MISSISSIPPI LEGISLATURE
2012 Regular Session
To: Gaming; Ways and Means
By: Representative Moak (By Request)
AN ACT TO CREATE THE MISSISSIPPI LAWFUL INTERNET GAMING ACT OF 2012; TO MAKE FINDINGS REGARDING THE AUTHORITY OF THE STATE TO REGULATE LAWFUL INTERNET GAMING, IN RESPONSE TO CERTAIN FEDERAL LAWS AND RECENT ACTION BY THE UNITED STATES DEPARTMENT OF JUSTICE; TO SET FORTH DEFINITIONS THAT APPLY TO THE PROVISIONS OF THE ACT; TO PROVIDE A PROCESS WHEREBY THE MISSISSIPPI GAMING COMMISSION MAY ISSUE INTERNET WAGERING PERMITS TO GAMING LICENSEES; TO PROVIDE ADDITIONAL POWERS TO THE COMMISSION, AS NECESSARY TO REGULATE LAWFUL INTERNET GAMING; TO IMPOSE AN ADDITIONAL LICENSE FEE IN THE AMOUNT OF FIVE PERCENT ON THE INTERNET WAGERING GROSS REVENUES PER CALENDAR MONTH; TO PRESCRIBE THE MANNER IN WHICH LAWFUL INTERNET GAMING MAY BE CONDUCTED; TO PROVIDE PENALTIES FOR VIOLATIONS OF THE ACT; TO AMEND SECTIONS 75-76-5, 75-76-33, 75-76-81, 75-76-101, 75-76-155, 75-76-157, 75-76-177, 75-76-191, 75-76-195 AND 75-76-325, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; TO BRING FORWARD SECTIONS 75-76-67, 75-76-79, 75-76-129, 75-76-267, 75-76-301 AND 75-76-303, MISSISSIPPI CODE OF 1972, FOR PURPOSES OF AMENDMENT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) The Legislature finds that since the development of the Internet, millions of people have chosen to engage in online gaming through illegal off-shore operators, and such unlawful gambling is conducted without oversight, regulation, or enforcement, all of which raises significant concerns for the protection of our citizens. Without regulation of online gambling, the public's trust and confidence in legal gaming is impacted.
(2) An effective state regulatory and licensing system for online gaming would inhibit underage wagering and otherwise protect vulnerable individuals, ensure that the games offered through the Internet are fair and safe, stop sending much-needed jobs and tax and fee revenue overseas to illegal operators, provide a significant source of taxable revenue, create jobs and economic development, address the concerns of law enforcement, and ensure that only those persons of good character and fitness, who meet strict criteria set forth in law and regulations, are suitable to facilitate and conduct online gaming activities.
SECTION 2. (1) The provisions of Sections 1 through 18 of this act shall be known and may be cited as the "Mississippi Lawful Internet Gaming Act of 2012."
(2) Pursuant to the federal law entitled "Unlawful Internet Gambling Enforcement Act of 2006," known as UIGEA and cited as 31 USCS 5301, the State of Mississippi finds that the state regulation of legal gaming in this state, and the provisions of this Mississippi Lawful Internet Gaming Act of 2012, prescribe a lawful exemption to UIGEA and specifically authorize use of the Internet to place, receive, or otherwise knowingly transmit a bet or wager where such Internet wagering complies with the provisions of Title 75, Chapter 76, Mississippi Code of 1972, and the applicable regulations promulgated by the Mississippi Gaming Commission. Further, the State of Mississippi finds that any question regarding the state's authority to regulate lawful Internet gaming that may have resulted from interpretations that such gaming violated certain other federal anti-gambling laws has been vacated by action of the United States Department of Justice on December 23, 2011.
SECTION 3. For purposes of Sections 1 through 18 of this act, the definitions found in Section 75-76-5 shall apply, and in addition, the following words and phrases shall have the meanings ascribed below, unless the context clearly indicates otherwise.
(a) "Customer deposits" – The deposits made by or on behalf of a gaming licensee having an Internet wagering permit, or returns of funds by or on behalf of a gaming licensee to an Internet wagering account.
(b) "Internet" – The international computer network of interoperable packet switched data networks, inclusive of such additional technological platforms as mobile, satellite, and other electronic distribution channels approved by the commission.
(c) "Internet game" – Any variation or composite of an authorized game that is offered through the Internet, provided that such games, or variations or composites, are found suitable for use by the commission after an appropriate test or experimental period; and any other game which is determined by the commission to be compatible with the public interest and to be suitable for Internet wagering after such appropriate test or experimental period. The term includes gaming tournaments conducted via the Internet in which players compete against one another in one (1) or more of the games authorized herein or by the commission or in approved variations or composites thereof if the tournaments are authorized by the commission.
(d) "Internet service provider" - Any one of the following:
(i) A person or entity offering the transmission, routing, or providing of connections for online communications, between or among points specified by a user, of material of the user's choosing, without modification to the content of the material as sent or received;
(ii) A provider of online services or network access, or the operator of facilities therefore;
(iii) A provider of hosting services for online websites, email and other electronic communications, or
(iv) A provider of custodial and registration services for Internet domain names.
(e) "Internet wagering" - The placing, receiving, or transmission of electronic data with a gaming licensee through the use, at least in part, of the Internet over a secure or dedicated transmission originating and ending within the state or as otherwise permitted under applicable law, which data, once accepted by said gaming licensee within a licensed gaming establishment, shall become a lawful bet or wager on an Internet game, all as approved by the commission.
(f) "Internet wagering account" - The formal, electronic statement or system recording the balance of a patron's debits, credits, and other activity relating to Internet wagering.
(g) "Internet wagering account agreement" – The agreement entered into between a gaming licensee and an individual, which agreement governs the terms and conditions of said individual's Internet wagering account and the use of the Internet for purposes of placing bets or wagers on Internet games. The Internet wagering account agreement may be executed electronically as approved by the commission.
(h) "Internet wagering permit" – The certificate and approval issued by the commission that certifies a gaming licensee's permission to conduct Internet wagering and that said gaming licensee's facilities conform to requirements of the act and applicable regulations.
(i) "Significant vendor" – Any person or entity that:
(i) On behalf of a gaming licensee, knowingly manages, administers, or controls bets or wagers that are initiated, received, or otherwise made as approved by the commission;
(ii) On behalf of a gaming licensee, knowingly manages, administers, or controls the games with which such bets or wagers are associated;
(iii) On behalf of a licensee, develops, maintains, or operates the software or other system programs or hardware on which the Internet games or the bets or wagers are managed, administered, or controlled;
(iv) Provides the trademarks, trade names, service marks, or similar intellectual property under which a gaming licensee identifies its Internet wagering to its customers;
(v) Provides information on individuals who made bets or wagers pursuant to Internet wagering not licensed under this act via a database or customer lists;
(vi) Provides any products, services, or assets to, and is paid a percentage of revenue or fees by, the gaming licensee (not including fees to financial institutions and payment providers for facilitating a deposit by a customer); or (vii) With respect to an applicant, proposes to provide any of the activities, services, or items identified in subparagraphs (a) through (e).
(j) "Internet wagering gross revenue" –
(i) For all Internet games, with the exception of Internet poker, the total of all sums actually received by a gaming licensee from Internet wagering, less the total of all sums actually paid out as winnings to patrons; provided, however, that the cash equivalent value of any merchandise or thing of value included in a jackpot or payout shall not be included in the total of all sums paid out as winnings to patrons for purposes of determining Internet wagering gross revenue.
(ii) For Internet poker, the total of all sums actually received by a gaming licensee from Internet poker, or the aggregate, during the relevant period, of the take, tournament fees and all other fees or charges required or received from customers directly as a result of Internet poker, from deposits into any account maintained by the licensee or on behalf of the licensee, less the total of all sums actually paid out as winnings to patrons; provided, however, that the cash equivalent value of any merchandise or thing of value included in a jackpot or payout shall not be included in the total of all sums paid out as winnings to patrons for purposes of determining Internet wagering gross revenue.
(iii) For all Internet games, including Internet poker, "Internet wagering gross revenue" shall not include customer deposits nor deposits that reflect promotional credits, incentives from loyalty or similar programs, bonuses, or complimentary amenities provided by or on behalf of the gaming licensee attendant to Internet gaming operations or Internet wagering; or returns of funds by or on behalf of a gaming licensee to an Internet wagering account, charge-back fees or bad debt incurred by the gaming licensee with respect to an Internet wagering account.
(k) "Licensed gaming establishment for Internet wagering" - Any room or area within the state approved by the commission to conduct Internet wagering and shall also include, where approved by the commission, redundancy facilities.
(l) "Redundancy facilities" – Any and all rooms or areas within the State of Mississippi, used by the gaming licensee for emergency back-up, redundancy or secondary operations attendant to gaming or Internet wagering as approved by the commission.
SECTION 4. (1) The commission may issue an Internet wagering permit upon satisfaction by a gaming licensee of all terms and conditions required by this chapter and applicable regulations.
(2) The commission may establish a separate division to which authority shall be delegated for the administration of Internet wagering, Internet wagering permits, and enforcement of criminal activity conducted, at least in part, through the Internet.
(3) Nothing in this section shall be construed to authorize the operation of a place of public accommodation, club or association (including one limited to dues-paying members or similar restricted groups), cafeteria, or similar establishment that allows access to the Internet for gambling, unless licensed under the provisions of Sections 1 through 18 of this act.
SECTION 5. In the regulation of lawful Internet gaming, the commission shall have the following additional powers with respect to conducting an in rem deactivation of Internet domains.
(1) The commission may commence an in rem action against any domain name or names used by an Internet site if:
(a) The domain name is used by an Internet site that is conducting unlawful Internet gambling; and
(b) The commission simultaneously sends a notice of the alleged violation and intent to proceed under this subsection to the registrant of the domain name at the postal and email address provided by the registrant to the registrar, if available, and publishes notice of the action as the court may direct promptly after filing the action. For purposes of this section, the actions described above shall constitute lawful service of process.
(2) In an in rem action commenced under subsection (1), a domain name shall be deemed to have its situs in the State of Mississippi, provided that:
(a) The domain name registrar or registry is located, doing business in, or maintains minimum contacts within the state; or
(b) Documents sufficient to establish control and authority regarding the disposition of the registration and use of the domain name are deposited with the court.
If the foregoing does not apply to a particular domain name, the in rem action may be brought in the State of Mississippi to prevent and restrain access to the domain by users located within the state if the domain is accessible from users within the state.
(3) Service of court orders shall be made as follows:
(a) In connection with an order obtained in an action to which subsection (2) applies, the commission or law enforcement officer shall serve any court order issued pursuant to this section on the domain name registrar or, if the domain name registrar is not located within the United States, upon the registry. Upon receipt of such order, the domain name registrar or domain name registry shall suspend operation of, and may lock, the domain name; or
(b) For nondomestic domains, in connection with an order obtained in an action to which subsection (2) applies, the commission or law enforcement officer may serve any court order issued pursuant to this section on entities described below. After being served with an order issued pursuant to this section; and, an Internet service provider, or any other operator of a nonauthoritative domain name system server shall, as expeditiously as possible, take technically feasible and reasonable steps designed to prevent a domain name from resolving to that domain name's Internet protocol address, except that (a) such entity shall not be required to modify its network or other facilities to comply with such order, to take any steps with respect to domain name lookups not performed by its own domain name system server; or to continue to prevent access to a domain name to which access has been effectively disabled by other means; and (b) nothing in this paragraph shall affect the limitation on an entity's liability under subsection (5) below.
(4) An entity taking an action described in this section shall determine how to communicate such action to the entity's users or customers. For purposes of an action filed under this section, the obligations of an entity described in this subsection shall be limited to the actions set out in each paragraph or subparagraph applicable to such entity, and no order issued pursuant to this section shall impose any additional obligations on, or require additional actions by, such entity.
(5) No cause of action shall lie in any court or administrative agency against any entity receiving a court order issued under this section, or against any director, officer, employee, or agent thereof, for any act reasonably designed to comply with this section or reasonably arising from such order, other than in an action pursuant to subsection (4). Any entity receiving an order under this subsection, and any director, officer, employee, or agent thereof, shall not be liable to any party for any acts reasonably designed to comply with this subsection or reasonably arising from such order, other than in an action pursuant to subsection (6), and any actions taken by customers of such entity to circumvent any restriction on access to the Internet domain instituted pursuant to this subsection or any act, failure, or inability to restrict access to an Internet domain that is the subject of a court order issued pursuant to this subsection despite good faith efforts to do so by such entity shall not be used by any person in any claim or cause of action against such entity, other than in an action pursuant to subsection (6). No domain name registry, domain name registrar, or service that provides advertisements to Internet sites shall be liable to any person on account of any action described in this section voluntarily taken if the entity reasonably believes the Internet site is engaged in providing unlawful Internet gambling.
(6) To compel compliance with this section, the commission may bring an action for injunctive relief against any party receiving a court order issued pursuant to this section that knowingly and willfully fails to comply with such order. A showing by the defending party in such action that it does not have the technical means to comply with this section, or that the order is inconsistent with this section, shall serve as a defense to such action to the extent of the inability to comply or such inconsistency.
(7) At any time after the issuance of a court order under this section:
(a) The commission may apply for a modification of the order to expand the order to apply to an Internet site that is reconstituted using a different domain name subsequent to the original order, and to include additional domain names that are used in substantially the same manner as the Internet site against which the action was brought, by providing the court with evidence that the Internet site associated with the requested modification is engaged in unlawful Internet gambling, and is under joint control, ownership, or operation of, or other affiliation with, the domain name subject to the order;
(b) A defendant or owner or operator of a domain name subject to the order, or any party required to take action based on the order, may petition the court to modify, suspend, or vacate the order, based on evidence that the Internet site associated with the domain name subject to the order is no longer, or never was, engaged in unlawful Internet gambling, or the interests of justice require that the order be modified, suspended, or vacated; and
(c) A registrar or owner, licensee, or operator of a domain name subject to the order may petition the court to vacate the order based on evidence that the registration of the domain name has expired and the domain name has been reregistered by a different party.
SECTION 6. (1) No Internet wagering shall be allowed, except for testing or pilot purposes, until a gaming licensee obtains an Internet wagering permit. A permit shall be issued by the commission upon a finding that:
(a) The gaming licensee's Internet wagering operations comply in all respects with the requirements of this chapter, including any regulations promulgated thereunder;
(b) Age and location verification requirements reasonably designed to block access to those under the age of twenty-one (21) years, persons located outside of the state, and those persons excluded or prohibited pursuant to Section 75-76-35;
(c) Appropriate data security standards to prevent unauthorized access by any person whose age and location has not been verified in accordance with the regulations promulgated hereunder;
(d) Appropriate standards to protect, within a reasonable certainty, the privacy and security of patrons; and
(e) The gaming licensee's initial system of internal controls applicable to Internet wagering, and the security and integrity of all financial transactions therein, comply with this chapter and the regulations promulgated thereunder.
(2) It shall be an express condition of any Internet wagering permit that a gaming licensee shall collect, report, and pay any and all applicable taxes and fees and shall maintain all books, records, and documents pertaining to said gaming licensee's Internet wagering in a manner and location within this state as approved by the commission, or for books, records, and documents not related to Internet wagering, at such other locations outside the state as approved by the commission. All such books, records and documents shall be immediately available for inspection during all hours of operation in accordance with the regulations of the commission and shall be maintained in such a manner and for such periods of time as the commission shall require.
(3) Subject to the power of the commission to deny, revoke, or suspend, an Internet wagering permit may be renewed by the commission for periods of one (1) to five (5) years.
SECTION 7. (1) All facilities, equipment other than personal electronic equipment owned and possessed by a person, and employees of a gaming licensee's Internet wagering operation shall:
(a) Be arranged in a manner promoting appropriate security for Internet wagering;
(b) Include a closed circuit visual monitoring system according to rules or specifications approved by the commission, with access to the online portal, signal, or transmission used in connection with Internet wagering;
(c) Not be designed in any way that might interfere with or impede the commission in its regulation of Internet wagering; and
(d) Comply in all respects with regulations of the commission pertaining thereto.
(2) An Internet wagering account shall be designated in the name of a natural person only and may not be in the name of any beneficiary, custodian, joint trust, corporation, partnership or other organization or entity, without the approval of the commission.
(3) An Internet wagering account may be executed via the Internet or such other electronic means as approved by the commission, and said account shall comply with the internal controls of the gaming licensee that, at a minimum, require the following:
(a) The filing and execution of an Internet wagering account agreement, the form of which having been preapproved by the commission;
(b) Proof of age and residency as demonstrated by at least two (2) forms of identification approved by the commission;
(c) Physical address of the principal residence of the prospective account holder, electronic mail address of the prospective account holder, and such other contact information, as the commission or gaming licensee may require;
(d) Password or other secured identification to access the Internet wagering account, or some other mechanism approved by the commission to authenticate the player as the secured holder to the Internet wagering account; and
(e) An acknowledgement under penalty of perjury that false or misleading statements made in regard to an application for an Internet wagering account may subject the applicant to civil and criminal penalties.
(4) The licensee may accept or reject an application after receipt and review of the application and proof of age for compliance with the provisions of Sections 1 through 18 of this act. The gaming licensee shall have the right, at any time with or without cause, to suspend or close any Internet wagering account at its sole discretion.
(5) In addition to those under the age of twenty-one (21) years, persons located outside of the state, and those persons excluded or prohibited pursuant to Section 75-76-35, a person who is an employee of the gaming licensee conducting Internet wagering is prohibited from obtaining an Internet wagering account with that gaming licensee; however, the person may have an Internet wagering account with another gaming licensee that does not employ the person.
(6) Internet wagering accounts shall not be assignable or otherwise transferable, and the gaming licensee may, at any time, declare all or any part of Internet wagering to be closed for wagering.
(7) A gaming licensee may accept bets or wagers through Internet wagering as follows:
(a) The bet or wager shall be placed directly with the gaming licensee by the holder of the Internet wagering account;
(b) The account holder placing the bet or wager shall provide the gaming licensee with authentication information for access to the Internet wagering account;
(c) A gaming licensee may not accept a bet or wager in an amount in excess of funds on deposit in the account holder's Internet wagering account; and
(d) Only the account holder may access his or her Internet wagering account and place a bet or wager on an Internet game; provided, however, the gaming licensee shall not be responsible for a nonaccount holder accessing an Internet wagering account where the nonaccount holder falsely represented that he or she was the account holder and provides the gaming licensee with authentication information of the account holder for access to the Internet wagering account.
(8) Credits to an Internet wagering account may be made as provided in this subsection.
(a) The account holder's deposits to the Internet wagering account shall be submitted by the account holder to the gaming licensee and shall be in the form of one of the following:
(i) Cash given to the gaming licensee;
(ii) Check, money order, negotiable order of withdrawal, or wire or electronic transfer, payable and remitted to the gaming licensee;
(iii) Charges made to an account holder's debit or credit card upon the account holder's authorization, which authorization may be given via the Internet or other electronic communication;
(iv) Promotional credits, incentives from loyalty or similar programs, bonuses, or complimentary amenities provided by or on behalf of the gaming licensee; or
(v) Any other method approved by the commission.
(b) When an account holder wins an Internet game, the gaming licensee shall pay to the account holder electronic chips or other cash equivalents in the appropriate amount pursuant to the rules of that Internet game for that particular type of wager. When the account holder cashes out the electronic chips or other cash equivalents, the gaming licensee shall credit the holder's account in the amount of the electronic chips or other cash equivalents.
(c) The gaming licensee shall have the right to refuse, for any valid reason, all or part of any wager or deposit to the Internet wagering account.
(d) Funds deposited in the Internet wagering account shall not bear interest to the account holder.
(9) Debits to an Internet wagering account may be made as provided by this subsection.
(a) When an account holder logs onto an Internet wagering account and exchanges account funds for electronic chips or other cash equivalents, the licensee shall debit the holder's account in the amount of funds exchanged. Upon receipt by a gaming licensee of an account wager or an account purchase order, the gaming licensee shall debit the account holder's electronic chips or other cash equivalents in the amount of the wager or purchase.
(b) A gaming licensee may authorize a withdrawal from an Internet wagering account when the account holder submits to the gaming licensee:
(i) Proper identification, whether via the Internet or at a gaming;
(ii) The correct authentication information for access to the account; and
(iii) Such other electronic forms or permissions as required by the commission.
Upon receipt of all of the foregoing information, and if there are sufficient funds in the account to cover the withdrawal, the gaming licensee, at the customer's direction, may also send a check payable in the amount requested to the holder at the address specified in the application for the Internet wagering account or shall transmit payment to the account holder electronically, as approved by the commission.
(10) The gaming licensee may apply chargeback, inactivity, or other fees or charges against an account holder's Internet wagering account.
SECTION 8. (1) An Internet service provider shall not be held liable for unlawful Internet gambling, or otherwise hosting an online gaming site permitted by this chapter or other applicable state or federal law, unless the Internet service provider has actual knowledge that the site in question is currently operating in violation of Sections 1 through 18 of this act, of this chapter, or of any other applicable provision of federal or state law.
(2) An Internet service provider that takes an action described in this section below with respect to an Internet site shall not be liable to any party for that action if the Internet service provider takes the action because the account holder or purported owner of the site is any one (1) of the following:
(a) A person or entity that is included in the list of unlicensed Internet gambling enterprises prepared by the commission;
(b) A person or entity that the Internet service provider reasonably believes is included in that list;
(c) A person or entity that is included in a list of unlicensed Internet gambling enterprises made available to the Internet service provider by the commission;
(d) A person or entity that the Internet service provider reasonably believes is included in a list described in paragraph (3) above;
(e) A person or entity that is demonstrated to be an unlicensed Internet gambling enterprise based on information, other than a list described in paragraph (c), that is made available to the Internet service provider transaction provider; or
(f) A person or entity that the Internet service provider reasonably believes is demonstrated to be an unlicensed Internet gambling enterprise based on information described in paragraph (e).
(3) An Internet service provider takes an action described in this section if the Internet service provider:
(a) Blocks or otherwise restricts an account holder's ability to access to the site, its control panel or filing system; (b) Prevents part or all of an Internet site from being accessed by users; or
(c) Closes an account or ends a hosting relationship.
(4) An Internet service provider that takes an action described in subsection (3) with respect to an Internet site shall not be liable to any party for that action if the Internet service provider takes such action pursuant to valid written notice of the illegal gambling activity, provided by the commission or any other ranking law enforcement official of any jurisdiction where the unlawful Internet gambling is accessible. The form of such notice shall be determined by regulations that shall be prescribed by the commission.
(5) On application of the commission or any other law enforcement official of any jurisdiction where unlawful Internet gambling is accessible, the court may issue a temporary restraining order, a preliminary injunction, or an injunction against the domain name used by an Internet site engaging in such unlawful Internet gambling to cease and desist from undertaking any further activity in violation of this act or any other applicable federal or state law. The court may grant injunctive relief with respect to an Internet service provider in one or more of the following forms:
(a) An order restraining the Internet service provider from providing access to a particular online site on the provider's system or network;
(b) An order restraining the Internet service provider from providing access, by taking reasonable steps specified in the order to block access, to a specific and identified Internet domain that is hosted outside the United States;
(c) An order restraining the Internet service provider from providing access, by taking reasonable steps specified in the order to block access, to a specific and identified Internet domain to users residing in a particular jurisdiction specified in the order;
(d) An order restraining the Internet service provider from providing access to a subscriber or account holder of the service provider's system or network who is engaging in unlawful Internet gambling and is identified in the order, by terminating the accounts of the subscriber or account holder that are specified in the order;
(e) An order restraining the Internet service provider from providing access to a subscriber or account holder of the service provider's system or network who is using the provider's service to engage in unlawful Internet gambling and is identified in the order, by terminating the accounts of the subscriber or account holder that are specified in the order; or
(f) Such other injunctive relief as the court may consider necessary to prevent or restrain unlawful Internet gambling, if such relief is the least burdensome to the Internet service provider among the forms of relief comparably effective for that purpose.
(6) Injunctive relief under this section shall be available only after notice and an opportunity for the Internet service provider to appear are provided, except for orders ensuring the preservation of evidence or other orders having no material adverse effect on the operation of the service provider's communications network.
SECTION 9. All bets or wagers made through Internet wagering shall be deemed to be initiated, received or otherwise made within the State of Mississippi, provided that such Internet wagering is conducted by a gaming licensee with an Internet wagering permit and in accordance with this chapter and the regulations adopted by the commission. The intermediate routing of electronic data in connection with Internet wagering shall not determine the location or locations in which a bet or wager is initiated, received, or otherwise made.
SECTION 10. (1) Each gaming licensee who holds or has applied for an Internet wagering permit shall submit to the commission a description of its initial internal procedures and administrative and accounting controls for Internet wagering that comply with the requirements of this act and the regulations promulgated thereunder, and provide adequate and effective controls for the real-time monitoring of all Internet games. A gaming licensee's initial system of internal controls shall contain both narrative and diagrammatic representations of the internal control system to be utilized by the licensed gaming establishment with regard to Internet wagering, including, but not limited to:
(a) Accounting controls, including the standardization of forms and definition of terms to be utilized for Internet wagering;
(b) Job descriptions and the system of personnel and chain-of-command, establishing a diversity of responsibility among employees engaged in Internet wagering and identifying areas of responsibility, salary structure, and personnel practices;
(c) Procedures for the establishment of Internet wagering accounts, including a procedure for age and location verification;
(d) Procedures for the termination of an Internet wagering account by the account holder and the return of any remaining funds in the Internet wagering account to the account holder;
(e) Procedures for the termination of a dormant account;
(f) Procedures for the log-on and authentication of an account holder and the log-off of the account holder when the account holder has ceased Internet wagering, including a procedure to automatically log-off the holder after a specified period of inactivity;
(g) Procedures for the crediting and debiting of Internet wagering accounts;
(h) Procedures for the withdrawal of funds from an Internet wagering account by the account holder;
(i) The recording of transactions pertaining to Internet wagering;
(j) Procedures for the security of information and funds in an Internet wagering account;
(k) Procedures for the security of licensed gaming establishments where Internet wagering is conducted;
(l) Procedures and security standards for the handling and storage of software, computers and other electronic equipment used to conduct Internet wagering;
(m) Procedures and security standards to protect software, computers and other gaming equipment used to conduct Internet wagering from tampering by gaming employees or any other person, from a location inside or outside of the gaming licensee's hotel facility;
(n) Procedures for responding to tampering with software, computers and other gaming equipment used to conduct Internet wagering or any gaming-related equipment or hardware used in support of gaming, including partial or complete suspension of Internet wagering operations or the suspension of any or all Internet wagering accounts when warranted;
(o) Procedures for the identification and maintenance of agreements pertaining to any person that manages, administers, controls, or otherwise materially affects bets or wagers that are initiated, received, or otherwise made in connection with Internet wagering;
(p) Procedures to assist problem and compulsive gamblers including, without limitation, procedures regarding self-exclusion; and
(q) Procedures for the use or involvement of significant vendors.
(2) The commission shall review the initial submission required by subsection (1) hereof, and shall determine whether it conforms with the requirements of Sections 1 through 18 of this act and whether the system submitted provides adequate and effective controls for Internet wagering of the particular gaming licensee submitting it. If the commission finds any insufficiencies, it shall specify them in writing to the gaming licensee, who shall make appropriate alterations. When the commission determines the initial submission to be adequate in all respects, it shall notify the gaming licensee. Except as otherwise provided in subsection (1) of this section, no gaming licensee shall commence or alter Internet wagering unless and until the initial submission is approved by the commission.
(3) It shall be lawful for a gaming licensee to provide marketing information and promotional credits, incentives from loyalty or similar programs, bonuses, and complimentary amenities by means of the Internet to players engaged in Internet wagering. (4) Upon approval by the commission of the initial submission required by subsection (1) hereof, each gaming licensee shall be required to create, maintain, and file with the commission a description of its internal procedures and administrative and accounting controls for Internet wagering that conform to the requirements of paragraphs (a) through (q) of subsection (1) hereof and the regulations promulgated thereunder. Once the procedures and controls set forth in the initial submission are approved by the commission, no further approval of a gaming licensee's internal procedures and administrative and accounting controls for Internet wagering is required.
SECTION 11. (1) The commission shall, by regulation, establish such technical standards for approval of software, computers and other gaming equipment used to conduct Internet wagering, including mechanical, electrical or program reliability, security against tampering, and the comprehensibility of wagering, as it may deem necessary to protect the player from fraud or deception and to insure the integrity of Internet wagering.
(2) All equipment used by a gaming licensee to conduct Internet wagering, including, but not limited to, computers, servers, monitoring rooms, and hubs, shall be located, with the prior approval of the commission, in a licensed gaming establishment including, where appropriate, redundancy facilities; provided, however, that such computers, servers, and other equipment not used in connection with Internet wagering may be located in such other locations within or outside of the state as approved by the commission.
(3) No software, computer or other gaming equipment shall be used to conduct Internet wagering unless it has been specifically tested and approved by the commission. The commission may, in its discretion, and for the purpose of expediting the approval process, refer testing to any testing laboratory. The commission shall give priority to the testing of software, computers or other gaming equipment which a gaming licensee has certified it will use to conduct Internet wagering in this state.
SECTION 12. (1) It is unlawful for a person to knowingly alter, tamper, or manipulate software, computers or other equipment used to conduct Internet wagering, in order to alter the odds or the payout of an Internet game, or to disable the Internet game from operating according to the rules of the game as authorized by the Internet wagering permit. Any person who is convicted of violating this provision shall be fined not more than Fifty Thousand Dollars ($50,000.00) for each violation. In the case of a person other than a natural person, any person who is convicted of violating this provision shall be fined not more than Two Hundred Thousand Dollars ($200,000.00) for each violation.
(2) In addition to the penalties provided in subsection (1), an employee of the gaming licensee who violates this section shall have his or her license revoked and shall be subject to such further penalty as the commission deems appropriate.
SECTION 13. (1) It is unlawful for a person to knowingly offer, or allow to be offered, any game through Internet wagering that has been altered, tampered, or manipulated in a way that affects the odds or the payout of an Internet game, or disables the Internet game from operating according to the rules of the game as promulgated by the commission. Any person who is convicted of a violation of this section shall be subject to be fined not more than Fifty Thousand Dollars ($50,000.00) for each violation. In the case of a person other than a natural person, any person who is convicted of violating this provision shall be fined not more than Two Hundred Thousand Dollars ($200,000.00) for each violation.
(2) In addition to the penalties provided in subsection (1), an employee of the gaming licensee who knowingly violates this section shall have his or her license suspended for a period of not less than thirty (30) days.
SECTION 14. (1) No person under the age of twenty-one (21) years is allowed to open, maintain, or use in any way an Internet wagering account. Any gaming licensee or employee of a gaming licensee who knowingly allows such a person to do so shall be subject to the penalty set forth in the regulations promulgated under this act, except that the establishment of all of the following facts by a licensee or employee allowing any such underage person to maintain an account shall constitute a defense to any regulatory action or penalty:
(a) The underage person falsely represented during the application process for an Internet wagering account that he or she was of the permitted age; and
(b) The establishment of the Internet wagering account was made in good faith, relying upon such representation, and in the reasonable belief that the underage person was actually the permitted age or older.
(2) In addition to the penalties provided in subsection (1) of this section, an employee of the gaming licensee who violates the provisions of this section more than twice may have his or her license revoked.
(3) In addition to the penalties provided in subsection (1) of this section, a gaming licensee that violates the provisions of this section may be fined or face such additional sanctions as the commission deems appropriate.
SECTION 15. (1) The commission shall, by regulation, establish fees for the issuance or renewal of Internet wagering permits. The issuance fee shall be based upon the cost of investigation and consideration of the license application and shall be not less than Two Hundred Thousand Dollars ($200,000.00). The renewal fee shall be based upon the cost of maintaining enforcement, control, and regulation of Internet wagering and shall not be less than One Hundred Thousand Dollars ($100,000.00).
(2) The commission shall certify actual and prospective costs of the investigative and enforcement functions of the commission, which costs shall be the basis, together with the operating expenses of the commission, for the establishment of annual license issuance and renewal fees.
(3) A nonrefundable deposit of at least One Hundred Thousand Dollars ($100,000.00) shall be posted with each application for an Internet wagering permit and shall be applied to the initial permit fee if the application is approved.
(4) Notwithstanding subsections (1) and (3) above, and in addition to the issuance or renewal fees for an Internet wagering permit, a gaming licensee having an Internet wagering permit shall pay to the commission:
(a) An amount equal to One Hundred Thousand Dollars ($100,000.00) annually to be deposited into the State General Fund; and
(b) An amount equal to One Hundred Thousand Dollars ($100,000.00) annually to be deposited into the Mississippi Gaming Commission Fund created in Section 75-76-325, to be used by the commission in combating criminal activity performed through the use of the Internet.
SECTION 16. (1) Whenever a gaming licensee owes a patron a specific amount of money as the result of a gaming transaction which remains inactive or dormant within a patron's Internet wagering account for such period and under such conditions established by regulation of the commission, regardless of whether the identity of the patron is known, the gaming licensee shall maintain a record of the obligation in accordance with the rules of the commission.
(2) If the patron does not claim the money in the account within one (1) year of the last date of activity by a patron with respect to his or her Internet wagering account, which date shall be established in accordance with the rules of the commission, the obligation of the gaming licensee to pay the patron shall expire. Fifty percent (50%) of the money in the account shall be paid by the gaming licensee to the Mississippi Gaming Commission Fund created in Section 75-76-325, and fifty percent (50%) shall be retained by the gaming licensee, provided that the licensee uses the full amount for marketing the State of Mississippi as a tourist destination. A gaming licensee shall attempt to contact the account holder of a dormant or inactive Internet wagering account in accordance with the regulations of the commission before closing or liquidating an Internet wagering account under this subsection.
SECTION 17. In addition to the license fees imposed in Section 75-76-177, a license fee shall be imposed on the Internet wagering gross revenues per calendar month of a gaming licensee in the amount of five percent (5%) of such revenues. An amount equal to seventy-five percent (75%) of such license fees on Internet wagering gross revenues shall be paid into the Mississippi Gaming Commission Fund created in Section 75-76-325, and an amount equal to twenty-five percent (25%) of such license fees on Internet wagering gross revenues shall be paid into the State General Fund.
SECTION 18. (1) It is unlawful for any person to offer games into play or displays such games through the Internet without approval of the commission.
(2) A person is guilty of unlawful Internet gambling when the person:
(a) Knowingly causes,
engages in or permits any gambling activity prohibited under Sections 1 through
18 of this act through the Internet from any point within the state, whether
the gambling activity is conducted within or without the state; or
(b) Manages, supervises, controls, operates or owns any operation
that conducts any gambling activity prohibited under Sections 1 through 18 of
this act through the Internet from any point within the state, during which
time the person knowingly causes or permits any gambling activity prohibited
under this chapter, whether the gambling activity is conducted within or
without the state.
(3) Any person who is convicted of violating the provisions of subsection
(2) of this section shall be punished as follows:
(a) For a violation of paragraph (a) of subsection (2), he shall be imprisoned in the county jail for up to ninety (90) days or fined up to Ten Thousand Dollars ($10,000.00), or both.
(b) For a violation of
paragraph (b) of subsection (2), he shall be imprisoned in the State
Penitentiary for up to ten (10) years or fined up to One Hundred Thousand
Dollars ($100,000.00), or both. In the case of a person other than a natural
person, for each violation, the person shall be fined up to Two Hundred Fifty
Thousand Dollars ($250,000.00).
(4) In addition to fines, imprisonment, or both, any person or entity
convicted of an offense under this section shall forfeit to the State of
Mississippi such person's or entity's right, title, and interest in and to the
following:
(a) Any website, domain name, online property, computer systems, hardware, software or other property used in the violation of this act;
(b) Any property, real or personal, constituting or traceable to gross profits or other proceeds obtained from such offense; and
(c) Any property, real or personal, used or intended to be used to commit or to promote the commission of such offense or any property traceable to such property.
SECTION 19. Section 75-76-5, Mississippi Code of 1972, is amended as follows:
75-76-5. (1) As used in this chapter, unless the context requires otherwise:
(a) "Applicant" means any person who has applied for or is about to apply for a state gaming license, registration or finding of suitability under the provisions of this chapter or approval of any act or transaction for which approval is required or permitted under the provisions of this chapter.
(b) "Application" means a request for the issuance of a state gaming license, registration or finding of suitability under the provisions of this chapter or for approval of any act or transaction for which approval is required or permitted under the provisions of this chapter but does not include any supplemental forms or information that may be required with the application.
(c) "Associated equipment" means any equipment or mechanical, electromechanical or electronic contrivance, component or machine used remotely or directly in connection with gaming or with any game, race book or sports pool that would not otherwise be classified as a gaming device, including dice, playing cards, links which connect to progressive slot machines, equipment which affects the proper reporting of gross revenue, computerized systems of betting at a race book or sports pool, computerized systems for monitoring slot machines, and devices for weighing or counting money.
(d) "Chairman" means the Chairman of the Mississippi Gaming Commission except when used in the term "Chairman of the State Tax Commission." "Chairman of the State Tax Commission" or "commissioner" means the Commissioner of Revenue of the Department of Revenue.
(e) "Commission" or "Mississippi Gaming Commission" means the Mississippi Gaming Commission.
(f) "Commission member" means a member of the Mississippi Gaming Commission.
(g) "Credit instrument" means a writing which evidences a gaming debt owed to a person who holds a license at the time the debt is created, and includes any writing taken in consolidation, redemption or payment of a prior credit instrument.
(h) "Enforcement division" means a particular division supervised by the executive director that provides enforcement functions.
(i) "Establishment" means any premises wherein or whereon any gaming is done.
(j) "Executive director" means the Executive Director of the Mississippi Gaming Commission.
(k) Except as otherwise provided by law, "game," or "gambling game" means any banking or percentage game played with cards, with dice or with any mechanical, electromechanical or electronic device or machine for money, property, checks, credit or any representative of value, including, without limiting, the generality of the foregoing, faro, monte, roulette, keno, fan-tan, twenty-one, blackjack, seven-and-a-half, big injun, klondike, craps, poker, chuck-a-luck (dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingui, slot machine, Internet game as provided for in Sections 1 through 18 of this act, or any other game or device approved by the commission. However, "game" or "gambling game" shall not include bingo games or raffles which are held pursuant to the provisions of Section 97-33-51.
The commission shall not be required to recognize any game hereunder with respect to which the commission determines it does not have sufficient experience or expertise.
(l) "Gaming" or "gambling" means to deal, operate, carry on, conduct, maintain or expose for play any game as defined in this chapter.
(m) "Gaming device" means any mechanical, electromechanical or electronic contrivance, component or machine used in connection with gaming or any game which affects the result of a wager by determining win or loss. The term includes a system for processing information which can alter the normal criteria of random selection, which affects the operation of any game, or which determines the outcome of a game. The term does not include a system or device which affects a game solely by stopping its operation so that the outcome remains undetermined, and does not include any antique coin machine as defined in Section 27-27-12.
(n) "Gaming employee" means any person connected directly with the operation of a gaming establishment licensed to conduct any game, including:
(i) Boxmen;
(ii) Cashiers;
(iii) Change personnel;
(iv) Counting room personnel;
(v) Dealers;
(vi) Floormen;
(vii) Hosts or other persons empowered to extend credit or complimentary services;
(viii) Keno runners;
(ix) Keno writers;
(x) Machine mechanics;
(xi) Security personnel;
(xii) Shift or pit bosses;
(xiii) Shills;
(xiv) Supervisors or managers; and
(xv) Ticket writers.
The term "gaming employee" also includes employees of manufacturers or distributors of gaming equipment within this state whose duties are directly involved with the manufacture, repair or distribution of gaming equipment.
"Gaming employee" does not include bartenders, cocktail waitresses or other persons engaged in preparing or serving food or beverages unless acting in some other capacity.
(o) "Gaming license" means any license issued by the state which authorizes the person named therein to engage in gaming.
(p) "Gross revenue" means the total of all of the following, less the total of all cash paid out as losses to patrons and those amounts paid to purchase annuities to fund losses paid to patrons over several years by independent financial institutions:
(i) Cash received as winnings;
(ii) Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and
(iii) Compensation received for conducting any game in which the licensee is not party to a wager.
For the purposes of this definition, cash or the value of noncash prizes awarded to patrons in a contest or tournament are not losses.
The term does not include:
(i) Counterfeit money or tokens;
(ii) Coins of other countries which are received in gaming devices;
(iii) Cash taken in fraudulent acts perpetrated against a licensee for which the licensee is not reimbursed; or
(iv) Cash received as entry fees for contests or tournaments in which the patrons compete for prizes.
(q) "Hearing examiner" means a member of the Mississippi Gaming Commission or other person authorized by the commission to conduct hearings.
(r) "Investigation division" means a particular division supervised by the executive director that provides investigative functions.
(s) "License" means a gaming license or a manufacturer's, seller's or distributor's license.
(t) "Licensee" means any person to whom a valid license has been issued.
(u) "License fees" means monies required by law to be paid to obtain or continue a gaming license or a manufacturer's, seller's or distributor's license.
(v) "Licensed gaming establishment" means any premises licensed pursuant to the provisions of this chapter wherein or whereon gaming is done.
(w) "Manufacturer's," "seller's" or "distributor's" license means a license issued pursuant to Section 75-76-79.
(x) "Navigable waters" shall have the meaning ascribed to such term under Section 27-109-1.
(y) "Operation" means the conduct of gaming.
(z) "Party" means the Mississippi Gaming Commission and any licensee or other person appearing of record in any proceeding before the commission; or the Mississippi Gaming Commission and any licensee or other person appearing of record in any proceeding for judicial review of any action, decision or order of the commission.
(aa) "Person" includes any association, corporation, firm, partnership, trust or other form of business association as well as a natural person.
(bb) "Premises" means land, together with all buildings, improvements and personal property located thereon, and includes all parts of any vessel or cruise vessel.
(cc) "Race book" means the business of accepting wagers upon the outcome of any event held at a track which uses the pari-mutuel system of wagering.
(dd) "Regulation" means a rule, standard, directive or statement of general applicability which effectuates law or policy or which describes the procedure or requirements for practicing before the commission. The term includes a proposed regulation and the amendment or repeal of a prior regulation but does not include:
(i) A statement concerning only the internal management of the commission and not affecting the rights or procedures available to any licensee or other person;
(ii) A declaratory ruling;
(iii) An interagency memorandum;
(iv) The commission's decision in a contested case or relating to an application for a license; or
(v) Any notice concerning the fees to be charged which are necessary for the administration of this chapter.
(ee) "Respondent" means any licensee or other person against whom a complaint has been filed with the commission.
(ff) "Slot machine" means any mechanical, electrical or other device, contrivance or machine which, upon insertion of a coin, token or similar object, or upon payment of any consideration, is available to play or operate, the play or operation of which, whether by reason of the skill of the operator or application of the element of chance, or both, may deliver or entitle the person playing or operating the machine to receive cash, premiums, merchandise, tokens or anything of value, whether the payoff is made automatically from the machine or in any other manner. The term does not include any antique coin machine as defined in Section 27-27-12.
(gg) "Sports pool" means the business of accepting wagers on sporting events, except for athletic events, by any system or method of wagering other than the system known as the "pari-mutuel method of wagering."
(hh) "State Tax Commission" or "department" means the Department of Revenue of the State of Mississippi.
(ii) "Temporary work permit" means a work permit which is valid only for a period not to exceed ninety (90) days from its date of issue and which is not renewable.
(jj) "Vessel" or "cruise vessel" shall have the meanings ascribed to such terms under Section 27-109-1.
(kk) "Work permit" means any card, certificate or permit issued by the commission, whether denominated as a work permit, registration card or otherwise, authorizing the employment of the holder as a gaming employee. A document issued by any governmental authority for any employment other than gaming is not a valid work permit for the purposes of this chapter.
(ll) "School or training institution" means any school or training institution which is licensed by the commission to teach or train gaming employees pursuant to Section 75-76-34.
(mm) "Cheat" means to alter the selection of criteria that determine:
(i) The rules of a game; or
(ii) The amount or frequency of payment in a game.
(nn) "Promotional activity" means an activity or event conducted or held for the purpose of promoting or marketing the individual licensed gaming establishment that is engaging in the promotional activity. The term includes, but is not limited to, a game of any kind other than as defined in paragraph (k) of this section, a tournament, a contest, a drawing, or a promotion of any kind.
(2) In addition to the definitions set forth in subsection (1) of this section, the definitions set forth in Section 3 of this act shall apply to lawful Internet gaming as authorized in Sections 1 through 18 of this act.
SECTION 20. Section 75-76-33, Mississippi Code of 1972, is amended as follows:
75-76-33. (1) The commission shall, from time to time, adopt, amend or repeal such regulations, consistent with the policy, objects and purposes of this chapter, as it may deem necessary or desirable in the public interest in carrying out the policy and provisions of this chapter. The commission shall comply with the Mississippi Administrative Procedures Law when adopting, amending or repealing any regulations authorized under this section or under any other provision of this chapter.
(2) These regulations shall, without limiting the general powers herein conferred, include the following:
(a) Prescribing the method and form of application which any applicant for a license or for a manufacturer's, seller's or distributor's license must follow and complete before consideration of his application by the executive director or the commission.
(b) Prescribing the information to be furnished by any applicant or licensee concerning his antecedents, habits, character, associates, criminal record, business activities and financial affairs, past or present.
(c) Prescribing the information to be furnished by a licensee relating to his employees.
(d) Requiring fingerprinting of an applicant or licensee, and gaming employees of a licensee, or other methods of identification and the forwarding of all fingerprints taken pursuant to regulation of the Federal Bureau of Investigation.
(e) Prescribing the manner and procedure of all hearings conducted by the commission or any hearing examiner of the commission, including special rules of evidence applicable thereto and notices thereof.
(f) Requiring any applicant to pay all or any part of the fees and costs of investigation of such applicant as may be determined by the commission under paragraph (g) of this subsection (2).
(g) Prescribing the amounts of investigative fees only as authorized by regulations of the commission under paragraph (f) of this subsection, and collecting those fees. The commission shall adopt regulations setting the amounts of those fees at levels that will provide the commission with sufficient revenue, when combined with any other monies as may be deposited into the Mississippi Gaming Commission Fund created in Section 75-76-325, to carry out the provisions of this chapter without any state general funds. In calculating the amount of such fees, the commission shall:
(i) Attempt to set the fees at levels that will create a balance in the Mississippi Gaming Commission Fund that does not exceed, at the end of any state fiscal year, two percent (2%) of the projected amount of funds that will provide the commission with such sufficient revenue; and
(ii) Demonstrate the reasonableness of the relationship between a fee and the actual costs of the investigative activity for which the fee is being prescribed.
(h) Prescribing the manner and method of collection and payment of fees and issuance of licenses.
(i) Prescribing under what conditions a licensee may be deemed subject to revocation or suspension of his license.
(j) Requiring any applicant or licensee to waive any privilege with respect to any testimony at any hearing or meeting of the commission, except any privilege afforded by the Constitution of the United States or this state.
(k) Defining and limiting the area, games and devices permitted, and the method of operation of such games and devices, for the purposes of this chapter.
(l) Prescribing under what conditions the nonpayment of a gambling debt by a licensee shall be deemed grounds for revocation or suspension of his license.
(m) Governing the use and approval of gambling devices and equipment.
(n) Prescribing the qualifications of, and the conditions under which, attorneys, accountants and others are permitted to practice before the commission.
(o) Restricting access to confidential information obtained under this chapter and ensuring that the confidentiality of such information is maintained and protected.
(p) Prescribing the manner and procedure by which the executive director on behalf of the commission shall notify a county or a municipality wherein an applicant for a license desires to locate.
(q) Prescribing the manner and procedure for an objection to be filed with the commission and the executive director by a county or municipality wherein an applicant for a license desires to locate.
(3) Notwithstanding any other provision of law, each licensee shall be required to comply with the following regulations:
(a) No wagering shall be allowed on the outcome of any athletic event, nor on any matter to be determined during an athletic event, nor on the outcome of any event, which does not take place on the premises, except as may be otherwise permitted under Sections 1 through 18 of this act pertaining to lawful Internet gaming.
(b) No wager may be placed by, or on behalf of, any individual or entity or group, not present on a licensed vessel or cruise vessel.
SECTION 21. Section 75-76-67, Mississippi Code of 1972, is brought forward as follows:
75-76-67. (1) Any person who the commission determines is qualified to receive a license or be found suitable under the provisions of this chapter, having due consideration for the proper protection of the health, safety, morals, good order and general welfare of the inhabitants of the State of Mississippi and the declared policy of this state, may be issued a state gaming license or found suitable. The burden of proving his qualification to receive any license or be found suitable is on the applicant.
(2) An application to receive a license or be found suitable shall not be granted unless the commission is satisfied that the applicant is:
(a) A person of good character, honesty and integrity;
(b) A person whose prior activities, criminal record, if any, reputation, habits and associations do not pose a threat to the public interest of this state or to the effective regulation and control of gaming, or create or enhance the dangers of unsuitable, unfair or illegal practices, methods and activities in the conduct of gaming or the carrying on of the business and financial arrangements incidental thereto; and
(c) In all other respects qualified to be licensed or found suitable consistent with the declared laws of the state.
(3) No person shall be granted a license or found suitable under the provisions of this chapter who has been convicted of a felony in any court of this state, another state, or the United States; and no person shall be granted a license or found suitable hereunder who has been convicted of a crime in any court of another state or the United States which, if committed in this state, would be a felony; and no person shall be granted a license or found suitable under the provisions of this chapter who has been convicted of a misdemeanor in any court of this state or of another state, when such conviction was for gambling, sale of alcoholic beverages to minors, prostitution, or procuring or inducing individuals to engage in prostitution.
(4) A license to operate a gaming establishment shall not be granted unless the applicant has satisfied the commission that:
(a) He has adequate business probity, competence and experience, in gaming or generally; and
(b) The proposed financing of the entire operation is:
(i) Adequate for the nature of the proposed operation; and
(ii) From a suitable source. Any lender or other source of money or credit which the commission finds does not meet the standards set forth in subsection (2) may be deemed unsuitable.
(5) An application to receive a license or be found suitable constitutes a request for a determination of the applicant's general character, integrity and ability to participate or engage in, or be associated with gaming. Any written or oral statement made in the course of an official proceeding of the commission or the executive director or any witness testifying under oath which is relevant to the purpose of the proceeding is absolutely privileged and does not impose liability for defamation or constitute a ground for recovery in any civil action.
(6) The commission may, in its discretion, grant a license to a corporation which has complied with the provisions of this chapter.
(7) The commission may, in its discretion, grant a license to a limited partnership which has complied with the provisions of this chapter.
(8) No limited partnership, except one whose sole limited partner is a publicly traded corporation which has registered with the commission, or business trust or organization or other association of a quasi-corporate character is eligible to receive or hold any license under this chapter unless all persons having any direct or indirect interest therein of any nature whatsoever, whether financial, administrative, policymaking or supervisory, are individually qualified to be licensed under the provisions of this chapter.
(9) The commission may, by regulation, limit the number of persons who may be financially interested and the nature of their interest in any corporation or other organization or association licensed under this chapter, and may establish such other qualifications of licenses as the commission, in its discretion, deems to be in the public interest and consistent with the declared policy of the state.
SECTION 22. Section 75-76-79, Mississippi Code of 1972, is brought forward as follows:
75-76-79. (1) (a) Except as otherwise provided in paragraphs (b) and (c) of this subsection, it is unlawful for any person, either as owner, lessee or employee, whether for hire or not, to operate, carry on, conduct or maintain any form of manufacture, selling or distribution of any gaming device for use or play in Mississippi or for distribution outside of Mississippi without first procuring and maintaining all required federal and state licenses.
(b) A lessor who specifically acquires equipment for a capital lease is not required to be licensed under this section.
(c) The holder of a state gaming license or the holding company of a corporate licensee may, within two (2) years after cessation of business or upon specific approval by the executive director, dispose of by sale in a manner approved by the executive director, any or all of its gaming devices, including slot machines, without a distributor's license. In cases of bankruptcy of a state gaming licensee or foreclosure of a lien by a bank or other person holding a security interest for which gaming devices are security in whole or in part for the lien, the executive director may authorize the disposition of the gaming devices without requiring a distributor's license.
(d) Any person whom the commission determines is a suitable person to receive a license under the provisions of this section may be issued a manufacturer's or distributor's license. The burden of proving his qualification to receive or hold a license under this section is at all times on the applicant or licensee.
(e) Every person who must be licensed pursuant to this section is subject to the provisions of Sections 75-76-199 through 75-76-265, unless exempted from those provisions by the commission.
(f) The commission may exempt, for any purpose, a manufacturer, seller or distributor from the provisions of Sections 75-76-199 through 75-76-265, if the commission determines that the exemption is consistent with the purposes of this chapter.
(g) As used in this section, "holding company" has the meaning ascribed to it in Section 75-76-199.
(2) If the commission determines that a manufacturer or distributor is unsuitable to receive or hold a license:
(a) No new gaming device or associated equipment manufactured by the manufacturer or distributed by the distributor may be approved;
(b) Any previously approved device or associated equipment manufactured by the manufacturer or distributed by the distributor is subject to revocation of approval if the reasons for the denial of the license also apply to that device or associated equipment;
(c) No new device or associated equipment manufactured by the manufacturer or distributed by the distributor may be sold, transferred or offered for use or play in Mississippi; and
(d) Any association or agreement between the manufacturer or distributor and a licensee must be terminated, unless otherwise provided by the commission. An agreement between such a manufacturer or distributor of gaming devices or associated equipment and a licensee shall be deemed to include a provision for its termination without liability on the part of the licensee upon a finding by the commission that the manufacturer is unsuitable to be associated with a gaming enterprise. Failure to include that condition in the agreement is not a defense in any action brought pursuant to this section to terminate the agreement.
(3) Failure of a licensee to terminate any association or agreement with a manufacturer or distributor of gaming devices or associated equipment after receiving notice of a determination of unsuitability, the denial of a license or failure to file a timely application for a license, is an unsuitable method of operation.
(4) There is hereby imposed and levied on each applicant for a manufacturer's, seller's or distributor's license under this section an annual license fee in the following amount:
(a) For the issuance or continuation of a manufacturer's license, One Thousand Dollars ($1,000.00).
(b) For the issuance or continuation of a seller's or distributor's license, Five Hundred Dollars ($500.00).
This fee is to be paid by the applicant to the State Tax Commission on or before the filing of the application for a manufacturer's, seller's or distributor's license by the applicant. Upon such payment the Chairman of the State Tax Commission shall certify to the executive director that such fee has been paid by the applicant.
Except for those amounts that a person issued a manufacturer's license under this section may charge for goods supplied or services rendered, the person holding the manufacturer's license may not be directly reimbursed by a holder of a gaming license for the cost of any fee paid by the person for the issuance or continuation of such a license, whether imposed under this section or any other provision of this chapter.
(5) A manufacturer or distributor of associated equipment who sells, transfers or offers the associated equipment for use or play in Mississippi may be required by the executive director to file an application for a finding of suitability to be a manufacturer or distributor of associated equipment.
Any person who directly or indirectly involves himself in the sale, transfer or offering for use or play in Mississippi of associated equipment who is not otherwise required to be licensed as a manufacturer or distributor may be required by the executive director to file an application for a finding of suitability to be a manufacturer or distributor of associated equipment.
If an application for a finding of suitability is not submitted within thirty (30) days after demand by the executive director, he may pursue any remedy or combination of remedies provided in this chapter.
(6) The executive director and his employees may inspect every gaming device which is manufactured, sold or distributed:
(a) For use in this state, before the gaming device is put into play.
(b) In this state for use outside this state, before the gaming device is shipped out of this state.
The executive director may inspect every gaming device which is offered for play within this state by a licensee.
The executive director may inspect all associated equipment which is manufactured, sold or distributed for use in this state before the equipment is installed or used by a gaming licensee.
In addition to all other fees and charges imposed by this chapter, the executive director may determine an inspection fee with regard to each manufacturer, seller or distributor which must not exceed the actual cost of inspection and investigation. Upon such determination, the executive director shall certify to the Chairman of the State Tax Commission the amount of the inspection fee and the name and address of the applicant. Upon such certification the State Tax Commission shall proceed to assess and collect such inspection fee from the applicant.
SECTION 23. Section 75-76-81, Mississippi Code of 1972, is amended as follows:
75-76-81. Except as otherwise provided in this section, the Chairman of the State Tax Commission shall assess and collect all taxes, fees, licenses, interest, penalties, damages and fines imposed by this chapter, and is hereby empowered to promulgate rules and regulations to administer such collections. Any records or other documents submitted by the licensee, or on his behalf, to the Mississippi Gaming Commission or executive director shall be made available to the Chairman of the State Tax Commission or his authorized agent upon written request.
The gross revenue fees levied by this chapter shall be due and payable on or before the twentieth day of the month next succeeding the month in which the fees accrue except as otherwise provided. The licensee shall make a return showing the gross revenue and compute the fee due for the period.
Except for fees imposed under Section 75-76-33(2)(f), all administrative provisions of the sales tax law, and amendments thereto, including those which provide for collection and administrative appeals procedures, fix damages, penalties and interest for failure to comply with the provisions of said sales tax law, and all other requirements and duties imposed upon any licensee or taxpayer, shall apply to all persons liable for taxes, fees and all other monies imposed under the provisions of this chapter. However, fines or other assessments levied by the Mississippi Gaming Commission or the executive director will not be considered due and payable until thirty (30) days after final determination of such fines or assessments. The Chairman of the State Tax Commission shall exercise all power and authority and perform all duties with respect to licensees or taxpayers under this chapter as are provided in said sales tax law, except where there is conflict, then the provisions of this chapter shall control.
The Mississippi Gaming Commission shall assess and collect all fees imposed under Section 75-76-33(2)(f) and shall deposit the funds received from the fees into the Mississippi Gaming Commission Fund created in Section 75-76-325. The commission shall also assess and collect all fees imposed under Sections 1 through 18 of this act and shall deposit the funds received from the fees in the manner prescribed under Sections 1 through 18 of this act.
The determination and/or assessment of any taxes, fees, licenses, interest, penalties, damages and fines under this chapter by the Chairman of the State Tax Commission, the Executive Director of the Mississippi Gaming Commission or the Mississippi Gaming Commission shall be prima facie correct.
SECTION 24. Section 75-76-101, Mississippi Code of 1972, is amended as follows:
75-76-101. (1) Except as otherwise provided in Sections 1 through 18 of this act, all gaming must be conducted with chips, tokens or other instrumentalities approved by the executive director or with the legal tender of the United States.
(2) Except as otherwise provided in Sections 1 through 18 of this act, no licensee shall permit participation by a person in a game conducted in the licensed gaming establishment if such person is not physically present in the licensed gaming establishment during the period of time when such game is being conducted, and all games and the participation of patrons therein shall be entirely located and conducted on the licensed premises.
SECTION 25. Section 75-76-129, Mississippi Code of 1972, is brought forward as follows:
[Through June 30, 2022, this section shall read as follows:]
75-76-129. On or before the last day of each month all taxes, fees, interest, penalties, damages, fines or other monies collected by the State Tax Commission during that month under the provisions of this chapter, with the exception of (a) the local government fees imposed under Section 75-76-195, and (b) an amount equal to Three Million Dollars ($3,000,000.00) of the revenue collected pursuant to the fee imposed under Section 75-76-177(1)(c) shall be paid by the State Tax Commission to the State Treasurer to be deposited in the State General Fund. The local government fees shall be distributed by the State Tax Commission pursuant to Section 75-76-197. An amount equal to Three Million Dollars ($3,000,000.00) of the revenue collected during that month pursuant to the fee imposed under Section 75-76-177(1)(c) shall be deposited by the State Tax Commission into the bond sinking fund created in Section 65-39-3.
[From and after July 1, 2022, this section shall read as follows:]
75-76-129. On or before the last day of each month, all taxes, fees, interest, penalties, damages, fines or other monies collected by the State Tax Commission during that month under the provisions of this chapter, with the exception of the local government fees imposed under Section 75-76-195, shall be paid by the State Tax Commission to the State Treasurer to be deposited in the State General Fund. The local government fees shall be distributed by the State Tax Commission pursuant to Section 75-76-197.
SECTION 26. Section 75-76-155, Mississippi Code of 1972, is amended as follows:
75-76-155. (1) A person under the age of twenty-one (21) years shall not:
(a) Play, be allowed to play, place wagers, or collect winnings, whether personally or through an agent, from any gaming authorized under this chapter.
(b) Be employed as a gaming employee.
(2) Except as otherwise provided in Sections 1 through 18 of this act, any licensee, employee, dealer or other person who violates or permits the violation of any of the provisions of this section, and any person under twenty-one (21) years of age who violates any of the provisions of this section shall, upon conviction, be punished by a fine of not more than One Thousand Dollars ($1,000.00) or imprisoned in the county jail not more than six (6) months, or by both such fine and imprisonment.
(3) Except as otherwise provided in Sections 1 through 18 of this act, in any prosecution or other proceeding for the violation of any of the provisions of this section, it is no excuse for the licensee, employee, dealer or other person to plead that he believed the person to be twenty-one (21) years old or over.
SECTION 27. Section 75-76-157, Mississippi Code of 1972, is amended as follows:
75-76-157. (1) Except as provided in Sections 75-76-159 through 75-76-165, and in Sections 1 through 18 of this act, inclusive, gaming debts not evidenced by a credit instrument are void and unenforceable and do not give rise to any administrative or civil cause of action.
(2) Except as otherwise provided in Sections 1 through 18 of this act, a claim by a patron of a licensee for payment of a gaming debt not evidenced by a credit instrument, and a dispute between a licensee and a patron associated with a promotional activity as defined in Section 75-76-5(mm), shall be resolved by the executive director in accordance with Sections 75-76-159 through 75-76-165, inclusive. The resolution of such a claim or dispute by the executive director shall include any claims for alleged winnings or losses, or the award or distribution of cash, prizes, benefits, tickets or any other item of value associated with the promotional activity, or the manner in which the specific event at which the award or distribution from the promotional activity is conducted; however, the authority granted under this subsection (2) regarding a promotional activity does not provide the executive director or the commission with any additional authority, not otherwise granted by law, to regulate the promotional activity with regard to those matters pertaining exclusively to the operational or administrative aspects of the promotional activity that occur in advance of such specific event at which the award or distribution is conducted.
SECTION 28. Section 75-76-177, Mississippi Code of 1972, is amended as follows:
75-76-177. (1) From and after August 1, 1990, there is hereby imposed and levied on each gaming licensee a license fee based upon all the gross revenue of the licensee as follows:
(a) Four percent (4%) of all the gross revenue of the licensee which does not exceed Fifty Thousand Dollars ($50,000.00) per calendar month;
(b) Six percent (6%) of all the gross revenue of the licensee which exceeds Fifty Thousand Dollars ($50,000.00) per calendar month and does not exceed One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month; and
(c) Eight percent (8%) of all the gross revenue of the licensee which exceeds One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month.
(2) All revenue received from any game or gaming device which is leased for operation on the premises of the licensee-owner to a person other than the owner thereof or which is located in an area or space on such premises which is leased by the licensee-owner to any such person, must be attributed to the owner for the purposes of this section and be counted as part of the gross revenue of the owner. The lessee is liable to the owner for his proportionate share of such license fees.
(3) If the amount of license fees required to be reported and paid pursuant to this section is later determined to be greater or less than the amount actually reported and paid by the licensee, the Commissioner of Revenue shall:
(a) Assess and collect the additional license fees determined to be due, with interest thereon until paid; or
(b) Refund any overpayment, with interest thereon, to the licensee.
Interest must be computed, until paid, at the rate of one percent (1%) per month from the first day of the first month following either the due date of the additional license fees or the date of overpayment.
(4) Failure to pay the fees provided for in this section when they are due for continuation of a license shall be deemed a surrender of the license.
(5) All fees imposed under the provisions of Sections 1 through 18 of this act shall be in addition to the fees imposed under this section.
SECTION 29. Section 75-76-191, Mississippi Code of 1972, is amended as follows:
75-76-191. (1) In addition to any other state gaming license fees provided for in this chapter, from and after August 1, 1990, there is hereby imposed and levied on each applicant for a state gaming license a license fee to be determined on the basis of the following annual rates:
(a) From establishments operating or to operate ten (10) games or less:
(i) Those establishments operating or to operate one (1) game, the sum of Fifty Dollars ($50.00).
(ii) Those establishments operating or to operate two (2) games, the sum of One Hundred Dollars ($100.00).
(iii) Those establishments operating or to operate three (3) games, the sum of Two Hundred Dollars ($200.00).
(iv) Those establishments operating or to operate four (4) games, the sum of Three Hundred Seventy-five Dollars ($375.00).
(v) Those establishments operating or to operate five (5) games, the sum of Eight Hundred Seventy-five Dollars ($875.00).
(vi) Those establishments operating or to operate six (6) or seven (7) games, the sum of One Thousand Five Hundred Dollars ($1,500.00).
(vii) Those establishments operating or to operate eight (8), nine (9) or ten (10) games, the sum of Three Thousand Dollars ($3,000.00).
(b) From establishments operating or to operate more than ten (10) games:
(i) For each game up to and including sixteen (16) games, the sum of Five Hundred Dollars ($500.00).
(ii) For each game from seventeen (17) to twenty-six (26) games, inclusive, the sum of Four Thousand Eight Hundred Dollars ($4,800.00).
(iii) For each game from twenty-seven (27) to thirty-five (35) games, inclusive, the sum of Two Thousand Eight Hundred Dollars ($2,800.00).
(iv) For each game more than thirty-five (35) games, the sum of One Hundred Dollars ($100.00).
(2) The license fee imposed by this section is to be paid by the applicant to the Department of Revenue on or before the filing of the application for issuance of a gaming license by the applicant, and is to be paid annually thereafter for continuation of the gaming license. Upon such payment, the Chairman of the Department of Revenue shall certify to the executive director that such fee has been paid by the applicant, and the amount of the fee paid.
(3) Card games, that is, stud or draw poker, bridge, whist, solo, low ball, and panguingui for money, and slot machines, when not utilized as an adjunct to or a unit of any banking, percentage or mechanical device or machine, are not gambling games under the provisions of this section.
(4) All games operated or conducted in one (1) room or a group of rooms in the same or a contiguous building or vessel are considered one (1) operation, and the license to be paid must be determined on the aggregate number of games in each room or group of rooms in the same or a contiguous building or vessel.
(5) All fees imposed under the provisions of Sections 1 through 18 of this act shall be in addition to the fees imposed under this section.
SECTION 30. Section 75-76-195, Mississippi Code of 1972, is amended as follows:
75-76-195. (1) Except as otherwise provided in subsection (6) of this section, in addition to any state gaming license fees or taxes, from and after August 1, 1990, (a) a municipality may impose a fee upon a licensee located within the municipality for conducting, carrying on or operating any gambling game, slot machine or other game of chance based upon all the gross revenue of the licensee derived from his establishment within the municipality, and (b) a county may impose a fee upon a licensee located within the unincorporated area of the county for conducting, carrying on or operating any gambling game, slot machine or other game of chance based upon all the gross revenue of the licensee derived from his establishment within the unincorporated area of the county, as follows:
(i) Four-tenths percent (.4%) of all the gross revenue which does not exceed Fifty Thousand Dollars ($50,000.00) per calendar month;
(ii) Six-tenths percent (.6%) of all the gross revenue which exceeds Fifty Thousand Dollars ($50,000.00) per calendar month and does not exceed One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month; and
(iii) Eight-tenths percent (.8%) of all the gross revenue of the licensee which exceeds One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month.
(2) Whenever a municipality or county imposes a fee under this section, it shall not become effective until the first day of the month following the month in which the municipality or county adopts the ordinance imposing the fee.
(3) All revenue received from any game or gaming device which is leased for operation on the premises of the licensee-owner to a person other than the owner thereof or which is located in an area or space on such premises which is leased by the licensee-owner to any such person must be attributed to the owner for the purposes of this section and be counted as part of the gross revenue of the owner. The lessee is liable to the owner for his proportionate share of such fees.
(4) If the amount of fees required to be reported and paid pursuant to this section is later determined to be greater or less than the amount actually reported and paid by the licensee, the State Tax Commission on behalf of the local government shall:
(a) Assess and collect the additional fees determined to be due, with interest thereon until paid; or
(b) Refund any overpayment, with interest thereon, to the licensee.
Interest must be computed, until paid, at the rate of one percent (1%) per month from the first day of the month following either the due date of the additional fees or the date of overpayment.
(5) Failure to pay the fees provided for in this section when they are due for continuation of a license shall be deemed a surrender of the license.
(6) A gaming licensee is not required to pay the fees provided for in this section with regard to the operation of lawful Internet gaming as authorized in Sections 1 through 18 of this act.
SECTION 31. Section 75-76-267, Mississippi Code of 1972, is brought forward as follows:
75-76-267. (1) Conviction by a court of competent jurisdiction of a person for a violation of, an attempt to violate, or a conspiracy to violate any of the provisions of this chapter shall act as an immediate revocation of all licenses which have been issued to the violator, and, in addition, the court may, upon application of the district attorney of the county or of the commission, order that no new or additional license under this chapter be issued to the violator, or be issued to any person for the room or premises in which the violation occurred, for one (1) year after the date of the revocation.
(2) Any person who willfully fails to report, pay or truthfully account for and pay over any license fee or tax imposed by the provisions of this chapter, or willfully attempts in any manner to evade or defeat any such license fee, tax or payment thereof, shall be punished by commitment to the custody of the Department of Corrections for not less than one (1) year nor more than six (6) years, or by a fine of not more than Five Thousand Dollars ($5,000.00), or by both fine and imprisonment.
(3) Except as provided in subsection (4), any person who willfully violates, attempts to violate, or conspires to violate any of the provisions of subsection (1) of Section 75-76-57, shall be punished by commitment to the custody of the Department of Corrections for not less than one (1) year nor more than twenty (20) years, by a fine of not more than Fifty Thousand Dollars ($50,000.00), or by both fine and imprisonment.
(4) A licensee who puts additional games or slot machines into play or displays additional games or slot machines in a public area without first obtaining all required licenses and approval is subject only to the penalties provided in Sections 75-76-93 and 75-76-103 and in any applicable ordinance of the county or municipality.
(5) The violation of any of the provisions of this chapter, the penalty for which is not specifically fixed in this chapter, is a misdemeanor.
SECTION 32. Section 75-76-301, Mississippi Code of 1972, is brought forward as follows:
75-76-301. It is unlawful for any person:
(a) To alter or misrepresent the outcome of a game or other event on which wagers have been made after the outcome is made sure but before it is revealed to the players.
(b) To place, increase or decrease a bet or to determine the course of play after acquiring knowledge, not available to all players, of the outcome of the game or any event that affects the outcome of the game or that is the subject of the bet or to aid anyone in acquiring such knowledge for the purpose of placing, increasing or decreasing a bet or determining the course of play contingent upon that event or outcome.
(c) To claim, collect or take, or attempt to claim, collect or take, money or anything of value in or from a gambling game, with intent to defraud, without having made a wager contingent thereon, or to claim, collect or take an amount greater than the amount won.
(d) Knowingly to entice or induce another to go to any place where a gambling game is being conducted or operated in violation of the provisions of this chapter, with the intent that the other person play or participate in the gambling game.
(e) To place or increase a bet after acquiring knowledge of the outcome of the game or other event that is the subject of the bet, including past-posting and pressing bets.
(f) To reduce the amount wagered or cancel the bet after acquiring knowledge of the outcome of the game or other event that is the subject of the bet, including pinching bets.
(g) To manipulate, with the intent to cheat, any component of a gaming device in a manner contrary to the designed and normal operational purpose for the component, including, but not limited to, varying the pull of the handle of a slot machine, with knowledge that the manipulation affects the outcome of the game or with knowledge of any event that affects the outcome of the game.
SECTION 33. Section 75-76-303, Mississippi Code of 1972, is brought forward as follows:
75-76-303. It is unlawful for any person at a licensed gaming establishment to use, or possess with the intent to use, any device to assist:
(a) In projecting the outcome of the game;
(b) In keeping track of the cards played;
(c) In analyzing the probability of the occurrence of an event relating to the game; or
(d) In analyzing the strategy for playing or betting to be used in the game, except as permitted by the commission.
SECTION 34. Section 75-76-325, Mississippi Code of 1972, is amended as follows:
75-76-325. (1) There is created in the State Treasury a special fund to be designated as the "Mississippi Gaming Commission Fund." The special fund shall consist of monies deposited therein under Section 75-76-81 and Sections 1 through 18 of this act and monies from any other source designated for deposit into the fund. Unexpended amounts remaining in the special fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned or investment earnings on amounts in the fund shall be deposited to the credit of the fund.
(2) Monies in the special fund may be used by the commission, upon appropriation by the Legislature, only for the purposes of carrying out the provisions of this chapter. Unexpended amounts remaining in the special fund at the end of a fiscal year shall be used by the commission in calculating the amounts of fees to be imposed under Section 75-76-33(2)(f) during the next succeeding state fiscal year that will be necessary to provide the commission with sufficient revenue, when combined with other monies deposited into the special fund, to carry out the provisions of this chapter without any State General Funds.
SECTION 35. The provisions of Sections 1 through 18 of this act shall be codified as a separate article in Title 75, Chapter 76, Mississippi Code of 1972.
SECTION 36. This act shall take effect and be in force from and after July 1, 2012.