CHAPTER 7 GAMING 3 GAR - BUSINESS REGULATIONS CH. 7 - GAMING

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1 CHAPTER 7 GAMING SOURCE: The original publication was made on February 15, NOTE: Rule-making authority for the formulation of gaming control rules and regulations by the Department of Revenue and Taxation is found in Public Law 26-52:4 (Oct. 17, 2001), which states: Notwithstanding any other provision of law, the Cockpit License Board, together with the Department of Revenue and Taxation, is hereby authorized to promulgate necessary rules and regulations to create a comprehensive regulatory scheme to regulate all gaming activities on Guam; provided, that the rules and regulations shall restrict gaming activities to those authorized and licensed on Guam as of August 1, Pursuant to this authority, the Department of Revenue and Taxation filed the gaming control regulations with the Legislative Secretary on January 3, 2003, consisting of rules and regulations now found in Articles 1 to 5 herein. See 5 GCA 9100 et seq. (Guam s Administrative Adjudication Law). This submission from the Department of Revenue and Taxation stated the following: Upon codification of these regulations, Chapter 5 of Title 11 of the Guam Code Annotated will be repealed and re-enacted, to be replaced by these regulations [.] And, Chapter 39 of Title 22 Guam Code Annotated is hereby repealed in its entirety and re-enacted under Chapter 5 of Title 11 Guam Code Annotated [.] However, section 4 of Public Law did not authorize the Department of Revenue and Taxation to repeal and reenact existing Guam law. Section 4 of Public Law authorized the Department of Revenue and Taxation only to promulgate necessary rules and regulations to create a comprehensive regulatory scheme to regulate all gaming activities on Guam. Public Law 26-52:4 (Oct. 17, 2001). The gaming control regulations are not codified in the Guam Code Annotated, but placed in this chapter. Article 1. Gaming Control Act. Article 2. Dog Racing - Pari-Mutuel. [Repealed] Article 3. Non-Profit Bingo Article 4. Cockfighting Article 5. Miscellaneous 1

2 ARTICLE 1 GAMING CONTROL ACT SOURCE: Article 1 was formerly entitled General Racing Operations Rules and Regulations for dog racing, and were filed with the Legislative Secretary on April 29, This article now contains rules and regulations governing gaming, which were filed with the Legislative Secretary on January 3, 2003 pursuant to Public Law 26-52: Name of Act Definitions Limited Gaming-Authorization-Regulation Function of Director Gaming Control Division - Creation Function of Division Chief of Gaming Control division - Qualification - Powers and Duties Investigators - Peace Officers Gaming Control Division - Access to Records Gaming Control Commission - Creation Commission - Powers and Duties Hearing Officer Conflict of Interest Limited Gaming Activities - Authorized and Unauthorized Licenses - Types Events Sponsored by Non-Profit Organizations Terms of Sponsorship Key Employee- Determination of Status Licenses - Revocable - Nontransferable Operator, Key Employee, Support Licensee, or Retailer - Qualification for Licensure Considerations for Licensure Temporary or Conditional Licenses Delegation of Authority to Issue Certain Licenses Licensed Premises - Retail Floor Plan License - Disqualification - Criteria Applicants and Licensees - Providing Information Application - Fee- Waiver of Confidentiality Supplier of Licensee - Licensure Requirements. 2

3 7129. Application - Authorization for Background Investigations License - Grounds for Approval or Denial Licensed Premises - Safety Conditions - Fire and Electrical Buildings - Accessible to Persons with Disabilities Waiver from Liability - Government of Guam - Disclosures or Publications Renewal of Licenses Denial of Application Appeal of Final Action of Commission Executive and Closed Meetings Communications - Privileged and Confidential Summary Suspension Suspension or Revocation of License - Grounds - Penalties Commission Hearings - Testimony Records - Confidentiality - Exceptions Chief and Director have Access to Files and Records Licensees - Duty to Maintain Records Limited Gaming Tax Violations of Taxation Provisions - Penalties Returns and Reports - Failure to File - Penalties Limited Gaming Fund Audits and Annual Reports Enforcement Attorney General - Duties Persons Prohibited from Interest in Limited Gaming Responsibilities of Operator Gaming Devices - Security and Audit Specifications Restriction upon Persons having Financial Interest in Retail Licenses Age of Participants - Violation as Misdemeanor Key Employee - Support License Extension of Credit Prohibited Failure to Pay Winners Persons in Supervisory Positions - Unlawful Acts Limited Gaming - Limited Hours Cheating Fraudulent Acts Unlawful Manufacture, Sale, Distribution, Marking, Altering, or Modification of Equipment and Devices 3

4 Associated with Limited Gaming - Unlawful Instruction Detention and Questioning of Person Suspected of Violating Act - Limitations on Liability - Posting of Notice Failure to Display Operator and Premises Licenses Authority, Duties, and Powers - Department of Revenue and Taxation and the Guam Police Department Untitled. This Act shall be known as the Gaming Control Act Definitions. (a) Applicant means any person who has applied for a limited gaming license for permission to engage in any limited gaming activities regulated under the provisions of this Act. (b) Bingo or game means a specific game of chance, commonly known as bingo or lotto, in which a right to participate is sold to a player and prizes are awarded on the basis of designated numbers or symbols conforming to randomly selected numbers or symbols. (c) Bingo equipment means equipment used, made, or sold for use in facilitating the operation of a bingo game. It includes, but is not limited to, tables, chairs, counters, bars, floors, markers, and public address systems used at any time in the operation of a bingo game regardless whether the equipment is also used for other purposes. The term includes: (1) Machine or other device from which balls or other items are withdrawn to determine the letters and numbers or other symbols to be called; (2) An electronic or mechanical card-minding device; (3) A pull-tab dispenser; (4) A bingo card; and (5) Any other device commonly used in the direct operation of a bingo game. (d) Bingo occasion means all activities incident to the conduct of a series of bingo games by a licensed authorized organization. (e) Bingo Proceeds and receipts from any bingo operation 4

5 means the total receipts from the operation of any bingo game or games by any bingo licensee. (f) Chairman means the chairman of the Gaming Control Commission. (g) Chief means the chief of the Gaming Control Division. (h) Commission means the Gaming Control Commission. (i) Department means the Department of Revenue and Taxation. (j) Director means the Director of the Department of Revenue and Taxation (k) Division means the Gaming Control Division. (l) Expenses means ordinary, necessary and reasonable costs incurred in preparation, or in the conduct of a bingo or other limited gaming activities. (m) Fund means the Limited Gaming Fund. (n) Gaming device means any equipment or mechanical, electromechanical or electronic contrivance, component or machine used remotely or directly in connection with gaming or any game which affects the result of a wager by determining win or loss. The term includes: (1) A slot machine. (2) A collection of two or more of the following components: (A) An assembled electronic circuit which cannot be reasonably demonstrated to have any use other than in a slot machine; (B) A cabinet with electrical wiring and provisions for mounting a coin, token or currency acceptor and provisions for mounting a dispenser of coins, tokens or anything of value; (C) A storage medium containing the source language or executable code of a computer program that cannot be reasonably demonstrated to have any use other than in a slot 5

6 machine; (D) An assembled video display unit; (E) An assembled mechanical or electromechanical display unit intended for use in gambling; or (F) An assembled mechanical or electromechanical unit which cannot be demonstrated to have any use other than in a slot machine; (3) Any mechanical, electrical or other device which may be connected to or used with a slot machine to alter the normal criteria of random selection or affect the outcome of a game. (4) A system for the accounting or management of any game in which the result of the wager is determined electronically by using any combination of hardware or software for computers. (5) Any combination of one of the components set forth in paragraphs (A) to (F), inclusive, of subsection (2) and any other component that the Commission determines, by regulation, to be a machine used directly or remotely in connection with gaming or any game which affects the results of a wager by determining a win or loss. (o) Gaming employee means any person employed by an operator or retailer hosting limited gaming to work directly with the limited gaming portion of such operator s or retailer s business, which person shall be twenty-one (21) years of age or older and hold a limited gaming support license. Persons deemed to be limited gaming employees shall include, but shall not be limited to, the following: any person involved in the handling, counting, collecting, or exchanging of money, property, checks, credit or any representative of value, including any coin, token, chip, cash premium, merchandise, redeemable game credits, or any other thing of value or payoff from any limited gaming activity, or any gaming device used in limited gaming; and such other persons as the commission shall by rule or regulation determine who are participating in limited gaming activities. (p) Gaming license means a license that authorizes any person, corporation or entity to engage in gaming and to repair, transport, manufacture, sell, purchase, operate and use all gaming equipment or 6

7 gaming devices and to engage in all remote, satellite, and on- line gaming activities and other off-site betting activities and to engage in a lottery or lottery games. (q) Gross receipts means the total revenue from any gaming activities less payments for any winnings paid to generate said revenue. (r) Immediate family means a person related by marriage or cohabitation in lieu of marriage and any and all children resulting from such marriage or cohabitation. (s) Key employee means any executive, employee, or agent of a limited gaming licensee having the power to exercise a significant influence over decisions concerning any part of the operation of a limited gaming licensee. (t) Lease and rental means the leasing or renting of equipment or premises used to conduct limited gaming and the possession or use thereof by the lessee or rentee for a consideration, without transfer of the title of such equipment to the lessee. (u) Licensed gaming establishment means any premises authorized herein for the conduct of gaming. (v) Licensed premises means that portion of any premises authorized herein for the conduct of gaming. (w) Licensee means any person licensed under this Act to conduct limited gaming activities. (x) Licensing authority means the Gaming Control Commission. (y) Limited Gaming means land based bingo, cockfighting, dog racing, land based lottery, carnival or liberation day gaming, and operation and use of land based electronic gaming devices as authorized herein. All equipment or paraphernalia used, or intended to be used, in limited gaming or any limited gaming activities shall be limited gaming equipment or limited gaming devices. (z) Lottery, lottery game, or lottery games means any game of chance approved by the Commission, or as otherwise authorized herein, and operated pursuant to this Act, including, but not limited to 7

8 instant tickets, on-line games, and games using mechanical or electronic devices but excluding pari-mutuel betting and casino gambling. (aa) Net proceeds means the gross amount collected from participants less the actual costs or expenses to generate said revenue and less depreciation expenses incurred. (bb) Non-profit Organization means: (1) A non-profit organization domiciled in Guam that is tax exempt as determined by the Department of Revenue and Taxation, organized to perform and engage primarily in performing charitable, benevolent, patriotic, employment-related, or educational functions that meet the other requirements of this Act. (2) A religious organization that has existed in Guam for at least two (2) years. (3) Any senior citizen recreational center that is defined as an organization by the Mayors Council of Guam whose members are fifty-five (55) years or older, the sole function of which is to provide amusement and diversion for its members. (cc) Operator means any person or other entity who places limited gaming equipment or limited gaming devices or bingo equipment upon another person s business premises or any person who, individually or jointly, pursuant to an agreement whereby consideration is paid for the right to place limited gaming devices or bingo equipment on another s business premises, engages in the business of placing and operating limited gaming devices or bingo equipment upon another person s business establishment. (dd) Past-posting means making a bet after the event has begun. (ee) Pinching bets means the removal of chips or money just before the dealer seizes losing bets. (ff) Pressing bets means the player lets winnings ride by wagering them along with the original bet. (gg) Recreational bingo session means a bingo session operated by any person or entity at no charge to participants in which the prizes for each bingo game during the bingo session shall be non-cash 8

9 prizes and the total of such prizes for each game shall not exceed twenty dollars ($20.00) as established pursuant to regulations established by the Commission. No such non-cash prizes awarded in recreational bingo shall be exchanged or redeemed for money; or for any other prize with a value in excess of the amount established pursuant to regulations established by the Commission. (hh) Retailer means any limited gaming licensee who maintains limited gaming equipment or conducts limited gaming activities at his place of business. (ii) Spouse means a person related by marriage or cohabitating in lieu of marriage Limited Gaming-Authorization-Regulation. Limited gaming as defined in Section 7102(y) is hereby authorized and may be operated and maintained and conducted subject to the provisions of the Gaming Control Act. All limited gaming, as said term is defined in Section 7102(y), shall be regulated by the Commission Function of Director. (a) The Director shall exercise all powers specified under this Act and shall enter into agreements with any department, agency, or unit of the Government of Guam to secure services which he/she deems necessary and to provide for the payment for such services. (b) The Director shall employ and compensate a legal counsel, technical consultants and assistants as are needed, or may be required, and, as otherwise permitted by law, to conduct activities in relation to regulating limited gaming activities in Guam Gaming Control Division - Creation. There is hereby created, within the Department of Revenue and Taxation, the Gaming Control Division, the head of which shall be the Chief of the Gaming Control Division. The Chief shall be appointed and subject to removal by, the Director with the approval of the Commission. The Division and the Commission created in Section 7110, shall exercise their respective powers and perform their respective duties and functions as specified in this Act under the Department as if 9

10 the same were transferred to the Department; except that the Commission shall have full and exclusive authority to promulgate rules and regulations related to limited gaming without any approval by, or delegation of authority from the Department as said authority to promulgate rules and regulations is defined in this Act Function of Division. The function of the Division, in conjunction and in cooperation with the Commission whose duties are specified herein, is to issue approved licenses, to implement approved rules and regulations, and supervise the conduct of limited gaming in Guam as limited gaming is defined in this Chapter in Section 7102(y) and as otherwise directed by the Commission Chief of Gaming Control Division - Qualification-Powers and Duties. (a) The Chief shall: (1) Be qualified by training and experience to direct the work of the Division; (2) Be of good character and shall not have been convicted of any felony or gambling-related offense; (3) Not be engaged in any other profession or occupation that could appear to be or which does present a conflict of interest to his/her duties as Chief; and, (4) Direct and supervise the administrative and technical activities of the Division. (b) In addition to the duties imposed upon the Chief elsewhere herein, the Chief shall: (1) Supervise and administer the operation of the Division and limited gaming in accordance with the provisions of this Act and the rules and regulations of the Commission; (2) Attend meetings of the Commission or to appoint a designee to attend on his/her behalf; (3) Direct such personnel as may be necessary to carry out the purposes of this Act, but no person shall be employed with 10

11 the Division who has been convicted of a felony or any gambling-related offense; (4) Confer with the Commission as necessary or desirable, but not less than once each month, with regard to the operation of the Division; (5) Make available for inspection by the Commission or any member of the Commission, upon request, all books, records, files, and other information and documents in the Chiefs office; (6) Advise and recommend to the Commission such rules and regulations and such other procedures as the Chief deems necessary and advisable to improve the operation of the Division and the conduct of limited gaming activities in Guam; (7) With the concurrence of the Commission or pursuant to Commission requirements and procedures, to enter into contracts for materials, equipment, and supplies to be used in the operation of the Division; (8) Make a continuous study and investigation of the operation and the administration of similar laws in relation to limited gaming activities which may be in effect in the United States or other countries; of any literature on limited gaming which, from time to time, may be published or available; and, of any federal laws which may affect the operation of the Division; (9) Furnish to the Director and the Commission a monthly report that contains a full and complete statement of the Division s revenue and expenses for each month. All reports required by this paragraph shall be public, and copies of all such reports shall be sent to the Governor of Guam, the Speaker of I Liheslaturan Guåhan, and the Public Auditor; (10) Annually prepare and submit to the Director and the Commission, for their approval, a proposed budget for the succeeding fiscal year, which budget shall set forth a complete financial plan for all proposed expenditures and anticipated revenues of the Division; (11) Take such action as may be determined by the Commission to be necessary to protect the security and integrity 11

12 of limited gaming activities in Guam; and, (12) Perform any other lawful acts that the Commission may consider necessary or desirable in order to carry out the purposes and provisions of this Act in relation to implementing and enforcing the Commission s authority and jurisdiction over limited gaming activities in Guam Investigators - Peace Officers. (a) All investigators of the Division, and their supervisors, including the Chief, shall have all the powers of any peace officer to: (1) Make arrests, with or without warrant, for any violation of the provisions of this Act in relation to limited gaming activities or the rules and regulations promulgated pursuant to this Act, any other laws or regulations pertaining to the conducting of limited gaming in Guam, or any criminal law of Guam, if, during an officer s exercise of powers or performance of duties under this Act, probable cause is established that a violation of any said law or rule or regulation has occurred; (2) Inspect, examine, investigate, hold, or impound any premises where limited gaming is conducted, any devices or equipment designed for or used in limited gaming, an1any books and records in any way connected with any limited gaming activity; (3) Require any person licensed by the Commission, upon demand, to permit an inspection of such person s licensed premises, gaming equipment and devices, or books or records; and to permit the testing and the seizure for testing or examination purposes of all such devices, equipment, and books and records; (4) Serve all warrants, notices, summonses, or other processes relating to the enforcement of laws regulating limited gaming; (5) Serve distraint warrants issued by the Division pertaining to limited gaming; (6) Conduct investigations into the character, record, and reputation of all applicants for limited gaming licenses, all limited gaming licensees, and such other persons as the Commission may determine pertaining to limited gaming; and, 12

13 (7) Investigate violations of all the laws pertaining to limited gaming and limited gaming activities. (b) Criminal violations of this Act discovered during an authorized investigation or is covered by the Commission shall be referred to the Attorney General of Guam. (c) The investigators of the Division and their supervisors, including the Chief, shall be considered peace officers as defined in 8 GCA (d) Nothing in this section shall be construed to prohibit the Guam Police Department from enforcing the provisions of this Act, and the rules and regulations promulgated pursuant to this Act, or from performing their other duties to the full extent permitted by law. All such police officers and the Attorney General of Guam shall have all the powers set forth in subsection (a) of this section. (e) The abuse of authority by any investigator of the Division shall be a third degree felony and punishable as such Gaming Control Division - Access to Records. The Division, for purposes of this Act, shall have full authority to procure, at the expense of the Division, any records furnished to or maintained by any law enforcement agency in the United States for the purpose of carrying out its responsibilities pursuant to this Act. Upon request from the Attorney General of Guam, the Division shall provide copies of any and all information obtained pursuant to this Act Gaming Control Commission - Creation. (a) Notwithstanding any other provision of law, there is hereby created, within the Department of Revenue and Taxation, the Gaming Control Commission. The Commission shall consist of the Director (ex officio) who shall have no vote, and five (5) members, all of whom shall be citizens of the United States and voting residents of Guam for at least five (5) consecutive years. The members shall be appointed by the Governor, with the consent and approval of I Liheslaturan Guåhan. No member shall have been convicted of a felony or any gambling-related offense, including those individuals who have been pardoned for these types of offenses that are committed subsequent to the effective date of the Gaming Control Act. At the first meeting of each fiscal year, a 13

14 chairman and vice-chairman of the Commission shall be chosen both of whom cannot serve consecutive terms as chairman or vice-chairman, and both of whom shall be elected by a majority of the members of the Commission from its regular members confirmed by the legislature. Membership and operation of the Commission shall additionally meet the following requirements: (1) One (1) member of the Commission shall have had at least five (5) years of law enforcement experience as a peace officer qualified pursuant to 8 GCA 5.55; one (1) member shall preferably be an attorney admitted to the practice of law in Guam for not less than five (5) years and who has experience in regulatory law or, alternatively to a practicing attorney with five (5) years experience in regulatory law, shall be a graduate of an American Bar Association accredited law school; one (1) member shall preferably be a certified public accountant or public accountant who has been practicing in Guam for at least five (5) years and who has a comprehensive knowledge of the principles and practices of corporate finance or, alternatively to a certified public accountant with five (5) years experience, shall be a graduate of an accredited college or university in Guam or the United States with a degree in finance or accounting; one (1) member shall have been engaged in business in a managementlevel capacity for at least five (5) years; and, one member shall be from the community-at-large who is not employed in any profession or industry otherwise described in this paragraph (1); (2) Initial members shall be appointed to the Commission by the Governor as follows: One member to serve until March 1, 2003, one member to serve until March 1, 2004, one member to serve until March 1, 2005, and two (2) members to serve until March 1, All subsequent appointments shall be for terms of five (5) years. No member of the Commission shall be eligible to serve more than two (2) consecutive five (5) year terms; (3) Any vacancy on the Commission shall be filled for the unexpired term in the same manner and for the remaining term as the original appointment. The member appointed to fill such vacancy shall be from the same category and shall have the required 14

15 qualifications described in paragraph (1) of this subsection (a) as the member vacating the position; (4) Any member of the Commission may be removed by the Governor for cause; (5) The term of any member of the Commission who misses more than two (2) consecutive regular Commission meetings without good cause shall be terminated and such member s successor shall be appointed in the manner provided for appointments under this section; (6) Commission members shall receive as compensation for their services one hundred dollars ($100.00) for each day spent in the conduct of Commission business and shall be reimbursed for necessary travel and other reasonable expenses incurred in the performance of their official duties. The maximum annual compensation for each member of the Commission, including reimbursement for necessary travel and other reasonable expenses incurred in the performance of their official duties, shall not exceed five thousand dollars ($5,000.00) per year; (7) Prior to confirmation by I Liheslaturan Guåhan, each member shall file with the Director a financial disclosure statement in the form required and prescribed by the Director. Such statement shall be renewed as of each February 15th during the member s term of office; (8) The Commission shall hold at least one (l) meeting each month and such additional meetings as may be prescribed by rules of the Commission. In addition, special meetings may be called by the Chairman, any two (2) Commission members, or the Chief, if written notification of such meeting is delivered to each member at least seventy-two (72) hours prior to such meeting. Notwithstanding any other provision of law, in emergency situations in which a majority of the Commission certifies that exigencies of time require that the Commission meet without delay, the requirements of public notice and of seventy-two (72) hours actual advance written notice to members may be dispensed with, and Commission members as well as the public shall receive such notice as is reasonable under the circumstances; 15

16 (9) A majority of the Commission shall constitute a quorum, but the concurrence of a majority of the members appointed to the Commission shall be required for any final determination by the Commission; and, (10) The Commission shall keep a complete and accurate written or recorded or videotaped record of all its meetings Commission - Powers and Duties. (a) In addition to any other powers and duties set forth herein, the Commission shall nonetheless have the following powers and duties: (1) To promulgate, within ninety days (90) days from the effective date of this Act, interim rules, regulations and an interim schedule of all fees authorized in this Act, governing limited gaming licensing and the conduct and operations of limited gaming activities as it deems necessary to carry out the purposes of this Act in relation to limited gaming activities in Guam. These interim rules, regulations and fees shall be valid until February 15th 2002 or until permanent rules, regulations and a schedule of fees are implemented, whichever shall occur first and, notwithstanding any other provision of law to the contrary, these interim rules, regulations and schedule of fees shall be promulgated, implemented and made effective without complying with the provisions of the Administrative Adjudication Act. On or before November 15th 2002 the Commission shall publish proposed permanent rules, regulations and schedule of fees whose adoption and promulgation shall comply with the Administrative Adjudication. (2) To conduct hearings upon complaints charging violations of this Act in relation to limited gaming activities or violations of rules and regulations promulgated pursuant to this Act, and to conduct such other hearings as may be required by the rules of the Commission or by the provisions of this Act; (3) To enter into agreements with the Guam Police Department for the conduct of investigations, identification, or registration, or any combination thereof, of licensed operators and employees in licensed premises engaging in limited gaming activities, which conduct shall include, but not be limited to, 16

17 performing background investigations and criminal records checks on an applicant applying for licensure pursuant to the provisions of this Act in relation to limited gaming activities and investigating violations of any provision of this Act or of any rule or regulation promulgated herein or by the Commission pursuant to paragraph (1) of subsection (a) of this section, discovered as a result of such investigator process or discovered by the Division, or the Commission in the course of conducting its business. Nothing in this section shall prevent or impair the Guam Police Department from engaging in the activities set forth in this paragraph (3) on their own initiative; (4) To conduct a continuous study and investigation of limited gaming throughout Guam for the purpose of ascertaining any defects in this Act in relation to limited, gaming, or in the rules and regulations promulgated pursuant to this Act in relation to limited gaming, in order to discover any abuses in the administration and operation of the Division or any violation of this Act in relation to limited gaming activities; (5) To formulate and recommend changes to any rule or regulation promulgated pursuant to this Act concerning limited gaming for the purpose of preventing abuses and violations of this Act in relation to limited gaming in Guam; to guard against the use of such rules and regulations as a cloak for the conducting of illegal limited gaming activities in Guam; and, to ensure that such rules and regulations shall be in such form and be so administered as to serve the true purpose and intent of this Act in relation to the conduct of limited gaming activities in Guam; (6) To report immediately to the Governor, the Attorney General, the Speaker of I Liheslaturan Guåhan, and such other Guam officials as the Commission deems appropriate, concerning any laws in relation to limited gaming that it determines require immediate amendment to prevent abuses and violations of this Act in relation to limited gaming or any rule or regulation promulgated pursuant to this Act in relation to limited gaming, or to remedy undesirable conditions in connection with the administration or the operation of the Division concerning limited gaming; (7) To require such special reports from the Chief as it 17

18 considers necessary in relation to limited gaming; (8) To issue temporary or permanent licenses to those involved in the ownership, participation, or conduct of limited gaming as authorized herein; (9) Upon complaint, or upon its own motion, to levy fines and to suspend or revoke licenses that the Commission has issued and is authorized to issue in this Act and as allowed herein; (10) To establish and collect fees and taxes upon persons, limited gaming licenses, and limited gaming equipment or other devices used in, or participating in limited gaming as allowed and defined in this Act; (11) To obtain all information from limited gaming licensees and other persons and agencies connected with limited gaming activities which the Commission deems necessary or desirable m the conduct of its business of regulating limited gaming activities; (12) To issue subpoenas for the appearance or production of persons, records, and things in connection with applications before the Commission or in connection with disciplinary or contested cases considered by the Commission in relation to limited gaming; (13) To apply for injunctive or declaratory relief to enforce the provisions of this Act and any rules and regulations promulgated pursuant to this Act in relation to limited gaming; (14) To inspect and examine without notice all premises wherein limited gaming is conducted or devices or equipment used in limited gaming, manufactured, sold, or distributed, and to summarily seize, remove, and impound, without notice or hearing from such premises any equipment, devices, supplies, books, or records used in limited gaming for the purpose of examination or inspection; (15) To enter into contracts with any governmental entity to carry out its duties in compliance with the provisions of existing laws. Such contracts or formal agreements, or both, are to be based on pre-established Commission criteria specifying minimum levels of cooperation and conditions for payment; 18

19 (16) To exercise such other incidental powers as may be necessary to ensure the safe and orderly regulation of limited gaming and the secure collection of all revenues, taxes, and license fees concerning limited gaming; (17) To establish internal control procedures for limited gaming licensees, including accounting procedures, reporting procedures, and personnel policies; (18) To establish and collect fees for performing background checks on all applicants for limited gaming licenses and on all persons with whom the Commission or Division may agree with or contract with for the providing of goods or services, as the Commission deems appropriate; (19) To establish and collect fees for performing, or having performed, tests on equipment and devices to be used in limited gaming; (20) To demand, at any time when limited gaming is being conducted, access to and inspection, examination, photocopying, and auditing of all papers, books, and records of applicants and limited gaming licensees, on their premises or elsewhere, as practicable and in the presence of the limited gaming licensee or his agent, pertaining to the gross income produced by any licensed limited gaming establishment conducting limited gaming activities, and to require verification of income, and all other matters affecting the enforcement of the policies of the Commission or any provision of this Act in relation to limited gaming; and to impound or remove all papers, books, and records of limited gaming applicants and limited gaming licensees, without hearing, for inspection or examination; and, (21) To prescribe voluntary alternative methods for the making, filing, signing, subscribing, verifying, transmitting, receiving, or storing of returns or other documents in relation to limited gaming activities. (22) To enter into agreements with any person, entity, partnership, association or corporation, not engaging in limited gaming activities or who are not otherwise subject to the jurisdiction of the Commission under the terms of this Act, wherein 19

20 said party consents to be bound by the provisions of this Act, in whole or in part, for an agreed term and conditions and in which agreement any activities, on agreement of the parties, may be defined as limited gaming activities as said term is defined in this Act and subject to the jurisdiction of the Commission. Any party executing any agreement consenting to the jurisdiction of the Commission, and defining some or all of its activities as limited gaming activities, shall be bound by the provisions of this Act to the extent agreed, as if they had originally been subject to the jurisdiction of the Commission and the provisions of this Act to the extent agreed. (b) Permanent rules, regulations and schedule of fees promulgated pursuant to subsection (1) of this section in compliance with the Administrative Adjudication Act shall include, but shall not be limited to, the following: (1) Rules, regulations and a schedule of any applicable fees defining the manner, type, allowable prizes and other pertinent rules and regulations for conducting lotteries or lottery games, dog racing, cockfighting, Liberation Day or carnival gaming, bingo and, the use of land based electronic gaming devices in Guam provided that any limited gaming activities allowed must not exceed those activities or expand the allowable activities which could had been authorized and licensed in Guam under Guam law as of August 1st 2001; (2) The procedures for the issuance, revocation, suspension, and summary suspension of all types of permanent and temporary limited gaming licenses required for the conduct of limited gaming activities in Guam as required under the terms of this Act; (3) The procedures for replacing any land based electronic gaming devices to ensure that the number of said machines licensed at any one time does not exceed the total number of machines for which licenses were issued by the Department prior to August 1st 2001 whether said machines were currently licensed or not on August 1st 2001; (4) The details of times, places, and structures where limited gaming shall be authorized; 20

21 (5) The type, time, place, manner, extent and all other pertinent regulations relating to carnival or Liberation Day gaming provided said rules and regulations allows only gaming activities which could have been conducted under Guam law on August 1st 2001 ; (6) The procedures and description of the scope and conditions for conducting investigations and inspections into the conduct of limited gaming activities, the background of limited gaming licensees and applicants for limited gaming licenses, the premises where limited gaming is authorized, all premises where limited gaming devices are located for the purpose of conducting limited gaming activities, the books and records of limited gaming licensees, and the sources and maintenance of limited gaming devices and equipment; (7) The detailed activities which the Commission determines constitutes fraud, cheating, or illegal or criminal activities in relation to limited gaming; (8) The percentage of the gross receipts to be paid by each limited gaming licensee to the Commission, in addition to all other license fees and ordinary income taxes for limited gaming activities as authorized in this Act; (9) The detailed procedures and grounds for seizure of limited gaming equipment, supplies, or books and records for the purpose of examination and inspection which are used in limited gaming activities; (10) The forms and procedures for disclosure of all financial interests of limited gaming applicants for limited gaming licenses and all other applicants intending to participate in limited gaming activities; (11) The detail grounds and procedures for the issuance or denial of support licenses by the Director for limited gaming activities; (12) The detailed procedures and grounds for granting all limited gaming licenses including any special or limiting conditions; 21

22 (13) The establishment of procedures for determining suitability or unsuitability of persons, acts, or practices connected with or relating to limited gaming activities; (14) The procedures for determining and for the payment of costs incurred in the operation and administration of the Division, and the costs resulting from any contract entered into for consulting or operational services for limited gaming regulation; (15) The procedures for determining and for payment of costs incurred by the Attorney General, the Guam Police Department and any other agency for investigations or background checks, which shall be paid by applicants for all limited gaming licenses; (16) The procedures and grounds for levying of fines for violations of this Act or any rule or regulation promulgated pursuant to this Act in relation to limited gaming activities; (17) The schedule of fees and their application on a yearly basis or per event for all license fees for all limited gaming licenses and equipment or other license issued by the Commission and for all land based gaming devices and limited gaming devices; (18) The detailed types and specifications of all equipment and devices which are authorized and may be used in limited gaming activities in Guam and to the extent possible, the types of equipment which are specifically disallowed, although equipment which are not specifically allowed shall be considered disallowed, and provided further, that all limited gaming equipment allowed must be those allowed and licensed by the Department as of August 1st 200l, and, (19) All other rules, regulations and schedule of fees necessary to accomplish the purposes of this Act in relation to the conduct of limited gaming activities in Guam Hearing Officer. Any dispute or complaints charging violations of this Act in relation to limited gaming activities or the violation of any rules and regulations promulgated pursuant to this Act, may be delegated by the 22

23 Commission to the Legal Counsel, as provided for in Section 7104 of this Act, or a Hearing Officer appointed pursuant to Chapter 9, Title 5 GCA (Administrative Adjudication Act) and furthermore all hearings required under the terms of this Act shall be conducted pursuant to the provisions of the Administrative Adjudication Act Conflict of Interest. (a) Members of the Commission and employees of the Division are declared to be in positions of public trust. In order to ensure the confidence of the people of Guam in the integrity of the Division, its employees, and the Commission, the following restrictions shall apply: (1) No member of the Commission, including his/her spouse, a natural child, child by adoption, stepchild, parents, grandparents, a brother or sister of the whole or half-blood of a member, or an uncle, aunt, nephew, or niece of the whole blood of a member, shall have any interest of any kind in a limited gaming license issued pursuant to this Act or own or have any interest in property where limited gaming is permitted. The provisions of his paragraph (1) shall apply to spouses of Commission members, in like fashion as to members; (2) No member of the Commission or employee of the Division, including the Chief, and no member of the immediate family, including spouses and issues therefrom, of Commission members, the Chief or employees of the Division, shall have any interest, direct or indirect, in any licensee, licensed premises, establishment, or business involved in or with limited gaming; (3) No member of the Commission or employee of the Division, including the Chief, and no member of the immediate family, including spouses and issues therefrom, of members of the Commission, the Chief or employee of the Division, shall receive any gift, gratuity, employment, or other thing of value from any person, corporation, association, or firm that contracts with or that offers services, supplies, materials, or equipment used by the Division in the normal course of its operations, or which is licensed by the Division or the Commission; (4) No member of the Commission or employee of the Division, including the Chief, and no member of their immediate 23

24 families, including spouses and issues therefrom, shall participate in limited gaming; and, (5) No member of the Commission or employee of the Division, including the Chief, shall have been convicted of a felony or any gambling-related offense or have received a pardon for such offense unless said pardoned offense was committed prior to the effective date hereof. (b) Notwithstanding the provisions of subsection (a) of this section, the Commission shall, by rule, determine that an ownership interest of no more than five percent (5%), held by or through an institutional investor fund, does not constitute an interest under paragraphs (1) and (2) of subsection (a) of this section Limited Gaming Activities - Authorized and Unauthorized. (a) The following are the only limited gaming activities authorized in Guam under this Act: (1) Bingo that is conducted by a tax exempt non-profit organization as defined in Section 7102 (bb) domiciled in Guam, and licensed to conduct bingo activities; (2) Cockfighting that is conducted at a licensed cockpit and that all wagers are present at the cockpit; (3) Dog racing that is conducted at a licensed dog-racing track and that all wagers are present at the racetrack as said activity is defined in Article 2 of this Act; (4) Public lottery and carnival or Liberation Day gaming; and, (5) Electronic gaming devices that have been registered, or were at any time previously registered, by the Department of Revenue and Taxation pursuant to 11 Guam Code Annotated, Chapter 22, Article 2, prior to August 1st Any electronic gaming devices previously registered with the Department may be replaced by new electronic gaming devices which are approximately similar to the old electronic gaming devices being replaced provided all old electronic gaming devices being replaced are disposed of or stored pursuant to rules and regulations issued 24

25 by the Commission. (b) All limited gaming activities aside from those listed in subsection (a), and the importation, manufacturing, and distribution of gaming devices in an attempt to conduct such limited gaming activities, except as indicated in the Gaming Control Act, are considered illegal and in violation of this Act. Such gaming devices, except as authorized herein, include any coin-operated device which, when operated, may return winnings (other than free games not redeemable for cash) of value to the user based partially or completely upon chance, by the operation of which a person may become entitled to receive winnings of value. It does not include pinball and other amusement machines or devices that are predominantly games of skill, whether affording the opportunity of additional chances or free plays or not. It does include slot machines, video poker machines and other machines or devices which afford the opportunity of winnings, payout, malfunction refunds, to the player, or giving the player or user anything of value under any guise or form based partially or completely upon chance except as otherwise authorized herein. (c) Any person found guilty of the importation, attempted importation or causing the importation of gaming devices to Guam, except as authorized herein, or who is found guilty of manufacturing a gaming device in Guam, except as authorized herein, shall be guilty of a felony and shall be subject to imprisonment for not more than five (5) years, a fine not to exceed Twenty-five Thousand Dollars ($25,000) per gaming device, or both such fine and imprisonment Licenses - Types. (a) The Commission shall issue six (6) types of licenses as follows: (1) Non-profit organization to engage in limited gaming activities authorized herein; (2) Electronic gaming device owners. An electronic gaming device owner s license is required for anyone owning such devices for limited gaming purposes. Each license issued pursuant to this paragraph (2) shall expire one (l) year from the date of its issuance but may be renewed upon the filing of an application for renewal. All owners of electronic gaming devices registered with the 25

26 Department under Section 7114(a)(5) shall be initially licensed for one (1) year and may apply for successive one (1) year renewals thereof. The Commission, pursuant to rules and regulations authorized herein, shall determine the fee for the initial license and all renewal fees thereof; (3) Operator. An operator license is required for any person who is an Operator as defined in Section 7102(cc) and is not licensed under any other subsection of this section. Each license issued pursuant to this paragraph (3) shall expire one (1) year from the date of its issuance but may be renewed for successive one (1) year periods upon the filing and approval of an application for renewal. The Commission, pursuant to rules and regulations authorized herein, shall determine the fee for the initial license and all renewals thereof. A licensed operator shall obtain gaming devices only from a licensed owner pursuant to paragraph (2) of this subsection; (4) Retail gaming. A retail gaming license is required for all persons permitting limited gaming on their premises and who are not licensed under subsections (1) through (3) above. Each license issued pursuant to this paragraph (4) shall expire one (l) year from the date of its issuance but may be renewed for successive one (1) year periods upon the filing and approval of an application for renewal. The Commission, pursuant to rules and regulations authorized herein, shall determine the fee for the initial license and all renewals thereof; (5) Support. A support license is required for all persons employed in the field of limited gaming and by all limited gaming employees who are not otherwise licensed under the provisions of sections (1) through (4) above or section (6) below. No person, required to hold a limited gaming support license, shall be an employee of, or assist, any licensee until such person obtains a valid limited gaming license. The Commission may deny a limited gaming support license to any person discharged, for cause, from employment by any licensed gaming establishment in this or any other country. Each license issued pursuant to this paragraph (5) shall expire two (2) years from the date of its issuance but may be renewed for successive two (2) year periods upon the filing 26