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Montana Administrative Register Notice 23-16-210 No. 14   07/30/2009    
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BEFORE THE DEPARTMENT OF JUSTICE

OF THE STATE OF MONTANA 

           

In the matter of the adoption of NEW RULE I concerning associated gambling business license, NEW RULE II concerning approval of variations of standard bingo cards, and the amendment of ARM 23.16.202, 23.16.401, 23.16.1245, 23.16.1716, 23.16.1914, 23.16.1915, 23.16.1916, 23.16.1916A, 23.16.2001, and 23.16.2602, concerning credit play, card dealer licenses, card room contractors license requirements, sports tab game seller license, distributor licenses, route operator licenses, manufacturer licenses, accounting system vendor licenses, manufacturer of illegal gambling devices license, and raffle record keeping requirements

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NOTICE OF ADOPTION AND AMENDMENT

 
 

            TO:  All Concerned Persons

 

            1.  On June 11, 2009, the Department of Justice published MAR Notice No. 23-16-210, regarding the public hearing on the proposed adoption and amendment of the above-stated rules at page 912, 2009 Montana Administrative Register, Issue Number 11.

 

            2.  The Department of Justice has adopted New Rule II (23.16.2404) as proposed, and amended ARM 23.16.401, 23.16.1245, 23.16.1716, 23.16.1914, 23.16.1915, 23.16.1916, 23.16.1916A, 23.16.2001, and 23.16.2602 exactly as proposed.

 

            3.  The Department of Justice adopts the remaining rule with the following changes, stricken matter interlined, new matter underlined:

 

            NEW RULE I (23.16.110)  ASSOCIATED GAMBLING BUSINESS LICENSE 

            (1) through (4) remain as proposed.

            (5)  The provisions of this rule do not apply to attorneys or accountants who are retained by licensees in their professional capacity and may have access to gambling related trade secrets, or proprietary, confidential, or tax information 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.

 

            4.  The Department of Justice amends ARM 23.16.202 with the following changes, stricken matter interlined, new matter underlined:

 

            23.16.202  CREDIT PLAY PROHIBITED  (1) through (4) remain as proposed.

(5)  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.

(6) remains as proposed.

 

5.  A public hearing was held on July 2, 2009.  Written and oral comments were received from Neil Peterson, executive director, Gaming Industry Association of Montana, Inc. (GIA), relating to the proposed New Rule I, and amendment to 23.16.202 relating to credit gambling.  Oral testimony was also received from Ronda Wiggers for the Montana Coin Machine Operators Association (MCMOA).  A summary of those comments appear with the Department of Justice's responses. 

 

Comment 1:  Mr. Peterson commented that the proposed New Rule I, while it excludes accountants and attorneys, is not adequately narrow to exclude other professionals such as marketing firms and information service providers, as the GIA believes those businesses were not intended to constitute "associated gambling businesses."  Mr. Peterson suggested expanding the list of professionals not subject to associated business licensure, and providing a separate section that excludes from licensure people who repair video gambling machines.  Ms. Wiggers stated that the MCMOA concurred in these comments. 

 

Response 1:  The proposed rule amendments were drafted to conform the rules to the legislative mandate of SB 86.  The new legislation defines associated gambling businesses and authorizes the department to adopt rules for licensure. 

The department's proposed rule envisions two ways that a license may be issued under the provisions of the associated gambling business license statute and the proposed rule:  1) a voluntary license where a business fits the definition of an associated gambling business and requests a license, such as a video gambling machine recycler; and 2) a mandatory license where the department in consultation with industry identifies a business/function that should be licensed, such as the VGM account system manufacturers.  Where the license will be mandatory, the department will adopt a separate rule.  No business will be required to obtain a license except where required by separate rule.  The department believes it would be unproductive and counter to this licensing scheme to attempt to identify all of the specific businesses/professions/functions that are not required to obtain licensure.  The department agrees clarification is warranted, and will amend (5) of the proposed rule to clarify that any requirement for an associated business license will be provided for under a separate rule.

In response to the GIA comment about those who repair video gambling machines, the department believes it is unnecessary and counter to the proposed licensing scheme.  Only licensed manufacturers and distributors can sell VGMs and associated gambling equipment, as defined by 23-5-602, MCA to licensed operators, route operators, distributors, or manufacturers.  To date, the department has not required licensure from those who provide VGM repair services as long as they did not buy or sell VGMs or associated gambling equipment.  As reflected by the amendment, the department will be required to propose and adopt a new rule before it will require licensure for people or businesses providing VGM repair services.

 

Comment 2:  Written and oral comments from Neil Peterson, GIA, addressed the proposed amendment to the rules relating to credit cards and credit gambling under 23.16.202.  Mr. Peterson said the GIA strongly supports the statutory changes under SB 86, and the proposed rule amendments.  Mr. Peterson noted a provision of the proposed rule amendment may conflict with 30-14-108(4), MCA, which requires the issuer or seller of gift certificates to redeem certificates for cash upon request when the original value of the certificate exceeded $5 and the remaining value is less than $5.  The MCMOA concurs in this comment.

 

Response 2:  The department agrees with the comments and amends (5) to provide it shall not conflict with the provisions of 30-14-108(4), MCA.

 

Comment 3:  Ronda Wiggers for the MCMOA stated that she understood the proposed rule amendment does not prohibit the purchase of restaurant gift cards with a credit card, and she requested confirmation of that understanding.  Ms. Wiggers stated that many of the Coin Ops' clients sell restaurant gift cards, and they wanted assurances they will still be able to sell the gift cards to customers who wish to make the purchase with a credit card. 

 

Response 3:  The department confirms that the rule still allows restaurants to sell gift cards and accept credit cards for their purchase.  Except as limited by 30-14-108(4), MCA, the rule as amended prohibits businesses from redeeming gift cards to provide cash for gambling.

           

By:  /s/ Steve Bullock                          /s/ J. Stuart Segrest            

        STEVE BULLOCK                      J. STUART SEGREST

        Attorney General                        Rule Reviewer

        Department of Justice

 

Certified to the Secretary of State July 20, 2009.

 

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