PETITION OF:

Notwithstanding any General or special law to the contrary, M.G.L. chapter 128A is hereby amended by adding at the end thereof the following section:

(2) DEFINITIONS.--As used in this section:

(a) "Authorized game" means a game or series of games of poker which are played in a nonbanking manner.

(b) "Banking game" means a game in which the house is a participant in the game, taking on players, paying winners, and collecting from losers or in which the card room establishes a bank against which participants play.

(c) "Card room" means a facility where authorized card games are played for money or anything of value and to which the public is invited to participate in such games and charged a fee for participation by the operator of such facility. Authorized games and card rooms do not constitute casino gaming operations.

(d) "Card room management company" means any individual not an employee of the card room operator, any proprietorship, partnership, corporation, or other entity that enters into an agreement with a card room operator to manage, operate, or otherwise control the daily operation of a card room.

(e) "Card room distributor" means any business that distributes card room paraphernalia such as card tables, betting chips, chip holders, drop boxes, banking supplies, playing cards, card shufflers, and other associated equipment to authorized card rooms.

(f) "Card room operator" means a licensed pari-mutuel licensee which holds a valid license to conduct live racing on, at least 100 calendar days of a year.

(g) "Division" means the state Treasury.

(h) "Gross receipts" means the total amount of money received by a card room from any person for participation in authorized games.

(i) "House" means the card room operator and all employees of the card room operator.

(j) "Net proceeds" means the total amount of gross receipts received by a card room operator from card room operations less direct operating expenses related to card room operations, including labor costs, admission taxes only if a separate admission fee is charged for entry to the card room facility, gross receipts taxes imposed on card room operators by this section, the annual card room license fees imposed by this section on each table operated at a card room, and reasonable promotional costs excluding officer and director compensation, interest on capital debt, legal fees, real estate taxes, bad debts, contributions or donations, or overhead and depreciation expenses not directly related to the operation of the card rooms.

(k) "Rake" means a set fee or percentage of the pot assessed by a card room operator for providing the services of a dealer, table, or location for playing the authorized game.

(3) CARDROOM AUTHORIZED.--Notwithstanding any other provision of law, it is not a crime for a person to participate in an authorized game at a licensed card room or to operate a card room described in this section if such game and card room operation are conducted strictly in accordance with the provisions of this section.

(4) AUTHORITY OF DIVISION.--The Treasury shall administer and regulate the operation of card rooms under this section and the rules adopted pursuant thereto, and is hereby authorized to:

(a) Adopt rules, including, but not limited to: the issuance of card room and employee licenses for card room operations; the operation of a card room; recordkeeping and reporting requirements; and the collection of all fees and taxes imposed by this section.

(b) Conduct investigations and monitor the operation of card rooms and the playing of authorized games therein.

(d) Suspend or revoke any license or permit, after hearing, for any violation of the provisions of this section or the administrative rules adopted pursuant thereto.

(e) Take testimony, issue summons and subpoenas for any witness, and issue subpoenas duces tecum in connection with any matter within its jurisdiction.

(f) Monitor and ensure the proper collection of taxes and fees imposed by this section. Permit holder internal controls are mandated to ensure no compromise of state funds. To that end, a roaming division auditor will monitor and verify the cash flow and accounting of card room revenue for any given operating day.

(5) LICENSE REQUIRED; APPLICATION; FEES.--No person may operate a card room in this state unless such person holds a valid card room license issued pursuant to this section.

(a) Only those persons holding a valid card room license issued by the division may operate a card room. A card room license may only be issued to a licensed pari-mutuel permit holder and an authorized card room may only be operated at the same facility at which the permit holder is authorized under its valid pari-mutuel wagering permit to conduct pari-mutuel wagering activities.

(b) After the initial card room license is granted, the application for the annual license renewal shall be made in conjunction with the applicant's annual application for its pari-mutuel license. If a permit holder has operated a card room during any of the 3 previous fiscal years and fails to include a renewal request for the operation of the card room in its annual application for license renewal, the permit holder may amend its annual application to include operation of the card room. In order for a card room license to be renewed the applicant must have requested, as part of its pari-mutuel annual license application, to conduct at least 90 percent of the total number of live performances conducted by such permit holder during either the state fiscal year in which its initial card room license was issued or the state fiscal year immediately prior thereto. If the application is for a harness permit holder card room, the applicant must have requested authorization to conduct a minimum of 140 live performances during the state fiscal year immediately prior thereto. If more than one permit holder is operating at a facility, each permit holder must have applied for a license to conduct a full schedule of live racing.

(c) Persons seeking a license or a renewal thereof to operate a card room shall make application on forms prescribed by the division. Applications for card room licenses shall contain all of the information the division, by rule, may determine is required to ensure eligibility.

(d) The annual card room license fee for each facility shall be $500 for the first table and $250 for each additional table to be operated at the card room. This license fee shall be deposited by the division with the Chief Financial Officer to the credit of the Pari-mutuel Wagering Trust Fund.

(7) CONDITIONS FOR OPERATING A CARDROOM.--

(a) A card room may be operated only at the location specified on the card room license issued by the division, and such location may only be the location at which the pari-mutuel permit holder is authorized to conduct pari-mutuel wagering activities pursuant to such permit holder’s valid pari-mutuel permit or as otherwise authorized by law.

(c) A card room operator must at all times employ and provide a nonplaying dealer for each table on which authorized card games which traditionally utilize a dealer are conducted at the card room. Such dealers may not have any participatory interest in any game other than the dealing of cards and may not have an interest in the outcome of the game. The providing of such dealers by a licensee shall not be construed as constituting the conducting of a banking game by the card room operator.

(d) Each card room operator shall conspicuously post upon the premises of the card room a notice which contains a copy of the card room license; a list of authorized games offered by the card room; the wagering limits imposed by the house, if any; any additional house rules regarding operation of the card room or the playing of any game; and all costs to players to participate, including any rake by the house. In addition, each card room operator shall post at each table a notice of the minimum and maximum bets authorized at such table and the fee for participation in the game conducted.

(e) The card room facility shall be subject to inspection by the division or any law enforcement agency during the licensee's regular business hours. The inspection will specifically encompass the permit holder internal control procedures approved by the division.

(f) A card room operator may refuse entry to or refuse to allow to play any person who is objectionable, undesirable, or disruptive, but such refusal shall not be on the basis of race, creed, color, religion, sex, national origin, marital status, physical handicap, or age, except as provided in this section.

(8) METHOD OF WAGERS; LIMITATION.--

(a) No wagering may be conducted using money or other negotiable currency. Games may only be played utilizing a wagering system whereby all players' money is first converted by the house to tokens or chips which shall be used for wagering only at that specific card room.

(b) The card room operator may limit the amount wagered in any game or series of games, but the maximum bet may not exceed $2 in value. There may not be more than three raises in any round of betting. The fee charged by the card room for participation in the game shall not be included in the calculation of the limitation on the bet amount provided in this paragraph.

(9) BOND REQUIRED.--The holder of a card room license shall be financially and otherwise responsible for the operation of the card room and for the conduct of any manager, dealer, or other employee involved in the operation of the card room. Prior to the issuance of a card room license, each applicant for such license shall provide evidence of a surety bond in the amount of $50,000, payable to the state, furnished by a corporate surety authorized to do business in the state or evidence that the licensee's pari-mutuel bond required by s. 550.125 has been expanded to include the applicant's card room operation. The bond shall guarantee that the card room operator will redeem, for cash, all tokens or chips used in games. Such bond shall be kept in full force and effect by the operator during the term of the license.

(10) FEE FOR PARTICIPATION.--The card room operator may charge a fee for the right to participate in games conducted at the card room. Such fee may be either a flat fee or hourly rate for the use of a seat at a table or a rake subject to the posted maximum amount but may not be based on the amount won by players. The rake-off, if any, must be made in an obvious manner and placed in a designated rake area which is clearly visible to all players. Notice of the amount of the participation fee charged shall be posted in a conspicuous place in the card room and at each table at all times.

(11) RECORDS AND REPORTS.--

(a) Each licensee operating a card room shall keep and maintain permanent daily records of its card room operation and shall maintain such records for a period of not less than 3 years. These records shall include all financial transactions and contain sufficient detail to determine compliance with the requirements of this section. All records shall be available for audit and inspection by the division or other law enforcement agencies during the licensee's regular business hours. The information required in such records shall be determined by division rule.

(b) Each licensee operating a card room shall file with the division a report containing the required records of such card room operation. Such report shall be filed monthly by licensees. The required reports shall be submitted on forms prescribed by the division and shall be due at the same time as the monthly pari-mutuel reports are due to the division, and such reports shall contain any additional information deemed necessary by the division, and the reports shall be deemed public records once filed.

(12) PROHIBITED ACTIVITIES.--

(a) No person licensed to operate a card room may conduct any banking game or any game not specifically authorized by this section.

(b) No person under 18 years of age may be permitted to hold a card room or employee license, or engage in any game conducted therein.

(c) No electronic or mechanical devices, except mechanical card shufflers, may be used to conduct any authorized game in a card room.

(d) No cards, game components, or game implements may be used in playing an authorized game unless such has been furnished or provided to the players by the card room operator.

(e) Each licensee that operates a card room facility shall use at least 4 percent of such permit holder’s card room monthly gross receipts to supplement its purses.

(f) The card room shall be deemed an accessory use to a licensed pari-mutuel operation.

(14) SUSPENSION, REVOCATION, OR DENIAL OF LICENSE; FINE.--

(a) The division may deny a license or the renewal thereof, or may suspend or revoke any license, when the applicant has: violated or failed to comply with the provisions of this section or any rules adopted pursuant thereto; knowingly caused, aided, abetted, or conspired with another to cause any person to violate this section or any rules adopted pursuant thereto; or obtained a license or permit by fraud, misrepresentation, or concealment; or if the holder of such license or permit is no longer eligible under this section.

(b) If a pari-mutuel permit holder’s pari-mutuel permit or license is suspended or revoked by the division pursuant to chapter 550, the division may, but is not required to, suspend or revoke such permit holder’s card room license. If a card room operator's license is suspended or revoked pursuant to this section, the division may, but is not required to, suspend or revoke such licensee's pari-mutuel permit or license.

(c) Notwithstanding any other provision of this section, the division may impose an administrative fine not to exceed $1,000 for each violation against any person who has violated or failed to comply with the provisions of this section or any rules adopted pursuant thereto.