment of federal
income taxes pursuant to the Internal Revenue Code of 1986, as
amended, constitutes prima facie evidence that the organization
is not a bona fide charitable, fraternal or religious
organization. - }
{ - (6) - } { + (7) + } 'Gambling device' means any device,
machine, paraphernalia or equipment that is used or usable in the
playing phases of unlawful gambling, whether it consists of
gambling between persons or gambling by a person involving the
playing of a machine. Lottery tickets, policy slips and other
items used in the playing phases of lottery and policy schemes
are not gambling devices within this definition. Amusement
devices other than gray machines, { - which - } { + that + }
do not return to the operator or player thereof anything but free
additional games or plays, shall not be considered to be gambling
devices.
{ - (7) - } { + (8) + }(a) 'Gray machine' means any
electrical or electro-mechanical device, whether or not it is in
working order or some act of manipulation, repair, adjustment or
modification is required to render it operational, that:
(A) Awards credits or contains or is readily adaptable to
contain, a circuit, meter or switch capable of removing or
recording the removal of credits earned by a player, other than
removal during the course of continuous play; or
(B) Plays, emulates or simulates a casino game, bingo or keno.
(b) A device is no less a gray machine because, apart from its
use or adaptability as such, it may also sell or deliver
something of value on the basis other than chance.
(c) 'Gray machine' does not include:
(A) Any device commonly known as a personal computer, including
any device designed and marketed solely for home entertainment,
when used privately and not for a fee and not used to facilitate
any form of gambling;
(B) Any device operated under the authority of the Oregon State
Lottery; or
(C) Any device manufactured or serviced but not operated in
Oregon by a manufacturer who has been approved under rules
adopted by the Oregon State Lottery Commission.
{ + (9) 'Handle' means the total amount of money and other
things of value bet on bingo, lotto or raffle games or the value
of raffle chances sold. + }
{ - (8) - } { + (10) + } 'Lottery' or 'policy' means an
unlawful gambling scheme in which:
(a) The players pay or agree to pay something of value for
chances, represented and differentiated by numbers or by
combinations of numbers or by some other medium, one or more of
which chances are to be designated the winning ones; and
(b) The winning chances are to be determined by a drawing or by
some other method; and
(c) The holders of the winning chances are to receive something
of value.
{ - (9) - } { + (11) + } 'Numbers scheme or enterprise'
means a form of lottery in which the winning chances or plays are
not determined upon the basis of a drawing or other act on the
part of persons conducting or connected with the scheme, but upon
the basis of the outcome of a future contingent event otherwise
unrelated to the particular scheme.
{ + (12) 'Operating expenses' means those expenses incurred
in the operation of the bingo, lotto or raffle games and related
concessions, including only the following:
(a) Salaries, employee benefits, workers' compensation coverage
and state and federal employee taxes;
(b) Security services;
(c) Legal and accounting services;
(d) Supplies and inventory;
(e) Rent, repairs, utilities, water, sewer and garbage;
(f) Insurance;
(g) Equipment;
(h) Printing and promotions;
(i) Postage and shipping;
(j) Janitorial services and supplies; and
(k) Leasehold improvements. + }
{ - (10) - } { + (13) + } 'Player' means a person who
engages in any form of gambling solely as a contestant or bettor,
without receiving or becoming entitled to receive any profit
therefrom other than personal gambling winnings, and without
otherwise rendering any material assistance to the establishment,
conduct or operation of the particular gambling activity. A
person who gambles at a social game of chance on equal terms with
the other participants therein is a person who does not otherwise
render material assistance to the establishment, conduct or
operation thereof by performing, without fee or remuneration,
acts directed toward the arrangement or facilitation of the game,
such as inviting persons to play, permitting the use of premises
therefor and supplying cards or other equipment used therein. A
person who engages in bookmaking is not a player.
{ - (11) - } { + (14) + } 'Profits from gambling' means
that a person, other than as a player, accepts or receives money
or other property pursuant to an agreement or understanding with
another person whereby the person participates or is to
participate in the proceeds of gambling.
{ - (12) - } { + (15) + } 'Promotes gambling' means that a
person, acting other than as a player, engages in conduct that
materially aids any form of gambling. Conduct of this nature
includes, but is not limited to, conduct directed toward the
creation or establishment of the particular game, contest,
scheme, device or activity involved, toward the acquisition or
maintenance of premises, paraphernalia, equipment or apparatus
therefor, toward the solicitation or inducement of persons to
participate therein, toward the conduct of the playing phases
thereof, toward the arrangement of any of its financial or
recording phases or toward any other phase of its operation. A
person promotes gambling if, having control or right of control
over premises being used with the knowledge of the person for
purposes of gambling, the person permits the gambling to occur or
continue or makes no effort to prevent its occurrence or
continuation.
{ - (13) - } { + (16) + } 'Raffle' means a lottery operated
by a charitable, fraternal or religious organization wherein the
players pay something of value for chances, represented by
numbers or combinations thereof or by some other medium, one or
more of which chances are to be designated the winning ones or
determined by a drawing and the player holding the winning chance
is to receive something of value.
{ - (14) - } { + (17) + } 'Slot machine' means a gambling
device that as a result of the insertion of a coin or other
object operates, either completely automatically, or with the aid
of some physical act by the player, in such a manner that,
depending upon elements of chance, it may eject something of
value or otherwise entitle the player to something of value. A
device so constructed or readily adaptable or convertible to such
use is no less a slot machine because it is not in working order
or because some mechanical act of manipulation or repair is
required to accomplish its adaptation, conversion or workability.
Nor is it any less a slot machine because apart from its use or
adaptability as such it may also sell or deliver something of
value on the basis other than chance.
{ - (15) - } { + (18) + } 'Social game' means:
(a) A game, other than a lottery, between players in a private
home where no house player, house bank or house odds exist and
there is no house income from the operation of the social game;
and
(b) If authorized pursuant to ORS 167.121, a game, other than a
lottery, between players in a private business, private club or
place of public accommodation where no house player, house bank
or house odds exist and there is no house income from the
operation of the social game.
{ - (16) - } { + (19) + } 'Something of value' means any
money or property, any token, object or article exchangeable for
money or property, or any form of credit or promise directly or
indirectly contemplating transfer of money or property or of any
interest therein.
{ - (17) - } { + (20) + } 'Unlawful' means not specifically
authorized by law.
SECTION 2. ORS 167.118 is amended to read:
167.118. (1) When a charitable, fraternal or religious
organization is licensed by the Department of Justice to conduct
bingo, lotto or raffle games, only the organization itself or an
employee thereof authorized by the { - Department of
Justice - } { + department + } shall receive money or property
or otherwise profit in any manner from the operation of the
games. However, the organization operating the games may present
a prize of money or other property to any player not involved in
the administration or management of the games.
(2) A charitable, fraternal or religious organization shall not
operate bingo, lotto or raffle games except at such locations and
upon such days and for such periods of time as the department
authorizes pursuant to ORS 167.118, 464.250 to 464.380, 464.420
and 464.450 to 464.530.
(3)(a) { - (A) - } Except as otherwise provided in
{ - subparagraph (B) of this paragraph - } { + paragraph (b)
of this subsection + }, it is unlawful for a licensee of the
{ - Department of Justice - } { + department + } to permit the
annual handle of its bingo, lotto and raffle operation to exceed
$1 million in any one calendar year.
{ - (B) - } { + (b) + } For licensee years ending December
31, 1991, and thereafter, the $1 million handle limitation in
{ - subparagraph (A) of this paragraph - } { + paragraph (a)
of this subsection + } shall be adjusted annually by the
{ - Department of Justice - } { + department + } taking into
account the cumulative rate of inflation since December 31, 1987.
{ - (b) As used in this subsection, 'handle' means the total
amount of money and other things of value bet on the bingo, lotto
or raffle games or the value of raffle chances sold. - }
(4) { + (a) + } { + Except as provided in paragraph (b) of
this subsection, + } an organization licensed by the
{ - Department of Justice - } { + department + } to operate
bingo or lotto games shall not award a prize exceeding
{ - $750 - } { + $1,500 + } in value in any one game { + ,
except that the prizes in two games per year may exceed $1,500
per game but may not exceed $10,000 per game + }.
{ + (b) After December 31, 1996, the department shall adjust
the $1,500 prize limitation in paragraph (a) of this subsection
every two years to take into account the cumulative rate of
inflation since December 31, 1994. The department may round the
prize limitation to the nearest $100.
(c) If the handle of an organization licensed by the department
to operate bingo, lotto or raffle games exceeds $250,000 in a
year, the total value of prizes awarded by the organization in
the year may not exceed 80 percent of the handle for the
year. + }
(5) Each charitable, fraternal or religious organization that
maintains, conducts or operates any bingo, lotto or raffle game
under license of the { - Department of Justice - }
{ + department + } must operate such games in accordance with
rules adopted by the department.
(6) { - (a) - } It is unlawful for a licensee to permit the
operating expenses of the games, excluding prizes or money paid
to players to exceed { - 15 - } { + 18 + } percent of the
annual handle of its bingo, lotto and raffle operation.
{ - (b) As used in this subsection, 'operating expenses'
means those expenses incurred in the operation of the games and
related concessions, including only the following: Salaries and
employee benefits, workers' compensation coverage, state and
federal employee taxes, security services, legal and accounting
services, supplies and inventory, utilities, rent, repairs, water
and sewer, insurance, equipment, printing and promotions, postage
and shipping, janitorial services and supplies, garbage and
leasehold improvements. - }
{ + (7) If the handle of an organization licensed by the
department to operate bingo, lotto or raffle games exceeds
$250,000 in a year, the net income for the year from the games
after payment of prizes and operating expenses may not be less
than six percent of the handle for the year. + }
SECTION 3. ORS 464.270 is amended to read:
464.270. (1) The Department of Justice shall not issue a
license to conduct bingo, lotto or raffle games to any
organization unless:
(a) The organization is exempt from payment of federal income
taxes as a charitable, fraternal or religious organization;
{ - and - }
{ + (b) The organization is a resident of this state; and + }
{ - (b) - } { + (c) + } The organization has held
{ - such - } { + the + } tax exempt status { + and has been a
resident of this state as required under this subsection + } for
at least one year preceding its application to the department for
a license and during which time the organization engaged
primarily in its charitable, fraternal or religious purpose.
{ + (2) An organization shall be considered a resident of
this state for purposes of subsection (1) of this section if the
organization maintains an office in this state, conducts a
substantial portion of the organization's charitable, fraternal
or religious activities in this state and anticipates using or
actually uses substantially all of the organization's receipts
from bingo, lotto and raffle games for charitable, fraternal or
religious activities in this state. The department may adopt
rules to determine residency of an organization under this
section. + }
{ - (2) - } { + (3) + } An application for a license must
be accompanied by a certificate of the organization's exemption
from payment of income taxes as a charitable, fraternal or
religious organization and by such other evidence of the
organization's status { + and residency + } under subsection (1)
of this section as the department may require.
{ - (3) - } { + (4) + } If an organization loses its tax
exempt status { + or ceases to be a resident of this state + }
after { - having applied - } { + applying + } for or
{ - having received - } { + receiving + } a license, the
organization shall promptly notify the department of the change
in status { + or residency + }. A license issued by the
department shall cease to be valid whenever the organization to
which it is issued loses its tax exempt status { + or ceases to
be a resident of this state + }.
SECTION 4. ORS 464.340 is amended to read:
464.340. { - After January 1, 1988, - } The department by
rule shall prohibit any licensee from allowing any person to
spend more than 30 hours in any one week administering the games,
or operating the games, or both. { + However, the department may
permit a licensee to allow one person to spend more than 30 hours
in a week administering or operating the games upon a showing of
business necessity. + }
SECTION 5. ORS 464.250 is amended to read:
464.250. The Department of Justice shall have the following
powers and duties relating to the regulation of the lottery known
as bingo, lotto or raffles:
(1) To authorize and regulate the operation of lottery games
commonly known as bingo, lotto and raffles permitted under ORS
167.117 { - (5)(d) - } and { - (13) - } { + 167.118 + }
and to adopt rules in accordance with applicable provisions of
ORS 183.310 to 183.550 for the performance of the department's
duties.
(2) To issue and renew licenses and permits for operation of
bingo, lotto and raffle games and to adopt license and permit
fees. Licenses and permits shall be valid for a period of one
year unless renewed. The department shall set fees at an amount
sufficient to cover all costs incurred by the department in its
activities. License fees shall consist of an initial payment,
{ - which - } { + that + } shall be in an amount established
by rule, prior to issuance or renewal of the license, together
with a monthly payment constituting a percentage of the
licensee's monthly gross income from the operation each month
thereafter. An applicant for a license or a permit shall submit
with the application a sum adequate to pay the required initial
fee payment. If the application is later withdrawn by the
applicant or if it is denied by the department, the department
shall retain such portion of the amount submitted to it as will
pay the reasonable costs expended for processing and
investigating the application. In a particular case, if the fee
adopted by the department is less than the actual expenses of the
department to investigate that particular application, the
department may charge to that particular applicant an additional
fee to repay the department for those costs. The department may
refuse to proceed with its investigation or to issue a license
until the department has been fully paid for those costs.
(3) To prescribe the manner and method of payment of all moneys
to be paid to or collected by the department.
(4) To adopt requirements as to what information an applicant
must provide to the department. However, each license applicant
must provide, and the department shall require, the names and
addresses of all persons having a management or ownership
interest in the bingo, lotto or raffle operation or in the
premises on which the operation is conducted and the names and
addresses of all officers and directors of the applicant
organization. The department shall also require the names and
addresses of all persons employed in bingo, lotto or raffle
operations. An applicant shall certify, under oath, that the
persons named on the application are all of the persons known by
the applicant to have an interest in the bingo, lotto or raffle
operation or the premises on which the operation is conducted
including all officers and directors of the applicant
organization. The department may require fingerprints, a
photograph, a handwriting sample and background checks on any
person seeking a license from it or any person holding an
interest in any bingo, lotto or raffle operation or in the
premises on which it is conducted. The department may also
require fingerprints or background checks of any manager or other
employee of such a bingo, lotto or raffle operation.
(5) To adopt record keeping requirements for licensees of the
department and the submission of reports to the department as the
department determines necessary. The department may require
licensees to record and report income from bingo, lotto, raffle,
concessions and other related operations, the amounts received
from each player, the costs and expenses of operations, the
nature and value of prizes and the fact of distribution of such
prizes to the winners thereof.
(6) To regulate and establish maximum limits on income derived
by licensees from bingo, lotto or raffles. However, in
establishing limits, the department shall take into account:
(a) The nature, character and scope of the activities of the
licensee;
(b) The sources of other income to the licensee; and
(c) The percentage or extent to which income derived from
bingo, lotto or raffles is used for charitable purposes, as
distinguished from nonprofit purposes other than charity.
(7) To regulate the manner of operation of bingo, lotto and
raffle games conducted by licensees.
(8) To cooperate with state and local law enforcement agencies
in investigating matters within the scope of the department's
duties and responsibilities.
(9) To establish maximum limits on compensation paid to persons
employed by licensees, for the purpose of conducting licensed
games, not to exceed 200 percent of the federal minimum wage
standard, or in the case of a person who supervises a bingo game
and is subject to the limitations of ORS 464.340, 300 percent of
the federal minimum wage standard, and to establish maximum
limits for other expenses connected with such operations. In
establishing these limits, the department shall consider the
amount of income received, or expected to be received, by the
organization from the bingo, lotto, raffle, concessions and other
related operations and the amount of money the operation could
generate for the organization's purposes absent such expenses.
The department may also take into account other factors,
including but not limited to whether charitable purposes are
benefited by the activities.
(10) The department shall not require persons working as
volunteers in a bingo, lotto or raffle operation conducted by a
bona fide charitable, fraternal or religious organization to
obtain permits for such work if the persons do not receive
compensation of any kind from the organization other than
reimbursement for actual or reasonable expenses, or have any
managerial or supervisory responsibility in connection with it.
The department may require that bingo, lotto and raffle operators
employing unlicensed volunteers submit to the department
periodically the names, addresses and dates of birth of the
volunteers. The department may adopt reasonable character
standards for volunteers, and if a volunteer does not meet the
standards, the department may require that the licensee not allow
the volunteer to work for the licensee.
(11) Subject to ORS 167.118 (4), the Department of Justice by
rule may establish value limits for prizes awarded at bingo,
lotto or raffle games and may regulate or prohibit the giving to
patrons any other thing of value to promote attendance at the
games.
SECTION 6. ORS 464.390 is amended to read:
464.390. When the Department of Justice determines that there
is a compelling community need for the charitable activities
funded by a bingo operation, and that funding will be seriously
reduced by the operation of ORS 167.117 and 167.118 and this
chapter, then the department may grant exceptions to ORS 167.118
(3) { - (a) - } , 464.250 (9), 464.340 and 464.350 for any bingo
licensee that was operating a bingo game in January 1987. Such
exceptions, if granted, shall be reviewed by the department not
less than once per year.
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