PUBLIC PROTECTION CABINET

Department of Charitable Gaming

(Amendment)

 

      820 KAR 1:001. Definitions for 820 KAR Chapter 1.

 

      RELATES TO: KRS 238.500-238.995

      STATUTORY AUTHORITY: KRS 238.515(9)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515(9) authorizes the Department of Charitable Gaming to promulgate administrative regulations to carry out the provisions of the chapter. This administrative regulation establishes definitions of terms used throughout 820 KAR Chapter 1.

 

      Section 1. Definitions. (1) "Account number" means the unique identification number, if any, assigned by a card-minding device system or electronic pulltab system to a customer that uses a card-minding device to play bingo or an electronic pulltab device to purchase and play a pulltab.

      (2) "Bet block" means an area that indicates the dollar amount of the wager.

      (3) "Bingo ball" means a ball imprinted with numbers and letters which is used in the selection process of a bingo game.

      (4) "Bingo machine" means:

      (a) A type of selection device with a receptacle for the unselected bingo balls, a blower for selecting the balls, and a ball tray that contains seventy-five (75) holes in which to place the ball once it is called; or

      (b) A generator that randomly selects the balls and displays them on the face of the device.

      (5) "Bingo paper pack" means a group of bingo paper sheets that are manufactured, collated, and sold by the manufacturer as a unit.

      (6) "Bingo paper package" means a group of bingo paper sheets or packs that are assembled together by an organization for sale at a gaming occasion that becomes a unique item for sale with a specific price.

      (7) "Bingo paper sheet" means a single piece of paper on which one (1) or multiple bingo faces are printed.

      (8) "Break open bingo" means a bingo game in which the numbers on the face are hidden until after purchase.

      (9) "Bundle" means to price a certain amount of bingo paper faces for a certain price with the patron choosing the type of packs that make up the total faces.

      (10) "Called" means that a number located on a bingo ball has been:

      (a) Selected by the selection device;

      (b) Verbally announced by the caller;

      (c) Displayed on the flashboard or other device; and

      (d) Placed in a ball tray or otherwise continuously displayed until completion of the bingo game.

      (11) "Cash" means currency, coinage, or a negotiable instrument.

      (12) "Cash over" means the total amount of money actually received from the sale of gaming supplies at a gaming occasion is more than the amount of money due from the sale of that quantity of gaming supplies.

      (13) "Cash short" means the total amount of money actually received from the sale of gaming supplies at a gaming occasion is less than the amount of money due from the sale of that quantity of gaming supplies.

      (14) "Chief executive officer" means the director of the organization or the person who has legal authority to direct the management of the organization, distributor, manufacturer, or facility.

      (15) "Chief financial officer" means the person who shall be:

      (a) Responsible for overseeing the financial activities of the organization, distributor, manufacturer, or facility;

      (b) The custodian of the gaming occasion records; and

      (c) Responsible for ensuring that the records are accurate, complete, and maintained regularly for inspection by the department.

      (16) "Conditioning" means a restatement of:

      (a) How many numbers or combinations of numbers are being selected by the players;

      (b) The way in which the numbers are being wagered; and

      (c) The corresponding dollar amount wagered.

      (17) "Continuation game" means a multipart bingo game in which more than one (1) game with more than one (1) pattern may be played on one (1) bingo paper sheet.

      (18) "Covered" means daubed or smeared with indelible ink if using a disposable paper bingo face, or marked electronically if using a card-minding device.

      (19) "Cumulative pulltab game" means a pulltab game consisting of multiple pulltab deals or game sets that is designed by the manufacturer so that a portion of each deal's predetermined payout is designated to a prize pool board.

      (20) "Deal" means each separate game or series of pulltabs, including electronic pulltabs, which has the same serial number and which may be composed of multiple packages. A deal of electronic pulltabs is called a "game set".

      (21) "Digital signature" means a method by which data, as in a software application, is expressed in a calculated number which is used to verify the accuracy of the data or a copy of the data.

      (22) "Disposable paper bingo face" means a nonreusable bingo face assembled in a single sheet, multiple face sheet, pad, or pack form.

      (23) "Draw ticket" means a blank ticket upon which the numbers are marked as they are randomly selected.

      (24) "Electronic pulltab" means an electronic version of a paper pulltab that is distributed from a finite number of game outcomes by a central computer system and played on an electronic pulltab device.

      (25) "Electronic pulltab system" means a central computer system, including an optional site system; electronic pulltab devices; point of sale stations; secondary components; and proprietary software, whereby the central computer system communicates with electronic pulltab devices for the purpose of distributing a finite number of electronic pulltabs, a certain number of which, if randomly selected, entitle a player to prize awards at various levels. The electronic pulltab system also provides reporting and control functions as specified by 820 KAR 1:033.

      (26) "EPROM" means Erasable Programmable ROM.

      (27)[(25)] "Event game" means a type of pulltab game, with or without a seal card, that is designed by the manufacturer so that certain prizes are determined by:

      (a) The draw of a bingo ball; or

      (b) A method of randomly selecting numbers or symbols that correspond to the numbers or symbols printed on a paper or electronic pulltab[ticket].

      (28)[(26)] "Exception log" means a record documenting a prize payout that has not been authorized by the computer.

      (29)[(27)] "Face" means a paper or an electronic representation containing:

      (a) Five (5) rows of five (5) squares with numbers or symbols;

      (b) A free center space;

      (c) The letters "B", "I", "N", "G", "O" printed in order over the five (5) columns; and

      (d) A unique perm number identifying each face.

      (30)[(28)] "Fixed base card-minding device" means a computer system, not necessarily manufactured by a licensed manufacturer, which has been loaded with proprietary software by a licensed manufacturer to enable it to function as a card-minding device.

      (31) "Fixed base electronic pulltab device" means a single personal computing device which has been loaded with proprietary software by a licensed manufacturer to enable it to function as an electronic pulltab device. A fixed based electronic pulltab device shall not be built into a cabinet or in any way be designed or manufactured to resemble any electronic gaming device that utilizes a video display monitor, such as a video lottery terminal, video slot machine, video poker machine, or any similar video gaming device.

      (32)[(29)] "Flare" means the paper included with a deal of paper pulltabs, or the electronic representation of a paper flare included with a game set of electronic pulltabs, that identifies the game, the rules of the game, the[and] payout structure, and other information as set forth by 820 KAR 1:032, 820 KAR 1:033, and 820 KAR 1:036.

      (33)[(30)] "Flashboard" or "display board" means a board that displays the bingo numbers called.

      (34)[(31)] "Form number" means a manufacturer’s alphanumeric number that identifies a pulltab payout structure.

      (35)[(32)] "Gambling" means staking or risking something of value on the outcome of a contest, game, gaming scheme, or gaming device which:

      (a) Is based upon an element of chance, in accord with an agreement or understanding that someone will receive something of value if there is a certain outcome; and

      (b) Does not include a contest or game in which eligibility to participate is determined by chance and the ultimate winner is determined by skill.

      (36) "Game set" means the entire pool of finite electronic pulltabs that contains predefined and randomized game results assigned under a unique serial number. This term is equivalent to "deal".

      (37) "Game subset" means a division of a game set into equal sizes following randomization, with each game subset also identified by a unique serial number.

      (38)[(33)] "Gaming occasion" means an event at which charitable gaming takes place, such as a bingo session, a charity fundraising event, a special limited charity fundraising event, a sale of pulltabs, or a sale of raffle tickets.

      (39)[(34)] "Gaming occasion program", "bingo program", "occasion program", or "program" means a written list of all games to be played and prize amounts to be paid for each game during a gaming occasion, including, if the prizes are based on attendance, the amount of the prize and the attendance required.

      (40)[(35)] "Hand-held card-minding device" means a hand-held computer that is either manufactured or customized by the manufacturer to operate as a card-minding device.

      (41) "Hand-held electronic pulltab device" means a single tablet or hand-held computer, other than a mobile phone or similar hand-held device, that is either manufactured or customized by the manufacturer to operate as an electronic pulltab device.

      (42)[(36)] "Hard card" means a reusable card bearing a bingo face or faces.

      (43)[(37)] "Inside ticket" means a blank Keno ticket:

      (a) Constructed with eighty (80) blocks numbered one (1) through eighty (80); and

      (b) Containing a bet block.

      (44)[(38)] "Jackpot prize in a progressive pulltab game" or "progressive jackpot prize" means a prize in addition to the instant or seal card prizes which is carried over from deal to deal, or game set to game set, until it is won.

      (45)[(39)] "Jar ticket" means a type of pulltab game ticket that is folded, glued, or stapled.

      (46)[(40)] "Keno" means a numbers game in which:

      (a) A participant chooses from one (1) to ten (10) numbers from a pool of eighty (80) numbers; and

      (b) The winner and the prize is determined by correctly matching the participant's numbers to the twenty (20) numbers generated in the game.

      (47)[(41)] "Keno equipment" means:

      (a) An electronic selection device;

      (b) A random number generator;

      (c) A computerized Keno system; or

      (d) An integrated system of computer hardware and software that:

      1. Generates a player ticket;

      2. Records a game outcome;

      3. Verifies a winning ticket;

      4. Produces a management report; or

      5. Performs other internal audit controls of a Keno operation.

      (48)[(42)] "Keno manager" means the person in charge of the operation of the Keno game.

      (49)[(43)] "Last sale" means a pulltab game designed by the manufacturer in which a prize is awarded to the person who bought the last pulltab or electronic pulltab in a deal or game set.

      (50)[(44)] "Merchandise prize" means a noncash prize given away at a charitable gaming event either as a game prize or a door prize.

      (51)[(45)] "Model number" means the name or number designated by the manufacturer that indicates the unique structural design of a hand-held card-minding device, fixed base card-minding device,[or] card-minding system component, hand-held electronic pulltab device, fixed base electronic pulltab device, or any element of an electronic pulltab system.

      (52)[(46)] "Multipackaged pulltab deal" means a pulltab game consisting of a single deal or game set of not more than 25,000[10,000] tickets that is packed or electronically grouped in subsets and in which each subset contributes to a prize pool with or without a prize board.

      (53)[(47)] "Multirace ticket" means a single Keno ticket that allows a player to make the same wager on consecutive games.

      (54)[(48)] "Outside ticket" means a computer-generated Keno ticket given to the player which reflects game and wagering information.

      (55)[(49)] "Perm number" means the number located on a bingo face that identifies the unique pattern of numbers appearing on that face.

      (56)[(50)] "Pickle jar, bonanza ball, or hot ball" means games played in conjunction with other bingo games in which:

      (a) A bingo ball is selected by the selection device prior to the start of certain bingo games or all bingo games; and

      (b) A patron is awarded the amount of money associated with the pickle jar, bonanza ball, or hot ball, if the selected bingo ball is called, and because of that selected ball being called, a patron wins the bingo game being played.

      (57)[(51)] "Player pick bingo" means that the patron picks the numbers which constitute a bingo on his or her face or faces and a machine prints those numbers on the bingo face at the gaming occasion before the game is played.

      (58)[(52)] "Player tracking software" means computer software installed on a card-minding device system, electronic pulltab system, or other point of sale system that is used to identify or track certain characteristics of bingo or pulltab players, including personal data and purchasing habits.

      (59)[(53)] "Progressive bingo" means a bingo game in which the value of the prize is carried forward to the next bingo occasion if no player wins at that session.

      (60)[(54)] "Progressive pulltab game" or "carryover pulltab game" means a pulltab game consisting of one (1) or more deals or game sets designed by the manufacturer so that a portion of the deal's predetermined prize payout is designated to a progressive jackpot and the jackpot value may accumulate from one (1) deal to the next deal until won.

      (61)[(55)] "PROM" means programmable ROM.

      (62)[(56)] "Promotional" means any item available at no charge to all participants at an event.

      (63)[(57)] "Proprietary software" means custom computer software developed by the manufacturer that is a primary component of a[the] card-minding device system or electronic pulltab system and is required for a card-minding device to be used in a game of bingo or for an electronic pulltab device to be used to play an electronic pulltab.

      (64)[(58)] "Pulltab" means a charity game ticket as defined by KRS 238.505(5).

      (65)[(59)] "Purchased prize" means any merchandise prize that was purchased and not donated.

      (66)[(60)] "Quick pick" means a number selection made for the player by a computer.

      (67)[(61)] "RAM" or "random access memory" means the electronic memory that a computer uses to store information.

      (68)[(62)] "Random number generator" means a device:

      (a) For generating number values that exhibit characteristics of randomness; and

      (b) Composed of:

      1. Computer hardware;

      2. Computer software; or

      3. A combination of computer hardware and software.

      (69)[(63)] "ROM" or "read only memory" means the electronic component used for storage of nonvolatile information in Keno equipment that provides instructions needed by the computer to begin its operations each time it is turned on and may be either "PROM" or "EPROM".

      (70)[(64)] "Secondary component" means an additional software or hardware component that:

      (a) Is part of or is connected to a card-minding device system or electronic pulltab system;

      (b) Does not affect the conduct of the game of bingo or an electronic pulltab;

      (c) Is provided by the manufacturer; and

      (d) May include computer screen backgrounds, battery charge-up software routines, monitors, keyboards, pointer devices, mice, printers, printer software drivers, or charging racks.

      (71)[(65)] "Selected" means a bingo number that has been obtained by the selection device and is ready to be called next by the bingo caller.

      (72)[(66)] "Selection device" means a device that:

      (a) May be operated manually or automatically; and

      (b) Is used to randomly select bingo numbers.

      (73)[(67)] "Selection pool" means the bingo numbers in a selection device that have not been selected.

      (74)[(68)] "Serial number" means a number assigned by the manufacturer to track the individual product.

      (75)[(69)] "Series number" means the number of unique faces contained in a series.

      (76)[(70)] "Set" means a case or cases of paper that contain one (1) of each face in a series.

      (77)[(71)] "Site system" means computer hardware, software, and peripheral equipment leased or purchased from a licensed distributor and used by a licensed organization to conduct, manage, and record bingo games played on card-minding devices and electronic pulltab games played on electronic pulltab devices.

      (a) It shall[that]:

      1. Be[(a) Is] located at the gaming[bingo] premises;

      2. Be[(b) Is] operated by the charitable organization;

      3. Interface[(c) Interfaces] with, connect[connects] with, control,[controls] or define[defines] the operational parameters of card-minding devices or electronic pulltab devices;

      4. Report and transmit the game results as prescribed by the department;

      5. Provide security and access levels sufficient so that the internal control objectives are met as prescribed by the department; and

      6. Contain a point of sale station.

      (b) It[(d)] may include the following components:

      1.[Point of sale station;

      2.] A caller verification system;

      2.[3.] Required printers;

      3.[4.] Modem;

      4.[5.] Proprietary executable software;

      5.[6.] Report generation software; and

      6.[7.] An accounting system or database.

      (78)[(72)] "Terminal number" means the unique identification number, if any, assigned by a manufacturer to a specific standard card-minding device or a specific electronic pulltab device.

      (79)[(73)] "Transaction log" means a record of the same information printed on each outside ticket that is:

      (a) Retained in the computer's memory; or

      (b) Printed out by the computer.

      (80)[(74)] "Verification system" means a book of bingo faces compiled by the manufacturer or an electronic device created by the manufacturer that:

      (a) Lists the unique patterns of numbers on each face by perm number; and

      (b) Is used to verify the authenticity of a winning face.

      (81)[(75)] "Version number" means a unique number designated by the manufacturer to identify a specific version of software used on or by the card-minding device system or the electronic pulltab system.

      (82)[(76)] "Way ticket" means a single ticket that permits wagering on a combination of groups of numbers in various ways designated by the player.

      (83)[(77)] "Week" means a seven (7) day period beginning on Sunday and ending Saturday.

      (84)[(78)] "Year" is defined by KRS 238.505(25).

 

SCOTT JONES, Commissioner

AMBROSE WILSON IV, Secretary

      APPROVED BY AGENCY: June 12, 2015

      FILED WITH LRC: June 12, 2015 at 4 p.m.

      PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall be held on July 23, 2015 at 10:30 a.m. Eastern Time at the Department of Charitable Gaming, 132 Brighton Park Boulevard, Frankfort, Kentucky 40601. Individuals interested in being heard at this hearing shall notify this agency in writing by five (5) workdays prior to the hearing of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. This hearing is open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted until the end of the calendar day on July 31, 2015. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.

      CONTACT PERSON: Noelle J. Bailey, General Counsel, Department of Charitable Gaming, 132 Brighton Park Boulevard, Frankfort, Kentucky 40601, phone (502) 573-5528, fax (502) 573-6625.

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact person: Noelle J. Bailey

      (1) Provide a brief summary of:

      (a) What this administrative regulation does: This administrative regulation defines terms necessary to implement use and regulation of electronic pulltab devices as approved by SB 33.

      (b) The necessity of this administrative regulation: This regulation is necessary to define terms used in 820 KAR Chapter 1 which governs the conduct of charitable gaming in Kentucky.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: The statutory authority for this regulation is KRS 238.515(9). KRS 238.515(9) authorizes the Department of Charitable Gaming to promulgate administrative regulations to carry out the provisions of the chapter. This administrative regulation establishes definitions of terms used throughout 820 KAR Chapter 1.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: The statutes specifically require the promulgation of administrative regulations to carry out the purpose and intent of the statutes. Terms used within those regulations must be defined. Specifically, the statutes require the department to define and regulate the use and control of electronic pulltab devices. This regulation facilitates effective administration of the statutes by providing definitions to terms used in the remaining regulations governing manufacturing, distribution, control, and use standards for electronic pulltab devices.

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: This amendment changes the following definitions: "account number"; "cumulative pulltab game"; "deal"; "event game"; "flare"; "jackpot prize"; "last sale"; "model number"; "multipackaged pulltab deal"; "player tracking software"; "progressive pulltab game"; "proprietary software"; "pulltab"; "secondary component"; "site system"; "terminal number"; and "version number". This amendment adds definitions of the following words: "electronic pulltab"; "electronic pulltab system"; "fixed base electronic pulltab device"; "game set"; "game subset"; and "hand-held electronic pulltab device". The amendment also clarifies that certain definitions only apply to Keno, including: "multirace ticket"; and "outside ticket".

      (b) The necessity of the amendment to this administrative regulation: This amendment is necessary as SB 33 was passed during the 2015 legislative session. SB 33 establishes the use of electronic pulltab devices in the conduct of charitable gaming. Definitions are necessary to define terms relating to electronic pulltab devices; this includes changing some existing definitions and adding others.

      (c) How the amendment conforms to the content of the authorizing statutes: The statutory authority for this regulation is KRS 238.515(9). KRS 238.515(9) authorizes the Department of Charitable Gaming to promulgate administrative regulations to carry out the provisions of the chapter. This administrative regulation establishes definitions of terms used throughout 820 KAR Chapter 1, which will include terms relating to newly authorized electronic pulltab devices.

      (d) How the amendment will assist in the effective administration of the statutes: The amendment defines terms that will be used throughout 820 KAR Chapter 1 regarding the licensing, manufacturing, distribution, use, and regulation of electronic pulltab devices. Those regulations are required by SB 33.

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: Licensed charitable organizations, distributors and manufacturers that wish to use, manufacture, or distribute electronic pulltab devices will be impacted by the regulation change. There are currently 615 licensed organizations, sixteen (16) licensed distributors, and twenty-four (24) licensed manufacturers; though the number of distributors and manufacturers is expected to rise due to the passage of SB 33. These licensees will be impacted as the regulation defines the terms to be used in other regulations to govern the manufacturer, distribution, and use of electronic pulltab devices.

      (4) Provide an analysis of how the entities identified in Question (3) above will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

      (a) List the actions that each of the regulated entities identified in Question (3) will have to take to comply with this administrative regulation or amendment: They will not be required to take any action as a result of this regulation change as this change only defines terms used in other regulations.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in Question (3): There will be no costs associated with complying with this amendment as it only defines terms used in other regulations.

      (c) As a result of compliance, what benefits will accrue to the entities identified in Question (3): This regulation change simply updates or adds definitions used elsewhere in the regulations, therefore this amendment does not necessarily require "compliance" that would lead to accrual of any benefit.

      (5) Provide an estimate of how much it will cost to implement this administrative regulation:

      (a) Initially: There will be no cost to implement this amendment to the administrative regulation as it only defines terms used in other regulations.

      (b) On a continuing basis: There should be no additional cost on a continuing basis as this amendment only defines terms used in other regulations.

      (6) What is the source of the funding to be used in the implementation and enforcement of this administrative regulation: There is no additional funding necessary to implement this amendment to the administrative regulation as it only defines terms used in other regulations. Similarly, there will be no additional funding necessary to enforce the provisions of the amended regulation.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by change, if it is an amendment: There will be no increase in fees or funding necessary to implement this amendment to the administrative regulation as it merely defines terms used in other regulations.

      (8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees: This amendment to the regulation does not establish any new fees or directly or indirectly increase any fees.

      (9) TIERING: Is tiering applied? No. This regulation applies equally to all licensed charitable gaming entities.

 

FISCAL NOTE ON STATE AND LOCAL GOVERNMENT

 

      1. What units, parts, or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? The Kentucky Department of Charitable Gaming as implementer of this regulation.

      2. Identify each state or federal statute or regulation that requires or authorizes the action taken by the administrative regulation. KRS 238.505, KRS 238.515, and KRS 238.545.

      3. Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect. There should be no effect on the expenditures or revenues of any government agency due to this administrative regulation.

      (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? The amendment to the regulation should not generate revenue in the first year or in subsequent years.

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? See response to (a) above.

      (c) How much will it cost to administer this program this program for the first year? This regulation simply defines terms used elsewhere in regulations that are also being updated or added. There may be some cost associated to administer the program as a whole, but there will be no costs associated to administer this particular regulation.

      (d) How much will it cost to administer this program in subsequent years? See response to (c) above.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of this administrative regulation.

      Revenues (+/-): Not applicable; see response to (c) above.

      Expenditures (+/-): Not applicable; see response to (c) above.

      Other explanation: There should be little to no fiscal impact as the amendment merely defines terms used in other regulations and does not require any new or additional procedures or actions.