As used throughout this chapter, the following definitions apply:

(1) "AARS" (automated accounting and reporting system) means a system that, at a minimum, is used to electronically report VGM accounting data to the State of Montana.

(2) "Accounting system vendor" means a person who sells or leases an accounting system to a licensed gambling manufacturer, route operator, or gambling operator to be utilized as an approved automated AARS, as provided in 23-5-637, MCA.

(3) "Active investor" means a beneficial owner as defined by the U.S. Securities and Exchange Commission (SEC) which includes an individual or group of individuals who directly or indirectly own 5% or more of a publicly traded corporation and directly or indirectly share voting power or investment power, including anyone who would be required to file a Schedule 13D with the SEC.

(4) "Control" means the power to cause or direct management and policies through ownership, contract, or otherwise.

(5) "Day" means the period of time, or any portion thereof, between any midnight and the midnight following.

(6) "Dealer" means a person who:

(a) deals playing cards in a card game of panguingue or poker; and

(b) may accept wagers and dispense winnings in a card game of panguingue or poker.

(7) "Financing" means investments, loans, deferred payment agreements for the purchase of real property (or tangible and intangible personal property or past or prospective services), and gifts, except tangible personal property intended and used for decoration or display on the premises.

(8) "Gambling license" means any license issued by the department pursuant to Title 23, chapter 5, MCA.

(9) "Institutional lender" means a person who:

(a) has been authorized under Title 32, chapters 1, 2, 3, and 4, MCA, to receive money on deposit or transact a trust or investment business, including banks, savings and loans, credit unions, investment companies, and development corporations; or

(b) is identified as a regulated lender in 31-1-111, MCA, which, in addition to lenders identified in (8)(a), includes bank holding companies, consumer loan licensees owned by bank holding companies, mutual or stock insurance companies, and federal and state agencies authorized to lend money.

(10) "Lease agreement" means a contract that transfers the right to possess and use of property for a term, in return for consideration. The terms of the lease may not transfer an ownership interest in the licensed gambling operation as defined in this rule.

(11) "Loan" means a written contract by which one delivers a sum of money or other thing of value to another and the latter agrees to return at a future time a sum equivalent to that which he/she borrowed.

(12) "Location manager" means a person employed or designated by the licensee to provide general oversight and ensure compliance with gambling laws and regulations under the authority and general guidance of the owner. A location manager may be a licensed owner, general manager, or onsite manager.

(13) "Manufacturer of electronic live bingo or keno equipment" means a person who produces from raw materials or subparts a completed piece of electronic equipment intended for use in the game of live bingo or keno. The term does not include a person who solely installs or connects electronic live bingo or keno equipment on an operator's premises.

(14) "Manufacturer of gambling devices not legal in Montana" means a person who assembles a completed or uncompleted piece of equipment intended for use as a gambling device which is not specifically authorized in Montana but is lawful in another jurisdiction.

(15) "Noninstitutional lender" or "noninstitutional source" means:

(a) a person other than an institutional lender as defined in (8) of this rule; or

(b) a consumer lender who is not a subsidiary of a bank or bank holding company who loans money or supplies financing to an applicant, licensee, or the owner of an applicant or licensee.

(16) "Owner" or "owner of an interest" means a person holding ownership as defined in 23-5-112, MCA.  The term "owner" or "owner of an interest" does not include route operators with a right to share in proceeds from VGMs they have leased to location operators. "Owner" or "owner of an interest" includes:

(a) guarantors on a loan to a gambling licensee from a noninstitutional source who make actual debt payments on behalf of a gambling licensee:

(i) that are disclosed as capital contributions; or

(ii) that the department determines are not actual loans to the gambling licensee under ARM 23.16.122;

(b) coborrowers, guarantors, and pledgors of collateral on a loan to a gambling licensee from a regulated lender who make actual debt payments on behalf of a gambling licensee and:

(i) who make actual debt payments on behalf of a gambling licensee and fail to meet the suitability requirements of 23-5-176, MCA; or

(ii) who make actual debt payments on behalf of a gambling licensee and fail to timely make complete disclosures of payments as required by 23-5-118, MCA;

(c) any person whose compensation or contractual rights in relation to the licensed gambling operation are based in whole or part on a percentage of gross or net sales; or

(d) a holding company, defined under this rule as a corporation operated for the purpose of owning the stocks of other corporations and controlling the operations of these corporations.

(17) "Passive investor" means a beneficial owner as defined by the U.S. Securities and Exchange Commission (SEC) which includes an individual or group of individuals who directly or indirectly own at least 5% but less than 20% of the shares of a publicly traded corporation, who have not acquired and who do not hold the securities for the purpose of, or with the effect of, changing or influencing the control of the issuer of the securities and who would be allowed to file with the SEC a schedule 13G in lieu of Schedule 13D. 

(18) "Person" means either a natural or an artificial person, and includes all partnerships, corporations, limited liability companies, associations, clubs, fraternal orders, religious organizations, or charitable organizations. A separate person exists when a partner in a partnership changes, any member(s) in a limited liability company changes, any shareholder(s) in a closed corporation changes, or 5% or more of the interest in a publicly traded corporation is transferred to or from a single individual.

(19) "Security interest" means an interest that is reserved or created by an agreement that secures payment or performance of an obligation.

(20) "Stranger to the license" means a person who has not both applied for licensure under Title 23, chapter 5, MCA, and these rules, and been approved by the department to hold an ownership interest in that licensed gambling operation.

(21) "Transfer" means to sell, assign, lease, or otherwise convey.

(22) "VGM" means a video gambling machine as defined in 23-5-112, MCA.

(23) "Working day" means every day except Saturdays, Sundays and all state legal holidays enumerated under 1-1-216, MCA. 

(1) Every person working or acting as a card dealer, operator, route operator, card room contractor, manufacturer, distributor, manufacturer of electronic live bingo or keno equipment, sports tab game seller, accounting system vendor, or manufacturer of illegal devices, as defined by Title 23, chapter 5, MCA, and by these rules, any nonprofit organization, or any other person required by statute or rule to hold a license issued by the department, must possess a valid license issued by the department. All licenses expire annually at midnight on June 30 unless otherwise provided for in these rules. All owners or owners of an interest, as that term is defined under ARM 23.16.101, are considered applicants for all licensing purposes within this chapter.

(2) An application for a gambling license must be submitted to the Department of Justice, Gambling Control Division, on forms prescribed by the department and described herein. The application is not complete unless it is signed and dated by all or any applicant(s) and contains all information, statements, documentation, and fees required by the department. An applicant applying for a gambling operator license prior to approval of a premises under 23-5-177, MCA, must submit an electronic application.

(3) The application must also contain:

(a) authorization for the examination and release of information for use in assessing a gambling license application;

(b) one or more personal history statements (Form 10), as required in the application;

(c) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement;

(d) any license or processing fee required by Title 23, chapter 5, MCA, or these rules; and

(e) any additional information, statements, or documentation required in the rules applicable to those licenses.

(4) Forms 10 and FD-258 are available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming.

(5) All required documents must be submitted by the applicant(s) in all new and amended license applications.

(1) An applicant for a gambling license must make full disclosure of all information, and provide fingerprints as required by the department, these rules, and Title 23, chapter 5, MCA.

(2) The department may, at its discretion, require additional information, documentation, or disclosure from an applicant for a gambling license.

(3) The department may require any noninstitutional lender to complete a document (Form 13) authorizing examination and release of information and (Form 10) a personal history statement on the lender, fingerprints on a form provided by the department, as well as any contract, statement, or other document from the lender deemed necessary to assess the suitability of an applicant's funding source as required in 23-5-176, MCA. The document must be signed and dated by the lender and attested to by a notary public. Forms 13, 10, and FD-258 are available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming.

(1) Upon receipt of an application for a gambling license, the department must make a thorough investigation as to the qualifications of the applicant for licensure. If, upon conclusion of such investigation, the applicant appears qualified under the law, a license must be issued if all requirements of the law and these rules are fulfilled.

(2) If the department issues a gambling operator license prior to approval of a premises under 23-5-117, MCA:

(a) the licensee must, within six months of the license approval, electronically submit an application for premises approval, which the department will investigate under standards outlined in 23-5-117, MCA; and

(b) the licensee may not offer any gambling activity until the premises has been approved.

(3) The department may consider the same matters, conditions, and qualifications for renewal of a gambling license as for the original application.

(2) The department may, in its discretion, grant the request with or without prejudice. If the division's decision to grant a request to withdraw an application is made with prejudice, it must be based on a finding that the applicant has engaged or is engaging in an act or practice constituting a violation of a provision of Title 23, chapter 5, MCA, or a rule or order of the department, or that the applicant is a person whom the department determines is not qualified to receive a license under 23-5-176 , MCA, or ARM 23.16.107. This decision is subject to challenge pursuant to the Montana Administrative Procedure Act.

(3) If a request for withdrawal is granted with prejudice, the applicant is not eligible to apply again for licensing or approval until after expiration of one year from the date of the final department action upon the decision to grant the withdrawal of the application with prejudice.

(1) The department may accept electronic submission of certain documents through the licensing portal.

(2) An electronically submitted document is only complete if:

(a) all requested information is provided; and

(b) the submitter is the applicant, licensee, or an authorized representative of the applicant or licensee.

(3) By electronically submitting a document, the submitter declares, under the penalty, that:

(a) the information submitted is true, correct, and complete; and

(b) the submitter is the applicant, licensee, or an authorized representative of the applicant or licensee.

(4) An electronically submitted document is subject to the same deadlines as a document submitted in paper form.

(1) With respect to any gambling license, permit, or authorization, the department may deny initial issuance, or, if issued, deny renewal or take any action authorized in 23-5-136, MCA, when the department can demonstrate that the applicant or holder of such license, permit or authorization has: 

(a) concealed, failed to disclose, or otherwise attempted to mislead the department with respect to any material fact contained in the application or contained in any other information required of or submitted by an applicant or licensee for any licensing purpose;

(b) purposely or knowingly failed to comply with Title 23, chapter 5, MCA, or these rules;

(c) been convicted of any felony within five years of the date of application;

(d) been placed and remains on probation or parole or under deferred prosecution for committing a felony;

(e) purposely or knowingly possessed or permitted to remain in or upon any premise licensed for gambling activity any device designed for the purpose of cheating or manipulating the outcome of any gambling activity or gambling enterprise authorized by Title 23, chapter 5, MCA;

(f) been prohibited by a governmental authority from being present upon the premises of any gambling establishment or gambling enterprise or any establishment where parimutuel wagering is conducted for any reason relating to improper gambling activities or any illegal act;

(g) failed to cooperate with any legislative investigative committee or other officially constituted body acting on behalf of the United States or any state, county, or municipality which seeks to investigate crimes relating to gambling, corruption of public officials, or any organized criminal activities;

(h) failed within a reasonable time to supply records within the applicant's or licensee's control requested by the department in any license or permit application or renewal application, or in any financial audit initiated by the department or ordered through administrative or court action;

(i) had any action taken against a gambling license by any agency of the state of Montana or other jurisdiction, which resulted in a final order declaring a violation or a conviction of any crime which is contrary to the declared gambling policy of the state of Montana;

(j) been voluntarily or involuntarily dissolved as an entity;

(k) failed to meet other qualifications for licensure as set forth in 23-5-176, MCA;

(l) had a gambling license denied for other than technical defects in the application; or

(m) failed to apply for or receive approval of a premises within the timeframe required in ARM 23.16.502.

(2) The department may, in its discretion, deny a license under (1) with or without prejudice. If the division's decision to deny an application is made with prejudice, it must be based on a finding that the applicant has engaged or is engaging in an act or practice constituting a violation of a provision of Title 23, chapter 5, MCA, or a rule or order of the department, or that the applicant is a person whom the department determines is not qualified to receive a license under 23-5-176, MCA, or this rule. This decision is subject to challenge pursuant to the Montana Administrative Procedure Act. Any person whose application has been denied with prejudice is not eligible to apply again for licensing or approval until after expiration of one year from the date of the final department action upon the decision to deny the application with prejudice.

(2) Upon receipt by the department of a written request for hearing, all proceedings involving the denial or nonrenewal of a gambling license shall be conducted in accordance with the Montana Administrative Procedure Act and the Attorney General's Model Rules of Procedure. The applicant shall notify the appointed hearing officer whether the applicant waives or invokes the confidentiality requirements of 23-5-115 , MCA.

(2) Any renewal or annual fee required by Title 23, chapter 5, MCA, or these rules, must accompany each renewal application.

(1) Except where licensure is required by Title 23, chapter 5, MCA, or under these rules, an associated gambling business license is a license the department may issue to a person or entity whose business provides products or services to a licensed gambling business and:

(a) possesses or maintains control over gambling equipment or devices;

(b) has access to gambling related trade secrets, or proprietary, confidential, or tax information; or

(c) is a party to a gambling transaction.

(2) An applicant for an associated gambling business license must submit to the department:

(a) an application using Form 17, with special instructions, and Form FD-258, which are available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming;

(b) Form 10 for all applicants as described in ARM 23.16.102;

(c) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department, for each person required to complete a personal history statement;

(d) financial statements for the applicant's business as described in ARM 23.16.502; and

(e) a check or money order for $1,100 made payable to the State Treasurer, which includes payment for the:

(i) $100 annual license fee; and

(ii) $1,000 processing fee to cover the actual cost of processing the license.

(3) Based on the actual cost incurred by the department in determining whether the applicant qualifies for licensure, the department will refund any overpayment of the processing fee or collect an amount sufficient to reimburse the department for any underpayment of actual costs. If an applicant withdraws the application after the department has begun processing the application, the department will refund any amount not expended as of the date of withdrawal.

(4) The department may waive the application and processing fee if the applicant is licensed as an operator, distributor, manufacturer of legal or illegal devices, or a route operator, and if the applicant is substantially the same and has not added strangers to the license.

(5) The provisions of this rule do not apply to professionals such as attorneys or accountants when they are retained in their professional capacity by licensees and may have access to gambling related trade secrets, or proprietary, confidential, or tax information. Where a gambling related business is given access to gambling related trade secrets or proprietary or confidential information in order to produce a product or service to be made available for sale to licensees in this state, and the department requires that business possess an associated gambling business license, those requirements are provided for under separate rule.

This rule has been repealed.

This rule has been repealed.

(1) Except as provided in (9) and (10), an existing owner of a licensed gambling operation may transfer an ownership interest to another existing owner of that same licensed gambling operation without receiving prior Gambling Control Division approval. Upon the licensee's next license renewal application, the licensee must file with GCD the form(s), information, and records required by the applicable section of this rule.

(2) Gambling activity may continue pending the outcome of a license investigation for a proposed transfer of ownership due to the death of a licensee under joint tenancy with right of survivorship as long as the person to whom the interest is transferred is already listed as an owner in the licensed operation and joint tenancy had been documented and approved in the original license application. The transfers must be reported on Form 37 along with the following documents:

(a) death certificate;

(b) will of the deceased, if any; and

(c) copy of the licensee's most recent financial statements or tax return.

(3) Gambling activity may continue pending the outcome of a license investigation for the proposed transfer of ownership in a licensed operation resulting from divorce as long as the spouse to whom an interest is transferred has already been approved and listed as an owner of that license. These types of proposed transfers must be reported on Form 37 along with the following documents:

(a) court decree of dissolution of marriage;

(b) source of funding documents, if any, if the transfer requires a buyout, e.g., bank statements supporting cash payments, loan and security agreements, installment payment agreement, etc.;

(c) copy of the licensee's most recent financial statements or tax return;

(d) if the transferring spouse will no longer be a licensee, copies of letters or other documents from lenders, landlords, or other parties to whom the licensee is obligated, which release the spouse from primary responsibility for the obligation, although the transferring spouse may still guarantee the obligation;

(e) if the transferring spouse is no longer a licensee, an updated bank signature card; and

(f) if the licensed entity is a corporation, copies of the cancelled and newly issued stock certificates.

(4) Gambling activity may continue pending the outcome of a license investigation for a proposed transfer of ownership in a licensed operation by gift among licensees. This type of proposed transfer must be reported on Form 37 along with the following documents:

(a) gifting statement which provides the names of the parties, the intent of the parties, and the percentage ownership to be transferred through the gift;

(b) copy of the licensee's most recent financial statements or tax return; and

(c) if the licensed entity is a corporation, copies of the cancelled and newly issued stock certificates.

(5) Gambling activities may continue pending the outcome of a license investigation for a proposed transfer of ownership in a licensed operation from a sale and purchase among owners of that license. This type of transfer must be reported on a Form 37 along with the following documents:

(a) transfer documents that include all terms of sale/transfer;

(b) if the licensed entity is a corporation, copies of the cancelled and newly issued stock certificates;

(c) source of funding documents for the purchase, e.g., bank statements supporting cash payments, loan and security agreements, installment payment agreements, etc.;

(d) copy of licensee's most recent financial statements or tax return;

(e) if the seller/transferor will no longer be a licensee, copies of letters or other documents from lenders, landlords, or other parties to agreements with which the licensee is obligated, which release the seller from primary responsibility for the obligation, although the seller/transferor may still guarantee the obligation; and

(f) if the seller is no longer on the license, an updated bank signature card.

(6) The department may conduct an investigation to determine whether the proposed transfer meets the licensure requirements in 23-5-176, MCA, and department rules. In any case of the transfer of an ownership interest among existing owners, before approving the transfer, the department must determine that the transferred ownership interest is independently exercised by the new owner and does not remain under the control of the transferor.

(7) Within 60 days after receiving the completed amended application, the department shall approve the proposed transfer by issuing an amended gambling license or notify the parties involved of the denial of the license or other appropriate action.

(8) The department may not charge any additional annual gambling license or machine permit fees.

(9) The provisions of this rule do not apply to the:

(a) transfer of a security interest in a licensed gambling operation; or

(b) transfer that results in less than 5% ownership interest in a publicly traded corporation.

(10) Transfers of an ownership interest that result in 5% or greater ownership in a publicly traded corporation shall be subject to the provisions of ARM 23.16.117. The department reserves the right to act under 23-5-136, MCA, in this situation if it determines that the transfer violates Montana gambling law or the rules in this chapter.

(1) Except as provided in (7), (8), (9), and (10), an ownership interest may not be transferred to a stranger to the license until a new gambling license application reflecting the proposed transfer is submitted to the department and the department approves the transfer.

(2) The gambling license application must include:

(a) the annual license fee, if applicable, and the processing fee required for the specific license; and

(b) a copy of the proposed agreement to transfer the interest.

(3) The department shall conduct an investigation to determine whether the proposed transfer meets the licensure requirements in 23-5-176, MCA, and department rules. In any case of the transfer of an ownership interest to a new owner, the department must determine that the transferred ownership interest will be independently exercised by the new owner and will not remain under the control of the transferor before approving the transfer.

(4) Within 90 days after receiving the completed application, the department shall approve the proposed transfer by issuing a gambling license, notify the applicant of the denial of the license, or take other action.

(5) After the gambling license has been issued, the department shall issue the appropriate gambling permits to the licensee upon submission of completed applications and payment of permit fees.

(6) A certificate, stock, or other evidence of ownership may not be registered in the licensee's records until the gambling license has been issued by the department.

(7) The provisions of this rule do not apply to the:

(a) transfer of a security interest in a licensed gambling operation; or

(b) transfer that results in less than 5% ownership interest in a publicly traded corporation. Transfers that result in an ownership interest of 5% or greater in a publicly traded corporation are subject to the provisions in (10). The department reserves the right to act under 23-5-136, MCA, in this situation if it determines that the transfer violates Montana gambling law or the rules in this chapter.

(8) Transfers of ownership in a licensed gambling operation resulting from foreclosure on a contract for deed or other instrument of transfer require submission of an application as described as follows:

(a) Gambling activity may continue pending the outcome of a license investigation for a proposed transfer of ownership interest resulting from foreclosure under the following conditions:

(i) the party foreclosing has had no change in ownership since last licensed, and is the licensee's immediate predecessor;

(ii) the foreclosing party is suitable for licensure;

(iii) all applicable permit fees are paid; and

(iv) the former licensee has notified the department of the foreclosure at the time the foreclosure is executed; notification must be made within five working days of execution and an application must be received by the department within 30 working days following notification; failure to notify the department within this time frame may result in department action to cause gambling operations to cease immediately, and:

(A) the foreclosure takes place within two years following the sale, in which case an amended license application may be submitted on a Form 37, together with a personal history statement (Form 10) for each person applying for licensure, and a complete set of fingerprints (Form FD-258) obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department, for each person required to complete a personal history statement, and a copy of the licensee's most recent financial statements or tax returns; or

(B) the foreclosure takes place more than two years but fewer than five years following the sale, a new license application is required, including all applicable fees, as long as the owner meets the criteria contained in (8)(a)(i), (ii), (iii), and (iv).

(b) Transfers resulting from foreclosure that do not meet all of the conditions set forth in (8)(a) require a new license application to be filed and gambling activities to cease pending approval of the application.

(9) Transfers of control of a licensed gambling operation into a receivership, trust, an estate mandated by court order, or to an attorney in fact actually exercising control under a power of attorney require an amended application to be filed. The transfer of ownership interest to an estate that results from the death of a licensee may be reported on Form 37.

(a) Under this circumstance, gambling activity may continue pending the outcome of the license investigation if the following documents are submitted and determinations are made:

(i) documentation of the event precipitating the transfer of the licensed gambling operation into a receivership, trust, or estate, e.g., death certificate;

(ii) documents naming/appointing a person to exercise control, e.g., receiver, personal representative, trustee, or attorney in fact;

(iii) personal history statement (Form 10), as that form is described in ARM 23.16.102(3)(b), for the person designated to act in the capacity of a receiver, or trustee, or attorney in fact;

(iv) a complete set of fingerprints, Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement; and

(v) a copy of the licensee's most recent financial statements or tax returns; and

(vi) the department determines the receiver or attorney in fact is suitable to hold or own a license.

(b) Upon the dissolution or termination of a receivership, trust, estate, or power of attorney licensed under (9), if ownership interests are distributed to strangers to the license, a new license application must be filed and all applicable rules and procedures must be followed.

(c) If ownership interests are transferred to existing owners following the dissolution of a receivership, trust, or estate, an amended license application must be filed. 

(10) Transfers that result in 5% or greater ownership interest in a licensed gambling operation held by a publicly traded corporation may occur prior to approval under the following conditions:

(a) Whenever a change in ownership results in 10% or greater ownership interest by an active investor, or 20% or greater ownership interest by a passive investor, the licensee shall, within 60 days from the date of change in ownership interest, file with the department a complete Form 40 license application form. The Form 40 shall be submitted together with all required documents and fees.

(b) Whenever a change in ownership results in an ownership interest by an active investor that is 5% or greater, but less than 10%, the licensee shall, within 60 days from the date of change in ownership interest, file with the department a complete Form 43 notification form, including all required documents.

(c) Whenever a change in ownership results in an ownership interest by a passive investor that is 5% or greater, but less than 20%, the licensee shall, within 60 days from the date of change in ownership interest, file with the department a complete Form 43 notification form, including all required documents.

(1) Except as provided in (3), money or any other thing of value constituting consideration for transferring an interest in a licensed gambling operation to a stranger to the license may not be paid, received, or used until the provisions of ARM 23.16.117 have been met. However, the funds may be placed in escrow pending compliance with these provisions.

(2) Except as provided in ARM 23.16.120, a loan, pledge, or similar transaction between the parties to the proposed transfer or with other parties associated with the transfer may be deemed a violation of this rule.

(3) Funds related to the transfer of an interest in a licensed gambling operation may be exchanged or released from escrow when temporary gambling authority is granted under ARM 23.16.509.

(1) Except as provided in ARM 23.16.509, a stranger to the license who proposes to acquire an ownership interest in a licensed gambling operation may not control or participate in any capacity reflecting ownership in that operation until the applicant's license has been approved by the department as provided for in ARM 23.16.117.

(2) If a person has been employed by the licensed gambling operation for more than six consecutive months before submitting to the department the application required in ARM 23.16.116 or 23.16.117, the employee may continue to be employed pending department action.

(1) Except as provided in (4), (5), (6), and (7), if a gambling licensee or license applicant proposes to acquire a loan or other forms of financing from a noninstitutional source for use in his licensed gambling operation or grant a security interest to a noninstitutional source, the department must approve the contract or security interest transfer before any funds from the loan or financing may be received or expended by the licensee or license applicant and before the security interest may be transferred.

(2) Except as provided in (4) and (5), a gambling licensee proposing to lend money to or acquire a security interest from, another gambling licensee must receive written confirmation of department approval of the loan, or security interest transfer before any funds from the loan may be transferred to or expended by the borrower licensee and before the security interest may be transferred.

(3) All licensees who propose to acquire loans or grant security interests in their licensed gambling operation, must notify the department in writing prior to acquiring the loan from a noninstitutional source, or transferring a security interest to a noninstitutional source. The notice, which is to be signed under oath, must include:

(a) the names and addresses of all parties to the loan or transfer;

(b) the amount and source of the loan funds or amount and source of the funds used to acquire the security interest;

(c) the nature and amount of the security provided for the loan or security interest;

(d) the purpose of the loan or transfer of the security interest.

(4) Prior department approval is not required on loans made to gambling operator licensees from route operators for the purpose of establishing a video gambling machine change bank (pool of funds out of which the operator can make change and pay out prizes on valid video gambling machine ticket vouchers) under the following conditions:

(a) the route operator submits a list of licensed gambling operators for which he will be providing a change bank loan and the amount of each change bank;

(b) the route operator enters into a written agreement with the gambling operator, signed by both parties, providing notification to the gambling operator that the loan proceeds may only be used to make change or to pay out prizes on valid video gambling machine ticket vouchers and that the use of the proceeds for any other purpose is a violation of the gambling laws and rules;

(c) at least twice each month, the route operator must reconcile the amount of prizes paid out with the cash remaining in the change bank. If the amount of prizes paid out cannot be reconciled with the cash remaining in the change bank, the route operator must analyze and document the difference. Any material differences must be immediately reported to the department. (For the purposes of this rule, material difference means any amount greater than 5% of the value of the change bank loan or $100, whichever is less.) A record of the reconciliations and analysis of material differences must be maintained for a minimum of 12 full quarters from the previous quarterly tax return due date; and

(d) failure to maintain adequate records or notify the department of material differences and investigations findings will subject the route operator to administrative action.

(5) Prior department approval is not required on loans made between closely related licensed operators under the following conditions:

(a) both licensed operators must have the same majority ownership. For the purposes of this rule the "same majority ownership" means the same individual or group of individuals owning a greater than 50% interest in both licensed operations;

(b) the operators submit a list of operations to which loans may be made and from which loans may be received;

(c) the borrower complies with (3);

(d) the borrower and lender's financial records accurately reflect the transaction as a loan payable and receivable. Any balance due upon renewal not previously reported on license renewal forms must also be reported on the license renewal application; and

(e) failure to maintain adequate records or notify the department of material differences will subject the licensees to administrative action.

(6) Prior department approval is not required for accounts payable incurred for the purpose of acquiring nongambling inventories, supplies and other materials or equipment under the following conditions:

(a) the payable does not require the transfer of a security interest in any assets of the licensed operation other than the product(s) purchased;

(b) the terms of repayment are of a short term nature, less than one year;

(c) repayment is due the seller of the products;

(d) the sale of such products is in the seller's normal course of business;

(e) a copy of the loan agreement or, in the case of a transfer of a security interest, the agreement precipitating the transfer, and a copy of the agreement to transfer the security interest or uniform commercial code document filed with the Secretary of State to record the transfer; and

(f) all such financing must be disclosed at the time of license renewal.

(7) Prior department approval is not required on loans to a licensed entity by an approved (licensed) owner of the entity (shareholder, member, partner) under the following conditions:

(a) the loan is used to meet an obligation of the licensed entity that cannot be met with its existing operating accounts and reserves;

(b) the funds loaned to the licensed entity must be those of the owner. The funds cannot have been borrowed by the owner from any other source;

(c) the loan must be memorialized by an agreement between the licensed entity and owner. The loan agreement must meet the department's evaluation standards;

(d) the borrower and lender's financial records must accurately reflect the transaction;

(e) any balance due upon renewal not previously reported on license renewal forms must be reported on the license renewal application; and

(f) failure to maintain adequate records of the transaction or source of funds loaned will be considered a violation of this rule.

(8) Prior department approval is not required for "cash equivalent sales" payables incurred for the purpose of acquiring video gambling machines under the following conditions:

(a) the seller of the machines is a licensed video gambling machine manufacturer or distributor;

(b) the payable does not require the transfer of a security interest in any assets of the licensed gambling operation other than the video gambling machines purchased;

(c) repayment is due the licensed seller of the machines; and

(d) the term of repayment does not exceed 365 days.

(9) The provisions of (8) do not apply to video gambling machine retail installment sale agreements or conversions from a "cash equivalent" sale to a retail installment sale agreement.

(10) The department may disapprove the loan or transfer of the security interest if it determines that the loan or transfer or the agreement(s) involves an unsuitable source of financing or otherwise violates any statute or rule.

(2) The department's examination to determine the existence of a lease or other similar arrangement includes, but is not limited to, the following factors:

(a) the nature of various employment relationships (e.g., "lessee"/"lessor", "lessee"/gambling-related employees, "lessor"/gambling-related employees) ;

(b) responsibility for liabilities (e.g., payment of taxes, insurance, rent; liability for injury; violations of law) ;

(c) methods and amounts of reimbursement (e.g., to "lessor", to "lessee") ;

(d) eventual transfer of business; and

(e) any other evidence indicating the existence of a lease or other method of conveyance.

(3) This rule does not prohibit a licensed operator from entering into an agreement with a licensed card room contractor to operate one or more live card game tables on the operator's premises.

(1) The department will evaluate a transaction to determine if it is a loan using standards in the Uniform Commercial Code, the Internal Revenue Code, and generally accepted commercial lending practices. Loans will also be evaluated in the context of overall financing of the business to determine that a loan rather than an ownership interest exists and that the contract does not grant the lender control of the licensed operation. 

(2) For loans made to a license applicant or licensee, a noninstitutional lender may require loan guarantees and may secure guarantee agreements with assets of the guarantor. The license applicant or licensee must ensure the following requirements are met:

(a) guarantors must meet the requirements of 23-5-176, MCA, prior to closing the noninstitutional loan;

(b) a loan guarantor on a noninstitutional loan must within 90 days of any payment under the guarantee elect to treat payments made under a guarantee agreement as loans, paid in capital, or other equity contributions.

(i) If the guarantor elects to treat the payments as loans to the licensee, the licensee must follow requirements for disclosing noninstitutional lenders found in ARM 23.16.120(7).

(ii) If the guarantor elects to treat payments as an equity contribution, and such election changes the percentage of ownership in the license, an amended license application must be filed with the department at the time of the election to disclose the change.

(3) A gambling license applicant with a loan from a regulated lender, that was acquired prior to receiving a gambling license, must disclose that loan, including all coborrowers, guarantors, or pledgors, to the department in the application. Following that disclosure, the department must complete a suitability investigation under the requirements of 23-5-176, MCA, of all coborrowers, guarantors, or pledgors who are not an owner of the license. No coborrower, guarantor, or pledgor may make a payment on a gambling licensee's loan until the department has determined the payor meets the requirements of 23-5-176, MCA.

(4) A gambling licensee that acquires a loan from a regulated lender must disclose that loan, including all coborrowers, guarantors, or pledgors, no later than the first license renewal following the licensee's receipt of funds under the loan.  Following that disclosure, the department must complete a suitability investigation under the requirements of 23-5-176, MCA, of all coborrowers, guarantors, or pledgors who are not an owner of the licensed entity. No coborrower, guarantor, or pledgor may make a payment on the licensee’s loan until the department has determined the payor meets the requirements of 23-5-176, MCA.

(5) A licensee with a loan from a regulated lender must, within 90 days of a coborrower's, guarantor's, or pledgor's payment on the loan, submit to the department on Form 45 all mandatory disclosures and related documentation.

(6) A licensee participating as a coborrower, guarantor, or pledgor, in a nonlicensee's loan from a regulated lender, must disclose to the department that loan and all parties to the loan no later than the first license renewal following closing of the loan. Following that disclosure, each party to the loan must undergo a suitability investigation by the department under 23-5-176, MCA. The licensee may not make a payment on the borrower’s loan until the department has determined all parties meet the requirements of 23-5-176, MCA.

(7) A licensee participating as a coborrower, guarantor, or pledgor, in a nonlicensee's loan from a regulated lender must, within 90 days of a making a payment on the borrower's loan, submit to the department on Form 45 all mandatory disclosures and related documentation.

(1) Except as otherwise required by ARM 23.16.116 or ARM 23.16.117, when an owner of a gambling operator license changes the type of alcoholic beverage license, the owner must submit an amended gambling license application on Form 39 and obtain department approval.

(2) The department may conduct an investigation to determine whether the proposed change of the license type meets the licensure requirements in 23-5-176, MCA, and department rules.

(3) The applicant may continue to operate during the time the amended application is being processed.

(1) Except as otherwise required by ARM 23.16.116 or ARM 23.16.117, when an owner of a gambling operator license changes the location of the alcoholic beverage license, the owner must submit an amended gambling license application and obtain department approval.

(2) A licensed manufacturer, distributor, or route operator may report a change of location on a Form 37 amended application.

(3) The department may conduct an investigation to determine whether the proposed change meets the licensure requirements in 23-5-176, MCA, and department rules.

(4) The gambling operator may continue to operate at the current location during the time the amended application is being processed.

(1) Except as otherwise required by ARM 23.16.116 or ARM 23.16.117, when the owner of a gambling operator license proposes a change in business entity, the owner must submit an amended gambling license application on Form 39 and obtain department approval.

(2) The department may conduct an investigation to determine whether the proposed change meets the licensure requirements in 23-5-176, MCA, and department rules.

(3) The applicant may continue to operate during the time the amended application is being processed.

(2) Both gaming and nongaming premises may transfer ownership of the licensed gaming operation to another form of business organization and retain the right to permit video gambling machines as long as no individuals who are strangers to the license are assigned an ownership interest.

(2) At any time during which a licensed gambling activity is being operated upon a premise, the department may enter upon the premise without advance notice and:

(a) inspect the records related to the operation of any licensed gambling activity;

(b) inspect, including the dismantling and reassembly of, all pieces of equipment and parts thereof, or devices of any nature which are being used to conduct the licensed activity; and

(c) make a count of all monies involved in the operation of the licensed activity located on the premise.

(1) Except as provided in (2), all gambling or gambling activity must be played on a cash basis. No credit may be extended to any player. Consideration to play a game of chance must be paid in full, in cash, in advance of any play. 

(2) Players may tender, and sponsors or licensees may accept, payment by cash, check, electronic check (e-check), or debit card for entry in Calcutta pools as provided in 23-5-222, MCA, raffles as provided in 23-5-413, MCA, casino nights as provided in 23-5-702, MCA, and card games normally scored using points as provided in Title 23, chapter 5, part 3, MCA.

(3) No operator may grant a loan of any kind at any time to a player or permit a deferred payment including post-dated checks or engage in any similar practice. A check or debit card used to obtain cash on the premises of a licensed operator must be delivered and accepted unconditionally. An operator may not accept or hold a check, credit card, or debit card pending the outcome of a gambling activity. An operator may not accept cash from the person who wrote the check to repurchase a check previously cashed on the premises, unless the cash is tendered by noon on the day following the date written on the check.

(4) All checks issued to a gambling operator for cash to participate in a gambling activity must be fully completed by the drafter (owner of the account). A completed check must include the name of the gambling licensee to whom it is payable, the amount of the check, the date upon which it was written, and the signature of the drafter. Evidence of a gambling licensee's routine pattern or practice of accepting checks omitting one or more of these elements raises a disputable presumption under ARM 23.16.3001 of illegal credit gambling.

(5) Checks returned from a banking institution labeled "dishonored" or "non-sufficient funds" are not subject to the same date requirements of this rule.

(6) A licensee may accept debit cards to provide cash to customers for gambling purposes. The customer must present the debit card and the cardholder must enter a PIN number. 

(7) No licensee may accept credit cards for cash advances or the sale of items that may be redeemed for cash, such as gambling chips, money orders, checks, electronic checks (e-checks), vouchers, travelers' checks, wire transfers, or gift cards. The sum of a credit card transaction may not exceed the actual price charged for food, beverages, items offered for sale, tax where applicable, any service tip offered to and retained by the licensee's staff plus any credit card transaction fee charged the customer.

(8) Any merchandise or services purchased from a licensee with a credit card may be refunded or reimbursed through an adjustment to the customer's credit card account, and not by a cash refund unless, as provided in 30-14-108(4), the gift card was originally purchased for an amount in excess of $5 and the amount remaining on the card is less than $5.

(9) The play of authorized card games which are normally scored using points is not considered credit gambling.

(1) The department is authorized to investigate gambling activities, alleged violations of Title 23, chapter 5, MCA, and these rules, and all applications for licenses, permits, authorizations, and registrations. The department may inspect records and audit financial activities bearing on holders of, or applicants for, any gambling license, permit, authorization, or registration. Upon completion by the department of its investigation of any matter within its jurisdiction, the department shall notify the person involved of its intended action. A person desiring a hearing to challenge the intended action must submit a written request to the department within 20 days as provided in ARM 23.16.108.

(2) If the subject of an investigation fails within a reasonable time to supply the department with records specifically requested by the department and within the subject's control, the department may complete its investigation by:

(a) denying the license, permit, authorization, or registration that is the subject of the investigation; and/or

(b) taking any action authorized in 23-5-136, MCA.

(3) Upon receipt by the department of a written request for hearing, all proceedings shall be conducted in accordance with the Montana Administrative Procedure Act and the Attorney General's Model Rules of Procedure.

(4) If requested, judicial review shall be conducted in accordance with 23-5-137, MCA, and the Montana Administrative Procedure Act. In cases of conflict, 23-5-137, MCA, shall prevail.

(5) This rule does not apply to temporary cease and desist orders issued by the department under 23-5-136, MCA.

(1) Notwithstanding any provision of the Montana Administrative Procedure Act or the Attorney General's Model Rules of Procedure to the contrary, hearsay evidence may be submitted in a proceeding before the Gambling Control Division if it meets the requirements of 23-5-138, MCA. The evidence must be submitted to the hearing examiner and to the respondent at least 30 days before the hearing at which it is to be considered. The evidence must be accompanied by a motion and if necessary a supporting brief. The respondent shall be given an opportunity to object to the evidence and request a prehearing conference at which its admissibility is considered. The hearing examiner shall issue a written ruling on the admissibility of the evidence at least ten days prior to the hearing in the matter.

(1) Except as provided in (2) and the Criminal Justice Information Act (Title 44, chapter 5, MCA), the department shall release information in its possession upon a case-by-case evaluation of whether the individual right to privacy clearly exceeds the merits of public disclosure.

(2) With regard to information obtained in the application or tax reporting processes, the department shall release information in conformance with 23-5-115, MCA, and 23-5-116, MCA.

(1) The following definitions apply for this rule:

(a) the terms "illegal gambling device" and "public gambling" have the definitions found in 23-5-112, MCA; and

(b) the term "museum" means a facility or registered historic site, whether publicly or privately owned, where objects of historic, scientific, artistic, or cultural interest are exhibited or demonstrated to the public.

(2) An illegal gambling device may not be:

(a) possessed, sold, or exchanged for value except as allowed by 23-5-152, MCA; or

(b) operated by any person to offer public gambling.

(3) An illegal gambling device displayed in a public place other than a museum must be:

(a) displayed in a manner so that it is not accessible for public use; and

(b) rendered permanently inoperable for purposes of conducting a gambling activity in the following manner:

(i) If the device is a punchboard, pull tab, or similar device, it must have all punches removed or be permanently sealed to prevent a person from selecting, punching, or breaking open a ticket, board, or card.

(ii) If the device is a roulette wheel, craps table, slot machine, or other similar illegal gambling device, all moveable parts must be welded or otherwise rendered permanently inoperable, or the entire device must be enclosed in a permanently sealed case.

(4) A licensed gambling operator shall notify the department in writing before displaying an illegal gambling device or an antique illegal gambling device on the licensed premises.

(1) The terms antique gambling device and public gambling have the definitions found in 23-5-112, MCA.

(2) An antique gambling device may be operated only:

(a) for public gambling by a licensed gambling operator if the device is a VGM permitted as required by law; or

(b) in a private residential dwelling for purposes other than public gambling.

(3) A licensee or nonlicensee may possess an antique gambling device that is not permitted as a VGM or that does not qualify for a permit. The device may be displayed in a public setting, but the device must not be offered for play and must be:

(a) inaccessible to the public by restricted placement, glass enclosure, or other effective physical barriers to reach; or

(b) rendered inoperable for purposes of conducting a gambling activity.

(4) A licensed gambling operator shall notify the department in writing before displaying an antique gambling device on the licensed premises.

(5) An antique gambling device may be offered for sale, subject to the restrictions of 23-5-153, MCA, and all other applicable federal, state, and tribal laws.

(6) To qualify as an antique gambling device, a device must conform to the age standards set forth in 23-5-112, MCA, and the proof standards set forth in 23-5-153, MCA. An antique gambling device may be restored but:

(a) must possess mostly original cabinet parts, castings, and components; and

(b) the mechanical mechanism or electronic components must be substantially original in parts and design.

(1) All shake-a-day games are subject to these general rules:

(a) only establishments licensed for the sale of alcoholic beverages to be consumed on the premises may offer shake-a-day games;

(b) the price per play may not exceed 50 cents;

(c) a player may play more than one pot per day, but may not play any individual pot more than once per day;

(d) the player must be allowed to choose the pot or pots the player plays;

(e) no more than five dice may be used;

(f) a gambling operator may offer noncash prizes for a winning combination, but the gambling operator may not award an additional roll of the dice; and

(g) the licensee must record and retain for 90 days the winner's name and contact information, the date, and the amount won.

(2) Cash in a shake-a-day pot is subject to the following provisions:

(a) the establishment may contribute cash to initially fund the pot, but that contribution may not be removed to reimburse the licensee;

(b) the establishment may not remove money from a pot for any reason, including reimbursing the licensee for noncash prizes such as drinks or merchandise awarded to players;

(c) the establishment may not cap the total cash in a pot, which must be allowed to grow until a winner is declared;

(d) the pot collected in each shake-a-day game must be kept separate from other shake-a-day pots and the establishment's other cash;

(e) the establishment may secure a pot on the premises, but the cash must be available to all employees and immediately paid to the winning player; and

(f) except for a predetermined percentage held back to fund a following game, the winner must receive all of the cash in a pot.

(3) Each establishment offering a shake-a-day game must clearly post the rules of the house games, which must include:

(a) price per play for each pot, which may not exceed 50 cents;

(b) the total cash in the pot, updated daily;

(c) the dice combinations required to win the pot or noncash prizes supplied by the gambling operator; and

(d) the percentage of the pot retained from a win to be used to fund the next game.

(1) Applications for card dealer licenses (Form 4) are available on the department's website (www.dojmt.gov/gaming), from a local Gambling Control Division office, or from a local Motor Vehicle Division office.

(2) An applicant for a card dealer license must first appear in person and present government-issued identification to an authorized representative of the Motor Vehicle Division. Upon confirmation of the applicant's identity, the authorized representative of the Motor Vehicle Division must obtain a photograph and signature of the applicant.

(3) An applicant for a card dealer license must next submit a completed application to the Department of Justice, Gambling Control Division. The application is not complete unless it contains:

(a) a card dealer application (Form 4) with all required information, signed and dated by the applicant;

(b) two original sets of fingerprints to be obtained from and certified by a local law enforcement agency;

(c) a completed personal history statement (Form 10); and

(d) the license fee and fingerprint processing fee.

(1) A card dealer license issued by the department will contain the licensee's:

(a) photograph;

(b) first name, middle initial, and last name; and

(c) assigned license number and expiration date.

(2) Card dealer licenses expire according to the following schedule:

(a) card dealers holding valid licenses on March 16, 2019, retain their expiration; and

(b) card dealer licenses issued or renewed after March 16, 2019, will expire on June 30 of each year.

(3) A card dealer on duty in a licensed gambling premises:

(a) must wear and display in a prominent manner a valid card dealer license issued to the card dealer; and

(b) must comply with any player's or law enforcement officer's request to inspect the dealer's license.

(4) A card dealer's license is nontransferable and may not be worn or displayed by any person other than the named licensee. In the case of a violation of this rule:

(a) a federal, state, or local law enforcement officer charged with the responsibility of investigating gambling activities may seize an expired license or a license displayed by anyone other than the named licensee;

(b) any confiscated card dealer license must be sent to the department along with a report detailing the circumstances of the seizure; and

(c) upon receipt of a confiscated card dealer license and the accompanying report, the department must immediately begin an investigation into the circumstances for the purposes of determining whether a violation of Title 23, chapter 5, MCA, or these rules occurred.

(1) In every case in which application is made to the department for a dealer license, the department will, within 90 days:

(a) issue a dealer license to the applicant; or

(b) deny a dealer license to the applicant.

(2) A card dealer license will expire if the department does not receive the application and supporting documents to renew the by the expiration date.

(3) If the holder of an expired license submits an application and supporting documents to renew the license within 30 days after the expiration date, the applicant may renew the license at the renewal license rate. If the renewal application and supporting documents are not received within 30 days, the holder shall reapply for a new original license in the manner required by these rules.

(4) Replacement of a card dealer license is accomplished by submitting a request to the department and including a $10 fee.

(1) An applicant for a card dealer license may request a temporary card dealer license while the application is being processed.

(2) An applicant for a temporary card dealer license must first appear in person and present government issued identification to an authorized representative of the Motor Vehicle Division. Upon confirmation of the applicant's identity, the authorized representative of the Motor Vehicle Division must obtain a photograph and signature of the applicant.

(3) The applicant must then appear in person and submit to an investigator for the department:

(a) Form 4 with all required information, signed and dated by the applicant;

(b) two original sets of fingerprints to be obtained from and certified by a local law enforcement agency;

(c) verifiable evidence that the applicant has an offer of employment as a card dealer, or a reasonable prospect for employment as a card dealer, and that such employment is expected to commence within 14 days of making application; and

(d) the license fee and fingerprint processing fee.

(4) A temporary dealer license is valid for no more than 90 days.

(1) The department may confiscate a temporary card dealer license by issuing a temporary cease and desist order based on a finding of any of the following conditions:

(a) the holder of such license has been placed or remains in actual or constructive custody as a result of any felony or gambling-related misdemeanor and is awaiting trial on such criminal charges; or

(b) the department, pursuant to ARM 23.16.203(1), has notified the holder of such a license of the department's intent to deny a permanent dealer license to the holder.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(1) Except as provided in (2) and (3), all applicants shall submit the following information on Forms 5, 10, 40, or 43, and FD-258, which are incorporated by reference and available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the division's web site www.dojmt.gov/gaming:

(a) name(s), addresses, telephone numbers, and social security numbers; history of gambling licensure with any federal, state, or local agency; civil and criminal record; record of residence and employment for the last ten years of any person with an ownership interest in the applicant entity; and record of current residence and employment of any person with an option to purchase a share in the applicant entity;

(b) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement;

(c) the applicant's most recent financial statements with the application form. The statements must reflect the business operation for which the application is being submitted and include a balance sheet, income statement, and a statement of the amount and source of funding. The department may accept current state or federal income tax returns if they reflect the business operation for which the application is being submitted. If the business is prospective or has recently begun operating, the applicant shall submit a beginning balance sheet and a statement of the amount and source of funding for the business;

(d) the amounts and sources of all business financing, along with the terms of each loan agreement and all related security agreements, and guarantees;

(e) the following ownership/management information, as applicable:

(i) if the business is a sole proprietorship, the above-cited information must be submitted on the proprietor; or

(ii) if the business is a partnership, the information must be submitted on each general and limited partner; or

(iii) if the business is a closely-held or subchapter S corporation, the information on each shareholder, and each officer and director if not the same; or

(iv) if the business is a publicly traded corporation, the names of each shareholder owning 5% or more of the company stock and the corporate officers and board of directors; or

(v) if the business is a limited liability company, the information must be submitted on all members; or

(vi) if the applicant is a nonprofit corporation or association, the information must be submitted for officers, directors, and the person(s) responsible for conducting the gambling activity (e.g., location manager, gambling manager, steering committee); or

(vii) if the owner(s) acquires the services of a gambling manager or management firm, the information must be submitted for the owner and the manager or management firm;

(f) the full name and address of every location manager; and

(g) a floor plan of the proposed premises that clearly identifies the areas where gambling activities will occur.

(2) If a premises has not been identified at the time of the application, applicants have six months from issuance of the license to apply for premises approval. The premises must meet suitability standards outlined in 23-5-117, MCA, and be approved within one year of issuance of the gambling operator license. Failure to apply for or receive approval of a premises within the required timeframe will result in administrative action to revoke the initial license approval.

(3) The department may consider an amended application process for applicants that possess an alcoholic beverage license.

(4) Operator licenses must be renewed annually by completing forms prescribed by the department. There is no renewal fee or annual license fee required for an operator license.

(1) When a gambling operator license is submitted, the applicant shall pay a deposit on the license application processing fee in an amount set forth in the application form.

(2) The applicant shall submit the deposit required under (1) in the form of a check or money order.

(3) Based on the actual cost incurred by the department in determining whether the applicant qualifies for licensure, the department shall refund any overpayment of the fee or collect an amount sufficient to reimburse the department for any underpayment of actual costs.

(4) If an applicant withdraws the application after the department has begun processing the application, the department shall refund any amount not expended as of the date of withdrawal.

(a) shares a common internal wall with another premises for which an operator's license has been issued; and

(b) the wall contains an internal entrance through which public access is allowed.

(2) If an internal entrance contained in a common wall is intended for nonpublic use only, the following conditions must be met to prohibit public access through the entrance:

(a) The entrance must be clearly identified as an entrance for nonpublic use only.

(b) The entrance must lead into an area in which the public does not normally have access, such as a storage area, an area located behind a bar or cashier booth, or a food service, preparation, or distribution area.

This rule has been repealed.

(1) Except as provided in (2) and ARM 23.16.510, any change in location managers, officers, or directors must be reported to the department within 30 days of the date of change.

(2)  Any gambling operator holding an alcoholic beverage license issued under 16-4-201(8), MCA, to military clubs, veterans' organizations, or fraternal organizations must report any change in officers or directors no later than the licensee's next license renewal application.

(3) New location managers, officers, and directors shall submit a personal history statement and a complete set of fingerprints (Forms 10 and FD-258).

(4) A license is subject to revocation if the changes in location managers, officers, or directors result in the licensee's failure to meet the statutory qualifications for licensure.

(1) The department may grant an applicant for a gambling operator license the temporary authority to operate gambling when: 

(a) the application and supporting documents, except Form FD-258 fingerprint cards, have been electronically submitted to the department through the department's licensing portal;

(b) the department has concluded the application is complete;

(c) within the 12-month period prior to submission of the application, the premises to be licensed had been licensed and operated as a gambling establishment, or licensed for the on-premises consumption of alcoholic beverages, and the premises were not altered from the last approved floor plan;

(d) the department has no adverse information about the applicant's owners, officers, and managers prior to granting temporary authority; and

(e) except for those grandfathered locations provided for under ARM 23.16.130, the Department of Revenue has issued temporary authority to purvey alcoholic beverages.

(2) Temporary gambling authority is neither a conditional approval, temporary license nor a permit. It does not constitute a transfer of ownership, nor does it guarantee or imply any assurance that the department will approve the application.

(3) Temporary gambling authority is valid for 45 days, except when terminated sooner. Prior to the expiration of temporary gambling authority, and upon written request of the applicant, the department may extend temporary gambling authority for additional periods of time up to 45 days, if the department determines that the cause of the delay was beyond the control of the applicant. The department shall notify the applicant if it requires additional information to make this determination and the applicant shall have seven days to submit written documentation to establish to the department's satisfaction that the delay was beyond the applicant's control. The department shall notify the applicant whether temporary gambling authority is extended, and the length of the period of extension of temporary gambling authority.

(4) Temporary gambling authority terminates whenever:

(a) the department, pursuant to ARM 23.16.203(1), has notified the applicant of the department's intent to deny the operator license; or

(b) the Department of Revenue has revoked a license or withdrawn temporary authority to purvey alcoholic beverages.

(5) All gambling activities on applicant's premises which require a gambling operator's license must immediately cease upon termination of temporary gambling authority.

(1) A gambling operator shall designate at least one location manager, which designation shall initially be made on the license application. A licensed owner who does not personally provide onsite management of the premises shall designate a location manager to perform such services. A location manager authorized by the licensee to provide general oversight of the gambling operation must be approved by the department.

(2) Except as provided in (3), within 30 days of a location manager commencing duties, the licensee shall submit to the department a completed location manager application (Form 30A), and for nonowners, the licensee shall also submit:

(a) a completed personal history statement (Form 10) for each location manager;

(b) two complete sets of fingerprint cards for each location manager; and

(c) fingerprint processing fees.

(3) So long as at least one approved location manager continues to serve as a location manager, the removal of any location manager or the addition of an owner as a location manager, shall be reported to the department no later than June 30 of the current fiscal year on a location manager application (Form 30A) or on the annual license renewal form.

(4) When a management company is contracted to manage a licensed location, at least one onsite manager must be approved as a location manager. The ownership, officers and directors of the management company and the onsite manager(s) employed by the management company must be reported to the department within 30 days of the contract effective date. To seek approval of a management company contracted to manage a licensed location, the licensee shall submit to the department:

(a) a completed location manager application (Form 30A); and

(b) for each owner, officer, director, and onsite manager of the management company;

(i) a complete personal history statement (Form 10);

(ii) two complete sets of fingerprint cards; and

(iii) fingerprint processing fees.

(5) Location manager and management company approval shall be based on the standards of suitability established in 23-5-176, MCA.

(6) Whenever a location manager or management company has been contracted by the licensee to manage a licensed location, the licensee shall:

(a) retain ultimate control over the license and premises;

(b) maintain active participation in the gambling operation sufficient to ensure the proper and lawful conduct of the business; and

(c) provide the location manager compensation in an amount that is commensurate with the duties performed. Location manager compensation may not be based on a percentage of a gross sales or net profits.

(7) Failure to abide by the provisions of this rule may subject the licensee to administrative action, including revocation of the license.

(2) Each participant in a poker run must travel to the designated locations at which playing cards are obtained.

(3) After all cards are accumulated, participants in the poker run shall select the requisite number of cards for the hand in the type of poker being played.

(1) Card game tournaments which involve consideration to play and the chance of winning something of value are gambling activities. Publicly played card game tournaments involving gambling activity are limited to the authorized card games provided for in 23-5-311, MCA.

(2) Except where there is a conflict with state law, department rule, or the applicable authority references, all poker tournaments shall comply with the most recent version of the Poker Tournament Directors Association Rules. The Poker Tournament Directors Association Rules may be obtained from the Gambling Control Division web site www.doj.mt.gov/gaming.

(3) A copy of the tournament rules must be provided to tournament participants and posted as provided for in 23-5-317, MCA.

(4) Every card game tournament involving poker or panguingue must be conducted by a licensed dealer as required in 23-5-309, MCA.

(5) In every tournament, a designated person, who may be one of the licensed dealers, must be present on the premises at all times during the tournament to oversee the conduct of the games and settle disputes.

(6) All winners must be determined at the conclusion of the tournament based upon points or chips accumulated throughout the course of the tournament. Prizes may only be awarded at the conclusion of the tournament. Any determination of a winner or award of a prize concludes a tournament.

(7) No card game tournament may be conducted as any part of a casino night.

(8) Card game tournaments may not be conducted between the hours of 2 a.m. and 8 a.m. on any day unless the hours for operating a live card game table have been extended by a city or county ordinance.

(9) Card game tournaments must comply with the requirements of Title 23, chapter 5, MCA, and the rules of the department.

(1) A licensed operator with a permit to operate at least one live card game table on premises may apply to the department for an annual permit to conduct large-stakes card game tournaments. The application must be submitted on Form 14A, the large- stakes card game tournament permit application, which is available from the department. The annual permit fee must accompany the submission of the application. A large-stakes card game tournament permit is effective July 1 through June 30.

(2) A licensed operator who has been issued a large-stakes card game tournament permit may conduct no more than 16 large-stakes tournaments during the permit year.

(3) A large-stakes card game tournament may be conducted for no more than five consecutive days.

(4) The only consideration that may be paid by a participant in a large-stakes card game tournament is an entry fee, and if allowed by tournament rules, a fee paid to reenter the tournament after the participant has been eliminated from competition. Under no circumstances may the total amount paid to participate in a large-stakes card game tournament, including all entry and reentry fees, exceed $1,875.

(5) The department must receive notification on Form 14A of each large- stakes card game tournament at least five business days before the start of the tournament. The permit holder may submit the complete notification Form 14A to the department by mail, FAX or e-mail. The notification of a large-stakes card game tournament must state:

(a) permit holder’s name and operator’s license number;

(b) type of card game to be played;

(c) number of tables to be used during the tournament;

(d) date(s) of the tournament;

(e) amount of entry fee and reentry fees;

(f) description of all prizes, including the amount of any cash prizes;

(g) whether it is a charitable tournament, including identification of all charitable beneficiaries;

(h) whether it is part of a progressive tournament, including identification of all other locations participating in the progressive tournament;

(i) the face value of the chips to be used; and

(j) a copy of all tournament rules not included in the Poker Tournament Directors Association Rules.

(6) The department will mail the licensee a permit for each approved large- stakes card game tournament. The large-stakes card game permit must be conspicuously posted in the same manner as the tournament rules posted as provided for in 23-5-317, MCA.

(7) A large-stakes card game tournament permit holder may conduct a large- stakes card game tournament for charitable purposes.

(a) Any large-stakes card game tournament held for charitable purposes must be publicly identified as a charitable tournament and the beneficiaries of the tournament must be publicly identified before the start of the tournament.

(b) If a large-stakes card game tournament permit holder conducts large- stakes card game tournaments for charitable purposes, the first three charitable tournaments conducted during a permit year will not be deducted from the permit holder’s annual 16-tournament limit. 

(c) If a large-stakes card game tournament is publicly identified as a charitable tournament, no less than 50% of the total of all entry and reentry fees must be paid to charitable, educational, or recreational nonprofit organization(s).

(d) For each charitable tournament, the permit holder conducting the tournament shall maintain for a period of 12 months from the date of the tournament, and provide to the department upon request:

(i) a record of the total amount of entry and reentry fees collected in the charitable tournament;

(ii) a description of how the tournament was publicly identified as a charitable tournament;

(iii) the name and address of each charitable, educational, or recreational nonprofit organization that received a distribution of the charitable proceeds; and

(iv) the amount of money distributed to each charitable, educational, or recreational nonprofit organization.

(8) A large-stakes card game tournament may be part of a progressive card game tournament in which the ultimate prize is not awarded until completion of the final round of the progressive tournament.

(a) The tournament must be publicly identified as being part of a progressive tournament prior to initiation of the tournament.

(b) Each location that participates in the progressive tournament must obtain a large-stakes card game tournament permit.

(c) If the tournament is part of a progressive tournament, prize(s) may include the right to participate in the higher level of tournament play, so long as the value of the higher level tournament is equal to the value of the expected top prize in the tournament.

(1) A licensed operator with a permit to operate at least one live card game table on premises may apply to the department for an annual permit to conduct small-stakes card game tournaments. The application must be submitted on Form 14B, the small-stakes card game tournament permit application, which is available from the department. The annual permit fee must accompany the submission of the application. The small-stakes card game tournament permit is effective July 1 through June 30.

(2) The only consideration that may be paid to participate in a small-stakes card game tournament is a single entry fee which must be paid before the start of the tournament, and may under no circumstances exceed $80. No other fees or costs may be assessed to participate in a small-stakes tournament.

(3) Small-stakes card game tournaments may only be conducted on permitted card tables, plus one additional card table used only for small-stakes tournament play.

(4) A small-stakes card game tournament permit holder may conduct a small-stakes card game tournament for charitable purposes.

(5) For each charitable tournament, the permit holder conducting the tournament shall maintain for a period of 12 months from the date of the tournament, and provide to the department upon request:

(a) a record of the total amount of entry and reentry fees collected in the charitable tournament;

(b) a description of how the tournament was publicly identified as a charitable tournament;

(c) the name and address of each charitable, educational, or recreational nonprofit organization that received a distribution of the charitable proceeds; and

(d) the amount of money distributed to each charitable, educational, or recreational nonprofit organization.

As used throughout this subchapter, the following definitions apply:

(1) "Ante" means the amount of money or chips each player places into the pot before the first deal of each game.

(2) "Authority reference" means the Official Montana Poker Rulebook (version 2014) and Scarne's Encyclopedia of Card Games, copyright 1983, by John Scarne, pages 18 through 276. These books will be used by the department as the authority on how to play authorized card games. The authority references are adopted and incorporated by reference; copies of Scarne's Encyclopedia of Card Games may be obtained from local bookstores and copies of the Official Montana Poker Rulebook may be obtained from the Gambling Control Division web site www.dojmt.gov/gaming. The sections of the books cited as authority will not apply where there is a conflict with state law or department rule.

(3) "Banking game" means a game where there is a fund against which everyone has the right to bet, the bank taking all that is lost by the bettors and paying all that is won. The test of such a game is whether the banker pays winnings and suffers losses. The game is not a banking game where the players bet against each other and settle with each other. Games in which any portion of the games includes betting against a fund are considered banking games.

(4) "Blind bet" means the money a player places into the pot before looking at his or her cards.

(5) "To burn a card" means to discard a card from the top of the deck and place it face down on the table according to house rules.

(6) "Card room contractor" means a person licensed by the department to operate one or more live card game tables on an operator's premises.

(7) "Card table" or "live card game table" means a table licensed by the department on which no more than one authorized card game is played at a time.

(8) "Dead card or hand" means a card or hand ruled out of play and ineligible to win any part of the pot.

(9) "Fouled hand" means a hand that either has an improper number of cards or has come in contact with discards.

(10) "Game" means a period in a session of play, from which emerges a winner(s).

(11) "Hand" means the cards dealt to or drawn by a player or the period of time in poker between dealing of the cards and winning of the pot.

(12) "House player" means any person who has a financial relationship with a dealer or an operator including, but not limited to, shills, proposition players, employees, or independent contractors.

(13) "Operator" means an individual licensed to conduct public gambling pursuant to Title 23, chapter 5, MCA.

(14) "Player" means a natural person participating in a live card game specifically authorized in Title 23, chapter 5, MCA, and described by these rules.

(15) "Poker" means a card game played by at least two players who bet against each other and settle with each other and not against the house. Poker is dealt by one dealer on a card table. A player bets on the card (hand) the player holds. There may be an initial ante round and/or blind bet by the players. After the players receive their starting card, there are one or more betting rounds. After all the dealing of cards and betting has occurred for a pot and there are two or more players still in contention, there is a showdown based on a maximum of five cards. The object of the game is for a player to win the pot either by making a bet no other player is willing to match or by having the best hand as described in these rules.

(16) "Pot" means all the bets placed by the players collected together.

(17) "Rake" means a set fee or percentage of the pot assessed by an operator for providing the services of a dealer, table, and location for public play.

(18) "Showdown" means the hands shown by all players remaining in the game.

(19) "Table stakes" means the amount of chips or cash in front of the player prior to the beginning of a hand.

(1) The following card games are authorized by law and must be played only in the manner set out for that game in the applicable authority reference:

(a) the poker games of Texas Hold'em, Draw Poker, Omaha, Seven Card Stud, and their variations as well as general poker rules and practices, according to the Official Montana Poker Rulebook (version 2014); and

(b) other poker variations, as well as the games of bridge, cribbage, hearts, panguingue, pinochle, pitch, rummy, solo, and whist, according to Scarne's Encyclopedia of Card Games, copyright 1983, by John Scarne, pages 18 through 276.

(2) Card games not specifically authorized herein are prohibited.

(3) The department may approve other proposed variations of card games authorized by Title 23, chapter 5, MCA. Banking games are not considered variations of authorized card games that are eligible for department approval. Persons submitting card games for approval must provide the following information to the department:

(a) a complete description of the play of game, including but not limited to, the ranking of cards, betting procedures, number of cards in the showdown, and role of the house in the game; and

(b) the history of game.

(4) The department may require an actual demonstration of any game submitted for approval.

(5) Upon completion by the department of its investigation of a proposed card game variation, the department shall notify in writing the person submitting the card game variation of its intended action. If the person then desires a hearing, he or she must submit a written request to the department within 20 days. From that point onward, all proceedings shall be conducted in accordance with the Montana Administrative Procedure Act and the Attorney General's Model Rules of Procedure.

(6) No variations other than those authorized by the department may be played prior to department approval.

(1) Except for the card games of panguingue and poker and their approved variations, an authorized card game as provided for in 23-5-311, MCA, which is played solely for prizes of minimal value, is considered a social card game and is not a gambling activity.

(2) For purposes of this rule, prizes of minimal value means:

(a) an award to an individual card game winner of cash and/or merchandise which does not exceed $10 in total value; or

(b) an award to the winner or winners of a social card game tournament in cash and/or merchandise in an amount which does not exceed a total value that is the equivalent of $10 times the number of participants. For example, if there are 25 participants in a tournament, the total value of a prize awarded cannot exceed $250.

(3) For purposes of this rule, a tournament means a prize structure which is determined by the play of more than a single game.

(4) Every poker or panguingue game or tournament, and every other authorized card game or card game tournament which is played for an award or prize greater than minimal value, is a gambling activity which must comply with the requirements of Title 23, chapter 5, MCA, and the rules of the department.

(2) The hands in poker are ranked and defined as follows from highest to lowest:

(a) five of a kind - four cards of the same rank and a wild card.

(b) straight flush - five cards of the same suit in sequence. An ace high straight flush is a "royal flush."

(c) four of a kind - four cards of the same rank.

(d) full house - three cards of the same rank and two cards of another rank.

(e) flush - five cards of the same suit.

(f) straight - five cards in sequence.

(g) three of a kind - three cards of the same rank.

(h) two pair - two cards of the same rank and two cards of another rank.

(i) one pair - two cards of the same rank.

(j) highest card - the highest ranking card in the hand of five unmatched cards.

(3) If two or more hands are tied in the ranking, the hand with the highest rank matched card or cards wins. Otherwise the tie must be broken by the rank of the unmatched cards in the hand.

(4) In the event hands are identical in all aspects except for the suit, players shall evenly divide the pot.

(5) Wild cards may be used in poker.

(2) The design on the backs of each card in the deck must be identical and no card may contain any marking, symbol, or design that will enable a player to know the identity of any element printed on the face of the card or that will in any way differentiate the back of that card from any other card in the deck. The backs of the cards may contain a logo.

(3) A blank card, commonly known as a cap card or cutting card, must be available and used by the dealer to indicate the location for a player's cut or to obstruct a player's view of the bottom card in the deck.

(4) No operator, card room contractor, or dealer may use cards that are taped, defaced, bent, crimped, or deformed in any manner.

(1) Each poker chip used must be either clearly and permanently impressed, engraved, or imprinted on one side with a specific value of the chip or colored so as to clearly denote the value of the chip. At the operator's or card room contractor's discretion, the other side of the chip may have the operator's or card room contractor's name represented by a related design, symbol, abbreviation, or other identification which would differentiate the operator's or card room contractor's chips from those being used by every other operator or card room contractor.

(2) Each denomination of poker chip must have a different primary color from the other denominations of chips. Each operator or card room contractor may, at his discretion, utilize contrasting secondary colors for any inlays on each denomination of poker chip.

(3) The value and colors of the poker chips must be conspicuously posted within sight of the card table.

(4) Poker chips must be sold for cash only and no credit of any nature may be extended to a person purchasing chips.

(5) The operator or card room contractor must redeem on demand his own chips for cash at the value for which they were sold.

(1) In games not scored with points, all wagers must be made with poker chips or cash.

(a) The currency must be spread on the top of the poker table by the dealer accepting it, in full view of the player who presented it.

(b) The amount of currency must be verbalized by the dealer accepting it.

(1) There must be at least two players.

(2) No player in a poker game may play other than the player's own hand.

(3) A player shall only play one hand and the player shall make all decisions without advice from any person.

(4) No player or other person may provide any information to any other player or person regarding a player's live or folded hand.

(5) A player may only obtain additional chips from the house and may not pass chips to another player or otherwise exchange them.

(6) Subsections (3) and (4) do not apply to the game of bridge when played according to the rules set forth in the authority reference.

(1) Except as provided in (3), in authorized card games using licensed dealers, licensed dealers shall have no financial interest, directly or indirectly, in the outcome of any game which they deal.

(2) Except as provided in (3), card dealers shall receive no share of the rake and must be employees of the licensed operator or card room contractor.

(3) This rule does not prevent licensed operators or card room contractors who are licensed dealers from dealing their own games or receiving a share of the rake.

(1) The operator, card room contractor, or dealer must identify house players upon request.

(2) The operator or card room contractor who is conducting a live card game may use house players only for the purpose of starting and/or maintaining sufficient number of players in the card game.

(3) The operator or card room contractor may:

(a) provide chips owned by the house to a house player for use in a live card game conducted by the operator or card room contractor;

(b) require the house player to return to the operator or card room contractor all house chips that remain with the house player when the house player exits the game;

(c) make the house player an employee who is paid a wage; and

(d) allow a house player to keep all of the winnings or a portion of the winnings derived from the use of house chips in a game conducted by the operator or card room contractor.

(4) The operator or card room contractor may not ask or require the house player to return any house chips, or the value of any house chips, that the house player lost in a game.

(5) No house players may be used by the operator or card room contractor in a card game tournament.

(2) Immediately prior to commencement of play of each game, the dealer must, in front of the players, shuffle all cards so that they are randomly intermixed.

(2) For a blind bet to be part of any game, it must be announced prior to beginning the deal. A blind bet may be used in addition to an ante.

(1) The rake may be a percentage of the pot or a set fee established by the house and must be clearly posted. The rake must remain in a designated area until the pot is awarded. The chip tray cannot be used as a designated rake area. After the pot is awarded, the rake may then be placed in the chip tray, a segregated area, or drop box near the dealer.

(2) A percentage rake must be pulled from the pot in an obvious manner following the completion of each betting round.

(3) A percentage rake must be calculated based on the amount bet in each round and placed in a designated rake area which is clearly visible to all players.

(4) A card dealer who has no interest in the operator's license or card room contractor's license may not recieve a share of a rake.

(1) Play must always proceed in a clockwise direction, with each player's turn to act following the person on the player's immediate right.

(2) The operator or card room contractor may set a minimum buy-in, a maximum buy-in, or both, for each game. The operator or card room contractor must announce the length of time a player may leave the game and still be considered part of the same playing session.

(3) The dealer must advise each new player of rules of the game being played prior to the ante.

(4) A player may not remove any of his or her chips from the table until the player quits the game. However, a player may use chips to pay for other goods or services in the premises.

(5) Players may only purchase additional chips between hands.

(6) Concealed chips may not be used in play for a game.

(7) Only poker chips and/or cash on the table (table stakes) at the start of a hand may be in play for that pot.

(2) A protected hand may not be ruled fouled by accidental contact with discards unless it is impossible to completely reconstruct. A player who has a protected hand taken in by the dealer or fouled by discards through no fault of the player is entitled to be refunded from the pot all the chips the player put in the pot on that game. In disputed cases, the dealer's decision is final.

(2) When the dealer burns a card, it must be placed facedown on the table before dealing any round of cards. Burned cards must be kept separate from the discards throughout the hand.

(3) A player facing a bet who announces a fold shall have a dead hand.

(4) All pots must be awarded by the dealer only. When the dealer has awarded the pot and it has been taken in by that player without a claim made against it, the award stands. No player may make an agreement with any other player regarding the pot. Each game must be played to conclusion and the pot awarded to the actual winning player.

(5) The dealer may place a maximum time limit on players during which time a player must act on his or her hand. At the lapse of the time limit, if there has not been a bet to the player, the player must check; if there has been a bet to the player, the player's hand is dead. However, the dealer shall provide a reasonable warning to the player prior to the application of this subsection.

(1) A player who unintentionally puts fewer chips into the pot than are needed to call a bet must either complete the call or withdraw his or her chips and fold.

(2) If an improper number of chips are bet by a player and the dealer puts the player's chips into the pot without making or hearing an immediate objection, it must be considered a bet by the player.

(3) A player must place his entire bet in front of the player at one time. Unless a player has failed to place the necessary amount of chips to call a bet or to signify a raise, the player may not place additional chips into the pot (no string bets). The dealer may allow a single apparent string bet, but must caution the player that such bets are not allowed.

(4) A player confronted by a bet larger than the player's table stakes may "call" with the amount of chips in front of the player ("all in" bet). The excess part of the bet is either returned to the bettor(s) or used to form a side pot with another player or players by matching the amount called.

(5) A side pot or other wager on the outcome of a hand is prohibited unless an "all in" bet is made as provided for in (4).

(6) In stud poker without a blind, the highest or lowest up card may be designated to initiate action if a house rule is posted to identify which method will be used.

(2) A misdeal shall cause all the cards to be returned to the dealer for a redeal.

(1) At least the following rules must be posted in a clear, legible manner at each card table or in such a conspicuous location that the player at a card table can readily read such rules.

(a) Games to be played.

(b) Betting limits of the games.

(c) Ante or blind bets (if any).

(d) Number of raises.

(e) Minimum and/or maximum buy-in limits (if any).

(f) $800 pot limit.

(g) Rake percentage or set fee.

(h) Check and raise (yes or no).

(i) Designated wild card(s).

(j) No side pots (except in cases of all-in bets).

(k) No credit.

(l) No passing chips.

(m) No checks.

(n) Maximum number of players in each type of game.

(o) Players must be 18 years old.

(p) House players identified upon request.

(2) When the operator or card room contractor chooses to make a general house rule, that house rule shall be posted on the premises where it can be clearly seen by players in the card game to which it applies.

(1) A person may obtain a card room contractor license by submitting to the department a card room contractor license application (Form 9), which is available upon request from the department.

(2) The application must include:

(a) full identification of the applicant, including legal name, address, phone number, and social security number or federal identification number;

(b) Forms 10 and FD-258 as described in ARM 23.16.102;

(c) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement;

(d) financial statements for the applicant's business as described in ARM 23.16.502;

(e) a $150 license fee;

(f) a fee to pay the charges to the department for obtaining background information from fingerprints; and

(g) a copy of each proposed agreement to be entered into with a licensed operator to provide gambling on the operator's premises.

(3) If a card room contractor proposes to amend an existing agreement or enters into additional agreements after obtaining a license, the contractor shall submit to the department for approval a copy of each proposed amended or additional agreement.

(4) A card room contractor shall not operate a card room under an amended or additional agreement unless and until such proposed agreement is approved by the department. This restriction does not apply when a proposed amendment to a previously approved agreement only extends the time period of the agreement and makes no other changes.

(5) A card room contractor license expires at midnight on June 30 and must be renewed annually by completing a form provided by the department.

(2) Any licensee allowing play of successive keno games must clearly post the house limits as to the number of successive games allowed, the requirement for payment in advance for the number of games to be played, the requirement to remain on the licensed premises while the games are played, and the requirement to personally claim any prizes before leaving the premises.

(3) In no case may prizes won on previous games be automatically carried forward to extend play for games beyond the number indicated when the player paid the caller.

(4) Record keeping for the play of successive games must be in accordance with these rules.

(1) Approved variations of keno are:

(a) A straight ticket in which a player picks from one to ten numbers and wagers that the numbers will be duplicated entirely or in part from the group of numbers drawn.

(b) A split ticket consisting of two or more straight tickets written on a single keno card. Each group on a split ticket is treated as if it were a single straight ticket.

(c) A way ticket in which a player selects three or more equal groups of numbers which when taken at least two groups at a time comprise several straight ticket combinations.

(d) A combination way ticket in which a player simultaneously combines any or all of the variations described in (1)(a), (b), and (c).

(e) A king ticket in which a single number, commonly known as a king number, is matched with each group of numbers selected. The king number is treated as any circled number group as used in way and combination way tickets.

(2) A group of numbers resulting from combining smaller groups for way, combination way, or king tickets may not exceed a total of ten numbers.

(a) line between or circle around each group for a split ticket; or

(b) circle around each group for a way, combination way, or king ticket.

(2) No more than 50¢ may be wagered on each group of numbers on a keno card, and no more than $100 may be awarded as a prize for each winning group of numbers.

As used throughout this subchapter, the following definitions apply:

(1) "Chance" means an opportunity to participate in a sports pool.

(2) "Competitor" means:

(a) a team in a sports event in which teams compete; or

(b) an individual in a sports event in which individuals compete.

(3) "Interval of a sporting event" means the regularly timed periods or naturally occurring breaks in a sports event established by the rules of the event (i.e., quarters in football and basketball games, periods in hockey, or innings in a baseball game) and not any other contrived point, action, event, or episode in the sports event.

(4) "Manufacturer of sports tabs" means a person who manufactures from raw materials or subparts completed sports tabs, sport tab cards, or sports tab games as they are defined by statute and rule.

(5) "Master square" means that portion of the sports pool card used in a traditional, series, or multiple way sports pool that is divided into spaces representing chances purchased by the participants and containing the name or initials of the participant in the sports pool.

(6) "Series of sports events" means two or more sports events involving the same sport that are conducted at the same level (e.g., collegiate, professional).

(7) "Space" means one of the smaller squares into which the master square is divided, which represents a chance in a traditional, series, or multiple way sports pool, and which contains the name or initials of the participant in a sports pool who has purchased that space.

(8) "Sponsor" means a licensed gambling operator conducting a sports tab game by selling individual sports tabs or conducting a sports pool by selling chances, the sales of which occur on premises appropriately licensed for on-premises alcoholic beverages consumption as provided in 23-5-119, MCA.

(9) "Sports event" means an athletic game, race, or contest involving two or more competitors who are natural persons or animals in which the winner is determined by a score or placement.

(10) "Sports pool" means a gambling activity based on a sports event or series of sports events that is conducted on a sports pool card for which consideration, in money, is paid by the participant for a chance to win money or other item of value.

(11) "Sports pool card" means a board, chart, or table used to conduct a sports pool and record the information required in ARM 23.16.1702.

(12) "Sports tab" means a ticket as defined in 23-5-501, MCA.

(13) "Sports tab card" means the card to which 100 sports tabs are randomly attached by a manufacturer of sports tabs and which is used in a sports tab game.

(14) "Sports tab game seller" means a person who:

(a) purchases or otherwise obtains sports tab games from a manufacturer of sports tabs; and

(b) sells sports tab games to sponsors for use in conducting sports tab games.

(15) "Total value of the sports pool" means an amount equal to the number of chances in a sports pool multiplied by the cost per chance and represents the prize(s) to be awarded.

(1) A traditional, series, or multiple way sports pool must be conducted on a sports pool card containing a master square.

(a) The master square of the card must be divided into spaces arranged in horizontal rows and vertical columns.

(b) The numbers for each horizontal row and vertical column must be randomly assigned after the person conducting the pool closes the pool to additional sale of spaces but prior to the beginning of the sports event or the first event in a series of sport events.

(c) Any unsold spaces when the numbers are assigned are considered purchased by the sponsor and must be marked in a manner indicating that they may not be sold to another person.

(d) Each space must be represented by a number from both the horizontal row and vertical column.

(e) Each competitor in the sports event must be assigned to either the horizontal or vertical axis of the master square before the beginning of each sports event, except when the sponsor publicly declares by rules in advance of any sales to award equal prizes based upon both winning number combinations (e.g., when the score is 37–29, the winners are those holding spaces corresponding to vertical 7 and horizontal 9, and vertical 9 and horizontal 7).

(2) A sports pool card used to conduct an authorized sports pool must be of adequate size to be easily read by participants and observers.

(3) A participant who wishes to purchase a chance on more than one traditional, series, or multiple way sports pool must select a space or spaces on each of the boards. After the sale of all chances, the master square of any such board may not be duplicated or altered in any manner so as to create additional sports pool boards.

(4) The sports pool card shall, in advance of any sale of any chance, clearly indicate:

(a) name of the sports event or series of events covered by the card;

(b) name of the competitors (or home vs. away/visitor) in the sports event or series of events;

(c) date of the sports event or dates of the series of sports events;

(d) total number of chances available in the pool;

(e) cost to the participant for each chance;

(f) total amount to be paid to each winner;

(g) predetermined intervals, as provided in ARM 23.16.1705(3), for which a prize will be awarded, if any;

(h) the sponsor's name; and

(i) in the case of a sports pool conducted by a sponsor to support a nonprofit organization, the name of the nonprofit organization, the percentage of the pool proceeds to be donated, and the percentage of the pool proceeds to be awarded to the winner.

(5) The name or initials of each participant who purchases a chance in the sports pool must be clearly displayed on the board as each chance is sold.

(6) After each prize is awarded, the names of the winners of each prize must be prominently displayed on each card.

(7) If the sports event is cancelled, the person conducting the sports pool must refund the full amount of the purchase price to each participant.

(8) If the sports event is rescheduled, the sponsor may:

(a) cancel the board and refund all monies to the participants; or

(b) change the sports pool board only so as to reflect the new date of the sports event.

(9) A sports pool card must be retained by the sponsor for at least 90 days from the date of the sports event, or last event in a series of sports events, upon which the sports pool was based, whichever occurs first.

(1) The total cost of a chance in a sports event, or in a sports event for a series sports pool as described in ARM 23.16.1705(3)(b), is unlimited. The total cost for each chance must be paid in full and in cash at the time the chance is selected.

(2) If the actual number of sports events conducted as part of a series of events is less than the number of events for which chances were sold, the sponsor shall refund to each participant the money paid for chances on those events that were not conducted.

(3) After sale of the chances begins, the sponsor:

(a) may not cancel the sports pool or alter it in any manner, except as provided in ARM 23.16.1702; and

(b) shall award all prizes at the end of the sports event or series of events in accordance with the information displayed under ARM 23.16.1702.

(4) In an authorized sports pool in which a competitor is randomly assigned to each participant purchasing a chance in the pool, a participant may not sell, trade, or otherwise transfer his competitor to another person.

(5) All money paid to participate in a sports pool must be maintained separately from all other monies. No portion of the money collected in the sale of sports pool chances, including any share designated for charitable purposes, if any, may be separated from the total amount of proceeds collected on the sports pool board until after the sports event upon which the pool was based has occurred.

(1) There must be at least one winner from among the participants in a sports pool. A winner or winners are determined by the score or place attained by one or more competitors in the sports event upon which the sports pool is conducted.

(2) The prizes awarded to the winner or winners of a sports pool may be cash or merchandise.

(a) Where the prize awarded is merchandise, the purchase price paid for the item(s) of the merchandise prize is considered to be the value of the prize. Proof of the purchase price of the item(s) of the merchandise prize shall be retained for a period of at least 90 days from the date of the sports event.

(b) Subject to (4), if the value of the merchandise prize is less than the amount of money paid by all participants for the chance to participate, the person conducting the sports pool shall award the balance to the winner(s).

(3) All prizes must be available for distribution to winners immediately at the end of the sports event or at the end of each sports event in a series of events.

(4) A nonprofit organization may receive up to 50 percent of the proceeds from the sale of chances in a sports pool if the nonprofit organization meets the requirements of 23-5-503, MCA.

(1) Authorized sports pools described in this rule are identified by a title to distinguish one pool type from another. The controlling factor as to the legality of a sports pool is not the pool's title but the method and manner in which the pool is conducted.

(2) The conduct of an authorized sports pool is subject to the provisions of 23-5-501 through 23-5-503, MCA, and department rules.

(3) The following sports pools are authorized under 23-5-501 through 23-5-503, MCA:

(a) A "traditional sports pool" involving a single sports event with two competitors that is conducted on a sports pool card containing a master square with 25, 50, or 100 spaces. Each space is randomly assigned a unique pair of numbers from the vertical and horizontal axis of the master square.

(i) A winner is determined by matching the numbers assigned to a space with the only or last digit of the score of each competitor in the sports event at the end of the event.

(ii) Winners may also be determined by the score at predetermined intervals during the event as long there is also a winner and prize awarded based upon the score at the end of the event. If any prize is awarded for a score attained at a predetermined interval, the value of any such prize may not exceed the value of the prize awarded for the score attained at the end of the event.

(b) A "series sports pool" conducted on a master square in conjunction with a series of sports events. The pair of numbers assigned to each space on the master square remains the same for each sports event in the series. The competitors in each sports event in the series may be individual teams or a combination of teams (e.g., a group of teams designated as home teams versus a group of teams designated as away teams). Spaces must be sold for all events in the series of sports events and may not be sold for individual events. Winners for each sports event in the series are determined:

(i) in the same manner as in a traditional sports pool; or

(ii) in the same manner as in a traditional sports pool for the first sports event in the series. For the second and subsequent events, winners are determined by combining the scores generated by each competitor in the previous events.

(c) A "multiple way sports pool" conducted on a master square with multiple sets of numbers randomly assigned to the horizontal and the vertical axes representing certain intervals of a single sports event or individual sports events in a series of events. Winners are determined in the same manner as in a traditional sports pool.

(d) A "selected point sports pool" in which the winner is the participant whose randomly assigned competitor is the first to attain a final score that matches a predetermined number (e.g., 28, 39).

(i) The number of participants in a selected point sports pool is limited to the number of competitors in an established league. Competitors are randomly assigned to the participants and may be assigned for a single week or the duration of the pool.

(ii) If declared by publicly posted rules before the sale of any chances, the pool may be designed to carry over the prize from week to week until a competitor's score matches the preselected score, or until the pool's predetermined conclusion if none of the competitor's scores match the preselected score. Subject to the limits provided in (d)(iii), participants may be required to increase their wager each week until a match occurs, or until the pool's predetermined conclusion if none of the competitor's scores match the preselected score. A competitor assigned to a participant who fails to pay the increased wager or otherwise drops out of the pool at any time before a winner is declared must be deleted from the list of competitors in the league.

(iii) If no competitor obtains the preselected score before the predetermined conclusion to the pool, the prize(s) must be awarded to the participant(s) whose assigned competitor has achieved a score closest to the preselected score, or an alternate score, as may be established by publicly posted rules before the sale of any chances.

(e) A "blackout sports pool" in which the winner is the participant who holds the randomly assigned competitor that first accumulates scores on succeeding weeks whose only or final digit corresponds to all of the numbers zero through nine. A variation of this pool tallies only those scores in which the competitor is the winner of a sports event. The number of participants is limited to the number of competitors in an established league.

(f) A "weekly sweepstakes sports pool" in which a different competitor or competitors are randomly assigned to participants for each week. The winner is determined by the most or least points scored by the competitor or competitors assigned to a participant or by the most games won by the competitors assigned to a participant. The number of participants is limited to the number of competitors in a league or to the maximum combination of competitors in a league.

(g) A "multiple competitor sports pool" in which three or more competitors simultaneously compete in a sports event or series of sports events as individuals, not as a team, such as in a car race or golf tournament. Competitors are randomly assigned to participants, and a pool winner is determined by the score or place that the competitor attains in the sports event or series of sports events.

(1) A variation of an authorized sports pool may not be conducted unless approved by the department. 

(2) A person qualified to be a sponsor may apply to the department for approval of a variation of an authorized sports pool by submitting the following information:

(a) a detailed description of the operation of the pool, which verifies that:

(i) there would be at least one winner from among the participants in the sports pool;

(ii) each participant would have an equal chance to win; and

(iii) competitors would be randomly assigned to each participant.

(b) a description of the method of choosing a winner; and

(c) an illustration or sample of the card used to conduct the pool.

(3) The department may request additional information, including a demonstration of the sports pool variation submitted for approval.

(4) After reviewing the proposed sports pool variation, the department shall notify in writing the applicant of its intended action. An applicant desiring to challenge the department's action must proceed under ARM 23.16.108 and 23.16.203.

(2) A licensee conducting such a sports pool must comply with additional health or safety measures as may be required by the county board of health or local law enforcement officials in which the premises are located.

(1) A sports tab game may be conducted as a traditional sports tab game in conjunction with a single sports event with two competitors, or as a series sports tab game. A sponsor may conduct more than one sports tab game for each event.

(a) A "traditional sports tab game" involves a single sports event with two competitors that is conducted using a sports tab card. A winner is determined by matching the numbers printed on the sports tab with the only or last digit of the score of each competitor in the sports event at the conclusion of the event. Winners may also be determined by the score at predetermined intervals during the event as long as there is also a winner and prize awarded based upon the score at the conclusion of the event. If any prize is awarded for a score attained at a predetermined interval, the value of any such prize may not exceed the value of the prize awarded for the score attained at the conclusion of the event, as provided in ARM 23.16.1714.

(b) A "series sports tab game" is conducted using a single sports tab card in conjunction with a series of sports events. The pair of numbers on a participant's sports tab are used for each sports event in the series. The competitors in each sports event in the series may be individual teams or a combination of teams (e.g., a group of teams designated as home teams versus a group of teams designated as away teams). Sports tabs must be sold for all events in the series of sports events and may not be sold for individual events. Winners for each sports event in the series are determined:

(i) in the same manner as in a traditional sports tab game; or

(ii) in the same manner as in a traditional sports tab game for the first sports event in the series. For the second and subsequent events, winners are determined by combining the scores generated by each competitor in the previous events.

(2) Before the sale of any sports tabs in a sports tab game, the sponsor shall describe the game by prominently displaying the following information on the sports tab card or on a board to which the card is attached:

(a) name of the competitors in the sports event;

(b) date of the sports event or dates of the series of sports events;

(c) notification of which competitor's score corresponds to the first and second numbers on the sports tab;

(d) name of the sponsor;

(e) cost of a sports tab;

(f) total dollar value of all prizes to be awarded to winners;

(g) total amount to be retained by the sponsor;

(h) dollar amount or type and value of merchandise to be awarded to each winner;

(i) predetermined intervals, as provided in ARM 23.16.1714, during the sports event for which prizes are to be awarded, if any;

(j) name of the competitors and the date of the sports event that will be substituted for the original sports event if it is cancelled; and

(k) in the case of a sports tab game conducted by a sponsor to support a nonprofit organization, the name of the nonprofit organization, the percentage of the net sports tab game proceeds to be donated, and the percentage of the net sports tab game proceeds to be awarded to the winner.

(3) After sale of the sports tabs begins, the sponsor:

(a) may not cancel the sports tab game or alter the game in any manner; and

(b) shall award all prizes only at the conclusion of the single sports event in a traditional sports tab game, or at the conclusion of all sports events in a series sports tab game, in accordance with the description required under (2), regardless of whether all sports tabs on the sports tab card are sold to participants before the start of the sports event.

(4) The sports tab games purchased must have a permanent, unduplicated serial number printed on the sports tab card and have the same number printed on each sports tab affixed to the sports tab card. The sports tab cards must not have any concealed numbers on the card other than those concealed by the 100 sports tabs.

(5) All money paid to participate in each sports tab game shall be kept separate from any other money. No share for charitable contributions or administrative expenses may be separated from the total amount collected until after the sports event has occurred.

(1) A sponsor shall purchase a sports tab game only from a licensed sports tab game seller. The sports tab card must display a sports tab decal as provided for in ARM 23.16.1717.

(2) A sponsor may conduct sports tab games only on premises licensed to sell alcoholic beverages for consumption on the premises.

(3) The total cost of each sports tab on the same sports tab card must be identical. A participant shall pay cash for the sports tab at the time the tab is selected.

(4) Except for the owner of the licensed premises under (2) who holds a gambling operator's license, every sports tab game sponsor must possess a current Montana Associated Gambling Business License.

(1) Winners may be determined by the score at predetermined intervals during the event as long as there is also a winner and prize awarded based upon the score attained at the conclusion of the event. If any prize is to be awarded for a score attained at a predetermined interval during a sports event, the value of any such prize may not exceed the value of the prize to be awarded for the score at the conclusion of the event.

(2) Except as provided in (4), a sponsor shall pay to the winners of a sports tab game at least 90% of the cost of the sports tabs. The sponsor may retain up to 10% of the cost of the sports tabs.

(3) The cost to participate in a sports tab game is unlimited and the total value of all prizes awarded in a sports tab game is unlimited. Prizes may be in cash or merchandise, or a combination of cash and merchandise. If merchandise is awarded, the purchase price paid for the merchandise is considered to be the value of the prize. Except as provided in (4), if the value of the merchandise is less than 90% of the cost of the sports tabs the difference must be awarded to the winners in cash.

(4) A sponsor who conducts a sports tab game to support a nonprofit organization may donate up to 50% of the net proceeds of the sports tabs if the nonprofit organization meets the requirements of 23-5-503, MCA.

(5) All prizes must be available for distribution to winners immediately at the conclusion of the sports event, or at the conclusion of all sports events in a series sports tab game.

(1) After a winning sports tab is submitted to the sponsor and a prize is awarded, the sponsor shall cancel the tab, by whatever means chosen, and attach the cancelled tab to the sports tab card or board.

(2) A sports tab that was not sold to a participant may be revealed by the sponsor after the beginning of the sports event, but all unsold sports tabs must remain attached to the sports tab card.

(3) The sponsor shall retain a sports tab card that was used in a sports tab game for at least one year after the date of the sports event upon which the sports tab game was based.

(4) If merchandise is awarded as a prize, the sponsor shall retain proof of the purchase price of the merchandise for one year after the date of the sports event.

(1) Before conducting business in this state, a sports tab game seller shall obtain a sports tab game seller license from the department. An applicant for a license shall submit to the department:

(a) a sports tab game seller license application. Form FD-258 is available upon request from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming;

(b) Form 10 as described in ARM 23.16.102, available upon request from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming;

(c) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement;

(d) financial statements for the applicant's business as described in ARM 23.16.502;

(e) a check or money order for $500 made payable to the state treasurer, which includes payment for the:

(i) $100 annual license fee; and

(ii) $400 processing fee to cover the actual cost of processing the license.

(2) Based on the actual cost incurred by the department in determining whether the applicant qualifies for licensure, the department shall refund any overpayment of the processing fee provided for in (1)(e)(ii) or collect an amount sufficient to reimburse the department for any underpayment of actual costs. If an applicant withdraws the application after the department has begun processing the application, the department shall refund any amount not expended as of the date of withdrawal.

(3) The department may waive the application license and processing fee provided in (1)(e)(i) and (1)(e)(ii) if the applicant is licensed as a manufacturer, distributor, or route operator and if the applicant is substantially the same and has no strangers to the license.

(4) A person licensed under this rule must comply with all laws and rules of the State of Montana and the Department of Justice.

(2) A sports tab game seller, either in the conduct of acquiring or selling sports tab games, or in the carrying on of the business and financial arrangements incidental to acquiring or selling sports tab games, shall not pose a threat to the public interest of the state; pose a threat to the effective regulation and control of gambling; or create a danger of illegal practices, methods, or activities.

(3) Before a sports tab game may be sold to a sponsor, the sports tab game seller shall affix a sports tab decal provided by the department in a conspicuous location on the front of the sports tab card. Once affixed, the decal may not be tampered with by any person.

(4) The licensed sports tab game seller shall obtain sports tab decals by submitting a request to the department on a form provided by the department. Upon receipt of the form, the department shall issue sports tab game decals to the sports tab game seller at no cost.

(5) The sports tab game seller shall collect a tax of $1 from the sponsor for each 100 sports tabs sold.

(2) If the sports tab game seller fails to file the form or remit the required tax when due, the following penalties will be assessed:

(a) 0-30 days late = 10% of tax due;

(b) 31-60 days late = 25% of tax due;

(c) 61-90 days late = 50% of tax due; and

(d) 91 days or more late = 100% of tax due.

(1) A sports tab game seller shall maintain records by serial number and by manufacturer of all sports tab cards purchased.

(2) A sports tab game seller shall maintain records documenting the total number of sports tab cards sold, the sponsor, and the sports tab tax decal serial number as affixed to each sports tab game card by serial number. The sports tab game seller must maintain these records, and make the records available to the department upon request, for a minimum of 12 full quarters from the previous quarterly tax return due date. Such records shall document:

(a) the total number of sports tab games sold by referencing the sports tab game by game serial number and corresponding sports tab tax decal serial number, including the sponsor's name, license number, address, and phone number; and

(b) the amount and serial numbers of sports tab tax decals remaining in the sports tab game seller's possession.

(3) A sports tab game seller may not transfer sports tab tax decals to any person, except when affixed to a sports tab card. If sports tab game sellers wish to reduce their sports tab tax decal inventory, they may only return the decals to the department. If sports tab game sellers cease to sell sports tab games, they shall file, within 15 days following the date upon which they terminated sales, a report on a form provided by the department, remit any tax due, and return all unused sports tab tax decals.

(4) A sports tab game seller shall return any sports tab tax decals to the department upon request of the department.

This rule has been repealed.

(1) "Act" means Title 23, chapter 5, part 6, MCA.

(2) "Applicant" means any person who has applied for a permit for a VGM.

(3) "ASD" (audit storage device) means a removable, portable, nonvolatile, electronic, memory storage device that is compatible with a standard port on a personal computer and is used to store electronic records of audit tapes.

(4) "Conventional ROM device" means a device that cannot be altered while installed in a gaming device and may contain executable programs or data that are directly addressed by a processor.

(5) "CTVS" (cash ticket validation system) means a stand-alone system that electronically acquires information from VGMs for the purpose of validating cash ticket vouchers.

(6) "Designated representative" means a person designated on forms provided by the department to be a representative of the licensed VGM owner or operator. This designation is made for the purposes of filing quarterly reporting documents, applying for permits, receiving of forms, etc. However, the permit holder or VGM owner remains responsible for maintaining accurate records, filing reports in a timely manner, or paying VGM taxes due.

(7) "Destruction of a VGM" may be the result of deliberate or accidental causes. However, in all cases a VGM shall be considered destroyed only if it results in the VGM never being able to function again.

(8) "EPROM" means an erasable and programmable read-only memory.

(9)  "EPRS" (electronic player rewards system) means a stand-alone system that electronically acquires information from VGMs for the purpose of player rewards, as authorized by Title 23, chapter 5, MCA.

(10) "Game marked spots" means spots selected by a keno game title that do not require player interaction.

(11) "Game title" means an identifier representing a unique playable game, as defined in 23-5-602, MCA, at its most basic level. For example, program name ABC123 has a poker game "Jacks or Better" with unique pay tables for the five cent and 25 cent denominations. The game titles might be "Jacks or Better .05" and "Jacks or Better .25."

(12) "Identification decal" means a decal permanently affixed to a VGM and bears its unique identification number issued by the department.

(13) "Lifetime memory clear" means a procedure initiated by use of the audit key to clear electronic meters as defined by the department.

(14) "Logic" means a digital integrated circuit.

(15) "Machine" means an electronic VGM.

(16) "Machine permit" means a permit issued by the State of Montana that authorizes a specific VGM to be offered for play.

(17) "Modification" means a change or alteration to a VGM that affects the manner or mode of play of the VGM. The term includes any change to the control program, graphics program, or theoretical return percentage. The term does not include:

(a) a change in a VGM from one approved configuration to another approved configuration or from one approved mode of play to another approved mode of play;

(b) replacement of one component with another approved component; or

(c) the rebuilding of a previously approved VGM with approved components in an approved configuration.

(18) "Multigame machine" means a VGM that at all times offers for play to the public, within the same VGM cabinet, a combination of at least two of the following types of games that have been approved by the department:

(a) video poker;

(b) video keno;

(c) video bingo; and

(d) video line games.

(19) "PAL" means a programmable array logic or digital integrated circuit.

(20) "Predominant game" means a game, authorized under Title 23, chapter 5, part 6, MCA, the play of which can result in progression to a bonus game, and contributes more than 50% of the overall theoretical return.

(21) "PROM" means programmable read-only memory.

(22) "Royalty" means a defined hand combination, card value, and/or card position in the game of video poker which determines the award of multipliers, credit that can be redeemed for cash, free games, or altered play in subsequent games.

(23) "Simulates the game of draw poker" means plays by or mimics the generally accepted rules or methods of any of the various card games known as "draw poker," whether played against another player or the house. Draw poker simulations include, but are not limited to, symbols used for or in place of images of playing cards, and draw poker wagering techniques. For purposes of this definition, a determination that a VGM plays the game of draw poker is not solely based on the game title.

(24) "Theoretical return" means the calculation of expected payback per 23-5-607, MCA, computed by summing the award and probability products for all paytable combinations.

(25) "Trigger game" means a game authorized under Title 23, chapter 5, part 6, MCA, the playing of which determines progression to bonus games, free games, or altered play in subsequent games.

(26) "Valid ticket voucher" is a ticket produced by a VGM that is the result of bona fide play of a gambling machine and not the result of forgery, player tampering, manipulation, or a VGM malfunction that can be documented.

(27) "Video bingo" means the game of bingo as defined in Montana law when offered and simulated by a VGM that uses video images and a random number generator rather than authorized equipment as defined in 23-5-112, MCA. The image or images projected on the video display of VGMs are a material component of the game and shall not simulate an illegal gambling device or enterprise.

(28) "Video keno" means the game of keno as defined in Montana law when offered and simulated by a VGM that uses video images and a random number generator rather than authorized equipment as defined in 23-5-112, MCA. The image or images projected on the video display of VGMs are a material component of the game and shall not simulate an illegal gambling device or enterprise.

(29) "Video line game" means a game in which numbers and/or symbols are drawn using a random number generator and displayed on a video screen in a variety of alignments or orders with a chance of achieving a defined outcome.

(30) "Video poker" means the games of draw poker, stud, or hold 'em as defined in this rule when offered and simulated by a VGM that uses video images and a random number generator.

(a) The images projected on the video display of VGMs are a material component of the game and shall not simulate an illegal gambling device or enterprise.

(b) Varieties of draw poker, stud, and hold 'em must be found in the department's authority reference used for the live game of poker.

(31) "Win" means playing a video game authorized in Title 23, chapter 5, part 6, MCA, as defined by rule, achieving a defined paytable combination and receiving an award that can be redeemed for cash. 

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(2) The identification decal must be affixed to a machine before a machine is placed in service.

(3) The identification decal must be placed on the machine in such a manner that the identification decal is not obstructed from view and can be permanently maintained.

(4) Upon the request of a licensed manufacturer, distributor, operator, or route operator, the department will provide replacement identification decals for decals that have been destroyed or removed.

(5) For all video gambling machines validly permitted at the time this rule becomes effective, identification decals may be placed on the machines:

(a) by an employee of the department; or

(b) by a route operator who shall submit audit tapes and documents verifying the placement on the proper machine.

This rule has been repealed.

(1) Except as provided below, any permit to operate an electronic video gambling machine is only valid for the permit holder and the premises identified on the permit application.

(2) When, during the first quarter of the permit year, a gambling operation changes ownership and the application for a new gambling operator license has been approved, the permit fee for the machines on the premises is $25 per machine if the $240 licensing fee has already been paid for that machine for the permit year.

(3) A permit is also restricted to the particular machine approved by the department and identified on the permit application. No additional permit fee will be charged when a licensed premises changes its location and its permitted video gambling machines also move to the new location. No additional permit fee will be charged when permitted video gambling machines are converted to multigame and the owner of the machines has connected or signed an agreement with the department to be connected to the automated accounting and reporting system.

(4) A machine may not be moved from a licensee's premises and placed in service at another premises unless application is made for a new electronic video gambling machine permit, the permit fee is paid, and a new permit is issued. A new permit is required even if a machine has a current, unexpired permit for the former location.

(5) If a machine is destroyed as a result of an accident, criminal act, or natural disaster, and then replaced by a newly permitted machine, the unused portion of the fee paid on the destroyed machine will be applied as a credit to the fee due on the replacement machine. The department may require proof of destruction before credit is applied.

(6) A completed Letter of Withdrawal (LOW) must be submitted to the department when a permitted machine is removed from play and the premises prior to the renewal deadline of each year, June 30. The LOW must be submitted no later than ten days from the date the machine is removed from play. A LOW form is available upon request from the department. The LOW is not complete unless it is dated and signed by the licensee or a designated representative, and contains all of the information and attachments required by the department. Except as provided in (8), the provisions of this rule do not apply to a machine temporarily removed from play for repair service.

(7) Completed LOWs must also be submitted to the department for machines removed from play for the following reasons:

(a) a licensed location is closed for remodeling and machines are out of play for 30 days or more;

(b) a licensed location is opened only seasonally and machines are out of play for 30 days or more; or

(c) the alcoholic beverage license associated with a licensed location/operator is placed on non-use status and machines are taken out of play for 30 days or more; or

(d) the gambling operator's license has been suspended, revoked, or otherwise terminated.

(8) A LOW must be submitted for machines removed from play for service when the operator determines that it will not be placed back into play during the permit year and will not be renewed at its current location.

(9) In each of the circumstances outlined under (7) and (8), the LOW is due within ten days of the date the requirement for submission has been met. In addition, a new permit will be issued if the machine is placed back in play at the location prior to the end of the fiscal year. The licensee must submit a completed replacement form for issuance of a new permit, and there will be no additional permit fee.

(1) A gambling operator is eligible to apply for video gambling machine permits only if the operator holds an appropriate alcoholic beverage license and:

(a) the restrictions of 23-5-629 and 16-4-213, MCA, do not apply;

(b) the restrictions of 23-5-629, MCA, apply, and

(i) the department receives a written application from both common owners that provides revocable consent for a single common owner to apply for video gambling machine permits exclusive of the other; or

(ii) the operators are common owners, as defined in 23-5-629, MCA, but do not, in fact, operate in an interrelated manner as defined in (2); or

(c) the resort area gambling machine permit restrictions of 16-4-213, MCA, apply, but fewer than 20 gambling machines are currently permitted in the resort area.

(2) Operators subject to the restrictions of 23-5-629, MCA, operate in an interrelated manner when they are common owners, as defined in 23-5-629, MCA, and the common owners operate the licensed businesses for their mutual or individual advantage, gain, or convenience. Operators meeting one or more of the definitions of "common owner" in 23-5-629, MCA, are presumed to operate in an interrelated manner and are presumed ineligible for video gambling permits. The presumption that operators subject to the restrictions of 23-5-629, MCA, are operating in an interrelated manner may be rebutted by the operators' submission to the department of evidence that they do not, in fact, operate in an interrelated manner. An operator applying for permits under this rule must:

(a) submit such evidence prior to applying for a video gambling machine permit;

(b) prove by a preponderance of the evidence that they do not operate in an interrelated manner; and

(c) submit any challenges to the department's intended action on such applications as outlined in ARM 23.16.203.

(3) An eligible gambling operator or machine owner must submit a completed video gambling machine permit application (Form 8) for each machine to be permitted. An application is not complete unless:

(a) it contains all information and statements required by Form 8; and

(b) it includes the permit fee required by 23-5-612, MCA.

(4) A permit fee is not refundable after the department issues the permit except:

(a) the department must refund a permit fee if the permit application is withdrawn before issuance or if the department denies the permit; or

(b) when the applicant demonstrates the permit application was the result of an inadvertent input error and the erroneously permitted machine was not placed in service.

(5) The department shall prorate the permit fee for a video gambling machine on a quarterly basis according to the following schedule:

Effective Dates For Permit                                 Permit Fee

July 1 through June 30                                             $240

October 1 through June 30                                       $180

January 1 through June 30                                       $120

April 1 through June 30                                               $60

(6) Video gambling machine permit renewals and fees must be submitted to the department prior to June 30 of the current license year.

(7) The department may consider the same criteria for renewal of permits as for the original issuance of a permit. Failure to satisfy the permit criteria contained in the act and these rules may result in denial of renewal of the permit.

(8) Upon approval of a permit application, the department will issue a new gambling operator license listing all renewed or newly permitted machines. A gambling operator may not place a machine in service before receiving the updated gambling operator license.

This rule has been repealed.

This rule has been repealed.

(1) Machine owner quarterly reporting requirements are as follows:

(a) For each machine not utilizing an approved automated accounting and reporting system, the machine owner or his designated representative must file with the department a quarterly tax report signed by the machine owner or his designated representative. The forms prescribed and supplied by the department require readings from the mechanical and electronic meters as required by the act. The report will be used by the department to verify payment of all taxes and the winning percentage of the machine as required by the act. The following requirements apply:

(i) The report must be delivered to the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or bear a United States postal service postmark not later than midnight of the 15th of the month following the quarters ending March 31, June 30, September 30, and December 31.

(ii) The mechanical and electronic meter readings must be taken at the same time and recorded for the report within seven days of the close of the operator's last day of business in the reporting quarter. The readings must be supported by the original printed accounting ticket.

(iii) The report is due on each machine after it has been permitted.

(b) For each machine utilizing an approved automated accounting and reporting system, the machine owner or his designated representative shall transmit files to the department with the following information:

(i) for tier I systems, all electronic meter readings and all events set out in ARM 23.16.2105 for each day the machine is in operation, and the last set of meter readings received before the end of the quarter (meter readings received no more than seven days before the end of the quarter) will be used as quarter end readings for purpose of calculating a tax advisory to be sent to machine owners;

(ii) for tier II systems, all electronic meter readings for each week or two week period for which the machine is approved to report, and within 14 days prior to the end of the quarter but not later than seven days after the last day of each quarter, all electronic and mechanical meter readings, along with an indication that it is the last reading to be reported in the quarter; and

(iii) for tier II systems, before- and after-service electronic and mechanical meter readings must be submitted in a format prescribed by the department, if meters are reset or malfunction.

(c) For machines utilizing an approved automated accounting and reporting system, after the final set of meter readings for the quarter is received, the department will electronically transmit a machine income and tax advisory by machine and location to the machine owner. Upon receipt of the machine income and tax advisory, the owner must contact the department within seven days in order to dispute the machine income and tax advisory.

(d) The machine owner will have until midnight of the 15th day of the month following the quarters ending March 31, June 30, September 30, and December 31 to confirm and pay any tax due by electronic check or credit/debit card.

(2) If a machine owner shares machine ownership, or a machine's revenues with another person or business entity, the machine owner or his designated representative must provide upon the same quarterly tax form prescribed by the department in (1), information for each machine as follows:

(a) full identification including name, address, and social security number (or federal identification number) of all persons or business entities involved in the above-mentioned business relationship;

(b) percentages of participation in machine income by each person or business entity involved in the above-mentioned business relationship; and

(c) specific machine income (total collections less amounts paid to players without adjustment for expenses) paid to and/or received by each person or business entity involved in the above-mentioned business relationship.

(3) Form 6 is a quarterly video gambling machine tax report; Form 6 is incorporated by reference and is available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming.

(4) For the purposes of this rule the term theft includes the physical break-in or entry into the video gambling machine, or manipulation of the machine by external means, resulting in the accumulation of credits available for redemption without the insertion of money. If the gross income reported for a machine has been reduced to reflect a loss resulting from a theft from the machine, the machine owner or his designated representative shall submit the following information together with the quarterly report:

(a) documentation from a law enforcement agency verifying that the theft was reported;

(b) a letter or other document signed by the machine owner's business insurance agent indicating the amount paid or to be paid, if any, by the insurer to cover the loss resulting from the theft; and

(c) the last cash-access accounting ticket generated before the theft occurred and the first cash-access accounting ticket generated after the theft occurred. The tickets will be used by the department to calculate the maximum amount that may be deducted for a loss resulting from a theft.

(d) In all cases the theft loss must be supported by records required in ARM 23.16.1827.

(5) If the machine owner or his designated representative fails to file the quarterly tax report or remit the required gross machine income tax when due, the following penalties will be assessed:

(a) 0 - 30 days late = 10% of tax due;

(b) 31 - 60 days late = 25% of tax due;

(c) 61 - 90 days late = 50% of tax due;

(d) 91 days or more = 100% of tax due.

(6) The imposition of these penalties does not preclude the department from taking further action against the machine owner responsible for preparing the report, including, but not limited to, temporary cease and desist orders under 23-5-136, MCA.

(1) Tier I systems shall transmit the information required by ARM 23.16.2105 each day.

(2) Tier II systems shall transmit the information required by ARM 23.16.2105 at either seven day or 14 day reporting intervals. The election of a specific reporting interval shall be made by the machine owner or a designated representative on the application to utilize an approved automated accounting system (form 34). Route operators shall notify the division of their election of reporting intervals, or change of election of reporting intervals, on form 34(a).

(3) A machine owner or a designated representative who fails to timely transmit the required information will receive a notice from the department identifying the reporting failure. Prior to the next reporting interval, the machine owner or a designated representative must respond to the department notice with a statement explaining the reason for the reporting failure.

(4) When the explanation for the reporting failure does not demonstrate the inability of the machine owner or a designated representative to physically access the machine in order to meet the reporting interval, or when multiple reporting failures demonstrate an inability to physically access the machine, the department may require more frequent reporting intervals, require longer periods of record retention, or take any action authorized under 23-5-136, MCA.

(1) Machine operation records must be maintained and made available for inspection by the department upon request. The records must be maintained by the machine owner. The records must provide all necessary information the department may require to ensure operation of machines in compliance with the law.

(2) Except as provided in (4), records to be maintained by machine owners continuing to file reports and maintain records manually and those using tier II automated accounting and reporting systems must include:

(a) a correct lifetime audit ticket as provided for by department rules, which must include progressive accounting data if applicable. For those reporting manually and on a tier II automated accounting and reporting system on a 7-day reporting interval, the lifetime audit ticket must be printed for each machine at least once every seven days. For those reporting on a tier II automated accounting and reporting system on a 14-day reporting interval, the lifetime audit ticket must be printed for each machine at least once every 14 days;

(b) the exact copy of all printed ticket vouchers and audit tickets, i.e. the duplicate audit tape(s) created at the time each audit or payout ticket is printed;

(c) readings of each machine's mechanical meters at least once every two weeks;

(d) documentation of total actual cash counted for the licensed location for the same period as the mechanical meter readings were taken as required in (2)(c); and

(e) a three-way reconciliation of the total actual cash count required in (2)(d), and the total cash activity reflected by both the electronic and mechanical meter readings required in (2)(b) and (c). The three totals, actual cash, electronic readings, and mechanical readings must be calculated and reconciled for the same time period and must be completed at least once every two weeks. Any material difference must be documented and the reason for the difference substantiated. A material difference means a difference in the amount of cash counted and cash reflected by the meters that is the lesser than 5% of the total monies placed in the machines during the reconciliation time period or $100. If the difference is due to gambling device malfunction(s), the device(s) must be taken out of play, repaired and service form(s) submitted to the department, before the machine is returned to play. Following a material difference, the machine owner must maintain documentation of the cash count required by (2)(d), by individual machine, until notification is submitted to the department to substantiate that the malfunction has been corrected.

(3) Machine owners using tier I accounting and reporting systems must maintain the following records:

(a) a correct lifetime audit ticket as provided for by department rules, which must include progressive accounting data if applicable. The lifetime audit ticket must be printed for each machine at least once every 7 days; and

(b) the exact copy of all printed ticket vouchers and audit tickets, i.e., the duplicate audit tape(s) created at the time each audit or payout ticket is printed.

(4) Machine owner's records required by this rule must be maintained in the State of Montana by the machine owner or his representative for the following periods:

(a) machine owners who continue to file reports and maintain records manually must retain those records a minimum of 12 full quarters from the previous quarterly report due date; and

(b) machine owners using a tier I or tier II system must maintain records for a period of four quarters.

(5) Records to be maintained by machine owners on machines with approved audit storage devices (ASD units) must include:

(a) all video gambling machine records required pursuant to 23.16.1902 either on the original ASD device or other electronic media which allow for retrieval and review or transmittal to the department for review; and

(b) all other machine records as required in (2)(c), (d), and (e).

(6) If the machine owner does not keep records as required in this rule, the department may estimate the tax by utilizing the best available method, e.g., average net daily income for a region, estimate based on historical performance, or a gross-up based on established payouts. The department is not limited to the aforementioned methods of estimating income. However, any method used must be justifiable given the factual circumstances, and is subject to administrative and judicial review.

(7) For any violation of the record keeping requirements found in this rule, the department may:

(a) act by means of temporary cease and desist orders under 23-5-136(1)(a), MCA; or

(b) impose civil penalties under 23-5-136(1)(b), MCA.

(1) Every operator, manufacturer, manufacturer of illegal devices, distributor, or route operator must retain for a period of three years all records relating to the possession, destruction, purchase, lease, rental, or sale of any gambling device. For purpose of this rule, three years means a minimum of 12 full quarters from the previous quarterly tax return due date. The information detailed in (2)(a), (b), (c), and (d) must be retained on each individual machine.

(2) An operator, manufacturer, manufacturer of illegal devices, distributor, or route operator must provide the division with a current list of all video gambling machines owned at the times of application and licensure and provide status reports as required by the department. These reports must include the following information:

(a) manufacturer;

(b) model;

(c) serial number;

(d) location machine is stored.

(3) Every operator, manufacturer, distributor, route operator, or producer of associated equipment desiring to sell, distribute, lease, or rent video gambling machines or associated equipment in this state or ship video gambling machines to a final destination within the state must:

(a) be issued and maintain all required federal, state, county, and municipal licenses and registrations;

(b) furnish to the department monthly reports identifying the quantities, serial number, manufacturer and model number of each machine such person destroys, purchases, or sells, and such other information the department may determine is necessary to regulate and control video gambling machines in accordance with the act and these rules. All such monthly reports must be filed with the department within 15 days after the end of each required monthly reporting period. The department shall not approve a permit without prior notification of shipment by the machine's manufacturer.

(4) Every manufacturer or distributor proposing to import video gambling machines not approved under ARM 23.16.1901 for research and development or proposing to export legal gambling machines from the state must:

(a) comply with the applicable requirements of ARM 23.16.2001(5) and report such shipments to the department on form 22; and

(b) receive prior approval. If the department has taken no action within five working days of receipt of form 22, the application for approval is deemed granted.

(1) A licensed video gambling machine operator, distributor, route operator, or manufacturer may only advertise the play, lease, or sale of video gambling machines authorized by Title 23, part 5, MCA.  No signs or advertisements may make any explicit or implicit reference to illegal gambling devices, such as slot machines, including equipment associated with illegal gambling devices.

(1) Each video gambling machine model or modification must:

(a) be inspected in the state for approval and licensure by the department. The department may inspect any machine sold or operated in the state. Any approval granted by the department to a person is not transferable. The department must be allowed immediate access to each machine. Keys to allow access to a machine for purposes of inspection may be provided to the department or must be immediately available at the premise. Machines for which a substantial modification or a series of minor modifications whose total result is substantial must meet all of the specific law or rule requirements in effect at the time of submission. Only those machines which are owned or operated in Montana, and to which the submitted modification will be applied are required to meet those specifications in effect at time of submission. The department's determination that a modification is substantial may be contested pursuant to the Montana Administrative Procedure Act;

(b) be operated by the players in the manner specified by this part;

(c) not have any switches, jumpers, wire posts, or other means of manipulation that could affect the operation or outcome of a game. The machine may not have any functions or parameters adjustable by and through any separate video display or input codes except for the adjustment of features that are wholly cosmetic or other operational parameters as approved by the Gambling Control Division. This is to include devices known as "knockoff switches;"

(d) offer only those games defined as video gambling in Title 23, chapter 5, MCA, and operate in the following manner:

(i) in the case of poker, after the initial cards have been dealt, the player may be allowed to raise his wager but the player may not exceed the overall statutory bet limit;

(ii) the game must display the combinations for which credits will be awarded and the number of credits awarded for each combination;

(iii) one credit may not exceed twenty-five cents in value;

(iv) the machine must have locked doors to two separate areas, one containing the logic board and software for the game and the other housing the cash. Conventional ROM devices must be accessible from the front of the machine. Access from one area to another must not be allowed;

(v) the machines may have:

(A) two mechanisms that accept coins, referred to as "mechanism 1" and "mechanism 2." These mechanisms must have devices referred to as "lockouts" which prohibit the machine from accepting coins during periods when the machine is inoperable;

(B) a mechanism that accepts cash in the form of bills that do not exceed $100;

(vi) in the case of poker each machine must use a color display with images of cards that closely resemble the standard poker playing cards;

(vii) the machine must be capable of printing a ticket voucher for all credits owed the player at the completion of each game. A valid ticket must contain the following in a format prescribed by the department:

(A) the name of the licensed establishment;

(B) the name of the city, town, or county in which the licensed establishment is located;

(C) the machine serial number;

(D) the video gambling machine identification number (VGMID) assigned to the machine;

(E) the time of day in hours and minutes in a 24-hour format. The clock must automatically account for daylight savings time and indicate "S" for standard time and "D" for daylight savings time;

(F) the current date;

(G) the program name and revision;

(H) the value of the prize in numbers;

(I) the value of the prize in words;

(J) the sequential number of the ticket voucher;

(K) this notice clearly displayed on the ticket: "Ticket Void After 48 hours."

(viii) the printing mechanism must be located in a locked area of the machine to ensure the safekeeping of the audit copy. The printing mechanism must have a paper sensing device that upon sensing a "low paper" condition will allow the machine to finish printing the ticket and prevent further play. The machine must recognize a printer power loss occurrence and cease play until power has been restored to the printer and the machine is capable of producing a valid ticket;

(ix) the machine must have nonresettable mechanical meters of at least seven digits, housed in a readily accessible locked machine area. These meters must be in a configuration prescribed by the department. The mechanical meters must be manufactured in such a way as to prevent access to the internal parts without destroying the meter. Meters must be hardwired (no quick connects will be allowed in the meter wiring system). The department may require and provide a validating identification sticker to attach to the mechanical meters to verify the meters are assigned to a specific licensed machine. The meters must keep a permanent record of:

(A) total dollars accepted by the coin acceptor mechanism(s), and bill acceptor (if applicable);

(B) total dollars played;

(C) total dollars won;

(D) total dollars paid;

(x) the machine must contain electronic metering, using meters that record and display the following on the video screen in a format prescribed by the department:

(A) total cents in mechanism(s) 1 and 2 (if applicable);

(B) total cents through the bill acceptor (if applicable);

(C) total cents, total cents played, total cents won, and total cents paid;

(D) total games played and total games won;

(E) total cents played and total cents won for each distinct paytable available for play; and

(F) any other metering required by these rules;

(xi) the machine must issue by activation of an external key switch, an accounting ticket containing a performance synopsis of the machine and progressive accounting data if applicable. The printing of all totals from the electronic meters shall occur automatically each time access occurs to either the logic compartment or any compartment where cash is collected. Whenever electronic meters are reset, each machine must produce a full accounting ticket both before and after each resetting. The tickets must be in the format prescribed by the department and contain:

(A) the name of the licensed establishment;

(B) the name of city, town, or county in which the licensed establishment is located;

(C) the serial number of the machine;

(D) the video gambling machine identification number (VGMID) assigned to the machine;

(E) the time of day, in hours and minutes in a 24-hour format;

(F) the current date;

(G) the program name and revision number; and

(H) the electronic meter readings required by the department;

(xii) the machine and any peripheral electronic device must have an identification tag permanently affixed to the machine by the manufacturer. The tag must be on the right-hand side, upper left corner of the machine or peripheral electronic device or in another location approved by the department and must include the following information:

(A) manufacturer;

(B) serial number;

(C) model;

(D) date of manufacture; and

(xiii) the face of the machine must be clearly labeled so as to inform the public that no person under the age of 18 years is allowed to play;

(xiv) each machine and peripheral electronic device must pass a static test that is determined by the department; and

(xv) a machine shall be equipped with a surge protector that will feed all A.C. electrical current to the machine and a backup power supply capable of maintaining for a 30-day period the accuracy of all electronic meters, date, and time during power fluctuations and loss. The battery must be in a state of charge during normal operation of the machine. Manufacturers incorporating either the use of E2 PROMs or a lithium battery for memory retention will be considered to meet this requirement; and

(e) video gambling machines submitted for approval on or after October 1, 2003 must comply with ARM 23.16.1920.

(2) Any and all modifications made to an approved video gambling machine must be submitted to the department for approval prior to installation.

(3) The department may suspend, or revoke a permit or revoke approval of a machine at any time when it finds that any machine or machine component does not comply with statutes and rules governing electronic video gambling machines in effect at the time of approval. The department may also suspend, or revoke the licenses or revoke approval of other similar model machines or machine components in use in the state.

(1) Each VGM model or modification must:

(a) be tested and approved by the department before it may be sold or permitted. The department's approval of a VGM is limited to the manufacturer to whom the approval was granted and may not be transferred. The department may inspect any VGM sold or permitted in the state. All owners or permit holders must grant the department immediate access to inspect VGMs in their possession. Keys to allow access to a VGM for inspection may be provided to the department or must be immediately available at the premises;

(b) be operated by the players in the manner specified by this part;

(c) not have any means of manipulation that could affect the accounting, and operation or outcome of a game. The VGM may not have any functions or parameters adjustable by any separate video display or input codes except for the adjustment of features that are wholly cosmetic or other operational parameters as approved by the Gambling Control Division;

(d) offer only those games defined as video gambling in Title 23, chapter 5, MCA, and operate in the following manner:

(i) in the case of poker, after the initial cards have been dealt, the player may be allowed to raise his wager but the player may not exceed the overall statutory bet limit;

(ii) each game title must display the combinations for which credits/cash value will be awarded and the credits/cash value awarded for each combination;

(iii) the VGM must have locked doors to two separate areas, one containing the logic board and software for the game and the other housing the cash. Conventional media storage devices must be accessible from the front of the VGM. Access from one area to another must not be allowed;

(iv) the VGM may have a mechanism that accepts cash in the form of bills that do not exceed $100;

(v) in the case of poker, each VGM must use a color display with images of cards that closely resemble standard poker playing cards;

(vi) the VGM must be capable of printing a ticket voucher for all credits/cash value owed the player at the completion of each game. A valid ticket voucher must contain the following information in a format prescribed by the department:

(A) the name of the licensed establishment;

(B) the name of the city, town, or county in which the licensed establishment is located;

(C) the VGM serial number;

(D) the VGM identification number (VGMID) assigned to the VGM;

(E) the time of day in hours, minutes, and seconds in a 24-hour format. The clock must automatically account for daylight savings time and indicate "S" for standard time and "D" for daylight savings time;

(F) the current date;

(G) the program name;

(H) the cash value in numerals;

(I) the cash value in words;

(J) the sequential number of the ticket voucher;

(K) this notice clearly displayed on the ticket voucher: "Ticket Void After 48 hours."

(vii) the printing mechanism must be located in a locked area of the VGM to ensure the safekeeping of the audit copy. The printing mechanism must have a paper sensing device that upon sensing a "low paper" condition will allow the VGM to finish printing the ticket and prevent further play. The VGM must recognize a printer power loss occurrence and cease play until power has been restored to the printer and the VGM is capable of producing a valid ticket voucher;

(viii) the VGM must have non-resettable mechanical meters of at least seven digits, housed in a readily accessible locked VGM area. These meters must be in a configuration prescribed by the department. The mechanical meters must be manufactured in such a way as to prevent access to the internal parts without destroying the meter. The department may require and provide a validating identification sticker to attach to the mechanical meters to verify the meters are assigned to a specific licensed VGM. The meters must keep a permanent record of:

(A) total dollars accepted by the coin acceptor mechanism(s) (if applicable), and bill acceptor (if applicable);

(B) total dollars played;

(C) total dollars won;

(D) total dollars paid;

(ix) the VGM must contain electronic metering, using meters that record and display the following on the video screen in a format prescribed by the department:

(A) total cents through mechanism(s) 1 and 2 (if applicable);

(B) total cents through the bill acceptor (if applicable);

(C) total cents, total cents played, total cents won, and total cents paid;

(D) total games played and total games won;

(E) total cents played and total cents won for each distinct paytable available for play; and

(F) any other metering required by these rules;

(x) the VGM must issue by use of the audit key, an accounting ticket containing a performance synopsis of the VGM and progressive accounting data if applicable. The printing of all totals from the electronic meters shall occur automatically each time access occurs to either the logic compartment or any compartment where cash is collected. Whenever a lifetime memory clear is performed, each VGM must produce a full accounting ticket both before and after each resetting. The tickets must be in the format prescribed by the department and contain:

(A) the name of the licensed establishment;

(B) the name of city, town, or county in which the licensed establishment is located;

(C) the VGM serial number;

(D) the VGM identification number (VGMID) assigned to the VGM;

(E) the time of day in hours, minutes, and seconds in a 24-hour format. The clock must automatically account for daylight savings time and indicate "S" for standard time and "D" for daylight savings time;

(F) the current date;

(G) the program name; and

(H) the electronic meter readings required by the department;

(xi) each VGM must have a manufacturer identification tag permanently affixed to it by the VGM manufacturer. The tag must be affixed in a location approved by the department and must include the following information:

(A) manufacturer;

(B) serial number;

(C) model; and

(D) date of manufacture;

(xii) the VGM must clearly display a statement that no person under the age of 18 years is allowed to play;

(xiii) each VGM and peripheral electronic device must pass a static test that is determined by the department;

(xiv) a VGM shall be equipped with a surge protector that will feed all A.C. electrical current to the VGM and maintain for a 30-day period the accuracy of all electronic meters, date, and time during power fluctuations and loss.

(2) Any modifications made to an approved VGM must be submitted to the department for approval prior to installation. If a modification is substantial or if a series of minor modifications results in a substantial modification, the VGM as modified must meet all specifications in effect at the time of submission. A licensee's challenge to the department's determination that a modification is substantial must proceed under ARM 23.16.203.

(3) When the department finds that any EPRS, CTVS, AARS, VGM, VGM component, or game title does not comply with statutes and rules applicable at the time of approval, or its actual operation differs from its intended and approved functioning, the department may require game title(s) to be disabled, suspend or revoke a permit, or revoke approval of the EPRS, CTVS, AARS, VGM, or VGM component. The department may also require game title(s) to be disabled, suspend or revoke the permits, or revoke approval of models of an EPRS, CTVS, AARS, VGM, or VGM component similar to one the department finds noncompliant.

(1) The department may approve a VGM using an audit storage device (ASD) in place of duplicate printed audit tapes. Each VGM providing ASD support must be reported on a tier I or tier II system and operate in the following manner: 

(a) the ASD must have a minimum capacity of 2GB;

(b) at a minimum, record information on the ASD as required in ARM 23.16.1901 as defined by the department; 

(c) at a minimum, maintain current record of $$IN, $$PL, $$WN, $$PD electronic meters as defined by the department;

(d) utilize directory and file layout specifications for all ASD data as provided by the department;

(e) retain ASD data records for a minimum of four quarters;

(f) record required data and confirm in real time;

(g) the ASD must reside in a locked area within the VGM;

(h) each record stored on the ASD must be digitally signed as defined by the department;

(i) the department will administer the distribution of RSA public encryption keys to manufacturers as defined by the department;

(j) the department must be able to authenticate records through the use of an external software utility and RSA private encryption keys as defined by the department;

(k) game play will be suspended when:

(i) an ASD is not present;

(ii) communication with an ASD is lost;

(iii) data written to an ASD does not conform to file conventions and cannot be corrected by the VGM;

(iv) the ASD has insufficient memory to record the largest record possible;

(v) a newly installed ASD has unexpected files, directories, or contains files from a VGM with a different VGMID;

(l) ASD data should not be cleared during a Lifetime Memory Clear;

(m) ASD data must be displayed on VGM by use of the audit key; and

(n) ASD data must display externally on personal computers using common applications such as Word or Excel. 

(1) Gambling operators must immediately pay all valid ticket vouchers in full and in cash upon presentation of the ticket for payment.

(2) A ticket voucher that is printed more than 48 hours before it has been presented for payment may, at the discretion of the gambling operator, be deemed invalid and not payable, only if the operator has given notice to players of the 48-hour voucher expiration by:

(a) posting a notice in plain view of the gambling public at the time of play that is not less than 24 inches by 36 inches that reads "Promptly Redeem Your Win Tickets -- Tickets Void After 48 hours"; and

(b) issuing ticket vouchers displaying their expiration by:

(i) for VGMs and programs approved prior to adoption of this rule, the face of the ticket voucher paper has been preprinted with the expiration notice required by ARM 23.16.1901; or

(ii) for VGMs and programs approved after adoption of this rule, the expiration notice is printed on the face of the ticket voucher as required by ARM 23.16.1901.

(3) A gambling operator who has a good faith reason to believe a ticket voucher resulted from a VGM malfunction may refuse payment of the ticket voucher and must proceed as required by ARM 23.16.1904.

(1) A gambling operator who has a good faith belief a ticket voucher is the result of a VGM malfunction may refuse payment of the ticket voucher but must follow these steps:

(a) the gambling operator must immediately:

(i) print an audit ticket from the VGM;

(ii) suspend play of the VGM; and

(iii) contact and consult with the VGM owner if the gambling operator is not also the VGM owner;

(b) after consulting with the VGM owner, a gambling operator:

(i) who no longer believes the ticket voucher resulted from a VGM malfunction shall immediately pay the ticket voucher as provided in ARM 23.16.1903 and the VGM may be returned to active play; or

(ii) who continues to believe the ticket voucher resulted from a VGM malfunction shall within 24 hours submit a completed Form 50 to the department, together with all required documents.

(2) The department upon receipt of the completed Form 50, together with all required documents, shall inspect and evaluate the suspended VGM or its subparts and determine whether the ticket voucher resulted from a VGM malfunction. The department shall notify the player, the VGM owner, and the gambling operator of its determination:

(a) if the department determines the ticket voucher did not result from a VGM malfunction, the gambling operator shall immediately pay the ticket voucher, and the VGM may be returned to active play; or

(b) if the department determines that a VGM malfunction occurred, the ticket voucher is invalid and the gambling operator need not pay the ticket voucher, but the department's determination may include compensation due the player. The department may continue to suspend play of the VGM or a game title until all necessary software or hardware corrections are completed and approved.

(3) VGM owners and gambling operators must report suspected or confirmed software or hardware malfunctions on a completed Form 50 supported by all required documents. The VGM owner or gambling operator must submit the Form 50 and supporting documents to the department within 24 hours of the suspected or confirmed malfunction.

(4)  VGM manufacturers must report software or hardware malfunctions on a completed Form 50A supported by all required documents. The Form 50A and supporting documents must be submitted to the department within 24 hours of the malfunction being confirmed by the VGM manufacturer.

(5) For purposes of this rule, the following definitions apply:

(a) a software malfunction means an obvious deviation from the ordinary and expected play of a game that interrupts play, or an event resulting in a player losing credits or additional play earned before the malfunction. Such deviations include, but are not limited to:

(i) repeated game lock-ups or freezes whether or not the VGM can be manipulated to resume play without loss of credits or games earned;

(ii) inability to print an accurate ticket voucher;

(iii) play or VGM behavior inconsistent with the general rules of the game or inconsistent with the particular game description found on help screens;

(iv) any recurrent play anomalies or irregularities; and

(v) any irregular play that can be replicated;

(b) a hardware malfunction means repeated failures or breakdowns of the same VGM component. Such failures or breakdowns include, but are not limited to:

(i) power supplies;

(ii) memory storage devices; and

(iii) logic board integrated circuits.

(6) The following are not software or hardware malfunctions that must be reported under this rule:

(a) a single unexpected VGM event or behavior that cannot be replicated and is not expected to recur;

(b) routine maintenance or repairs commonly reported under ARM 23.16.1929; and

(c) routine maintenance or repairs necessary due to ordinary wear and breakdowns.

(1) A VGM must include the following hardware specifications:

(a) All electrical and mechanical parts and design principles shall follow acceptable industrial codes and standards in both design and manufacture.

(b) A VGM shall be designed to ensure that the player will not be subjected to any physical, electrical, or mechanical hazards.

(1) Each VGM must meet the following specifications:

(a) the random number selection process shall conform to an acceptable random order of occurrence and uniformity of distribution as defined by the department;

(b) any variable data, e.g., location name, shall not reside on conventional ROM storage devices that contain game programs;

(c) the game program must not interfere in any way with expected random play;

(d) all electronic meters must be eight digits in length except those used for tracking currency which must be ten digits in length;

(e) for each game title played, the paytable must be prominently displayed and understandable to the player;

(f) poker, keno, bingo, or video line game programs submitted for approval on or after October 1, 2003 and all multigame programs must comply with ARM 23.16.1920;

(g) prominently displays the message "Promptly Redeem Your Win Tickets – Tickets Void After 48 hours" when the printing of a cash ticket voucher is initiated;

(h) the duration of a game title shall be the period of play for a game authorized under Title 23, chapter 5, part 6, MCA, starting with the utilization of the first random number and ending with the last utilized random number; and

(i) paytables must be static and displayed in a form that is readable and clearly defined prior to the start of the game.

(2) A VGM may have software that includes but is not limited to the following:

(a) paytable;

(b) graphics;

(c) deal;

(d) optional features to include but not be limited to:

(i) raise;

(ii) auto-bet;

(iii) hold and discard;

(e) program name.

(3) Unattended or auto-play is prohibited except for free games initiated by or as a result of a trigger game.

(4) Notwithstanding any other rule to the contrary, on or after June 30, 1997, the image or images projected on each VGM shall not simulate, in part or in whole, an illegal gambling device or enterprise. 

(1) Each video poker game title must meet the following specifications for approval for use within the state of Montana. To be approved the game must:

(a) use a deck of cards consisting of 52 standard playing cards (jokers may also be used);

(b) conform to the standard rules of poker in the following manner:

(i) the theoretical return of a royalty must be less than 50% of the overall theoretical return;

(ii) "hand" means the cards dealt to or drawn by a player and retained at the completion of a game;

(c) using a random number generator, draw and display the initial cards in order;

(d) using a random number generator, replace any discarded cards, if applicable, with additional cards; and

(e) display the winning hand and credits/cash value won for that hand. 

(1) Each video line game title must meet the following specifications for approval for use within the state of Montana. To be approved, the game must:

(a) using a random number generator, draw and display a minimum of three numbers or symbols in a line;

(b) clearly identify each individual line that is brought into play by wagering additional money when more than one line is played during a game;

(c) display and identify each winning combination of numbers or symbols, if any, and the credits/cash value won, if any, at the end of each game;

(d) the movement of numbers or symbols stops automatically, or the player may manually stop the movement prior to the automatic stop;

(e) provide winning combinations that form a vertical, horizontal, or diagonal line or other specified shapes that may include:

(i) matching numbers or symbols; or

(ii) particular numbers or symbols that appear in any sequence or position; and

(f) provide a theoretical return of each bet increment not to exceed 92%.

(2) Licensed VGM manufacturers submitting video line games for approval must supply written verification from a qualified independent testing service that the theoretical return for each bet increment does not exceed 92%. For purposes of this rule, a qualified independent testing service means a person or entity that:

(a) holds a current Montana Associated Gambling Business License;

(b) shares no common ownership interests with the licensed VGM manufacturer that submits the video line game to the department for approval; and

(c) has at least one contract with, or is licensed by, another governmental entity to test gambling machines and provide mathematical certification for the maximum theoretical return for VGM software.

(1) Each video keno game title must meet the following specifications for approval for use within the state of Montana. To be approved, the game must:

(a) display a fixed playing field of numbers from 1 - 80;

(b) only accept bets on a minimum of two spots and a maximum of ten spots per game;

(c) using a random number generator, draw and display the balls picked;

(d) conform to standard rules of keno except:

(i) game marked spots can be used to trigger free games, games with altered play, bonus games, award multipliers, or credits/cash value;

(ii) the position, characteristics, or order of a drawn ball can affect the paytable; and

(e) display the total number of player spots picked at the end of each game, display the number of balls drawn that matched the players' picks (this may be shown as three out of eight, eight out of ten, etc.) and display any credits/cash value awarded for these combinations. 

(1) Each video bingo game title must meet the following specifications for approval within the state of Montana. To be approved, the game must:

(a) utilize a field of numbers from one to 75;

(b) provide a card or cards that contain 24 numbered spaces per card and one free spot. No cards may be identical;

(c) generate cards by utilizing a random number generator;

(d) conform to standard rules of bingo except:

(i) the position of a drawn ball can be a material component of the game; and

(ii) each game need not produce a bingo.

(e) using a random number generator, draw and display the number of balls picked and the credits/cash value awarded for the number of balls drawn to obtain a bingo;

(f) allow the player the choice of cards on which to play. All winning cards must be available for display on the screen, including any that may be played by the VGM in any game; and

(g) designate the winning arrangement of numbers prior to commencing play.

(1) Each multigame VGM must meet the following specifications for approval for use within the State of Montana, if applicable:

(a) offer at least two approved types of games as follows:

(i) video poker games that comply with ARM 23.16.1907;

(ii) video keno games that comply with ARM 23.16.1908;

(iii) video bingo games that comply with ARM 23.16.1909; and

(iv) video line games that comply with ARM 23.16.1907A.

(1) The department shall determine what optional features may be allowed and such features must be approved by the department prior to inclusion in a VGM's game format. For video poker games the department will evaluate only those draw poker, stud poker, and hold 'em games described in the authority references identified in the department's card game rules.

(1) The department may approve bonus games that can be awarded to the player as a result of playing video poker, keno, bingo, or video line games under the following conditions:

(a) before a bonus game may be awarded to the player, the player must achieve a defined outcome by playing a video game authorized in Title 23, chapter 5, part 6, MCA; and

(b) the theoretical return of all bonus games must be less than 50% of the overall theoretical return for that game.

(2) Bonus games can determine any one or more of the following at no risk to the player:

(a) paytable multipliers to be applied to the award obtained in the trigger game;

(b) paytables and/or paytable multipliers for subsequent games;

(c) the number of free video games awarded as authorized in Title 23, chapter 5, part 6, MCA; or

(d) the award of credits/cash value.

(3) Video poker, keno, bingo, and video line games, authorized in Title 23, chapter 5, part 6, MCA, with or without altered play whether awarded free or for consideration, are not classified as bonus games. When subsequent games are awarded as a result of playing an authorized video poker, keno, bingo, or video line game, awards in the corresponding trigger game cannot be affected by the play of those subsequent games.

(1) To ensure an EPRS, VGM, AARS, or CTVS complies with the act and these rules, the department may require a licensed manufacturer, accounting system vendor, or associated gambling business to supply information, including but not limited to:

(a) all technical manuals;

(b) all schematics, printed wire assembly and hardware block diagrams;

(c) all microprocessor manuals;

(d) all source code, including programmer's comments;

(e) binary images for all programs;

(f) media storage devices containing binary image(s), including those that may reside on the peripheral devices;

(g) software compiler;

(h) a written description of the random number generator algorithm;

(i) schedule of proposed payout(s), percentage(s) and odds determinations;

(j) programmer's memory map;

(k) a description of the methods of all testing criteria if performed and the results of the tests for the following:

(i) random number generator;

(ii) electromechanical interference;

(iii) radio frequency interference;

(iv) FCC standards;

(v) A.C. line noise;

(vi) static electricity;

(vii) extreme temperature conditions;

(l) an operator's manual for each peripheral device utilized; and

(m) additional information to be provided for an EPRS, AARS, or CTVS upon request.

This rule has been repealed.

(1) The use of a temporary replacement or loaner machine is authorized only where it is being used to replace a permitted machine that has been removed from service for repair.

(2) Any operator placing a temporary replacement machine in service must notify the department on a form prescribed by the department. An application to place a temporary replacement machine in service is incorporated by reference as Form 7 and is available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming.

(3) The temporary replacement machine must have an identification number issued by the department. The identification number must be issued in advance of the machine being placed into service, and must be issued to a holder of an operator license. The identification number must be affixed to the machine.

(4) The operator is responsible for filing all quarterly tax reports for the temporary replacement machine.

(5) In no case may the number of machines authorized by the number of permits issued the operator be exceeded by the use of temporary replacement machines. A temporary replacement machine may not be used for more than 90 days in a single location.

(6) A machine replaced by a temporary replacement machine must be removed from public access.

(1) Before conducting business in the state, a distributor shall obtain a license from the department. An applicant for a license shall submit to the department:

(a) a distributor's license application, Forms 17 and FD-258 are available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming;

(b) Form 10 for all applicants as described in ARM 23.16.102;

(c) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement;

(d) financial statements for the applicant's business as described in ARM 23.16.502; and

(e) a check or money order for $2,000 made payable to the State Treasurer, which includes payment for the:

(i) $1,000 annual license fee; and

(ii) $1,000 processing fee to cover the actual cost of processing the license.

(2) Based on the actual cost incurred by the department in determining whether the applicant qualifies for licensure, the department shall refund any overpayment of the processing fee provided for in (1)(e)(ii) or collect an amount sufficient to reimburse the department for any underpayment of actual costs. If an applicant withdraws the application after the department has begun processing the application, the department shall refund any amount not expended as of the date of withdrawal.

(3) The department may waive the application license and processing fees provided for in (1)(e) if the applicant is licensed as a manufacturer, manufacturer of illegal devices, or route operator and if the applicant is substantially the same and has no strangers to the license.

(1) Before conducting business in the state, a route operator shall obtain a license from the department. An applicant for a license shall submit to the department:

(a) a route operator license application, Forms 17 and FD-258 are available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming;

(b) Form 10 for all applicants as described in ARM 23.16.102;

(c) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement;

(d) financial statements for the applicant's business as described in ARM 23.16.502; and

(e) a check or money order for $2,000 made payable to the State Treasurer, which includes payment for the:

(i) $1,000 annual license fee; and

(ii) $1,000 processing fee to cover the actual cost of processing the license.

(2) Based on the actual cost incurred by the department in determining whether the applicant qualifies for licensure, the department shall refund any overpayment of the processing fee provided for in (1)(e)(ii) or collect an amount sufficient to reimburse the department for any underpayment of actual costs. If an applicant withdraws the application after the department has begun processing the application, the department shall refund any amount not expended as of the date of withdrawal.

(3) The department may waive the application license and processing fee provided in (1)(e)(i) and (1)(e)(ii) if the applicant is licensed as a manufacturer, manufacturer of illegal devices, or distributor and if the applicant is substantially the same and has no strangers to the license.

(1) Before conducting business in the state, a manufacturer shall obtain a license from the department. An applicant for a license shall submit to the department:

(a) a manufacturer's license application, Forms 17 and FD-258 are available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming;

(b) Form 10 for all applicants as described in ARM 23.16.102;

(c) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement;

(d) financial statements for the applicant's business as described in ARM 23.16.502; and

(e) a check or money order for $2,000 made payable to the State Treasurer, which includes payment for the:

(i) $1,000 annual license fee; and

(ii) $1,000 processing fee to cover the actual cost of processing the license.

(2) Based on the actual cost incurred by the department in determining whether the applicant qualifies for licensure, the department shall refund any overpayment of the processing fee or collect an amount sufficient to reimburse the department for any underpayment of actual costs. If an applicant withdraws the application after the department has begun processing the application, the department shall refund any amount not expended as of the date of withdrawal.

(3) The department may waive the application license and processing fee if the applicant is licensed as a distributor, manufacturer of illegal devices, or route operator and if the applicant is substantially the same and has not added strangers to the license.

(1) A vendor of a tier I or tier II AARS must obtain a license from the department before conducting business in this state. An applicant for a license must submit to the department: 

(a) Form 17, with special accounting system vendor instructions, and Form FD-258, available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming;

(b) Form 10 for all applicants as described in ARM 23.16.102;

(c) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement;

(d) financial statements for the applicant's business as described in ARM 23.16.502; and

(e) a check or money order for $1,100 made payable to the State Treasurer, which includes payment for the:

(i) $100 annual license fee; and

(ii) $1,000 processing fee to cover the actual cost of processing the license.

(2) Based on the actual cost incurred by the department in determining whether the applicant qualifies for licensure, the department will refund any overpayment of the processing fee or collect an amount sufficient to reimburse the department for any underpayment of actual costs. If an applicant withdraws the application after the department has begun processing the application, the department will refund any amount not expended as of the date of withdrawal.

(3) The department may waive the application and processing fee if the applicant is licensed as an operator, distributor, manufacturer of legal or illegal devices, or a route operator, and if the applicant is substantially the same and has not added strangers to the license.

This rule has been transferred.

(1) Each person submitting an EPRS capable of interfacing with a VGM, VGM, AARS, CTVS, or a modification to an approved EPRS capable of interfacing with a VGM, VGM, AARS, or CTVS for testing and department approval must:

(a) be licensed as a manufacturer, accounting system vendor, or associated gambling business within the state of Montana;

(b) at the time of submission deposit with the department a sum of money to begin testing. This sum is to be as follows:

(i) VGMs, $10,000;

(ii) CTVS, $5,000;

(iii) AARS, $15,000;

(iv) EPRS, $5,000; 

(v) modification to an approved EPRS, VGM, CTVS, or AARS, $1,000.

(2) This account will be charged at the rate of $130 per hour.

(3) The division will provide an accounting to the submitting person for charges assessed and will refund any overpayment. The department will notify the submitting person of any underpayment and collect that money prior to giving notice of its intended action.

(1) The communications protocol used shall be the full implementation of International Game Technology's (IGT) Slot Accounting System (SAS) protocol version 6.00 or later.

(a) The IGT SAS protocol specification documents may be obtained from IGT via e-mail: sasman@igt.com.

(b) The required minimum implementation of the IGT SAS protocol is defined in the Montana SAS Serial Protocol Implementation Guide. The guide is available on the Montana Department of Justice, Gambling Control Division web site (www.dojmt.gov/gaming) and is available by request from the Gambling Control Division, Technical Services Section, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424; (406) 444-1971.

(2) The physical interface specification is the Electronic Industries Association (EIA) standard EIA-232-F serial communication interface. Note: This standard is also known as RS-232 and TIA (Telecommunication Industry Association).

(a) The physical interface at the VGM shall be a female D-type 9-pin connector. The cable must be of sufficient length to easily reach the system interface board mounting regardless of the orientation of the interface board.

(b) The VGM shall be configured as data terminal equipment with EIA-232 connector pin out in accordance with the standard as follows:

PIN      SIGNAL      Description

1          DCD            Data Carrier Detect (not used)

2          RX               Received Data

3          TX               Transmit Data

4          DTR             Data Terminal Ready (optional)

5          GND            Signal Ready

6          DSR             Data Set Ready (not used)

7          RTS             Request To Send (not used)

8          CTS             Clear To Send (not used)

9          RI                 Ring Indicator (not used)

(3) Any device communicating with a VGM shall be tested and approved by the department before being offered for sale, sold, or installed/connected to any permitted VGM. This does not include proprietary business software that only receives data published from a Tier 1 site controller.

(1) A CTVS is associated equipment that electronically acquires information and data from a VGM for the purpose of validating the authenticity of a ticket voucher presented for payment.

(2) A person licensed as a manufacturer may manufacture and sell a CTVS subject to the following restrictions:

(a) all CTVS and site controllers must be tested and approved by the department prior to being offered for sale, sold, or installed/connected to any permitted VGM;

(b) a CTVS may only be used with VGMs employing an approved AARS;

(c) a CTVS may not electronically capture VGM accounting information and records to be communicated to the department or elsewhere; and

(d) all electronically acquired information must be limited to the sole purpose of validating ticket vouchers.

(3) A gambling operator may use a CTVS subject to the following restrictions:

(a) a gambling operator may purchase an approved CTVS only from a licensed manufacturer, distributor, or route operator; and

(b) before acquiring a CTVS system, every gambling operator must complete a CTVS use disclosure form (Form 33) supplying information to the department, which must include the gambling operator's confirmation:

(i) only AARS enabled VGMs will use a CTVS; and

(ii) the operator's use of electronically acquired information:

(A) will be limited to ticket voucher validation for VGMs permitted to the gambling operator's individual licensed premises; and

(B) will be restricted to VGM ticket voucher validation.

(1) Any machine which, in substance, simulates the game of video poker, keno, bingo, or video line games, without conforming to the requirements of the act or these rules and is placed in service for play by the public is prohibited.

(2) Except as provided in ARM 23.16.2001, a person who owns or operates a machine described in (1) is in violation of the act, these rules and Title 23, chapter 5, MCA. The civil and criminal penalties provided in those titles shall apply.

(a) each machine must be placed in such a manner that a minor who tries to play a machine is immediately observed by the licensee or the licensee's employees; and

(b) public access is, to the greatest extent possible, limited to persons over the age of 18.

(1) The department may conditionally approve specific models of VGMs or modifications based on its finding that the VGMs conform to the act and these rules.

(a) Final approval of each VGM or modification is required even if a VGM has been conditionally approved.

(b) Conditional or final approval may be withdrawn if the department later learns a VGM does not conform to specifications or requirements that were in effect at the time conditional or final approval was granted.

(2) Approval includes inspection of the hardware and software and all information provided to the department to determine whether a VGM or modification meets all requirements of the act and these rules.

(3) The department may accept shipment of hardware or software as part of an application for conditional or final approval provided that:

(a) the department will not be responsible for any purchase, shipping, or handling charges;

(b) all the applicable information required in ARM 23.16.1911 must accompany the VGM or modification; and

(c) prior to shipment, the department approved such shipment of a VGM or modification for scheduled testing and approval.

(4) A licensee holding approval of a VGM shall have 180 days from the effective date of a new or amended rule establishing VGM specifications in which to conform the VGM to the new specifications. 

(1) Certain information collected by the department is known to contain confidential information. Information designated as confidential includes but is not limited to the following:

(a) technical manuals, instructions, wiring, or logic diagrams for the machine;

(b) source codes;

(c) results of simulations and related information explaining simulation methodology;

(d) media or logic boards containing compiled programs.

(2) Information relating to the results of actual operations as shown on a VGM's meters is not confidential and may be used to compile studies or reports.

(3) Persons with access to confidential information as described in (1) may not use or reveal anything of a confidential nature outside the scope of its intended purpose.

(4) The department shall secure confidential information and restrict all persons from access, except designated employees whose duties include testing and interpretation of the information. Such information is not public record and may not be released to any member of the public.

(1) When the department approves the software and logic board of a machine, it may use a prescribed security seal process to guard against any unauthorized tampering or changes to the method by which the game is played on the machine.

(2) Any repair or replacement of a machine's logic board which may cause a loss of memory, change in program name or revision, or change in the meter reading must be reported to the Gambling Control Division of the Department of Justice on forms prescribed by the department at the time of the repair. The report requires the disclosure of the following information:

(a) final electronic and mechanical meter readings before repair;

(b) initial electronic and mechanical meter readings after repair; and

(c) the nature of the problem encountered which necessitated the repair.

(3) Any repair made to a machine's logic board which requires the breaking of a department seal must be reported to the department before the seal is removed or broken. After repair, the logic board must be reapproved by the Gambling Control Division before being reused in a machine.

(4) Any repair or replacement made to a machine's meters must be reported to the Gambling Control Division before a seal is removed or broken and the readings of the machine's electronic and mechanical meters must be provided to the Gambling Control Division. After repair, the initial readings of the electronic and mechanical meters must be provided before the machine is again placed in operation. The department must subsequently be given access to the machine to reseal the meters and verify their proper operation.

(5) To ensure the integrity, security, and monitoring of machines in service, a permitted machine may not be substituted or replaced until the replacement machine has been issued a permit by the department.

This rule has been repealed.

(1) The department has the right during the licensee's normal business hours to inspect any EPRS, AARS, CTVS, or VGM. Such right of inspection includes immediate access to each EPRS, AARS, CTVS, or VGM and unlimited inspection of all VGM parts. The department may immediately seize and remove any EPRS, AARS, CTVS, or VGM or device that violates state law or these rules.

(2) Given reasonable cause, the department may remove any EPRS, AARS, CTVS, or VGM or parts from a VGM for laboratory testing and analysis.

(3) The department may seal any EPRS, AARS, CTVS, or VGM left on the licensee's premises pending the department's investigation. Breaking or removing the department's seal will subject the licensee to seizure of the entire EPRS, AARS, CTVS, or VGM and suspension or revocation of any permit or license issued by the department.

This rule has been repealed.

This rule has been repealed.

(1) Video gambling machines, which have not been approved for operation or sale, may be brought into Montana for the purposes of trade shows, exhibitions, and similar activities, under the following requirements:

(a) The machines must simulate only games authorized in Title 23, chapter 5, MCA.

(b) The department must receive written notification of the activity and intent to display these devices at least three working days prior to the event. Such notification shall include the following information:

(i) a list describing the machines or associated equipment including model and serial number;

(ii) the event, its location, and number of days the device(s) will be displayed;

(iii) the method of transportation and location of storage of the machines;

(iv) the name of the company represented, and the name, address, and telephone number of the individual who will be responsible for the machine while in the state;

(v) the dates the machines will enter and leave the state; and

(vi) the sources and destinations of the machines.

(2) The department may inspect these devices to insure conformity with the requirements of this section.

(3) No machines brought into Montana under this rule may remain in the state for more than 20 working days.

This rule has been repealed.

This rule has been repealed.

(1) Before conducting business in the state, a manufacturer of illegal gambling devices shall obtain a license from the department. An applicant for a license shall submit to the department:

(a) a manufacturer license application, Form 17 is available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department's web site www.dojmt.gov/gaming;

(b) Forms 10 and FD-258 for all applicants as described in ARM 23.16.102;

(c) a complete set of fingerprints, on Form FD-258 provided by the department, obtained and certified by a local law enforcement agency, the department, or a private security company approved by the department for each person required to complete a personal history statement;

(d) financial statements for the applicant's business as described in ARM 23.16.502; and

(e) a check or money order for $2,000 made payable to the State Treasurer, which includes payment for the:

(i) $1,000 annual license fee; and

(ii) $1,000 processing fee to cover the actual cost of processing the license.

(2) Based on the actual cost incurred by the department in determining whether the applicant qualifies for licensure, the department shall refund any overpayment of the processing fee or collect an amount sufficient to reimburse the department for any underpayment of actual costs. If an applicant withdraws the application after the department has begun processing the application, the department shall refund any amount not expended as of the date of withdrawal.

(3) The department may waive the application license and processing fee if the applicant is licensed as a distributor, route operator, or manufacturer and if the applicant is substantially the same and has not added strangers to the license.

(4) A person licensed under this rule may import or export illegal gambling devices and associated equipment or either of them only if the sale and transportation of the devices or equipment complies with all applicable local, tribal, state, and federal laws and regulations. The department must approve all proposed imports and exports of illegal gambling devices and associated equipment prior to shipment.

(5) A person licensed under this rule may apply for prior approval to import or export illegal gambling devices and associated equipment or either of them, by submitting to the department:

(a) copies of the applicable gambling licenses held by that person from the jurisdiction(s) to which the person intends to export or from which the person intends to import illegal gambling devices and associated equipment or either of them and, when applicable, approved tribal compacts and relevant ordinances or documents; or

(b) a completed Form 22 including:

(i) the identity of the seller, purchaser, shipper, receiver, method of shipment, proposed date of shipment and estimated date of delivery;

(ii) the terms of the sale, including all contracts, invoices or other documents related to the sale;

(iii) written approval from the jurisdiction in which the devices or associated equipment will be exported or imported; and

(iv) the manufacturer, model number, serial number, type and number of:

(A) devices or associated equipment that will be exported;

(B) illegal devices and associated equipment that contain components that will be imported and used by the licensee to manufacture an illegal device for export from the state;

(C) illegal devices and/or associated equipment that will be imported and tested, reconditioned, refurbished, repaired, or otherwise substantially modified in preparation for export from the state;

(D) illegal devices that will be imported and modified into gambling machines specifically authorized by Montana law or rule; or

(E) illegal devices that will be imported and used for research and development purposes.

(6) If the department has taken no action within five working days of receipt of Form 22, the application for approval is deemed granted.

(7) A person importing or exporting illegal gambling devices and associated equipment or either of them under (5) (a) must provide monthly report(s) to the department using Form 22 and must supply information described in (5) (b) (i) , (ii) (in the case of imports only) , and (iv) . All monthly reports under this rule must be filed with the department within 15 days after the end of each required monthly reporting period.

(8) A person who proposes to import an illegal gambling device to be modified into a gambling machine which is specifically authorized by Montana law or rule must be licensed as a manufacturer and hold the department's approval under ARM 23.16.1901(1)(a) for the machine model to which it is to be modified.

(9) Form 22 is available from the Gambling Control Division, 2550 Prospect Ave., P.O. Box 201424, Helena, MT 59620-1424, or on the department’s web site www.dojmt.gov/gaming.

This rule has been repealed.

(1) The department shall allow a video gambling machine to offer a multigame subject to the following:

(a) the owner has received approval of an application to connect to the automated accounting and reporting system provided in 23-5-637, MCA; or

(b) the owner has entered into an agreement with the department for connection to the automated accounting and reporting system when the system becomes available. The agreement to connect to the automated accounting and reporting system shall be in the form of the agreement labeled Department of Justice, Gambling Control Division Form 31.

(2) Video gambling machines identified on Department of Justice, Gambling Control Division Form 31(a) shall be committed to connecting to the automated accounting and reporting system unless multigame is removed from the video gambling machine.

(3) The department shall provide notice to the video gambling machine owner and the video gambling machine lessee not less than 90 days before the date that the video gambling machine owner is required to submit an application to be connected to the automated accounting and reporting system. The notice shall include a general description of the installation and an estimated cost for connection to the automated accounting and reporting system. Cost estimates for components of the system to be provided by manufacturers will only be included in the notice if available from manufacturers on a timely basis. A video gambling machine shall be committed unless the owner has submitted a Gambling Control Division Form 31(c), (Notice of Movement or Removal of Multi-Game) with the form required by ARM 23.16.1929 (service report) to the Gambling Control Division at least 60 days prior to the date for which the owner has been provided notice that the video gambling machine is to be connected to the automated accounting and reporting system.

(4) If the licensed operator of the video gambling machine on which multigame is available is not the video gambling machine owner, each agreement (Form 31) shall be accompanied by a form (Form 31(b)) that acknowledges that the licensed operator has reviewed, understands and agrees to the terms of the agreement (Form 31).

(5) The combination of games may not be offered for play prior to October 1, 2003.

(1) For purposes of determining when an approved automated accounting system is available under the terms of multi-game video gambling machine agreements, the availability date shall be January 1, 2008, which is a date not sooner than 180 days after the department approved at least two commercially available systems under ARM 23.16.2105 for tier II systems, and when tax reporting was available through the department's internet web site.

(1) The department shall provide notification for connection to an approved system, as required by ARM 23.16.2101(3) and (4), according to the multi-county districts established by Executive Order 2-71 and Executive Order 7-73. The department shall give priority to those multi-county districts, or combination of districts where, as of March 1, 2008, the greatest number of video gambling machines committed by agreement to connect to an approved reporting system, but not yet connected, are located.

(2) The notification and begin-reporting schedule shall be as follows: 

(a) District 7 includes: Big Horn, Carbon, Stillwater, Sweet Grass, and Yellowstone counties. District 11 includes: Mineral, Missoula, and Ravalli counties. District 10 includes: Flathead, Lake, Lincoln, and Sanders counties. District 8 includes: Broadwater, Jefferson, and Lewis and Clark counties. District 12 includes: Beaverhead, Deer Lodge, Granite, Madison, Powell, and Silver Bow counties. District 5 includes: Cascade, Chouteau, Glacier, Pondera, Teton, and Toole counties. District 4 includes: Blaine, Hill, and Liberty counties. District 1 includes: Daniels, Phillips, Roosevelt, Sheridan, and Valley counties. District 2 includes: Dawson, Garfield, McCone, Prairie, Richland, and Wibaux counties. District 3 includes: Carter, Custer, Fallon, Powder River, Rosebud, and Treasure counties. District 6 includes: Fergus, Golden Valley, Judith Basin, Musselshell, Petroleum, and Wheatland counties. District 9 includes: Gallatin, Meagher, and Park counties.

(3) A machine owner who has received a notice to connect may request, in writing, one 90-day postponement of the begin-reporting date upon a demonstration, in writing, of hardship.

(4) A machine owner or lessee who chooses to not connect to an approved reporting system, as provided by these rules, must remove the multi-game software from the video gambling machines, and provide written notice to the department as required by ARM 23.16.1822, at least 30 days prior to the applicable begin-reporting date established in (2).

(1) Each automated accounting and reporting system must be inspected for approval by the department. The department may inspect any approved automated accounting and reporting system sold or operated in the state. Any approval granted by the department to a person is not transferable. Upon request, the department must be allowed immediate access to an approved accounting and reporting system.

(2) Tier I and tier II automated accounting and reporting systems are allowed as follows:

(a) tier I automated accounting and reporting systems electronically communicate information from individual video gambling machines, using the logical interface communications protocol provided in ARM 23.16.1920, and forward the information to a state-sponsored internet provider via internet connection. Tier I automated accounting and reporting systems operate in the following manner:

(i) an approved tier I system shall communicate the following information to the department:

(A) video gambling machine ID;

(B) filing quarter for meter reading to apply;

(C) notification if the last reading for the quarter;

(D) operator number (location);

(E) route operator license number (if applicable);

(F) notification if meter reading is the first reading for a new video gambling machine;

(G) SAS event code for tier I reporting;

(H) date meter recording was taken;

(I) time meter reading was taken;

(J) soft meter total cents in, total cents played, total cents won, total cents paid;

(K) accounting system software version; and

(L) Program ID;

(ii) monitors video gambling machine performance and records events as defined in ARM 23.16.1920(1)(b);

(iii) video gambling machine system interface boards must utilize power sources independent of that supplied by the video gambling machine so as to not interfere with video gambling machine operation;

(iv) system interface boards shall be securely mounted in each video gambling machine that communicates to an accounting and reporting system; and

(v) the following events must be recorded and reported:

(A) slot door opened;

(B) slot door closed;

(C) drop door opened;

(D) drop door closed;

(E) card cage opened;

(F) card cage closed;

(G) AC power applied to the VGM;

(H) AC power was lost from the VGM;

(I) cashbox door opened;

(J) cashbox door was closed;

(K) cashbox removed;

(L) cashbox installed;

(M) belly door opened;

(N) belly door closed;

(O) operator changed configuration options; and

(P) soft meter reset to zero.

(b) Tier II automated accounting and reporting systems that electronically communicate video gambling machine information to a state-sponsored internet site. Tier II automated accounting and reporting systems operate in the following manner:

(i) at a minimum an approved tier II system shall communicate the following information to the department:

(A) vgm ID;

(B) filing quarter for meter reading to apply;

(C) notification if the last reading for the quarter;

(D) operator number (location);

(E) route operator license number (if applicable);

(F) notification if meter reading is the first reading for a new vgm;

(G) notification if service report is included;

(H) date meter recording was taken;

(I) time meter reading was taken;

(J) service report codes for problem, labor, and parts before and after service (when applicable);

(K) before and after meter reading indication for service if applicable;

(L) hard meter bill in (if applicable);

(M) hard meter coin in, total played, total won, total paid;

(N) soft meter total in, total played, total won, total paid;

(O) number of games played if available;

(P) number of games won if available;

(Q) accounting system software version; and

(R) Program ID if changed since last transmission.

(3) The department may provide file layout specifications for all tier I and tier II information reporting.

(4) Data packet transmission reporting periods are programmable by weekday and time in hours and minutes in a 24-hour format.

(5) Data packet transmission supports real time requests and automatic recurrence by week, day, and time.

(6) Automated accounting and reporting systems must be operated in the manner specified by this rule.

(1) An owner or operator intending to utilize an approved automated accounting and reporting system shall, not less than 60 days prior to the first day of the quarter in which the system is to be utilized, submit to the department an application for use of the approved automated accounting and reporting system.

(2) An owner or operator intending to utilize an approved system in which the data entry and recordkeeping will be performed by the route operator as part of a written vending agreement shall, not less than 30 days prior to the first day of the quarter in which the system is to be utilized, submit to the department an application for use of the approved automated accounting and reporting system.

(3) The application shall provide the following information:

(a) a description of the approved automated accounting and reporting system, including the name of the accounting system vendor;

(b) a listing of all video gambling machines that will be connected;

(c) information required for issuance of a user ID and password for internet transactions; and

(d) e-mail addresses for authorized employees identified on the application.

(4) The department may approve, deny, or request a modification of the application.

(5) The owner or operator must demonstrate the ability to effectively operate the approved accounting and reporting system, and the department must validate the e-mail addresses for employees identified on the application.

(6) In addition to utilizing an approved accounting and reporting system, the owner or operator will be subject to and must continue to keep records and file quarterly reports manually through the end of the quarter in which they apply for system approval.

(1) The department may enter into an agreement with accounting system vendors, route operators, or licensed operators to provide for testing of systems under ARM 23.16.2102. Any agreement for testing shall include the following:

(a) the continued reporting and maintenance of records as provided in ARM 23.16.1826, 23.16.1826A, and 23.16.1827, during the test period;

(b) a description of information to be reported to the Gambling Control Division for purposes of validating test results; and

(c) a final date that the test will terminate.

(2) The department will field test all tier I systems as follows:

(a) review data for correct file submission format;

(b) test batch upload process for proper procedures;

(c) test for ability to correct any rejected records;

(d) test submitted e-mail addresses; and

(e) evaluate transmissions of data for a 30-60 day period.

(3) The department will field test all tier II automated accounting and reporting systems by requiring all proposed accounting systems to satisfactorily record and communicate electronic meter readings and to demonstrate the system can reliably record and communicate complex transactions.

(4) The department will provide a web site to allow on-line entry of tier II meter readings. In addition, the department will provide an electronic spreadsheet which will allow for entry of required tier II data.

(5) The department may approve an automated accounting and reporting system for purposes of field testing prior to final approval of the system.

(2) Any proposed substantial modification of a tier I system or a series of minor modifications whose total result is substantial must meet all of the specific law or rule requirements in effect at the time of submission. The department's determination that a modification is substantial may be contested pursuant to the Montana Administrative Procedure Act.

(3) All modifications to tier II systems that modify the information or communication of the information required for tier II systems by ARM 23.16.2105(2) (b) (i) must be approved by the department.

(2) In the event an accounting system vendor fails to renew its license and the conditions for continuation cannot be met, operators using the system shall have 120 days to convert to a new system.

This rule has been repealed.

(1) "Electronic live bingo or keno equipment" means an electronic device or system that uses a microprocessor to generate random numbers during a live bingo or keno game.

(2) "Manufacturer" means a manufacturer of electronic live bingo or keno equipment as defined in ARM 23.16.101.

(1) Before conducting business in this state, a manufacturer shall obtain an electronic live bingo or keno manufacturer license from the department. An applicant for a license shall submit to the department:

(a) an electronic live bingo or keno manufacturer license application (Form 17);

(b) Form 10 for all applicants as described in ARM 23.16.102;

(c) financial statements for the applicant's business as described in ARM 23.16.502; and

(d) a check or money order for $2,000 made payable to the State Treasurer, which includes payment for the:

(i) $1,000 annual license fee; and

(ii) $1,000 processing fee to cover the actual cost of processing the license.

(2) Based on the actual cost incurred by the department in determining whether the applicant qualifies for licensure, the department shall refund any overpayment of the processing fee provided for in (1)(d)(ii) or collect an amount sufficient to reimburse the department for any underpayment of actual costs. If an applicant withdraws the application after the department has begun processing the application, the department shall refund any amount not expended as of the date of withdrawal.

(2) Based on the actual cost incurred by the department in examining the equipment, the department shall refund any overpayment of the fee or collect an amount sufficient to reimburse the department for any underpayment of actual costs.

(2) At the time the modification is submitted to the department, the manufacturer shall pay a fee of $200 to cover the actual cost of examining the modification. An overpayment or underpayment of the fee will be processed as provided for in ARM 23.16.2303(2).

(3) Any previously approved equipment subject to a modification must meet the specifications in effect at the time the modification is submitted to the department.

(1) Electronic live bingo or keno equipment may offer only those games authorized as live bingo or keno under Title 23, chapter 5, part 4, MCA.

(2) The equipment must:

(a) allow easy access to the equipment for field verification;

(b) have a manufacturer identification tag permanently affixed to approved hardware in a location approved by the department that lists the manufacturer, serial number, model, and date of manufacture;

(c) have no means of manipulation that could affect the accounting operation or outcome of a game;

(d) generate game numbers using a random number generator; and

(e) meet the same specifications imposed on VGMs under ARM 23.16.1901, 23.16.1905, and 23.16.1906.

(3) In addition to the requirements provided for in (1) and (2), electronic live bingo equipment must:

(a) use a field of numbers from 1 through 75;

(b) display the numbers picked;

(c) operate in conformance with the standard rules of bingo; and

(d) designate the winning arrangement of numbers before each game begins.

(4) In addition to the requirements provided for in (1) and (2), electronic live keno equipment must:

(a) use a field of numbers from 1 through 80;

(b) display the numbers picked; and

(c) operate in conformance with the standard rules of keno.

(5) The department shall determine what optional features may be allowed. These features must be approved by the department before installation.

(6) At the department's request, the licensed manufacturer shall submit any information required under ARM 23.16.1911 that the department determines is necessary to ensure that the equipment is in compliance with this rule. 

(1) Within 15 days following the end of each calendar quarter, a licensed manufacturer shall submit to the department a quarterly activity report (form 18), which is available upon request from the department.

(2) The report must list the following information for all electronic live bingo and keno equipment shipped into or within the state by the manufacturer:

(a) model number;

(b) serial number;

(c) destination; and

(d) any other information required by the department.

(3) A licensed manufacturer shall retain for a minimum of 12 full quarters from the previous quarterly tax return due date all records verifying the information reported under this rule.

Throughout this subchapter, the following definitions apply:

(1) "Bank" means the common fund into which player consideration to play keno or bingo is placed and out of which prizes are awarded.

(2) "Bingo" means a game of chance played for prizes with cards bearing numbers as described in law, in which the holder covers such numbers when objects similarly numbered are drawn or electronically determined, and in which the game is won by persons covering one or more previously designated arrangements of numbers on such cards. A game of bingo begins with the first number called and ends when an individual or individuals covers the previously designated arrangements, declares bingo, and the game is verified.

(3) "Filing date" means July 31st of each year.

(4) "Game" means a single period of play during a bingo session in which a winner or winners are chosen or the game as defined in law or administrative rule ends.

(5) "Gross keno or bingo game income" means the total consideration paid by all the players to play.

(6) "Gross proceeds" means gross income received to play live keno or bingo minus the prize payouts.

(7) "Inside keno cards" mean the cards on which players record their selections which are submitted to and retained by the keno caller as a receipt and to verify player selections.

(8) "Keno or bingo caller" means any individual responsible for the collection of player consideration, verification of bets and winners and distribution of awards.

(9) "Outside keno cards" mean the cards on which players' selections are recorded by a keno caller and issued to the player as a receipt. These cards must contain the card manufacturer name and a purchase series number.

(10) "Payout(s)" means a prize or prizes awarded to winners. The term does not include prizes awarded to winners of free, promotional games.

(11) "Payout slips" means a report detailing the payouts made in each live keno or bingo game, including promotional prizes. The slips must also contain the name of the individual making the payouts, game date and the payouts or prizes, for each game.

(12) "Player" means a natural person paying valuable consideration to play live keno or bingo.

(13) "Promotional game" means a game during which a prize is awarded but for which no consideration is required by the players.

(14) "Tax year end" means June 30th of each year.

(1) A record of live keno and bingo gross proceeds, must be maintained separate and distinct from other sources of operator revenue. Unless designated otherwise the operator of a live keno or bingo game must retain daily accounting records for a period of three years from the due date of the live game income tax return. The records must remain legible and be kept in the State of Montana and accessible by the department from the licensee.

(a) The following records must be maintained by operators of live keno and bingo games:

(i) the gross income collected, supported by proper records as required in these rules.

(ii) the amounts paid out for prizes supported by proper records as required in these rules.

(iii) records documenting the starting and ending cash bank which must be verified by a signature. The amount of the starting bank must be verified by the signature of at least one person responsible for counting or managing the starting game bank. The ending bank must be verified by the signature of at least one person responsible for counting or managing the ending game bank. In no case may the same person verify both starting and ending cash bank amounts.

(iv) records providing a reconciliation of gross income, actual profit, cash long or short, and bank deposit.

(v) a copy of the schedule of games and their prizes.

(b) the form(s) on which daily live keno and bingo records are kept must, at a minimum, provide for the requirements of (1)(a). If necessary, the form(s) must also provide for the following:

(i) if live game cash is used to pay expenses other than prize payouts, the daily reconciliation form(s) must include an entry for these expenses. In addition to the reconciliation entry, copies of the expense receipts must be attached to and kept with the associated daily records.

(ii) if adjustments are made to increase or decrease the starting bank balance for the next day or session of play, the adjustments must be accounted for on the operator's daily reconciliation form(s).

(2) In addition to the records required to be kept under part 1 of this rule, the live keno operator must maintain the following records:

(a) a record of outside keno card purchases, detailing the number of cards purchased by series number must be kept for a period not less than three years from the due date of the associated live keno income tax return. The outside keno card purchase invoices must segregate the order by single cards and card sheets;

(b) if the premise uses a cash register or other method of calculating cash on hand with which a tape record is maintained, the tape record must be kept with other daily records;

(c) if, in the game bank reconciliation process, the operator experiences a net cash overage or shortage in excess of 1% of gross game income for a one-month period, the overage or shortage must be investigated. A record detailing the findings of the investigation must be maintained with other required records;

(d) a record of the total number of keno cards sold, segregated by card price, must also be maintained on a daily basis;

(e) payout slips must be maintained by each keno caller for each work shift. It must also be initialed by the keno caller at the end of the shift. Prizes awarded for promotional games must be recorded on the payout slips. The slips must also be maintained as part of the operator's records for a period of three months;

(f) for the purposes of calculating gross proceeds promotional game prizes must be subtracted from total payouts;

(g) the ending bank balance less the days gross proceeds and any other adjustments must be used as the beginning balance for the next day; and

(h) if a licensed premise has not kept records in the manner prescribed in these rules and no other records exist with which the department may calculate the gross keno proceeds, the department may estimate a tax using the best available method.

(3) In addition to the records required to be kept under part 1 of this rule, the live bingo operator must maintain the following records:

(a) a record of all bingo card purchases, detailing the number of cards purchased by type;

(b) if the premise uses a cash register or other method of calculating cash on hand with which a tape record is maintained the tape record must be kept with the daily records;

(c) payout slips must be maintained by bingo callers for each work shift. Prizes awarded for promotional games must be recorded on the payout slips but so designated for the purpose of calculating gross proceeds. The payout slips must be initialed by the caller at the end of his/her shift. The slips must also be maintained as part of the operator's records for a period of three months;

(d) the day's gross proceeds must be reconciled with the ending bank balance. If, in the bank reconciliation process, the operator experiences a net cash overage or shortage in excess of 1% of the gross game income for a one-month period, the overage or shortage must be investigated. A record detailing the findings of the investigation must be maintained with other required records. For the purposes of calculating gross proceeds, promotional game prizes must be subtracted from the total payouts;

(e) the ending bank balance less the days gross proceeds and any other adjustments must be used as the beginning balance for the next day; and

(f) if records are not kept in the manner prescribed in these rules the department may estimate gross proceeds using the best available method.

This rule has been repealed.

(2) A person requesting approval from the department for conducting a variation of an authorized bingo card shall submit the following information to the department:

(a) an illustration or facsimile of the proposed bingo card variation submitted for approval; and

(b) a detailed description of the operation of the game of bingo utilizing the proposed bingo card variation, which must verify that the game complies with all requirements for games of bingo as set out in 23-5-412, MCA.

(3) The department may request additional information, including a demonstration of the game of bingo utilizing the bingo card variation submitted for approval.

(4) After reviewing the proposed bingo card variation, the department shall notify in writing the person submitting the variation of its intended action. If the person desires a hearing he shall submit a written request to the department within 20 days. Upon receipt of the request, all proceedings must be conducted according to the Montana Administrative Procedure Act and the Attorney General's Model Rules of Procedure.

(1) All live keno operators must provide a pay table listing prizes awarded on winning cards. All valid winning keno cards presented to the keno caller before the next game must be paid in full as per the pay table.

(2) All live bingo operators must provide a list of general game rules and normal prize payouts. This provision does not preclude bingo operators from conducting games not listed in their rules or adjusting payouts, as long as the games are legal under the provisions of the statutes and administrative rules and the changes are announced to the players before the game begins.

(a) All valid winning patterns on bingo cards must be paid in full as per the listed or announced prizes.

(b) In no case may:

(i) the prizes paid out exceed $800 per winning pattern;

(ii) the total prizes paid during a regular bingo session exceed $3,000;

(iii) the total prizes paid during a special bingo session exceed $5,000;

(iv) bingo games be extended in any manner so as to exceed the prize limitations; or

(v) identical cards be played so as to exceed prize limitations.

(a) 0-30 days late = 10% of tax due;

(b) 31-60 days late = 25% of tax due;

(c) 61-90 days late = 50% of tax due;

(d) 91 days or more = 100% of tax due.

(2) The imposition of these penalties does not preclude the department from taking any other action against the operator as allowed by law.

(1) A licensed operator granted an annual permit by the department to conduct live bingo games on a specified premises may apply for a permit to conduct a special bingo session.

(2) To apply for a special bingo session permit, the operator shall submit an application to the department on Form 38, which is available from the department. The application for a special bingo session must include:

(a) licensed operator's name;

(b) operator license number;

(c) location of the special bingo session;

(d) date and start time of the special bingo session;

(e) date of applicant's most recent special bingo session; and

(f) $10 processing fee.

(3) The special bingo session application must be received by the department at least ten working days before the start of the proposed special bingo session. The department may process an application received by fax but shall not issue a permit on such an application until the fee is received by the department. An application may not receive approval if received by the department less than ten working days before the date of the proposed start of the special bingo session.

(4) A special bingo session permit issued to an operator shall be counted against the allotment of annual special bingo sessions whether or not the special bingo session was held by the operator.

(5) A special bingo session must be publicly identified as being a special bingo session.

(6) An operator's special bingo session permit must be posted and clearly visible to the public. The permit is specific to an operator and location. An operator may conduct up to five special bingo sessions per year. At least 30 days must elapse between each special bingo session.

(7) Special bingo sessions must comply with the requirements of Title 23, chapter 5, MCA, and the rules of the department.

This rule has been repealed.

(1) A raffle sponsor must make all raffle terms available to the public prior to the sale of any raffle tickets. In all cases a raffle sponsor must establish and make available the date of the raffle drawing. Other raffle terms may include:

(a) the name and contact information of the raffle sponsor;

(b) persons eligible or ineligible to purchase tickets;

(c) locations where sales are known to be prohibited;

(d) cost of raffle tickets;

(e) a complete description of the prize(s) and its value;

(f) an estimated number of tickets to be sold which may be unlimited;

(g) the date ticket sales close; and

(h) the method of drawing winning ticket(s).

(2) The following random selection processes are authorized for use in determining a winner of a raffle as defined in 23-5-112, MCA:

(a) a drawing from a drum or other receptacle containing raffle ticket stubs or other suitable indicators of the ticket purchaser's identity that have been thoroughly mixed before the drawing;

(b) an approved 50/50 raffle electronic processing system containing a random number generator; and

(c) selection by any other process if:

(i) the process is reasonably assured of being random and is not connected to an event that has its own intrinsic significance (e.g., a sports event, game of chance, contest); and

(ii) the indicator of the raffle ticket purchaser's identity reasonably assures the random selection of a winner.

(3) Any raffle conducted by a nonprofit organization, college, university, public school district as provided in 20-6-101 and 20-6-701, MCA, or nonpublic school as described in 20-5-102(2)(e), MCA, must be publicly identified as a charitable raffle.

(4) Prior to conducting a raffle on the internet, a nonprofit organization must first complete a one-time registration form (Form 46) supplied by the department.

(5) A raffle sponsor's challenge to the department's intended action to refuse registration as a nonprofit must proceed under ARM 23.16.203.

(6) For each raffle conducted, the entity conducting the raffle shall maintain for a period of 12 months from the date of the raffle drawing, and provide to the department upon request:

(a) a record of the total proceeds collected;

(b) a detailed description of the prize(s) awarded;

(c) a description of the selection process used to determine the winner(s);

(d) a record reflecting the source of the prize(s), including any money paid to purchase prizes;

(e) a record of any administrative costs paid with raffle proceeds;

(f) a description of how the raffle was publically identified as a charitable raffle, where applicable;

(g) the name and address of the person(s) awarded raffle prize(s); and

(h) a detailed record of the distribution of the charitable raffle proceeds, where applicable.

(7) For any violation of this rule, the department may pursue remedies available under 23-5-136, MCA.

(a) may be conducted for an entry fee not to exceed 50 cents each day;

(b) may not accumulate entry fees and offer prize amounts exceeding $500; and

(c) may continue for a period not to exceed 30 days.

(2) Daily pot raffles for which the prize is an accumulation of entry fees may only be sponsored by religious or nonprofit organizations.

(3) In the case of for profit sponsors, the sponsor must own the prize prior to collecting entry fees and the prize may not be an accumulation of entry fees.

(4) Daily pot raffles may draw tickets or indicators each day for a period not to exceed 30 days or until the accumulated entry fees equal $500.

(5) If no winner has been selected after 30 days from the date of the payment of the first entry fee; or the accumulated entry fees equal $500, no further entries may be made and at that time the drawing of tickets or indicators must be continued until a winner is selected.

(6) All requirements for raffles as set out in 23-5-413 , MCA, apply to the conduct of daily pot raffles.

As used throughout this subchapter, the following definitions apply:

(1) "50/50 raffle" means a raffle sponsored by a nonprofit organization in which the winner is awarded a monetary prize calculated by a predetermined percentage of the gross raffle ticket sales proceeds (example: 50% to the player and 50% to the raffle sponsor).

(2) "50/50 raffle electronic processing system" means products and support services supplied to a 50/50 raffle sponsor.

(3) "Nonprofit organization" means a nonprofit organization as defined in 23-5-112, MCA.

(1) Only a nonprofit organization, a college, a university, a public school district, or a nonpublic school may sponsor and offer a 50/50 raffle. 

(2) All 50/50 raffles are subject to the following restrictions:

(a) the sponsor is responsible for compliance with Montana statutes and regulations, including ARM 23.16.2602, as well as all other applicable state and federal statutes and regulations;

(b) credit gambling is prohibited and 50/50 raffle sales may not be made by credit card;

(c) the drawing must occur and the winner must be identified on the date advertised to the public and established in the sponsor's rules; and

(d) proceeds from the raffle must be divided between the winner and the sponsor and may not include a percentage of ticket sales for administrative expenses or other fees payable to any third party.

(3) A nonprofit organization may purchase or contract for a 50/50 raffle electronic processing system subject to these restrictions:

(a) the nonprofit organization must register with the department for exemption from the general internet gambling prohibition as provided in ARM 23.16.2602;

(b) the sponsor may only use an approved 50/50 raffle electronic processing system;

(c) 50/50 raffle tickets may be sold only on the day of the drawing;

and

(d) the department may conduct on-site inspections and tests of the 50/50 raffle electronic processing system to assure proper functioning and compliance.

(1) Before contracting with a nonprofit organization to supply a 50/50 raffle electronic processing system, an associated gambling business must:

(a) be licensed under 23-5-178, MCA, and ARM 23.16.110; and

(b) submit to the department for testing and approval all hardware and software offered to a 50/50 raffle sponsor.

(2) A 50/50 raffle electronic processing system may include:

(a) payment processing software which distinguishes and prohibits credit card transactions;

(b) promotional advertising;

(c) secure raffle sales data compilation, tabulation, transmission, and storage;

(d) secure wired or wireless data transmission;

(e) duplicate raffle ticket or receipt printing;

(f) on-site or off-site computer processing and data storage;

(g) selection of the raffle winner using a secure random number generator; and

(h) related services approved by the department.

(1) Each associated gambling business submitting a 50/50 raffle electronic processing system to the department for testing must deposit the sum of $1,000 to begin testing. This fund is applied toward the department's actual testing cost and is managed as follows:

(a) the department's technical services section will bill at the rate of $130 per hour; and

(b) the department will provide an accounting to the licensee for charges assessed and will refund any overpayment. The department will notify the submitting person of any underpayment and collect that money prior to notice of its intended action.

(2) "Competitor" means an entrant in the underlying event upon which a Calcutta pool is based and who is "purchased" or wagered upon by a participant in the Calcutta pool.

(3) "Participant" means a person who bids/wagers in a Calcutta pool, who "purchases" a competitor in the event underlying the pool, and who stands to win according to the rules of the pool.

(4) "Prize" means anything of value awarded a winner of a Calcutta pool or anything of value awarded a winner of an underlying event from the Calcutta pool based on that event.

(5) "Proceeds" means the amount left in a Calcutta pool after administrative costs and prizes have been paid.

(6) "Purchase" means to earn the right to wager in a Calcutta pool by submitting the highest bid on a particular competitor in the underlying event.

(7) "Underlying event" means an actual game, tournament, or contest with more than two entrants which is wagered upon by the participants in a Calcutta pool. Fictitious or contrived events shall not be considered underlying events for purposes of Calcutta pool wagering.

(a) the event underlying the Calcutta pool;

(b) the number of competitors in the underlying event (actual number or best estimate);

(c) the value of prizes to be awarded (a prize may be a percentage of the total wagers);

(d) any projected costs of administering the pool;

(e) the intended use of the proceeds of the pool;

(f) a copy of the rules of the Calcutta pool which will be publicly posted.

(2) All applications for authorization to conduct Calcutta pools should be received by the department at least ten working days before the start of the auction. The department may process an application received by FAX. An application may not receive approval if received by the department with less than ten working days before the start of the tournament.

(2) Upon completion by the department of its investigation, the department shall notify the organization authorized to conduct the Calcutta pool of any penalties it intends to impose. If the organization then desires a hearing, it must submit a written request to the department within 20 days of the receipt of notice of intended department action.

(3) Upon receipt by the department of a written request for hearing, all subsequent proceedings shall be conducted in accordance with the Montana Administrative Procedure Act and the Attorney General's Model Rules of Procedure.

(2) If the person presumed to be conducting illegal gambling then desires a hearing, he must submit a written request to the department within 20 days of the department's action.

(3) All proceedings in cases of presumed illegal gambling must be conducted pursuant to 23-5-136 and 23-5-137 , MCA, the Montana Administrative Procedure Act, and the Attorney General's Model Rules of Procedure.

(1) "Casino night" means a fundraising event as defined in 23-5-701 , MCA.

(2) "Imitation money" means script, chips, tokens, or similar items that have an assigned value at a casino night that is greater than the value of the currency for which it is exchanged and that has no other value except for that value assigned at the casino night.

(2) In addition to the information required in 23-5-705 , MCA, the application must include:

(a) a list of the games to be conducted during the casino night;

(b) the name and address of the member of the nonprofit organization responsible for managing the casino night;

(c) the intended use of the proceeds from the casino night;

(d) a $25 permit fee;

(e) a copy of the rules to be used to conduct the casino night as provided for in ARM 23.16.3103; and

(f) a copy of the organization's charter, certificate of incorporation as a nonprofit organization issued by the Montana Secretary of State, or other similar evidence of nonprofit status.

(3) A casino night permit may not be issued unless the application is dated and signed by the applicant and contains the information and attachments required in (2).

(4) An application for a casino night permit must be received by the department at least ten working days before the proposed start of the casino night. The department may process an application received by FAX but shall not issue a permit on such an application until the fee is received by the department.

(1) A casino night must be conducted in accordance with Title 23, chapter 5, part 7, MCA, department rules, and the following requirements:

(a) The casino night permit issued by the department must be posted and clearly visible to persons participating in the casino night.

(b) Only those types of gambling activities for which the permit was issued may be conducted during the casino night.

(c) The casino night may be conducted only at the location for which the permit was issued and by the nonprofit organization issued the permit.

(d) Before conducting a casino night, the nonprofit organization shall develop rules governing the type of gambling activities to be conducted during the casino night and the manner in which they are to be conducted. The rules must identify the amount of the entry fee, value assigned to the imitation money and amount distributed to each participant, and the method for awarding prizes.

(e) Imitation money may be issued only during the casino night, and the money may not be redeemed by the permittee after the casino night has ended.

(f) No cash, currency, or other form of consideration may be used during the casino night except for imitation money as provided for in the casino night house rules.

(g) Cash or merchandise may be awarded as prizes. The value of the merchandise is not restricted to the prize limitations provided for in 23-5-312, 23-5-412, or 23-5-413, MCA.

(h) A prize may not be awarded in connection with the casino night to a person who was not present at the event and personally made the wager or personally obtained the ticket or chance resulting in the award payment.

(i) A person under age 18 may not assist in operating or managing a casino night or participate as a player in any casino night activity, except for a raffle.

(j) No card game tournament may be part of a casino night.

(k) The organization issued the permit and the person identified as the manager of the casino night is responsible for ensuring compliance with Title 23, chapter 5, part 7, MCA, and department rules.

(2) The report must contain the following information:

(a) total receipts collected from the casino night;

(b) total administrative expenses;

(c) total value of prizes awarded;

(d) total amount used for a civic, charitable, or educational purpose; and

(e) a description of the civic, charitable, or educational purpose for which the proceeds were used, including the name of any entity receiving proceeds.

(1) "Administrative fee" means an amount that may be charged a member for payment of expenses directly related to the operation of a fantasy sports league. An administrative fee may not exceed 15% of a member's entrance fee.

(2) "Entrance fee" means the amount charged a member, excluding any administrative fee, for membership in a fantasy sports league.

(3) "Fantasy sports league" means a gambling activity as defined in 23-5-801 , MCA.

(4) "Member" means a person or group of persons who own a fictitious team that is a competitor in a fantasy sports league.

(5) "Prize" means anything of value awarded to a winner of a fantasy sports league.

(6) "Transaction fee" means an amount charged a member for trading or purchasing a player after the initial teams in the fantasy sports league are selected. The fee for each transaction may not exceed the entrance fee.

(2) The rules must include:

(a) name, address, and telephone number of the person or organization conducting the league;

(b) amount charged for entrance, administrative, and transaction fees;

(c) name of the professional sport and teams on which the league is based;

(d) length of the season that the league is to operate;

(e) size of a member's team roster;

(f) method used to select players;

(g) method for awarding points to a team based on the performance of individual players, teams, or both during a designated period; and

(h) anticipated prizes to be awarded.

(2) If a prize is merchandise, the purchase price paid for the merchandise is considered the value of the prize.

(a) name and address of each individual who participated as a member in the league;

(b) total amount collected for each of the following fees:

(i) entrance;

(ii) administrative; and

(iii) transaction.

(c) number of interim trades or purchases made by each member;

(d) proof of the purchase price of any merchandise prize awarded; and

(e) a list of the prizes awarded at the conclusion of the league season, including:

(i) the amount of each prize;

(ii) name of the member awarded each prize; and

(iii) total value of the payout of the fantasy league.

(2) Records required under this rule must be presented to the department upon request.

(2) Players for initial teams must be selected through a random drawing or competitive bidding process.

(3) An entrance fee and any administrative fee must be paid in cash at the time a member joins the league. A transaction fee must be paid in cash at the time the trade or purchase of an interim player is made.

(4) The total value of prizes awarded to all members must equal the total amount collected for entrance, administrative, and transaction fees, minus any payment for administrative expenses.

(1) The department may approve devices, machines, instruments, apparatuses, contrivances, schemes, activities, or enterprises used in, or associated with, promotional games of chance authorized by Title 23, chapter 5, MCA. Any promotional game of chance offered or displayed in public without conforming to the requirements of this rule is prohibited.  

(2) A bona fide promotional game of chance utilizes or involves any scheme, device, or enterprise, by whatever name known, for the disposal or distribution of property among persons who have not paid or are not expected to pay any valuable consideration or who have not purchased or are not expected to purchase any goods or services for a chance to obtain the property, a portion of it, or a share in it, and which is not manufactured or intended for purposes of gambling.

(a) As used in this rule, valuable consideration means a payment or promise of payment of anything of value, a token, object or article exchangeable for money or property, credit or promise directly or indirectly or contemplating transfer of money or property or interest therein, deposits or any other thing of pecuniary value as a condition of entering a promotional game of chance, or winning a prize from the game. Valuable consideration does not mean, for example, registering to participate or to qualify to participate in the promotional game of chance without purchasing goods or services; personally attending places or events without payment of an admission price or fee; or purchasing postage for purposes of mailing.

(b) Payouts for bona fide promotional games of chance, offered by a gambling licensee and/or an on-premises consumption alcoholic beverage licensee, are subject to the maximum payout limitation for any single element of the authorized gambling enterprise simulated. Payouts for bona fide promotional games of chance offered by any person or entity that are not a gambling or alcoholic beverage licensee, are not limited by the payout limits for the authorized gambling enterprise simulated.

(3) Any devices, machines, instruments, apparatuses, contrivances, schemes, activities or enterprises that simulate the following games, variations of the following games, or in any manner incorporate aspects of the following games are prohibited and shall not be approved by the department:

(a) banking card games, such as blackjack, twenty-one, jacks or better, baccarat, or chemin de fer;

(b) dice games, known as craps, hazard, or chuck-a-luck;

(c) sports betting other than horse racing, sports pools as authorized by law, or as provided in (9); or

(d) table games, such as roulette or faro.

(4) Except as provided in (9) and (11) of this rule, all schemes, activities or enterprises that are not prohibited by (3) of this rule and that are used in bona fide promotional games of chance do not require approval by the department before such activities or enterprises are played, displayed, operated, or conducted in public so long as the game is conducted in compliance with these rules.

(5) All schemes, activities or enterprises shall be conducted in a manner that does not allow the winner to be unfairly predetermined or the game to be manipulated or rigged. The person or business conducting the promotion shall not arbitrarily remove, disqualify, disallow or reject any entry or fail to award prizes offered or print, publish or circulate literature or advertising material used in connection with such promotional game of chance that is false, deceptive or misleading.

(6) Gambling operators conducting promotional schemes, commonly called by such names as "coupon(s)" or "5 for 5", "5 for 10", or "10 for 5", in which an establishment pays for video gambling machine play to customers who purchase additional play on the machine shall post a clearly readable sign on a wall in the operator's establishment in full view of patrons playing video gambling machines. The sign shall include the following language:

This establishment requests that if you accept one of our promotions or promotional coupons for video gambling machine play that you play the machine for [time limit established by location] minutes.

Any customer or patron of this establishment may print a valid ticket voucher and cash-out any valid ticket voucher at any time during machine play. Mont. Code Ann. ; 23-5-608 .

If a customer or patron of this establishment chooses to cash-out their free or credit play in less than [time limit established by location] minutes, the establishment will cash-out their valid ticket voucher in full but reserves the right to refuse this promotional offer for future play.

(a) An operator who does not suggest, impose, recommend, or state a time limit is exempt from the foregoing sign requirement.

(7) All devices, machines, instruments, apparatuses, or contrivances not prohibited by (3) of this rule and which are used in bona fide promotional games of chance as provided in statute shall be approved by the department before such device is played or displayed in public. Persons submitting such proposed devices, machines, instruments, apparatuses, or contrivances for approval shall comply with the following:

(a) The applicant must submit a promotional device application to the department that shall include:

(i) a complete physical description, the printed circuit board schematics, and the wiring diagrams of the proposed device;

(ii) a complete description of the method of operation of the device and promotional scheme, activity, or enterprise in which the device is intended to be used;

(iii) marketing, promotion, or sale literature denoting that the new proposed device is for promotional purposes only; and

(iv) proof by a preponderance of the evidence that the proposed device was manufactured for purposes other than gambling. In determining whether a device meets the requirements of this rule, the department may review such factors as initial and resulting design of the device, its prior and intended use, the device's inability to accumulate credits, and the source of the device and component parts. The proposed device shall not be manufactured from already existing or modified gambling devices.

(b) Concurrent with the submission of the application pursuant to (7)(a), the applicant shall submit a prototype of the proposed device to the department for final physical inspection;

(c) The individual or entity submitting the game for review shall be responsible for transportation of the proposed device to and from the department's offices;

(d) The proposed device shall not be manufactured with an input mechanism or related components. For purposes of this rule only, an input mechanism is defined as an electrical, mechanical or electro-mechanical device, instrument, apparatus, contrivance, or part used or intended for use with money, token, credit, deposit, check, or any other thing of monetary value that by activation puts the device into the play mode. Examples of devices used as input mechanisms are: coin or token acceptors, bill acceptors, magnetic card readers, buttons or switches (local, wire remote, radio remote, etc.). Examples of related components include coin or token head, coin or token chute, and coin or token return;

(e) The proposed device must free play. For purposes of this rule only, free play means one game after another can be played without any intervention by player or operator;

(f) The proposed device shall be labeled "No Purchase Required" which is printed in a clearly legible typeface and which is displayed in a prominent manner that is immediately obvious to the casual observer.

(g) The manufacturer shall attach to the proposed device a manufacturer identification tag that includes the manufacturer name, the date the proposed device was manufactured, and a unique serial and model number;

(h) Thirty days from or after the date the department renders final approval of the proposed device, the applicant shall submit to the department 25 color photographic prints (5" x 7") of the front view of the authorized proposed device.

(8) No department approval is required for ticket or card devices described under 23-5-112, MCA, and promotional wheel devices as defined herein, so long as such devices are bona fide promotional games of chance; and the ticket or card devices described under 23-5-112, MCA, comply with (7)(f) of this rule; and promotional wheel devices comply with (7)(e), (f), and (g) of this rule. For the purposes of this rule, a promotional wheel device is defined as one or more vertically constructed circular frames or disks, displaying various symbols, such as numbers or pre-identified sectors, that is freely spun for the random selection of a symbol as determined by a permanently stationary mark for selecting the particular symbol when the wheel stops spinning.

(9) The department may, on a case-by-case basis, approve schemes, activities or enterprises that simulate the sport guessing game defined under this subsection as "pick-the-winners." "Pick-the-winners" is a bona fide promotional game of chance where participants choose one team to win a sports event from a predesignated number of sports events during a particular week, and where the participant who chooses the most winning teams wins a predesignated prize. In the event of a tie, there must be one additional tie-breaker contest for the participants to pick the winning team and guess the score of the contest. The tied participant who picks the winning team and whose guess is closest to the final score of the tie breaker contest shall be declared the winner. "Pick-the-winners" games using any form of written advertisements, promotional or informational material, or entry or application forms shall comply with (7)(f) of this rule. For purposes of this subsection, a "predesignated prize" shall not exceed the value of $100 and shall be either cash or tangible merchandise. "Pick-the-winners" games shall be conducted in compliance with these rules. 

(10) Upon completion by the department of its investigation of a proposed device, activity, or enterprise for use in a promotional game of chance, the department shall notify the person submitting the device or enterprise in writing of the department's decision. If the person then desires a hearing, he or she must submit a written request to the department within 20 days. From that point forward, all proceedings shall be conducted in accordance with the Montana Administrative Procedure Act and the Attorney General's Model Rules of Procedure.

(11) Nothing in this rule is intended to approve or authorize promotional games of chance conducted via wire, satellite or telephone communication or similar remote electronic forum. Approval from the department is required for all such proposed activities.

(12) For any violation of this rule, the department may:

(a) act by means of temporary cease and desist orders under 23-5-136(1)(a), MCA; or

(b) impose civil penalties under 23-5-136(1)(b), MCA.

(2) A "financial incentive," means any inducement involving the payment of money, any reduction in price paid for goods or services, or any award of credit.

(1) Carnival games that are intended to be operated at a fair or carnival may be submitted to the department for analysis with the purpose of determining if the games meet the requirements of 23-6-102, MCA. No games shall be authorized unless specifically approved by the department following a review of the game and how it is played. The department may authorize a game not listed in 23-6-104, MCA, if, after careful review, it can be demonstrated that winning is not contingent upon lot or chance and is based upon the skill of the player as defined under 23-6-104(2)(h)(xiv), MCA. No device, machine, instrument, apparatus, contrivance, scheme, or system which meets the definition of gambling as in 23-5-112, MCA, shall be approved.

(2) The actual game must be submitted, not a facsimile or description of the game. The following information must be included with each game submitted:

(a) the name of the person or entity submitting the game, with address and telephone number;

(b) instructions for operation of the game and rules by which the game is played;

(c) all technical manuals, schematics, printed wire assembly and hardware block diagrams, microprocessor manuals, source listings, flow charts, programmer's comments (if applicable); and

(d) any pertinent information the department may deem necessary to complete the review.

(3) A fee shall be collected to offset the department's costs associated with the review, and shall be based on staff time expended to complete the review and shall be charged on an hourly basis. The fee shall be the responsibility of the individual or entity submitting the game. No approval shall be considered final until the fees have been paid.

(4) The individual or entity submitting the game for review shall be responsible for transportation of the game to and from the department's offices.

(5) The department shall have 30 days after submission of the game to complete the review. Final approval shall be given only after payment of fees.