Document:

Exhibit 10.7

 

SECOND
AMENDMENT TO MASTER VIDEO LOTTERY TERMINAL CONTRACT

 

This Second Amendment to Master Video Lottery
Contract (the “Second Amendment”) is entered into on the 3rd day of May, 2012 by and between the Division of Lotteries
of the Rhode Island Department of Revenue, an agency of the State of Rhode Island (formerly known as the Division of Lotteries
of the Rhode Island Department of Administration), with its principal address at 1425 Pontiac Avenue, Cranston, Rhode Island 02920
(the “Division”), and UTGR, Inc., a Delaware corporation with its principal office located at 100 Twin River Road,
Lincoln, Rhode Island 02865, as reorganized under the Plan (as defined below) (as so reorganized, “UTGR”), and amends
that certain Master Video Lottery Terminal Contract by and between the Division and UTGR dated as of July 18, 2005 (the “Master
Contract”) and that certain First Amendment to Master Video Lottery Terminal Contract by and between the Division and UTGR
dated November 4, 2011 (the “First Amendment”). The Division and UTGR are referred to herein collectively as the “Parties,”
and individually, as a “Party.” This Second Amendment shall take effect as set forth in Section 3 below.

 

WITNESSETH:

 

WHEREAS, the Division
and UTGR entered into that certain Master Contract dated as of July 18, 2005 and the First Amendment to that Master Contract as
of November 4, 2010;

 

WHEREAS, on June 23,
2009, the Debtors (as defined in the First Amendment) filed voluntary petitions pursuant to chapter 11 of title 11 of the United
States Bankruptcy Code (11 U.S.C. §§ 101-1532) with the U.S. Bankruptcy Court for the District of Rhode Island (the “Bankruptcy
Court”), jointly administered under case number 09-12418(ANV) (the “Bankruptcy Cases”);

 

WHEREAS, by order dated
June 24, 2010, the plan of reorganization filed by the Debtors in the Bankruptcy Cases (the “Plan”) was confirmed by
the Bankruptcy Court;

 

WHEREAS, during the
2010 legislative session of the Rhode Island General Assembly, the State of Rhode Island enacted into law 2010-H 8157, as amended,
entitled “An Act Relating to Authorizing the First Amendments to the Master Video Lottery Terminal Contracts,” signed
by the Governor of Rhode Island on May 27, 2010 (the “2010 VLT Contracts Act”);

 

WHEREAS, pursuant to
and in accordance with the 2010 VLT Contracts Act, Section 4.1 of the First Amendment authorized UTGR to conduct a Promotional
Points Program as detailed in said Section 4.1;

 

WHEREAS, during the
2011 legislative session of the Rhode Island General Assembly, the State of Rhode Island enacted into law 2011-H 5894 Substitute
A, as amended entitled “An Act Making Appropriations for the Support of the State for the Fiscal Year Ending June 30, 2012”
(the ‘‘FY 2012 State Budget”), which FY 2012 State Budget included Article 25, entitled “Article 25, as
Amended, Relating to Authorizing State-Operated Casino Gaming at Twin River” attached hereto as Exhibit A (the “2011
Gaming Act”);

 

    	 

    	 

    

 

WHEREAS, the FY 2012
State Budget was signed by the Governor of Rhode Island on June 30, 2011;

 

WHEREAS, Section 8
of the 2011 Gaming Act, inter alia, expressly authorized and empowered the· Division to enter into with Twin River a second
amendment to the Master Contract for certain specified purposes as set forth in Section 8(a)(i) of the 2011 Gaming Act; and

 

NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
and in consideration of the mutual promises, covenants, obligations and conditions herein contained, the Division and UTGR hereby
agree as follows:

 

		1.	Definitions and Interpretation.

 

		1.1.	References to the “Agreement” contained in this Second Amendment, the Master Contract and the First Amendment thereto
are, or shall be deemed to be, references to the Master Contract, as amended and extended by the First Amendment and this Second
Amendment thereto.

 

		1.2.	Any capitalized terms used in this Second Amendment but not defined herein shall have the meaning as defined in the Master
Contract and/or First Amendment.

 

		2.	Promotional Points Program.

 

		2.1.	Pursuant to and in accordance with the authorization granted to the Division in Section 8 of the 2011 Gaming Act, Section 4.1
of the First Amendment is hereby amended to add the following provision thereto:

 

“Notwithstanding the above, commencing in FY
2012, in addition to the Promotional Points Program established in Part A, Section 4(a)(ii) of the 2010 VLT Contracts Act, the
Division is authorized to grant approval to UTGR to expend an additional amount of Promotional Points not to exceed seven hundred
fifty thousand dollars ($750,000) pursuant to the same terms and conditions authorized by Chapter 16 of the Public Laws of 2010
and this Section 4.1.”

 

		3.	Effective Date.

 

		3.1.	This Second Amendment shall be effective as of the 1st day of July 2011.

 

		4.	Miscellaneous.

 

		4.1.	Except as specifically modified in this Second Amendment, all other terms of the Master Contract and the First Amendment shall
remain in full force and effect.

 

    	 	- 2 -	 

     

    

 

		4.2.	This Second Amendment contains the entire agreement by and between the parties and supersedes and replaces all prior understandings
or agreements (if any), oral and written , with respect to such subject matter.

 

		4.3.	This Second Amendment may be executed in counterparts, each of which is deemed an original, but when taken together constitute
one and the same instrument.

 

IN WITNESS WHEREOF, the Parties have caused
this Second Amendment to be signed by their duly authorized representatives as of the date first set forth above.

 

 

	UTGR, Inc.	 	Division of Lotteries

	 	 

	By:	 /s/ Craig L. Eaton	 	By:	/s/ Gerald S. Aubin

	 	 

	Name:	Craig L. Eaton	 	Name:	 Gerald S. Aubin

	 	 

	Title:	Senior VP	 	Title:	Director

 

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Exhibit
A

 

2011 Gaming Act

 

    	 	- 4 -	 

     

    

 

article
25 as amended

 

RELATING TO AUTHORIZING
STATE-OPERATED CASINO GAMING AT TWIN

 

ARTICLE
________

 

RELATING TO AUTHORIZING STATE-OPERATED CASINO GAMING
AT

TWIN RIVER SUBJECT TO STATEWIDE AND LOCAL VOTER APPROVAL

 

Section
1.  Section 42.61.2-1 of the General Laws in Chapter 42.61.2 entitled “Video Lottery Terminal” is hereby amended
to read as follows:

 

42.61.2-1. Definitions.
[Effective June 30, 2019.1 – For the purpose of this chapter, the following words shall mean:

 

(1)   “Central
communication system” means a system approved by the lottery division, linking all video lottery machines at a licensee location
to provide auditing program information and any other information determined by the lottery. In addition, the central communications
system must provide all computer hardware and related software necessary for the establishment and implementation of a comprehensive
system as required by the division. The central communications licensee may provide a maximum of fifty percent (50%) of the video
lottery terminals.

 

(2)   “Licenses
video lottery retailer” means a pari-mutuel licensee specifically licensed by the director subject to the approval of the
division to become a licensed video lottery retailer.

 

(3)    “Net
terminal income” means currency placed into a video lottery terminal less credits redeemed for cash by players.

 

(4)   “Pari-mutuel
licensee” means an entity licenses and authorized to conduct:

 

		(i)	Dog racing, pursuant to chapter 3.2 of title 41; and/or

 

(ii)    Jai-alai
games, pursuant to chapter 7 of title 41.

 

    	 

    	 

    

 

(5)   “Technology
provider” means any individual, partnership, corporation, or association that designs, manufactures, installs, operates,
distributes or supplies video lottery machines or associated equipment for the sale or use in this state.

 

(6)   “Video
lottery games” means lottery games played on video lottery terminals controlled by the lottery division.

 

(7)   “Video
lottery terminal” means any electronic computerized video game machine that, upon the insertion of cash, is available to
play a video game authorized by the lottery division, and which uses a video display and microprocessors in which, by chance, the
player may receive free games or credits that can be redeemed for cash. The term does not include a machine that directly dispenses
coins, cash, or tokens.

 

(8)   “Casino
gaming” means any and all table and casino-style games played with cards, dice or equipment, for money, credit, or any representative
of value; including, but not limited to roulette, blackjack, big six, craps, poker, baccarat, pa gov., any banking or percentage
game, of any other game or device included within the definition of Class III gaming as that term is defined in Section 2703(8)
of Title 25 of the United States Code and which is approved by the state through the division of state lottery.

 

Section
2.  Chapter 42.61.2 of the General Laws entitled “Video Lottery Terminal” is hereby amended by adding thereto
the following section:

 

42-61.2-2.1.
State authorized to operate casino gaming. - (a) State-operated casino gaming shall be authorized at the facility of the
licensed video lottery terminal retailer known as “Twin River” located in the town of Lincoln; provided, that the requirements
of Article VI, Section 22 of the Rhode Island Constitution are met with respect to said facility at the general election
next held after enactment of this section.

 

    	 	- 2 -	 

     

    

 

(1)   With
respect to the “Twin River” facility, the authorization of this section 2.1 shall be effective upon: (i) The certification
by the secretary of state that the qualified voters of the state have approved the expansion of gambling at such facility to include
casino gaming; and (ii) The certification by the board of canvassers of the town of Lincoln that qualified electors of the
town of Lincoln have approved the expansion of gambling at such facility to include casino gaming.

 

(b)   The
general assembly finds that:

 

(1)    The
operation of casino gaming at Twin River will play a critical role in the economy of the state and enhance state and local revenues;

 

(2)   Pursuant
to Article VI, section 15 of the Rhode Island Constitution and the specific powers, authorities and safeguards set forth in subsection
(c) herein in connection with the operation of casino gaming, the state shall have full operational control over the specified
location at which casino gaming shall be conducted;

 

(3)   It
is in the best interest of the state to have the authorization to operate casino gaming as specified at Twin River; and

 

(4)   It
is in the best interest of the state to conduct an extensive analysis and evaluation of competitive casino gaming operations and
thereafter for the general assembly to enact comprehensive legislation during the 2012 legislative session to determine the terms
and conditions pursuant to which casino gaming would be operated in the state if it is authorized as set forth herein.

 

(c)   Notwithstanding
the provisions of any other law pursuant to Article VI, Section 15 of the Rhode Island Constitution, the state is authorized
to operate, conduct and control casino gaming at Twin River, subject to subsection (a) above. In furtherance thereof, the state,
through the division of state lottery and/or the department of business regulation, shall have full operational control to operate
the foregoing facility, the authority to make all decisions about all aspects of the functioning of the business enterprise, including,
without limitation, the power and authority to;

 

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(1)   Determine
the number, type, placement and arrangement of casino gaming games, tables and sites within the facility;

 

(2)   Establish
with respect to casino gaming one or more systems for linking, tracking, deposit and reporting of receipts, audits, annual reports,
prohibitive conduct and other such matters, determined from time to time.

 

(3)   Collect
all receipts to casino gaming, require that Twin River collect casino gaming gross receipts in trust for the state through the
division of state lottery, deposit such receipts into an account or accounts of its choice, allocate such receipts according to
law, and otherwise maintain custody and control over all casino gaming receipts and funds;

 

(4)   Hold
and exercise sufficient powers over Twin River’s accounting and finances to allow for adequate oversight and verification
of the financial aspects of casino gaming at the facility, including, without limitation;

 

(i)   The
right to require Twin River to maintain an annual balance sheet, profit and loss statement, and any other necessary information
or reports; and

 

(ii)   The
authority and power to conduct periodic compliance or special or focused audits of the information or reports provided, as well
as the premises with the facility containing records of casino gaming or in which the business of Twin River’s casino gaming
operations are conducted;

 

    	 	- 4 -	 

     

    

 

(5)   Monitor
all casino gaming operations and have the power to terminate or suspend any casino gaming activities in the event of an integrity
concern or other threat to the public trust, and in furtherance thereof, require the licensed video lottery retailer to provide
a specific area or areas from which to conduct such monitoring activities;

 

(6)   Define
and limit the rules of play and odds of authorized casino gaming games, including, without limitation, the minimum and maximum
wages for each casino gaming game;

 

(7)   Have
approval rights over matters relating to the employment of individuals to be involved, directly or indirectly, with the operation
of casino gaming at Twin River;

 

(8)   Establish
compulsive gambling treatment programs;

 

(9)   Promulgate,
or propose for promulgation, any legislative, interpretive and procedural rules necessary for the successful implementation, administration
and enforcement of this chapter; and

 

(10)  Hole
all other powers necessary and proper to fully effectively execute and administer the provisions of this chapter for its purpose
of allowing the state to operate a casino gaming facility through a licensed video lottery retailer hosting said casino gaming
on behalf of the State of Rhode Island.

 

(d)    Subject
to subsection (a) above, the state, through the division of state lottery and/or the department of business regulation, may expand
Twin River existing video lottery license issued, or issue Twin River a new casino gaming license, to permit casino gaming to the
extent authorized by this act.

 

    	 	- 5 -	 

     

    

 

(e)    Subject
to subsection (a) above, all rules and regulations shall be promulgated by the state, through the division of state lottery and
the department of business regulation, in accordance with the authority conferred upon the general assembly pursuant to Article VI,
Section 15 of the Rhode Island Constitution. In accord therewith, subject to subsection (a) above, the state, through the division
of state lottery and/or the department of business regulation, shall have authority to issue such regulations as it deems appropriate
pertaining to control, operation and management of casino gaming as specifically set forth in subsections (b) and (c) herein.

 

Section
3.  Nothing in this act shall abrogate or diminish the powers of the state, through the division of state lottery and/or
the department of business regulations, to conduct and control video lottery terminals pursuant to chapter 42-61.2 of the general
laws.

 

Section
4.  Pursuant to Article VI, Section 22 of the Rhode Island Constitution, the following question shall be submitted by
the secretary of state to the qualified electors of the state at the next statewide general election, and the secretary of state
shall certify the election results:

 

“Shall an act
be approved which would authorize the facility known as “Twin River” in the town of Lincoln to add state-operated casino
gaming, such as table games, to the types of gambling it offers?”

 

Section
5.  Pursuant to Article VI, Section 22 of the Rhode Island Constitution, the following question shall be submitted by
the local board of canvassers to the qualified electors of the town of Lincoln at the next statewide general election, and the
results thereof shall be certified to the secretary of state:

 

 

“Shall an act
be approved which would authorize the facility known as “Twin River” in the town of Lincoln to add state-operated casino
gaming, such as table games, to the types of gambling it offers?”

 

Section
6.  Purpose. The purpose of Sections 7 through 10 of this act is to help strengthen the commercial health of the Twin
River facility and the Newport Grand facility and project for the people of Rhode Island the public’s share of revenues generated
at the Twin River and Newport Grand facilities.

 

    	 	- 6 -	 

     

    

 

Section
7.  Unless otherwise amended by this Act, the terms, conditions, provisions, and definitions of Chapter 322 and 323 of
the Public Laws of 2005 and Chapter 16 of the Public Laws of 2010 are hereby incorporated herein by reference and shall remain
in full force and effect.

 

Section
8.  Authorized Procurement of Second Amendment to the Master Video Lottery Terminal Contract.

 

(a)    Notwithstanding
any provision of the general or public laws or regulations adopted thereunder to the contrary, the division of state lottery is
hereby expressly authorized and empowered, to enter into with Twin River and Newport Grand a Second Amendment to the Twin River
Master Contract and to the Newport grand Master Contract, for the following purposes and containing the following terms and conditions,
all of which shall be set forth in more particular detail in the Second Amendment;

 

(i)     To
provide that the requirements of Part A, Section 4(a)(ii) s to Twin River and Part B, Section (4)(a)(ii) as to Newport
Grand be amended to add the following provision thereto: The Division is authorized, in addition to the Promotional Points Program
established in Part A, Section 4(a)(ii) and Part B, Section 4(a)(ii), to approve an additional amount of Promotional
Points not to exceed seven hundred fifty thousand dollars ($750,000) per facility pursuant to the same terms and conditions authorized
by Chapter 16 of the Public Laws of 2010.

 

    	 	- 7 -	 

     

    

 

(ii)    To
provide that the requirements of the following subsection found in Chapter 16 of the Public Laws of 2010, Part B, Section
4(1)(iii)(2) be stricken and removed from the First Amendment to Master Video Terminal Contract, to wit: and (2) the division shall
not owe any amount pursuant to said section 4(a)(iii) in any given marketing year unless, pursuant to subsection 42-61.2-7(a),
the state has received net terminal income for such marketing year in an amount equal to or exceeding the amount of net terminal
income the state received for the state’s fiscal year 2010. The requirements so stricken shall allow the Marketing Program
and payments due thereunder to be in effect for fiscal year 2011 pursuant to the terms and conditions set forth in said section.

 

(b)    All
other terms and conditions contained in the First Amendment to Master Video Lottery Terminal Contract shall remain in full force
and effect.

 

Section
9.  Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled “Video Lottery Terminal” is hereby amended
to read as follows:

 

42-61.2-7. Division
of revenue. [Effective June 30, 2009 and expires June 30, 2011.] —(a) Notwithstanding the provisions of section 42-61-15,
the allocation of net terminal income derived from video lottery games is as follows:

 

(1)    For
deposit in the general fund and to the state lottery division fund for administrative purposes: Net terminal income not otherwise
disbursed in accordance with subdivisions (a)(2) — (a)(6) herein;

 

(i)     Except
for the fiscal year ending June 30, 2008, nineteen one hundredths of one percent (0.19%) up to a maximum of twenty million dollars
($20,000,000) shall be equally allocated to the distressed communities as defined in section 45-13-12 provided that no eligible
community shall receive more than twenty-five percent (25%) of that community’s currently enacted municipal budget as its
share under this specific subsection. Distributions made under this specific subsection are supplemental to all other distributions
made under any portion of general laws section 45-13-12. for the fiscal year ending June 30, 2008 distributions by community shall
be identical to the distributions made in the fiscal year ending June 30, 2007 and shall be made from general appropriations. For
the fiscal year ending June 30, 2009, the total state distribution shall be the same total amount distributed in the fiscal year
ending June 30, 2009 and shall be made from general appropriations, provided however that $784,458 of the total appropriation shall
be distributed equally to each qualifying distressed community.

 

    	 	- 8 -	 

     

    

 

(ii)    Five
one hundredths of one percent (0.05%) up to a maximum of five million dollars ($5,000,000) shall be appropriated to property tax
relief to fully fund the provisions of section 44-33-2.1. The maximum credit defined in subdivision 44-33-0(2) shall increase to
the maximum amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit of five hundred dollars
($500) is obtained. In no event shall the exemption in any fiscal year be less than the prior fiscal year.

 

(iii)   One
and twenty-two one hundredths of one percent (1.22%) to fund section 44.34.1-1, entitled “Motor Vehicle and Trailer Excise
Tax Elimination Act of 1998” to the maximum amount to the nearest two hundred fifty dollar ($250) increment within the allocation.
In no event shall the exemption in any fiscal year be less than the prior fiscal year.

 

(iv)   Except
for the fiscal year ending June 30, 2008, ten one hundredths of one percent (0.10%) to a maximum of ten million dollars ($10,000,000)
for supplemental distribution to communities not included in paragraph (a)(1(i) above distributed proportionately on the
basis of general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008 distributions by community
shall be identical to the distributions made in the fiscal year ending June 30, 2007 and shall be made from general appropriations.
For the fiscal year ending June 30, 2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter,
funding shall be determined by appropriation.

 

    	 	- 9 -	 

     

    

  

(2)    To
the licensed video lottery retailer;

 

(a)    (i)
  Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-six percent (26%) minus three hundred eighty four
thousand nine hundred ninety-six dollars ($384,996);

 

(ii)    On
and after the effective date of the NGJA Master Contract, to the licensed video lottery retailer who is a party to the NGJA Master
Contract, all sums due and payable under said Master Contract minus three hundred eighty four thousand nine hundred ninety-six
dollars (384,996).

 

(b)    (i)
  Prior to the effective date of the UTGR Master Contract, to the present licensed video lottery retailer at Lincoln Park which
is not a party to the UTGR Master Contract, twenty-eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven
thousand six hundred eighty-seven dollars ($767,687);

 

(ii)    On
and after the effect date of the UTGR Master Contract, to the licensed video lottery retailer who is a party to UTGR Master Contract,
all sums due and payable under said Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars ($767,687).

 

(3)    (i)
  To the technology providers who are not a party to the GTECH Master Contract as set forth and referenced in Public Law, 2003,
Chapter 32, seven percent (7%) of the net terminal income of the provider’s terminals: in addition thereto, technology providers
who provide premium or licensed proprietary content or those games that have unique characteristics such as 3D graphics, unique
math game play features or merchandising elements to video lottery terminals may receive incremental compensation, either in the
form of a daily fee or to an increased percentage, if all of the following criteria are met;

 

    	 	- 10 -	 

     

    

 

		(A)	A licensed video lottery retailer has requested the placement of premium or licensed proprietary
content at its licensed video lottery facility;

 

(B)   The
division of lottery has determined in its sole discretion that the request is likely to increase net terminal income or is otherwise
important to preserve or enhance the competiveness of the licensed video lottery retailer;

 

(C)   After
approval of the request by the division of lottery, the total number of premium or licensed property content video lottery terminals
does not exceed ten percent (10%) of the total number of video lottery terminals authorized at the respective licensed video lottery
retailer, and

 

(D)   All
incremental costs are shared between the division and the respective licensed video lottery retailer based upon their proportionate
allocation of net terminal income. The division of lottery is hereby authorized to limited agreements with the licensed video lottery
retailers or the technology providers, as applicable, to effect the intent herein.

 

(ii)    TO
contractors who are a party to the Master Contract as set forth and referenced in Public Law 2003, Chapter 32, all sums due and
payable under said Master Contract;

 

(iii)   Notwithstanding
paragraphs (i) and (ii) above, there shall be subtracted proportionately from the payments to technology providers the sum of six
hundred twenty-eight thousand seven hundred thirty-seven dollars ($628,737);

 

(4)    To
the city of Newport one and one hundredth percent (1.01%) of net terminal income of authorized machines at Newport Grand except
that effective November 9, 2009, the allocation shall be one and two tenths percent (1.2%) of net terminal income of authorized
machines at Newport Grand for each week the facility operates video lottery games on a twenty-four (24) hour basis for all eligible
hours authorized and to the town of Lincoln one and twenty-six hundredths percent (1.26%) of net terminal income of authorized
machines at Lincoln Par except that effective November 9, 2009, the allocation shall be one and forty-five hundredths percent (1.45%)
of net terminal income of authorized machines at Lincoln Park for each week the facility operates video lottery games on a twenty-four
(24) hour basis for all eligible hours authorized;

 

    	 	- 11 -	 

     

    

 

(5)    To
the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net terminal income of authorized machines at Lincoln
Park up to a maximum of ten million dollars ($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the
account of a Tribal Development Fund to be used for the purpose of encouraging and promoting: home ownership and improvement, elderly
housing, adult vocational training; health and social services; childcare; natural resource protection; and economic development
consistent with state law. Provided, however, such distribution shall terminate upon the opening of any gamily facility in which
the Narragansett Indians are entitled to any payments or other incentives; and provided further, any monies distributed hereunder
shall not be used for, or spent on previously contracted debts; and

 

(6)    Unclaimed
prizes and credits shall remit to the general fund of the state;

 

(7)    Payments
into the state’s general fund specified in subdivisions (a)(1) and (a)(6) shall be made on an estimated monthly basis. Payment
shall be made on the tenth day following the close of the month except for the last month when payment shall be on the last business
day.

 

(c)    Notwithstanding
the above, the amounts payable by the Division to UTGR related to the Marketing Program shall be paid on a frequency agreed by
the division, but no less frequently than annually.

 

    	 	- 12 -	 

     

    

 

(d)    Notwithstanding
anything in this chapter 61.2 of this title 42 to the contrary, the Director is authorized to fund the Marketing Program as described
above in regard to the First Amendment to the UTGR Master Contract.

 

(e)    Notwithstanding
the above, the amounts payable by the Division to Newport Grand related to the Marketing Program shall be paid on a frequency agreed
by the Division, but no less frequently than annually.

 

(f)     Notwithstanding
anything in this chapter 61.2 of this title 42 to the contrary, the Director is authorized to fund the Marketing Program as described
above in regard to the First Amendment to the Newport Grand Master Contract.

 

42-61.2-7. Division
of revenue. [Effective June 30, 2011.] — (a) Notwithstanding the provisions of section 42-61-15, the allocation of
net terminal income derived from video lottery games is as follows:

 

(1)    For
deposit in the general fund and to the state lottery division fund for administrative purposes: Net terminal income not otherwise
disbursed in accordance with subdivisions (a)(2); — (a)(6) herein:

 

(i)     Except
for the fiscal year ending June 30, 2008, nineteen one hundredths of one percent (0.19%) up to a maximum of twenty million dollars
($20,000,000) shall be equally allocated to the distressed communities as defined in section 45-13-12 provided that no eligible
community shall receive more than twenty-five percent (25%) of that community’s currently enacted municipal budget as its
share under this specific subsection. Distributions made under this specific subsection are supplemental to all other distributions
made under any portion of general laws section 45-13-12. For the fiscal year ending June 30, 2008 distributions by community shall
be identical to the distributions made in the fiscal year ending June 30, 2007 and shall be made from general appropriations. For
the fiscal year ending June 30, 2009, the total state distribution shall be the same total amount distributed in the fiscal year
ending June 30, 2008 and shall be made from general appropriations. For the fiscal year ending June 30, 2010, the total state distribution
shall be the same total amount distributed in the fiscal year ending June 30, 2009 and shall be made from general appropriations,
provided however that $784,458 of the total appropriation shall be distributed equally to each qualifying distressed community.

 

    	 	- 13 -	 

     

    

 

(ii)    Five
one hundredths of one percent (0.05%) up to a maximum of five million dollars ($5,000,000) shall be appropriated to property tax
relief to fully fund the provisions of section 44-33-2.1. The maximum credit defined in subdivision 44-33-0(2) shall increase to
the maximum amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit of five hundred dollars
($500) is obtained. In no event shall the exemption in any fiscal year be less than the prior fiscal year.

 

(iii)   One
and twenty-two one hundredths of one percent (1.22%) to fund section 44-34.1-1, entitled “Motor Vehicle and Trailer Excise
Tax Elimination Act of 1998”, to the maximum amount to the nearest two hundred fifty dollar ($250) increment within the allocation.
In no event shall the exemption in any fiscal year be less than the prior fiscal year.

 

(iv)   Except
for the fiscal year ending June 30, 2008, ten one hundredths of one percent (0.10%) to a maximum of ten dollars ($10,000,000) for
supplemental distribution to communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of
general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008 distributions by community shall
be identical to the distributions made in the fiscal year ending June 30, 2008 and shall be made from general appropriations. For
the fiscal year ending June 30, 2009, no funding shall be disbursed. For the fiscal year during June 30, 2010 and thereafter, funding
shall be determined by appropriation.

 

    	 	- 14 -	 

     

    

 

(2)    To
the licensed video lottery retailer:

 

(a)    (i)
Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-six percent (26%) minus three hundred eighty four
thousand nine hundred ninety-six dollars ($384,996);

 

(ii)    On
and after the effective date of the NGJA Master Contract, to the licensed video lottery retailer who is a party to the NGJA Master
Contract, all sums due and payable under said Master Contract minus three hundred eighty four thousand nine hundred ninety-six
dollars ($384,996);

 

(b)    (i)
Prior to the effective date of the UTGR Master Contract, to the present licensed video lottery retailer at Lincoln Park which
is not a party to the UTGR Master Contract, twenty-eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven
thousand six hundred eighty-seven dollars ($767,687);

 

(ii)    On
and after the effective date of the UTGR Master Contract, to the licensed video lottery retailer who is a party to the UTGR Master
Contract, all sums due and payable under said Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven
dollars ($767,687).

 

(3)    (i)
To the technology providers who are not a party to the GTECH Master Contract as set forth and referenced in Public Law 2003, Chapter
32, seven percent (7%) of the net terminal income of the provider’s terminals; in addition thereto, technology providers
who provide premium or licensed proprietary content or those games that have unique characteristics such as 3D graphics, unique
math game play features or merchandising elements to video lottery terminals may receive incremental compensation, either in the
form of a daily fee or as an increased percentage, if all of the following criteria are met.

 

    	 	- 15 -	 

     

    

 

(A)   A
licensed video lottery retailer has requested the placement of premium or licensed proprietary content at its licensed video lottery
facility;

 

(B)   The
divisions of lottery has determined in its sole discretion that the request is likely to increase net terminal income or is otherwise
important to preserve or enhance the competiveness of the licensed video lottery retailer;

 

(C)   After
approval of the request by the division of lottery, the total number of premium or licensed property content video lottery terminals
does not exceed ten percent (10%) of the total number of video lottery terminals authorized at the respective licensed video lottery
retailer; and

 

(D)   All
incremental costs are shared between the division and the respective licensed video lottery retailer based upon their proportionate
allocation of net terminal income. The division of lottery is hereby authorized to amend agreements with the licensed video lottery
retailers, or the technology providers, as applicable, to effect the intent herein.

 

(ii)    To
contractors who are a party to the Master Contract as set forth and referenced in Public Law 2003, Chapter 32, all sums due and
payable under said Master Contract;

 

(iii)   Notwithstanding
paragraphs (i) and (ii) above, there shall be subtracted proportionately from the payments to technology providers the sum of
six hundred twenty-eight thousand seven hundred thirty-seven dollars ($628,737);

 

    	 	- 16 -	 

     

    

 

(4)    To
the city of Newport one and one hundredth percent (1.01%) of net terminal income of authorized machines at Newport Grand except
that effective November 9, 2009 until June 30, 2012, the allocation shall be one and two tenths percent (1.2%) of net terminal
income of authorized machines at Newport Grand for each week the facility operates video lottery games on a twenty-four (24) hour
basis for all eligible hours authorized and to the town of Lincoln one and twenty-six hundredths percent (1.26%) of net terminal
income of authorized machines at Lincoln Park except that effective November 9 2009 until June 303, 2012, the allocation shall
be one and forty-five hundredths percent (1.45%) of net terminal income of authorized machines at Lincoln Park for each week the
facility operates video lottery games on a twenty-four (24) basis for all eligible hours authorized; and

 

(5)   To
the Narragansett Indian Tribe, seventeen hundredths of one percent (0.1%) of net terminal income of authorized machines at Lincoln
Park up to a maximum of ten million dollars ($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the
account of a Tribal Development Fund to be used for the purpose of encouraging and promoting: home ownership and improvement, elderly
housing, adult vocational training; health and social services; childcare; natural resource protection; and economic development
consistent with state law. Provided, however, such distribution shall terminate upon the opening of any gaming facility in which
the Narragansett Indians are entitle to any payments or other incentives; and provided further, any monies distributed hereunder
shall not be used for, or spent on previously contracted debts; and

 

(6)    Unclaimed
prizes and credits shall remit to the general fund of the state; and

 

(7)    Payments
into the state’s general fund specified in (a)(1) and (a)(6) shall be made on an estimated monthly basis. Payment shall be
made on the tenth day following the close of the month except for the last month when payment shall be on the last business day.

 

    	 	- 17 -	 

     

    

 

(c)    Notwithstanding
the above, the amounts payable by the Division to UTGR related to the Marketing Program shall be paid on a frequency agreed by
the Division, but no less frequently than annually.

 

(d)    Notwithstanding
anything in this chapter 61.2 of this title 42 to the contrary, the Director is authorized to fund the Marketing Program as described
above in regard to the First Amendment to the UTGR Master Contract.

 

(e)     Notwithstanding
the above, the amounts payable by the Division to Newport Grand related to the Marketing Program shall be paid on a frequency agreed
by the Division, but no less frequently than annually.

 

(f)     Notwithstanding
anything in this chapter 61.2 of this title 42 to the contrary, the Director is authorized to fund the Marketing Program as described
above in regard to the First Amendment to the Newport Grand Master Contract.

 

Section
10.This Article shall take effect upon passage.

 

    	 	- 18 -Exhibit 10.8

 

THIRD
AMENDMENT TO MASTER VIDEO LOTTERY TERMINAL CONTRACT

 

This Third Amendment to Master Video Lottery
Contract (the “Third Amendment”) is entered into on the 18th day of September 2012 by and between the
Division of Lotteries of the Rhode Island Department of Revenue, an agency of the State of Rhode Island (formally known as the
Division of Lotteries of the Rhode Island Department of Administration), with its principal address at 1425 Pontiac Avenue,
Cranston, Rhode Island 02920 (the “Division”), and UTGR, Inc., a Delaware corporation with its principal office located
at 100 Twin River Road, Lincoln, Rhode Island 02865, (“UTGR”), and amends that certain Master Video Lottery Terminal
Contract by and between the Division and UTGR dated as of July 18, 2005 (the “Master Contract”), that certain
First Amendment to Master Video Lottery Terminal Contract by and between the Division and UTGR dated November 4, 2010 (the
“First Amendment”) and that certain Second Amendment to Master Video Lottery Terminal Contract by and between the Division
and UTGR dated May 3, 2012 (the “Second Amendment”). The Division and UTGR are referred to herein collectively as the
“Parties,” and individually, as a “Party.” This Third Amendment shall take effect as set forth in Section 3
below.

 

WITNESSETH

 

WHEREAS, the Division and UTGR entered
into that certain Master Contract dated as of July 18, 2005 which Master Contract has been amended as indicated above;

 

WHEREAS, during the 2012 legislative session
of the Rhode Island General Assembly, the State of Rhode Island enacted into law 2012 – S 3001 Substitute A and 2012
– H 8213 Substitute A as amended, identical bills, both of which are entitled “An Act Relating to Revenue Protection,”
and both of which were signed by the Governor of Rhode Island on June 20, 2012, (Copies of both bills are attached hereto
as Exhibit A and Exhibit B (“2012 Revenue Protection Act”);

 

WHEREAS, Section 8 of the 2012 Revenue
Protection Act, inter alia, expressly authorizes and empowers the Division to enter into with UTGR a Third Amendment to
the Master Contract for certain specified purposes as set forth in Section 8(a)(1) of the 2012 Revenue Protection Act; and

 

NOW, THEREFORE, pursuant to Section 8
of the 2012 Revenue Protection Act and in consideration of the foregoing and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and in consideration of the mutual promises, covenants, obligations and conditions
herein contained, the Division and UTGR hereby agree as follows:

 

		1.	Definitions and Interpretation.

 

		1.1	References to the “Agreement” contained in this Third Amendment, the Master Contract,
First Amendment, and Second Amendment thereto are, or shall be deemed to be, references to the Master Contract, as amended and/or
extended as by the First Amendment, Second Amendment, and this Third Amendment thereto.

 

		1.2	Any capitalized terms used in this Third Amendment but
not defined herein shall have the meaning as defined in the Master Contract, First Amendment Second Amendment, and/or applicable
law, including but not limited to, the 2012 Revenue Protection Act.

 

     

     

    

  

		2.	Promotional Points Program.

 

		2.1	Pursuant to and in accordance with the authorization granted to the Division in Section 8
of the 2012 Revenue Protection Act, the Master Contract is hereby amended by adding the following definition to Section 1
thereof:

 

“1.7. Initial Promotional
Points Program” means that promotional points program authorized in Section 4(a)(ii) of the 2010 Contracts Act,
as amended by Article 25 of the 2011 Gaming Act and set forth in Section 4.1 of the First Amendment, and as amended by
Section 2.1 of the Second Amendment.

 

		2.2	The Second Amendment is hereby amended by adding the following paragraph to the end of Section 2
thereof:

 

“Notwithstanding the foregoing,
commencing in FY 2013, in addition to the Initial Promotional Points Program established in Part A, Section 4(a)(ii)
of the 2010 VLT Contracts Act, as amended by Article 25 of the 2011 Gaming Act, the Division is authorized to grant approval
to UTGR for a Supplementary Promotional Points Program pursuant to terms and conditions established from time to time by the Division
during the term of the Master Contract. The approved amount of Supplementary Promotional Points shall not to exceed six percent
(6%) of Twin River net terminal income of the Prior Marketing Year. For avoidance of doubt, the aggregate approved amount of Initial
and Supplementary Promotional Points Programs, in total, shall therefore not exceed ten percent (10%) of the amount of net terminal
income of Twin River of the Prior Marketing Year, plus an additional seven hundred fifty thousand dollars ($750,000) pursuant to
the same terms and conditions authorized by Chapter 151, Article 25 of the Public Laws of 2011 Section 8(a)(i).”

 

		3.	Effective Date.

 

This Third Amendment shall be effective
as of the 1st day of July, 2012.

 

		4.	Miscellaneous.

 

		4.1	Except as specifically modified in this Third Amendment, all other terms of the Master Contract,
First Amendment and Second Amendment shall remain in full force and effect.

 

		4.2	This Third Amendment contains the entire agreement by and
between the parties and supersedes and replaces all prior understandings or agreements (if any), oral or written, with respect
to the subject matter hereof.

 

    - 2 -

     

    

  

		4.3	This Third Amendment may be executed in counterparts, each of which is deemed an original, but
when taken together constitute one and the same instrument.

 

IN WITNESS WHEREOF, the Parties have caused
this Third Amendment to be signed by their duly authorized representatives as of the date first set forth above.

 

	UTGR, Inc.	 
	 	 	 
	By:	/s/ Craig L. Eaton	 
	 	 	 
	Name:	Craig L. Eaton	 
	 	 	 
	Title:	Senior Vice President	 
	 	 	 
	Division of Lotteries of the Department of Revenue	 
	 	 	 
	By:	/s/ Gerald S. Aubin	 
	 	 	 
	Name:	Gerald S. Aubin	 
	 	 	 
	Title:	Director	 

  

    - 3 -

     

    

 

2012 –
s 3001 substitute a

 

state of
rhode island

 

in general
assembly

 

january
session, A.D. 2012

 

 

 

AN ACT

 

RELATING TO REVENUE PROTECTION

 

Introduced By: Senators
Goodwin, Bates, and Felag

 

Date Introduced: May 24,
2012

 

Referred To: Senate Finance

 

It is enacted by the
General Assembly as follows:

 

SECTION 1. Purpose.
The general assembly hereby finds that:

 

(a) The Twin River
facility located in the Town of Lincoln (“Twin River”) is an important source of revenue for the state of Rhode Island,
having been licensed by the Rhode Island Department of Business Regulation to conduct pari-mutuel wagering, and at which the Division
(as defined herein) operates games of the Rhode Island Lottery.

 

(b) The Newport Grand
facility located in the City of Newport (“Newport Grand”) is an important source of revenue for the state of Rhode
Island, having been licensed by the Rhode Island Department of Business Regulation to conduct pari-mutuel wagering, and at which
the Division (as defined herein) operates games of the Rhode Island Lottery.

 

(c) In a study commissioned by the Rhode Island Department of
Revenue, Christiansen Capital Advisors, LLC anticipated that competition from gaming facilities recently authorized in Massachusetts
could have a 25-40% negative impact on state revenues generated from state-operated gaming in Rhode Island, amounting to losses
to the state of one hundred million dollars ($100,000,000) or more in annual revenue.

 

     

     

    

  

(d) Revenues generated
from state-operated gaming in Rhode Island constitute the third largest source of revenue to the state, behind only revenue generated
from income taxes and sales and use taxes.

 

(e) Accordingly, competition
from gaming facilities in Massachusetts present an imminent threat to revenues generated by the state, and thus an imminent threat
to the public welfare.

 

(f) It is therefore
imperative that action be taken to ameliorate the anticipated adverse effects on state revenues from competition from gaming facilities
recently authorized in Massachusetts.

 

(g) It is also imperative
that action be taken to preserve and protect the state’s ability to maximize revenues at Twin River and Newport Grand in
an increasingly competitive gaming market by expanding critical revenue-driving promotional programs through legislative authorization
and necessary amendments to contracts, previously authorized by the General Assembly, to position the promotional programs for
long-term success.

 

(h) It is also in the best interest of the state to preserve
public confidence in the integrity of Rhode Island gaming by authorizing the Division to promulgate regulations to direct and control
state-operated Table Gaming (as defined herein).

 

    - 2 -

     

    

  

(i) It is the intent
of the general assembly that this act address, independently: (1) Section 8 of Chapter 151, Article 25 of the
Public Laws of 2011 authorizing a referendum question to be submitted to statewide and Town of Lincoln voters at the next general
election asking such voters to approve Casino Gaming (as defined therein) at Twin River; and (2) Section 1 of Chapters 24
and 25 of the Public Laws of 2012 authorizing a referendum question to be submitted to statewide and City of Newport voters at
the next general election asking such voters to approve Casino Gaming at Newport Grand; it being the intent of the General Assembly
that the voters’ actions on the referendum questions as to Twin River be independent of the voters’ actions on the
referendum questions as to Newport Grand.

 

(j) It is also the
intent of the general assembly that this act satisfies the general assembly’s obligations pursuant to subdivision 42-61.2-2.1(b)(4)
of the Rhode Island General Laws.

 

(k) It is also the
intent of the general assembly that this act, being necessary to address an imminent threat to the public welfare, as aforesaid,
shall be liberally construed so as to effectuate its purposes, including without limitation, the state’s attempt to minimize
certain commercial risks faced by UTGR (as defined herein) and Newport Grand, LLC (as defined herein) by entering into agreements
with the Division.

 

SECTION 2. Definitions.
(a) For the purposes of this act, the following terms shall have the following meanings:

 

(1) “Division”
means the division of lotteries within the department of revenue and/or any successor as party to the UTGR Master Contract, the
Newport Grand Master Contract and the GTECH Master Contract.

 

(2) “GTECH Master
Contract” means that certain Master Contract made as of May 12, 2003 pursuant to Chapters 32 and 33 of the Public
Laws of 2003, as amended from time to time.

 

(3) “Initial Promotional Points Program” means that
promotional points program authorized in Section 4(a)(ii) of Part A as to Twin River and Part B as to Newport Grand
of Chapter 16 of the Public Laws of 2010, as amended by Section 8 of Chapter 151, Article 25 of the Public
Laws of 2011.

 

    - 3 -

     

    

  

(4) “Newport
Grand, LLC” means that limited liability company defined in Chapter 16 of the Public Laws of 2010, Part B, Section 2(l).

 

(5) “Newport
Grand Master Contract” means that certain Master Video Lottery Terminal Contract made as of November 23, 2005 by and
between the Division and Newport Grand Jai Alai, LLC, as amended from time to time.

 

(6) “Prior Marketing
Year” means the prior state fiscal year.

 

(7) “Promotional
Points” means the promotional points issued pursuant to any free play or other promotional program operated by the Division
at a licensed video lottery terminal facility (including, without limitation, the promotional points programs at Twin River and
Newport Grand authorized pursuant to Chapter 16 of the Public Laws of 2010, Part A as to Twin River and Part B as
to Newport Grand, Section 4(a)(ii), Chapter 151, Article 25 of the Public Laws of 2011, Section 8(a)(i), and
Section 8 hereof as to Twin River and Section 9 hereof as to Newport Grand), which are downloaded to a video lottery
terminal by a player.

 

(8) “Supplementary
Promotional Points Program” means that promotional points program authorized in Section 8 hereof as to Twin River and
Section 9 hereof as to Newport Grand.

 

(9) “UTGR”
means that corporation defined in Chapter 16 of the Public Laws of 2010, Part A, Section 2(n).

 

(10) “UTGR Master Contract” means that certain Master
Video Lottery Terminal Contract made as of July 18, 2005 by and between the Division, the Department of Transportation and
UTGR, as amended from time to time.

 

    - 4 -

     

    

  

SECTION 3. Except as
otherwise amended by this act, the terms, conditions, provisions and definitions of Chapters 32 and 33 of the Public Laws
of 2003, Chapters 322 and 323 of the Public Laws of 2005, Chapter 16 of the Public Laws of 2010, Chapter 151, Article 25
of the Public Laws of 2011 and Chapters 24 and 25 of the Public Laws of 2012 are hereby incorporated by reference and shall
remain in full force and effect.

 

SECTION 4. Sections 42-61.2-1
and 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled “Video Lottery Terminal” is hereby amended to read
as follows:

 

42-61.2-1. Definitions.
[Effective June 30, 2009.] – For the purpose of this chapter, the following words shall mean:

 

(1) “Central
communication system” means a system approved by the lottery division, linking all video lottery machines at a licensee location
to provide auditing program information and any other information determined by the lottery. In addition, the central communications
system must provide all computer hardware and related software necessary for the establishment and implementation of a comprehensive
system as required by the division. The central communications licensee may provide a maximum of fifty percent (50%) of the video
lottery terminals.

 

(2) “Licensed
video lottery retailer” means a pari-mutuel licensee specifically licensed by the director subject to the approval of the
division to become a licensed video lottery retailer.

 

(3) “Net terminal
income” means currency placed into a video lottery terminal less credits redeemed for cash by players.

 

(4) “Pari-mutuel
licensee” means an entity licensed and authorized to conduct:

 

(i) Dog racing, pursuant
to chapter 3.1 of title 41; and/or

 

(ii) Jai-alai games, pursuant to chapter 7 of title 41.

 

    - 5 -

     

    

  

(5) “Technology
provider” means any individual, partnership, corporation, or association that designs, manufactures, installs, maintains,
distributes or supplies video lottery machines or associated equipment for the sale or use in this state.

 

(6) “Video lottery
games” means lottery games played on video lottery terminals controlled by the lottery division.

 

(7) “Video lottery
terminal” means any electronic computerized video game machine that, upon the insertion of cash, is available to play a video
game authorized by the lottery division, and which uses a video display and microprocessors in which, by chance, the player may
receive free games or credits that can be redeemed for cash. The term does not include a machine that directly dispenses coins,
cash, or tokens.

 

(8) “Casino gaming”
means any and all table and casino-style games played with cards, dice or equipment, for money, credit, or any representative of
value; including, but not limited to roulette, blackjack, big six, craps, poker, baccarat, pai gow, any banking or percentage game,
or any other game of device included within the definition of Class III gaming as that term is defined in Section 2703(8)
of Title 25 of the United States Code and which is approved by the state through the division of state lottery.

 

(9) “Net Table
Game Revenue” means win from Table Games minus counterfeit currency.

 

(10) “Rake” means a set fee or percentage of cash
and chips representing cash wagered in the playing of a nonbanking Table Game assessed by a Table Game Retailer for providing the
services of a dealer, gaming table or location, to allow the play of any nonbanking Table Game.

 

    - 6 -

     

    

  

(11) “Table Game”
or “Table Gaming” means that type of Casino Gaming in which table games are played for cash or chips representing cash,
using cards, dice or equipment and conducted by one or more live persons.

 

(12) “Table Game
Retailer” means a retailer authorized to conduct Table Gaming pursuant to section 42-61.2-2.1 and 42-61.2-2.2 of the
Rhode Island General Laws.

 

42-61.2-7. Division
of revenue. [Effective June 30, 2011.] – (a) Notwithstanding the provisions of section 42-61-15, the allocation
of net terminal income derived from video lottery games is as follows:

 

(1) For deposit in
the general fund and to the state lottery division fund for administrative purposes: Net terminal income not otherwise disbursed
in accordance with subdivisions (a)(2) – (a)(6) herein;

 

(i) Except for the fiscal year ending June 30, 2008, nineteen
one hundredths of one percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally allocated to the
distressed communities as defined in section 45-13-12 provided that no eligible community shall receive more than twenty-five
percent (25%) of that community’s currently enacted municipal budget as its share under this specific subsection. Distributions
made under this specific subsection are supplemental to all other distributions made under any portion of general laws section 45-13-12.
For the fiscal year ending June 30, 2008 distributions by community shall be identical to the distributions made in the fiscal
year ending June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30, 2009, the
total state distribution shall be the same total amount distributed in the fiscal year ending June 30, 2008 and shall be made
from general appropriations. For the fiscal year ending June 30, 2010, the total state distribution shall be the same total
amount distributed in the fiscal year ending June 30, 2009 and shall be made from general appropriations, provided however
that $784,458 of the total appropriation shall be distributed equally to each qualifying distressed community. For each of the
fiscal years ending June 30, 2011 and June 30, 2012, seven hundred eighty-four thousand four hundred fifty-eight dollars
($784,458) of the total appropriation shall be distributed equally to each qualifying distressed community.

 

    - 7 -

     

    

  

(ii) Five one hundredths
of one percent (0.05%) up to a maximum of five million dollars ($5,000,000) shall be appropriated to property tax relief to fully
fund the provisions of section 44-33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the
maximum amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit of five hundred dollars
($500) is obtained. In no event shall the exemption in any fiscal year be less than the prior fiscal year.

 

(iii) One and twenty-two
one hundredths of one percent (1.22%) to fund section 44-34.1-1, entitled “Motor Vehicle and Trailer Excise Tax Elimination
Act of 1998”, to the maximum amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no
event shall the exemption in any fiscal year be less than the prior fiscal year.

 

(iv) Except for the fiscal year ending June 30, 2008, ten
one hundredths of one percent (0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to communities
not included in paragraph (a)(1)(i) above distributed proportionately on the basis of general revenue sharing distributed
for that fiscal year. For the fiscal year ending June 30, 2008 distributions by community shall be identical to the distributions
made in the fiscal year ending June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30,
2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter, funding shall be determined
by appropriation.

 

    - 8 -

     

    

  

(2) To the licensed
video lottery retailer:

 

(a) (i) Prior to the
effective date of the NGJA Master Contract, Newport Jai Ali twenty-six percent (26%) minus three hundred eighty four thousand nine
hundred ninety-six dollars ($384,996);

 

(ii) On and after the
effective date of the NGJA Master Contract, to the licensed video lottery retailer who is a party to the NGJA Master Contract,
all sums due and payable under said Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars ($384,996).

 

(iii) Effective July 1,
2013, provided that the referendum measure authorized by Section 1 of Chapters 24 and 25 of the Public Laws of 2012 is
approved statewide and in the City of Newport and provided further that Newport Grand commences and continues to offer table games,
the rate of net terminal income payable to Newport Grand, LLC under the Newport Grand Master Contract shall increase by one and
one half percentage (1.5%) points.

 

(b) (i) Prior to the
effective date of the UTGR Master Contract, to the present licensed video lottery retailer at Lincoln Park which is not a party
to the UTGR Master Contract, twenty-eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven thousand
six hundred eighty-seven dollars ($767,687);

 

(ii) On and after the effective date of the UTGR Master Contract,
to the licensed video lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said Master Contract
minus seven hundred sixty-seven thousand six hundred eighty-seven dollars ($767,687).

 

    - 9 -

     

    

  

(3) (i) To the technology
providers who are not a party to the GTECH Master Contract as set forth and referenced in Public Law 2003, Chapter 32, seven
percent (7%) of the net terminal income of the provider’s terminals; in addition thereto, technology providers who provide
premium or licensed proprietary content or those games that have unique characteristics such as 3D graphics, unique math/game
play features or merchandising elements to video lottery terminals may receive incremental compensation, either in the form of
a daily fee or as an increased percentage, if all of the following criteria are met:

 

(A) A licensed video
lottery retailer has requested the placement of premium or licensed proprietary content at its licensed video lottery facility;

 

(B) The division of
lottery has determined in its sole discretion that the request is likely to increase net terminal income or is otherwise important
to preserve or enhance the competiveness of the licensed video lottery retailer;

 

(C) After approval
of the request by the division of lottery, the total number of premium or licensed propriety content video lottery terminals does
not exceed ten percent (10%) of the total number of video lottery terminals authorized at the respective licensed video lottery
retailer; and

 

(D) All incremental
costs are shared between the division and the respective licensed video lottery retailer based upon their proportionate allocation
of net terminal income. The division of lottery is hereby authorized to amend agreements with the licensed video lottery retailers,
or the technology providers, as applicable, to effect the intent herein.

 

(ii) To contractors
who are a party to the Master Contract as set forth and referenced in Public Law 2003, Chapter 32, all sums due and payable
under said Master Contract;

 

(iii) Notwithstanding paragraphs (i) and (ii) above, there
shall be subtracted proportionately from the payments to technology providers the sum of six hundred twenty-eight thousand seven
hundred thirty-seven dollars ($628,737);

 

    - 10 -

     

    

  

(4) (A) To the city
of Newport one and one hundredth percent (1.01%) of net terminal income of authorized machines at Newport Grand, except that:

 

(i) Effective November 9,
2009 until June 30, 2013, the allocation shall be one and two tenths percent (1.2%) of net terminal income of authorized machines
at Newport Grand for each week the facility operates video lottery games on a twenty-four (24) hour basis for all eligible hours
authorized, and

 

(ii) Effective July 1,
2013, provided that the referendum measure authorized by Section 1 of Chapters 24 and 25 of the Public Laws of 2012 is
approved statewide and in the City of Newport, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal
income of authorized video lottery terminals at Newport Grand; and

 

(B) To the town of
Lincoln one and twenty-six hundredths percent (1.26%) of net terminal income of authorized machines at Twin River except that,

 

(i) Effective November 9,
2009 until June 30, 2013, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal income of
authorized machines at Twin River for each week video lottery games are offered on a twenty-four (24) hour basis for all eligible
hours authorized, and

 

(ii) Effective July 1, 2013, provided that the referendum
measure authorized by Article 25, Chapter 151, Section 4 of the Public Laws of 2011 is approved statewide and in
the Town of Lincoln, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal income of authorized
video lottery terminals at Twin River; and

 

    - 11 -

     

    

 

(5) To the Narragansett Indian Tribe, seventeen hundredths
of one percent (0.17%) of net terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars ($10,000,000)
per year, which shall be paid to the Narragansett Indian Tribe for the account of a Tribal Development Fund to be used for the
purpose of encouraging and promoting: home ownership and improvement, elderly housing, adult vocational training; health and social
services; childcare; natural resource protection; and economic development consistent with state law. Provided, however, such
distribution shall terminate upon the opening of any gaming facility in which the Narragansett Indians are entitled to any payments
or other incentives; and provided further, any monies distributed hereunder shall not be used for, or spent on previously contracted
debts; and

 

(6) Unclaimed prizes
and credits shall remit to the general fund of the state; and

 

(7) Payments into the
state’s general fund specified in subdivisions (a)(1) and (a)(6) shall be made on an estimated monthly basis. Payment
shall be made on the tenth day following the close of the month except for the last month when payment shall be on the last business
day.

 

(b) Notwithstanding
the above, the amounts payable by the Division to UTGR related to the Marketing Program shall be paid on a frequency agreed by
the Division, but no less frequently than annually.

 

(c) Notwithstanding
anything in this chapter 61.2 of this title 42 to the contrary, the Director is authorized to fund the Marketing Program
as described above in regard to the First Amendment to the UTGR Master Contract.

 

(d) Notwithstanding
the above, the amounts payable by the Division to Newport Grand related to the Marketing Program shall be paid on a frequency agreed
by the Division, but no less frequently than annually.

 

(e) Notwithstanding anything in this chapter 61.2 of this
title 42 to the contrary, the Director is authorized to fund the Marketing Program as described above in regard to the First
Amendment to the Newport Grand Master Contract.

 

    - 12 -

     

    

  

(f) Notwithstanding
the provisions of § 42-61-15, the allocation of Net Table Game Revenue derived from Table Games at Twin River is as follows:

 

(1) For deposit into
the state lottery fund for administrative purposes and then the balance remaining into the general fund:

 

(i) Sixteen percent
(16%) of Net Table Game Revenue, except as provided in subsection (f)(1)(ii);

 

(ii) An additional
two percent (2%) of Net Table Game Revenue generated at Twin River shall be allocated starting from the commencement of Table Game
activities by such Table Game Retailer, and ending, with respect to such Table Game Retailer, on the first date that such Table
Game Retailer’s net terminal income for a full State fiscal year is less than such Table Game Retailer’s net terminal
income for the prior State fiscal year, at which point this additional allocation to the State shall no longer apply to such Table
Game Retailer.

 

(2) To UTGR, Net Table
Game Revenue not otherwise disbursed pursuant to above subsection (f)(1); provided, however, on the first date that such Table
Game Retailer’s net terminal income for a full State fiscal year is less than such Table Game Retailer’s net terminal
income for the prior State fiscal year, as set forth in subsection (f)(1)(ii) above, one percent (1%) of this Net Table Game
Revenue shall be allocated to the town of Lincoln for four (4) consecutive State fiscal years.

 

(g) Notwithstanding
the provisions of § 42-61-15, the allocation of Net Table Game Revenue derived from Table Games at Newport Grand is as
follows:

 

(1) For deposit into the state lottery fund for administrative
purposes and then the balance remaining into the general fund: eighteen percent (18%) of Net Table Game Revenue.

 

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(2) To Newport Grand
LLC, Net Table Game Revenue not otherwise disbursed pursuant to above subsection (g)(1) provided, however, on the first date
that such Table Game Retailer’s net terminal income for a full State fiscal year is less than such Table Game Retailer’s
net terminal income for the prior State fiscal year, one percent (1%) of this Net Table Game Revenue shall be allocated to the
city of Newport for four (4) consecutive State fiscal years.

 

SECTION 5. Chapter 42-61.2
of the General Laws entitled “Video Lottery Terminal” is hereby amended by adding thereto the following section:

 

42-61.2-3.1.
Table game regulation. – (a) In addition to the powers and duties of the Division director under Sections 42-61-4,
42-61.2-3 and 42-61.2-4, and pursuant to § 42-61.2-2.1 and § 42-61.2-2.2, the Division director shall promulgate
reasonable rules and regulations relating to state-operated Table Gaming and set policy for these Table Games. These rules and
regulations shall include, but not be limited to:

 

(1) Establishing standards
and procedures for Table Gaming and associated equipment.

 

(2) Establishing standards,
rules and regulations to govern the conduct of Table Games and the system of wagering associated with Table Games, including without
limitation:

 

(i) The object of the
Table Game and method of play, including what constitutes win, loss or tie bets;

 

(ii) Physical characteristics
of the Table Games and Table Game equipment;

 

(iii) Wager and payout
odds for each type of available wager;

 

(iv) The applicable
inspection procedures for any of the following, as required by a Table Game;

 

(A) Cards;

 

(B) Dice;

 

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(C) Wheels and balls;
and

 

(D) Other devices,
equipment and accessories related to table games.

 

(v) Procedures for
the collection of bets and payouts, including requirements for internal revenue service purposes;

 

(vi) Procedures for
handling suspected cheating or Table Gaming irregularities; and

 

(vii) Procedures for
handling any defective or malfunctioning Table Game equipment.

 

(3) Establishing the
method for calculating Net Table Game Revenue and standards for the daily counting and recording of cash received in the conduct
of Table Games, and ensuring that internal controls are followed, including the maintenance of financial books and records and
the conduct of annual audits at the expense of the table game retailer.

 

(4) Establishing the
number and type of Table Games authorized at a Table Game Retailer’s facility, and all rules related thereto.

 

(5) Establishing any
Table Game rule changes, Table Game minimum and maximum wager changes, and changes to the type of Table Game being offered at a
particular gaming table, including any notice by the Table Game Retailer to the public.

 

(6) Requiring the Table
Game Retailer to:

 

(i) Provide written
information at each Table Game about game rules, payoffs or winning wagers and other information as the Division may require.

 

(ii) Provide specifications approved by the Division to integrate
and update the Table Game Retailer’s surveillance system to cover all areas where Table Games are conducted and other areas
as required by the lottery division. The specifications shall include provisions providing the Division and other persons authorized
by the Division with onsite access to the system.

 

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(iii) Designate one
or more locations within the Table Game Retailer’s facility to conduct Table Games.

 

(iv) Ensure that visibility
in a Table Game Retailer’s facility is not obstructed in any way that could interfere with the ability of the Division, the
Table Game Retailer or other persons authorized under this section or by the Division to oversee the surveillance of the conduct
of Table Games.

 

(v) Ensure that the
count room for Table Gaming has appropriate security for the counting and storage of cash.

 

(vi) Furnish each Table
Game with a sign acceptable to the division indicating the permissible minimum and maximum wagers at the Table Game.

 

(vii) Adopt policies
or procedures to prohibit any Table Game equipment from being possessed, maintained or exhibited by any person on the premises
of a Table Game Retailer’s facility except in the areas of such facility where the conduct of Table Games is authorized or
in a restricted area designated to be used for the inspection, service, repair or storage of Table Game equipment by the Table
Game Retailer or in an area used for employee training and instruction by the Table Game Retailer.

 

(viii) Ensure that
drop boxes are brought into or removed from an area where Table Games are conducted or locked or unlocked in accordance with procedures
established by the Division.

 

(ix) Designate secure
locations for the inspection, service, repair or storage of Table Game equipment and for employee training and instruction to be
approved by the Division.

 

(7) Establishing the size and uniform color by denomination
of Table Game chips used in the conduct of Table Games, including tournaments, and a policy for the use of promotional or commemorative
chips used in the conduct of certain Table Games. All types of Table Game chips shall be approved by the Division prior to being
used for play at a Table Game.

 

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(8) Establishing the
procedure to be used by a Table Game Retailer to determine and extract a Rake for the purposes of generating Net Table Game Revenue
from nonbanking games.

 

(9) Establishing minimum
standards relating to the acceptance of tips or gratuities by dealers at a Table Game, which shall include:

 

(i) The requirement
that tips or gratuities accepted by dealers at banking Table Games be placed in a common pool for complete distribution pro rata
among all dealers based on the daily collection of such tips or gratuities; provided however, the Division may establish an alternative
distribution method for tips or gratuities at a banking Table Game upon submission by the Table Game Retailer of a proposal acceptable
to the division to modify the existing distribution method for tips or gratuities.

 

(ii) The requirement
that tips or gratuities accepted by dealers at nonbanking Table Games are not required to be pooled and may be retained by the
dealers; provided however, the Division may establish an alternative distribution method for tips or gratuities at a nonbanking
Table Game upon submission by the Table Game Retailer of a proposal acceptable to the division to modify the existing distribution
method for tips or gratuities.

 

(10) Establishing
the minimal proficiency requirements for Table Game personnel, including without limitation Table Game dealers. The foregoing
requirements of this subsection (10) shall not affect any rules or regulations of the Rhode Island Department of Business
Regulation requiring licensing of personnel of state-operated gaming facilities.

 

(11) Establishing the practices and procedures
governing the conduct of Table Game tournaments.

 

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(12) Establishing appropriate
eligibility requirements and standards for traditional Table Game equipment suppliers.

 

(13) Any other matters
necessary for conducting Tables Games.

 

(b) The Division shall
promulgate the Table Game regulations authorized by this section on or before March 31, 2013.

 

(c) A Table Game Retailer
shall reimburse and pay to the Division (or to such other entities as the Division may identify) all reasonable costs and expenses
associated with the Division’s review of the business or operations of the Table Game Retailer, including, but not limited
to, such items as ongoing auditing, legal, investigation services, compulsive and problem gambling programs, and other related
matters.

 

(d) The Table Game
Retailer shall provide secure, segregated facilities as required by the Division on the premises for the exclusive use of the Lottery
staff and the State Police. Such space shall be located proximate to the gaming floor and shall include surveillance equipment,
monitors with full camera control capability, as well as other office equipment that may be deemed necessary by the Division. The
location and size of the space shall be subject to the approval of the Division.

 

SECTION 6. Sections 42-61.2-5,
42-61.2-8 and 42-61.2-12 of the General Laws in Chapter 42-61.2 entitled “Video Lottery Terminal” are hereby amended
to read as follows.

 

42-61.2-5. Exclusion of minors. – No person
under the age of eighteen (18) years may play a video lottery game or a Table Game authorized by this chapter, nor shall any licensed
video lottery or Table Game retailer knowingly permit a minor to play a video lottery machine or Table Game or knowingly pay a
minor with respect to a video lottery credit slip or Table Game chip. Violation of this section shall be punishable by a fine of
five hundred dollars ($500).

 

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42-61.2-8. Penalty
for manipulation or tampering. – Any person who, with intent to manipulate the outcome, payoff, and/or operation
of a video lottery terminal or Table Game, manipulates the outcome, prize, or operation of a video lottery terminal or Table Game
by physical or electronic means shall be guilty of a felony punishable by imprisonment for not more than ten (10) years or by a
fine of not less than ten thousand ($10,000) dollars or both.

 

42-61.2-12. Prize
– Set-off for child support debts. – Notwithstanding the provisions of section 42-61-7 relating to assignment
of prizes, the following set off provisions shall apply to the payment of any prize requiring the issuance of Internal Revenue
Service Form W-2G by a video lottery retailer (whether or not a Table Game Retailer) to a patron:

 

(1) With respect to
a person entitled to receive the prize who has an unpaid child support order(s) arrearage(s) in excess of five hundred dollars
($500), as provided by the department of human services pursuant to subsection 42-61-7.1(3), the division of state lottery:

 

(i) Shall establish
rules and regulations pursuant to section 42-61.2-3 and section 42-61.2.3.1) providing for the establishment and operation of a
system whereby the division of state lottery shall have the ability to communicate such information to video lottery retailers
so as to identify a person entitled to receive a prize requiring the issuance of Internal Revenue Service Form W-2G who has an
unpaid child support order(s) arrearage(s).

 

(ii) Upon receipt of information indicating an unpaid child
support arrearage the video lottery retailer shall set off against the amount due to that person an amount up to the balance of
the child support arrearage(s). The video lottery retailer shall then make payment as prescribed by the division of lottery to
the Rhode Island family court in the case of child support arrearages(s) which shall deposit the amount set off into the registry
of the family court for a period of forty-five (45) days, or if any application for review has been filed pursuant to subsection
27-57-1(d), until final disposition of the application until further order of the court.

 

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(iii) The video lottery
retailer shall pay to this person the remaining balance of the prize amount, if any, after reduction of the amount set off above
for child support.

 

(2) The division of
lottery, the lottery director and the video lottery retailer shall be discharged of all further liability upon payment of a prize
pursuant to this section. Except in the case of gross negligence, the division of lottery, the lottery director and the video lottery
retailer shall not be liable to any party or person for failure to make such a set-off.

 

(3) The department
of human services shall periodically within each year furnish the director with a list or compilation of names of individuals,
together with any other identifying information and in a form that the director shall require, who as of the date of the list or
compilation, have an unpaid child support order arrearage in excess of five hundred dollars ($500) as shown on the Rhode Island
family court decrees department of human services child support enforcement computer system (“CSE system”). For the
purposes of this section, the terms used in this section shall be given the meaning and definitions specified in section 15-16-2.

 

(4) Any party aggrieved
by any action taken under this section may within thirty (30) days of the withholding of the payment by the lottery director seek
judicial review in the family court, which may, in its discretion, issue a temporary order prohibiting the disbursement of funds
under this section, pending final adjudication.

 

(5) Notwithstanding any other general or special law to the
contrary, this section shall apply to all existing gambling facilities within the state as of the time of enactment and also to
any gambling facility within this state which is established after the date of enactment.

 

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SECTION 7. Chapter
42-61.2 of the General Laws entitled “Video Lottery Terminal” is hereby amended by adding thereto the following sections:

 

42-61.2-13. Table
game enforcement. – (a) Whoever violates sections 42-61.2-2.1 or 42-61.2-3.1 or any rule or regulation, policy or
procedure, duly promulgated thereunder, or any administrative order issued pursuant to sections 42-61.2-2.1 or 42-61.2-3.1, shall
be punishable as follows:

 

(1) In the Division
director’s discretion, the Division director may impose an administrative penalty of not more than one thousand dollars ($1,000)
for each violation. Each day of continued violation shall be considered as a separate violation if the violator has knowledge of
the facts constituting the violation and knows or should know that such facts constitute or may constitute a violation. Lack of
knowledge regarding such facts or violation shall not be a defense to a continued violation with respect to the first day of its
occurrence. Written notice detailing the nature of the violation, the penalty amount, and effective date of the penalty will be
provided by the Division director. Penalties shall take effect upon notification. A written request for a hearing must be submitted
in writing to the Division director within thirty (30) days of notification of violation.

 

(2) (a) In the Division
director’s discretion, the Division director may endeavor to obtain compliance with requirements of this chapter by written
administrative order. Such order shall be provided to the responsible party, shall specify the complaint, and propose a time for
correction of the violation.

 

(b) The Division director shall enforce this chapter. Such enforcement
shall include, but not be limited to, referral of suspected criminal activity to the Rhode Island state police for investigation.

 

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(c) Any interest, costs
or expense collected under this section shall be appropriated to the Division for administrative purposes.

 

(d) Any penalty imposed
by the Division pursuant to this Section 42-61.2-13 shall be appealable to Superior Court.

 

42-61.2-14. Compulsive
and problem gambling program. – The Division and the State acknowledge that the vast majority of gaming patrons can
enjoy gambling games responsibly, but that there are certain societal costs associated with gaming by some individuals who have
problems handling the product or services provided. The Division and the State further understand that it is their duty to act
responsibly toward those who cannot participate conscientiously in gaming. Pursuant to the foregoing, Twin River and Newport Grand,
in cooperation with the State, shall offer compulsive and problem gambling programs that include, but are not limited to (a) problem
gambling awareness programs for employees; (b) player self-exclusion program; and (c) promotion of a problem gambling hotline.
Twin River and Newport Grand shall modify their existing compulsive and problem-gambling programs to include Table Games to the
extent such games are authorized at such facilities. Twin River and Newport Grand shall reimburse and pay to the Division no less
than one hundred thousand dollars ($100,000) in aggregate annually for compulsive and problem gambling programs established by
the Division. The contribution from each facility shall be determined by the Division.

 

42-61.2-15. Table game hours of operation. –
To the extent Table Games are authorized at Twin River, such Table Games may be offered at Twin River for all or a portion of the
days and times that VLTs are offered. To the extent Table Games are authorized at Newport Grand, such Table Games may be offered
at Newport Grand for all or a portion of the days and times that VLTs are offered.

 

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SECTION 8. Authorized
Procurement of Third Amendment to the UTGR Master Contract.

 

(a) Notwithstanding
any provision of the general or Public Laws to the contrary, within ninety (90) days of the enactment of this Act, the Division
is hereby expressly authorized and directed to enter into with UTGR a Third Amendment to the UTGR Master Contract to effectuate
the terms and conditions of this Act relative to video lottery terminals, including, without limitation, the following:

 

(1) There is hereby
authorized a Supplementary Promotional Points Program at Twin River (in addition to the Initial Promotional Points Program), pursuant
to the terms and conditions established from time to time by the Division during the term of the UTGR Contract. The approved amount
of the Supplementary Promotional Points Program shall not exceed six percent (6%) of Twin River net terminal income of the Prior
Marketing Year. For avoidance of doubt, the aggregate approved amount of the Initial and Supplementary Promotional Points Programs,
in total, shall therefore not exceed ten percent (10%) of the amount of net terminal income of Twin River of the Prior Marketing
Year, plus an additional seven hundred and fifty thousand dollars ($750,000) allocated pursuant to the terms of Chapter 151, Article
25 of the Public Laws of 2011, Section 8(a)(i).

 

(2) The requirements of this Section 8 related to the Supplementary
Promotional Points Program shall take effect on and after July 1, 2012.

 

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SECTION 9. Authorized
Procurement of Third Amendment to the Newport Grand Master Contract.

 

(a) Notwithstanding
any provision of the general or Public Laws to the contrary, within ninety (90) days of the enactment of this Act, the Division
is hereby expressly authorized and directed to enter into with Newport Grand, LLC a Third Amendment to the Newport Grand Master
contract to effectuate the terms and conditions of this Act relative to video lottery terminals, including, without limitation,
the following:

 

(1) There is hereby
authorized a Supplementary Promotional Points Program at Newport Grand (in addition to the Initial Promotional Points Program),
pursuant to the terms and conditions established from time to time by the Division during the term of the Newport Grand Master
Contract. The approved amount of the Supplementary Promotional Points Program shall not exceed six percent (6%) of Newport Grand
net terminal income of the Prior Marketing Year. For avoidance of doubt, the aggregate approved amount of the Initial and Supplementary
Promotional Points Programs, in total, shall therefore not exceed ten percent (10%) of the amount of net terminal income of Newport
Grand of the Prior Marketing Year, plus an additional seven hundred and fifty thousand dollars ($750,000) allocated pursuant to
the terms of Chapter 151, Article 25 of the Public Laws of 2011, Section 8(a)(i).

 

(2) The requirements
of this Section 9 related to the Supplementary Promotional Points Program shall take effect on and after July 1, 2012.

 

SECTION 10. This act
shall take effect upon passage, except for section 7. With respect to Twin River, Section 7 shall take effect only if Casino Gaming
at Twin River is approved statewide and by the Town of Lincoln pursuant to Article 25, Chapter 151, Section 4 of the Public Laws
of 2011. With respect to Newport Grand, Section 7 shall take effect only if Casino Gaming at Newport Grand is approved statewide
and by the City of Newport pursuant to Section 1 of Chapters 24 and 25 of the Public Laws of 2012. Voter approval or non-approval
with respect to one facility shall be independent of voter approval or non-approval with respect to the other facility.

 

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EXPLANATION

 

BY THE LEGISLATIVE COUNCIL

 

OF

 

AN ACT

 

RELATING TO REVENUE PROTECTION

 

***

 

This act would make
several amendments regarding gaming in Rhode Island, and specifically table. The act would provide for the regulation of table
gaming. The act also would revise the allocation of revenue in the event table gaming is approved at Newport Grand and/or Twin
River by appropriate vote.

 

This act would take
effect upon passage, except for section 7. With respect to Twin River, Section 7 shall take effect only if Casino Gaming at Twin
River is approved statewide and by the Town of Lincoln pursuant to Article 25, Chapter 151, Section 4 of the Public Laws of 2011.
With respect to Newport Grand, Section 7 shall take effect only if Casino Gaming at Newport Grand is approved statewide and by
the City of Newport pursuant to Section 1 of Chapters 24 and 25 of the Public Laws of 2012. Voter approval or non-approval with
respect to one facility shall be independent of voter approval or non-approval with respect to the other facility.

 

     

     

    

 

2012 –
h 8213 substitute a AS AMENDED

 

state of
rhode island

 

in general
assembly

 

january
session, A.D. 2012

 

 

 

AN ACT

 

RELATING TO REVENUE PROTECTION

 

Introduced By: Representatives
Melo, San Bento, Jackson, Petrarca, and Mattiello

 

Date Introduced: May 24,
2012

 

Referred To: House Finance

 

It is enacted
by the General Assembly as follows:

 

SECTION 1. Purpose.
The general assembly hereby finds that:

 

(a) The Twin River
facility located in the Town of Lincoln (“Twin River”) is an important source of revenue for the state of Rhode Island,
having been licensed by the Rhode Island Department of Business Regulation to conduct pari-mutuel wagering, and at which the Division
(as defined herein) operates games of the Rhode Island Lottery.

 

(b) The Newport Grand facility located in the City of Newport
(“Newport Grand”) is an important source of revenue for the state of Rhode Island, having been licensed by the Rhode
Island Department of Business Regulation to conduct pari-mutuel wagering, and at which the Division (as defined herein) operates
games of the Rhode Island Lottery.

 

     

     

    

  

(c) In a study commissioned
by the Rhode Island Department of Revenue, Christiansen Capital Advisors, LLC anticipated that competition from gaming facilities
recently authorized in Massachusetts could have a 25-40% negative impact on state revenues generated from state-operated gaming
in Rhode Island, amounting to losses to the state of one hundred million dollars ($100,000,000) or more in annual revenue.

 

(d) Revenues generated
from state-operated gaming in Rhode Island constitute the third largest source of revenue to the state, behind only revenue generated
from income taxes and sales and use taxes.

 

(e) Accordingly, competition
from gaming facilities in Massachusetts present an imminent threat to revenues generated by the state, and thus an imminent threat
to the public welfare.

 

(f) It is therefore
imperative that action be taken to ameliorate the anticipated adverse effects on state revenues from competition from gaming facilities
recently authorized in Massachusetts.

 

(g) It is also imperative
that action be taken to preserve and protect the state’s ability to maximize revenues at Twin River and Newport Grand in
an increasingly competitive gaming market by expanding critical revenue-driving promotional programs through legislative authorization
and necessary amendments to contracts, previously authorized by the General Assembly, to position the promotional programs for
long-term success.

 

(h) It is also in the best interest of the state to preserve
public confidence in the integrity of Rhode Island gaming by authorizing the Division to promulgate regulations to direct and control
state-operated Table Gaming (as defined herein).

 

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(i) It is the intent
of the general assembly that this act address, independently: (1) Section 8 of Chapter 151, Article 25 of the Public Laws of 2011
authorizing a referendum question to be submitted to statewide and Town of Lincoln voters at the next general election asking such
voters to approve Casino Gaming (as defined therein) at Twin River; and (2) Section 1 of Chapters 24 and 25 of the Public Laws
of 2012 authorizing a referendum question to be submitted to statewide and City of Newport voters at the next general election
asking such voters to approve Casino Gaming at Newport Grand; it being the intent of the General Assembly that the voters’
actions on the referendum questions as to Twin River be independent of the voters’ actions on the referendum questions as
to Newport Grand.

 

(j) It is also the
intent of the general assembly that this act satisfies the general assembly’s obligations pursuant to subdivision 42-61.2-2.1(b)(4)
of the Rhode Island General Laws.

 

(k) It is also the
intent of the general assembly that this act, being necessary to address an imminent threat to the public welfare, as aforesaid,
shall be liberally construed so as to effectuate its purposes, including without limitation, the state’s attempt to minimize
certain commercial risks faced by UTGR (as defined herein) and Newport Grand, LLC (as defined herein) by entering into agreements
with the Division.

 

SECTION 2. Definitions.
(a) For the purposes of this act, the following terms shall have the following meanings:

 

(1) “Division”
means the division of lotteries within the department of revenue and/or any successor as party to the UTGR Master Contract, the
Newport Grand Master Contract and the GTECH Master Contract.

 

(2) “GTECH Master
Contract” means that certain Master Contract made as of May 12, 2003 pursuant to Chapters 32 and 33 of the Public Laws of
2003, as amended from time to time.

 

(3) “Initial Promotional Points Program” means that
promotional points program authorized in Section 4(a)(ii) of Part A as to Twin River and Part B as to Newport Grand of Chapter
16 of the Public Laws of 2010, as amended by Section 8 of Chapter 151, Article 25 of the Public Laws of 2011.

 

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(4) “Newport
Grand, LLC” means that limited liability company defined in Chapter 16 of the Public Laws of 2010, Part B, Section 2(l).

 

(5) “Newport
Grand Master Contract” means that certain Master Video Lottery Terminal Contract made as of November 23, 2005 by and between
the Division and Newport Grand Jai Alai, LLC, as amended from time to time.

 

(6) “Prior Marketing
Year” means the prior state fiscal year.

 

(7) “Promotional
Points” means the promotional points issued pursuant to any free play or other promotional program operated by the Division
at a licensed video lottery terminal facility (including, without limitation, the promotional points programs at Twin River and
Newport Grand authorized pursuant to Chapter 16 of the Public Laws of 2010, Part A as to Twin River and Part B as to Newport Grand,
Section 4(a)(ii), Chapter 151, Article 25 of the Public Laws of 2011, Section 8(a)(i), and Section 8 hereof as to Twin River and
Section 9 hereof as to Newport Grand), which are downloaded to a video lottery terminal by a player.

 

(8) “Supplementary
Promotional Points Program” means that promotional points program authorized in Section 8 hereof as to Twin River and Section
9 hereof as to Newport Grand.

 

(9) “UTGR”
means that corporation defined in Chapter 16 of the Public Laws of 2010, Part A, Section 2(n).

 

(10) “UTGR Master Contract” means that certain Master
Video Lottery Terminal Contract made as of July 18, 2005 by and between the Division, the Department of Transportation and UTGR,
as amended from time to time.

 

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SECTION 3. Except as
otherwise amended by this act, the terms, conditions, provisions and definitions of Chapters 32 and 33 of the Public Laws of 2003,
Chapters 322 and 323 of the Public Laws of 2005, Chapter 16 of the Public Laws of 2010, Chapter 151, Article 25 of the Public Laws
of 2011 and Chapters 24 and 25 of the Public Laws of 2012 are hereby incorporated by reference and shall remain in full force and
effect.

 

SECTION 4. Sections
42-61.2-1 and 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled “Video Lottery Terminal” is hereby amended
to read as follows:

 

42-61.2-1. Definitions.
[Effective June 30, 2009.] – For the purpose of this chapter, the following words shall mean:

 

(1) “Central
communication system” means a system approved by the lottery division, linking all video lottery machines at a licensee location
to provide auditing program information and any other information determined by the lottery. In addition, the central communications
system must provide all computer hardware and related software necessary for the establishment and implementation of a comprehensive
system as required by the division. The central communications licensee may provide a maximum of fifty percent (50%) of the video
lottery terminals.

 

(2) “Licensed
video lottery retailer” means a pari-mutuel licensee specifically licensed by the director subject to the approval of the
division to become a licensed video lottery retailer.

 

(3) “Net terminal
income” means currency placed into a video lottery terminal less credits redeemed for cash by players.

 

(4) “Pari-mutuel
licensee” means an entity licensed and authorized to conduct:

 

(i) Dog racing, pursuant
to chapter 3.1 of title 41; and/or

 

(ii) Jai-alai games, pursuant to chapter 7 of title 41.

 

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(5) “Technology
provider” means any individual, partnership, corporation, or association that designs, manufactures, installs, maintains,
distributes or supplies video lottery machines or associated equipment for the sale or use in this state.

 

(6) “Video lottery
games” means lottery games played on video lottery terminals controlled by the lottery division.

 

(7) “Video lottery
terminal” means any electronic computerized video game machine that, upon the insertion of cash, is available to play a video
game authorized by the lottery division, and which uses a video display and microprocessors in which, by chance, the player may
receive free games or credits that can be redeemed for cash. The term does not include a machine that directly dispenses coins,
cash, or tokens.

 

(8) “Casino gaming”
means any and all table and casino-style games played with cards, dice or equipment, for money, credit, or any representative of
value; including, but not limited to roulette, blackjack, big six, craps, poker, baccarat, pai gow, any banking or percentage game,
or any other game of device included within the definition of Class III gaming as that term is defined in Section 2703(8) of Title
25 of the United States Code and which is approved by the state through the division of state lottery.

 

(9) “Net Table
Game Revenue” means win from Table Games minus counterfeit currency.

 

(10) “Rake” means a set fee or percentage of cash
and chips representing cash wagered in the playing of a nonbanking Table Game assessed by a Table Game Retailer for providing the
services of a dealer, gaming table or location, to allow the play of any nonbanking Table Game.

 

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(11) “Table Game”
or “Table Gaming” means that type of Casino Gaming in which table games are played for cash or chips representing cash,
using cards, dice or equipment and conducted by one or more live persons.

 

(12) “Table Game
Retailer” means a retailer authorized to conduct Table Gaming pursuant to section 42-61.2-2.1 and 42-61.2-2.2 of the Rhode
Island General Laws.

 

42-61.2-7. Division
of revenue. [Effective June 30, 2011.] – (a) Notwithstanding the provisions of section 42-61-15, the allocation of
net terminal income derived from video lottery games is as follows:

 

(1) For deposit in
the general fund and to the state lottery division fund for administrative purposes: Net terminal income not otherwise disbursed
in accordance with subdivisions (a)(2) ‒ (a)(6) herein;

 

(i) Except for the fiscal year ending June 30, 2008, nineteen
one hundredths of one percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally allocated to the
distressed communities as defined in section 45-13-12 provided that no eligible community shall receive more than twenty-five percent
(25%) of that community’s currently enacted municipal budget as its share under this specific subsection. Distributions made
under this specific subsection are supplemental to all other distributions made under any portion of general laws section 45-13-12.
For the fiscal year ending June 30, 2008 distributions by community shall be identical to the distributions made in the fiscal
year ending June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30, 2009, the total state
distribution shall be the same total amount distributed in the fiscal year ending June 30, 2008 and shall be made from general
appropriations. For the fiscal year ending June 30, 2010, the total state distribution shall be the same total amount distributed
in the fiscal year ending June 30, 2009 and shall be made from general appropriations, provided however that $784,458 of the total
appropriation shall be distributed equally to each qualifying distressed community. For each of the fiscal years ending June 30,
2011 and June 30, 2012, seven hundred eighty-four thousand four hundred fifty-eight dollars ($784,458) of the total appropriation
shall be distributed equally to each qualifying distressed community.

 

    - 7 -

     

    

  

(ii) Five one hundredths
of one percent (0.05%) up to a maximum of five million dollars ($5,000,000) shall be appropriated to property tax relief to fully
fund the provisions of section 44-33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum amount
to the nearest five dollar ($5.00) increment within the allocation until a maximum credit of five hundred dollars ($500) is obtained.
In no event shall the exemption in any fiscal year be less than the prior fiscal year.

 

(iii) One and twenty-two
one hundredths of one percent (1.22%) to fund section 44-34.1-1, entitled “Motor Vehicle and Trailer Excise Tax Elimination
Act of 1998”, to the maximum amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no
event shall the exemption in any fiscal year be less than the prior fiscal year.

 

(iv) Except for the fiscal year ending June 30, 2008, ten one
hundredths of one percent (0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to communities
not included in paragraph (a)(1)(i) above distributed proportionately on the basis of general revenue sharing distributed for that
fiscal year. For the fiscal year ending June 30, 2008 distributions by community shall be identical to the distributions made in
the fiscal year ending June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30, 2009, no
funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter, funding shall be determined by appropriation.

 

    - 8 -

     

    

  

(2) To the licensed
video lottery retailer:

 

(a) (i) Prior to the
effective date of the NGJA Master Contract, Newport Jai Ali twenty-six percent (26%) minus three hundred eighty four thousand nine
hundred ninety-six dollars ($384,996);

 

(ii) On and after the
effective date of the NGJA Master Contract, to the licensed video lottery retailer who is a party to the NGJA Master Contract,
all sums due and payable under said Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars ($384,996).

 

(iii) Effective July
1, 2013, provided that the referendum measure authorized by Section 1 of Chapters 24 and 25 of the Public Laws of 2012 is
approved statewide and in the City of Newport and provided further that Newport Grand commences and continues to offer table games,
the rate of net terminal income payable to Newport Grand, LLC under the Newport Grand Master Contract shall increase by one and
one half percentage (1.5%) points.

 

(b) (i) Prior to the
effective date of the UTGR Master Contract, to the present licensed video lottery retailer at Lincoln Park which is not a party
to the UTGR Master Contract, twenty-eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven thousand
six hundred eighty-seven dollars ($767,687);

 

(ii) On and after the effective date of the UTGR Master Contract,
to the licensed video lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said Master Contract
minus seven hundred sixty-seven thousand six hundred eighty-seven dollars ($767,687).

 

    - 9 -

     

    

  

(3) (i) To the technology
providers who are not a party to the GTECH Master Contract as set forth and referenced in Public Law 2003, Chapter 32, seven percent
(7%) of the net terminal income of the provider’s terminals; in addition thereto, technology providers who provide premium
or licensed proprietary content or those games that have unique characteristics such as 3D graphics, unique math/game play features
or merchandising elements to video lottery terminals may receive incremental compensation, either in the form of a daily fee or
as an increased percentage, if all of the following criteria are met:

 

(A) A licensed video
lottery retailer has requested the placement of premium or licensed proprietary content at its licensed video lottery facility;

 

(B) The division of
lottery has determined in its sole discretion that the request is likely to increase net terminal income or is otherwise important
to preserve or enhance the competiveness of the licensed video lottery retailer;

 

(C) After approval
of the request by the division of lottery, the total number of premium or licensed propriety content video lottery terminals docs
not exceed ten percent (10%) of the total number of video lottery terminals authorized at the respective licensed video lottery
retailer; and

 

(D) All incremental
costs are shared between the division and the respective licensed video lottery retailer based upon their proportionate allocation
of net terminal income. The division of lottery is hereby authorized to amend agreements with the licensed video lottery retailers,
or the technology providers, as applicable, to effect the intent herein.

 

(ii) To contractors
who are a party to the Master Contract as set forth and referenced in Public Law 2003, Chapter 32, all sums due and payable under
said Master Contract;

 

(iii) Notwithstanding paragraphs (i) and (ii) above, there shall
be subtracted proportionately from the payments to technology providers the sum of six hundred twenty-eight thousand seven hundred
thirty-seven dollars ($628,737);

 

    - 10 -

     

    

  

(4) (A) To the city
of Newport one and one hundredth percent (1.01%) of net terminal income of authorized machines at Newport Grand, except that:

 

(i) Effective November
9, 2009 until June 30, 2013, the allocation shall be one and two tenths percent (1.2%) of net terminal income of authorized machines
at Newport Grand for each week the facility operates video lottery games on a twenty-four (24) hour basis for all eligible hours
authorized, and

 

(ii) Effective July
1, 2013, provided that the referendum measure authorized by Section 1 of Chapters 24 and 25 of the Public Laws of 2012 is
approved statewide and in the City of Newport, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal
income of authorized video lottery terminals at Newport Grand; and

 

(B) To the town of
Lincoln one and twenty-six hundredths percent (1.26%) of net terminal income of authorized machines at Twin River except that,

 

(i) Effective November
9, 2009 until June 30, 2013, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal income of authorized
machines at Twin River for each week video lottery games are offered on a twenty-four (24) hour basis for all eligible hours authorized,
and

 

(ii) Effective July 1, 2013, provided that the referendum measure
authorized by Article 25, Chapter 151, Section 4 of the Public Laws of 2011 is approved statewide and in the Town of Lincoln,
the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal income of authorized video lottery terminals
at Twin River; and

 

    - 11 -

     

    

  

(5) To the Narragansett
Indian Tribe, seventeen hundredths of one percent (0.17%) of net terminal income of authorized machines at Lincoln Park up to a
maximum of ten million dollars ($10,000.000) per year, which shall be paid to the Narragansett Indian Tribe for the account of
a Tribal Development Fund to be used for the purpose of encouraging and promoting: home ownership and improvement, elderly housing,
adult vocational training; health and social services; childcare; natural resource protection; and economic development consistent
with state law. Provided, however, such distribution shall terminate upon the opening of any gaming facility in which the Narragansett
Indians are entitled to any payments or other incentives; and provided further, any monies distributed hereunder shall not be used
for, or spent on previously contracted debts; and

 

(6) Unclaimed prizes
and credits shall remit to the general fund of the state; and

 

(7) Payments into the
state’s general fund specified in subdivisions (a)(1) and (a)(6) shall be made on an estimated monthly basis. Payment shall
be made on the tenth day following the close of the month except for the last month when payment shall be on the last business
day.

 

(b) Notwithstanding
the above, the amounts payable by the Division to UTGR related to the Marketing Program shall be paid on a frequency agreed by
the Division, but no less frequently than annually.

 

(c) Notwithstanding
anything in this chapter 61.2 of this title 42 to the contrary, the Director is authorized to fund the Marketing Program as described
above in regard to the First Amendment to the UTGR Master Contract.

 

(d) Notwithstanding
the above, the amounts payable by the Division to Newport Grand related to the Marketing Program shall be paid on a frequency agreed
by the Division, but no less frequently than annually.

 

(e) Notwithstanding anything in this chapter 61.2 of this title
42 to the contrary, the Director is authorized to fund the Marketing Program as described above in regard to the First Amendment
to the Newport Grand Master Contract.

 

    - 12 -

     

    

  

(f) Notwithstanding
the provisions of § 42-61-15, the allocation of Net Table Game Revenue derived from Table Games at Twin River is as follows:

 

(1) For deposit into
the state lottery fund for administrative purposes and then the balance remaining into the general fund:

 

(i) Sixteen percent
(16%) of Net Table Game Revenue, except as provided in subsection (f)(1)(ii);

 

(ii) An additional
two percent (2%) of Net Table Game Revenue generated at Twin River shall be allocated starting from the commencement of Table Game
activities by such Table Game Retailer, and ending, with respect to such Table Game Retailer, on the first date that such Table
Game Retailer’s net terminal income for a full State fiscal year is less than such Table Game Retailer’s net terminal
income for the prior State fiscal year, at which point this additional allocation to the State shall no longer apply to such Table
Game Retailer.

 

(2) To UTGR, Net Table
Game Revenue not otherwise disbursed pursuant to above subsection (f)(1); provided, however, on the first date that such Table
Game Retailer’s net terminal income for a full State fiscal year is less than such Table Game Retailer’s net terminal
income for the prior State fiscal year, as set forth in subsection (f)(1)(ii) above, one percent (1%) of this Net Table Game Revenue
shall be allocated to the town of Lincoln for four (4) consecutive State fiscal years.

 

(g) Notwithstanding
the provisions of § 42-61-15, the allocation of Net Table Game Revenue derived from Table Games at Newport Grand is as follows:

 

(1) For deposit into the state lottery fund for administrative
purposes and then the balance remaining into the general fund: eighteen percent (18%) of Net Table Game Revenue.

 

    - 13 -

     

    

  

(2) To Newport Grand
LLC, Net Table Game Revenue not otherwise disbursed pursuant to above subsection (g)(1) provided, however, on the first date that
such Table Game Retailer’s net terminal income for a full State fiscal year is less than such Table Game Retailer’s
net terminal income for the prior State fiscal year, one percent (1%) of this Net Table Game Revenue shall be allocated to the
city of Newport for four (4) consecutive State fiscal years.

 

SECTION 5. Chapter
42-61.2 of the General Laws entitled “Video Lottery Terminal” is hereby amended by adding thereto the following section:

 

42-61.2-3.1.
Table game regulation. – (a) In addition to the powers and duties of the Division director under Sections 42-61-4,
42-61.2-3 and 42-61.2-4, and pursuant to § 42-61.2-2.1 and § 42-61.2-2.2, the Division director shall promulgate reasonable
rules and regulations relating to state-operated Table Gaming and set policy for these Table Games. These rules and regulations
shall include, but not be limited to:

 

(1) Establishing standards
and procedures for Table Gaming and associated equipment.

 

(2) Establishing standards,
rules and regulations to govern the conduct of Table Games and the system of wagering associated with Table Games, including without
limitation:

 

(i) The object of the
Table Game and method of play, including what constitutes win, loss or tic bets;

 

(ii) Physical characteristics
of the Table Games and Table Game equipment;

 

(iii) Wager and payout
odds for each type of available wager;

 

(iv) The applicable
inspection procedures for any of the following, as required by a Table Game:

 

(A) Cards;

 

(B) Dice;

 

    - 14 -

     

    

  

(C) Wheels and balls;
and

 

(D) Other devices,
equipment and accessories related to table games.

 

(v) Procedures for
the collection of bets and payouts, including requirements for internal revenue service purposes;

 

(vi) Procedures for
handling suspected cheating or Table Gaming irregularities; and

 

(vii) Procedures for
handling any defective or malfunctioning Table Game equipment.

 

(3) Establishing the
method for calculating Net Table Game Revenue and standards for the daily counting and recording of cash received in the conduct
of Table Games, and ensuring that internal controls are followed, including the maintenance of financial books and records and
the conduct of annual audits at the expense of the table game retailer.

 

(4) Establishing the
number and type of Table Games authorized at a Table Game Retailer’s facility, and all rules related thereto.

 

(5) Establishing any
Table Game rule changes, Table Game minimum and maximum wager changes, and changes to the type of Table Game being offered at a
particular gaming table, including any notice by the Table Game Retailer to the public.

 

(6) Requiring the Table
Game Retailer to:

 

(i) Provide written
information at each Table Game about game rules, payoffs or winning wagers and other information as the Division may require.

 

(ii) Provide specifications approved by the Division to integrate
and update the Table Game Retailer’s surveillance system to cover all areas where Table Games are conducted and other areas
as required by the lottery division. The specifications shall include provisions providing the Division and other persons authorized
by the Division with onsite access to the system.

 

    - 15 -

     

    

  

(iii) Designate one
or more locations within the Table Game Retailer’s facility to conduct Table Games.

 

(iv) Ensure that visibility
in a Table Game Retailer’s facility is not obstructed in any way that could interfere with the ability of the Division, the
Table Game Retailer or other persons authorized under this section or by the Division to oversee the surveillance of the conduct
of Table Games.

 

(v) Ensure that the
count room for Table Gaming has appropriate security for the counting and storage of cash.

 

(vi) Furnish each Table
Game with a sign acceptable to the division indicating the permissible minimum and maximum wagers at the Table Game.

 

(vii) Adopt policies
or procedures to prohibit any Table Game equipment from being possessed, maintained or exhibited by any person on the premises
of a Table Game Retailer’s facility except in the areas of such facility where the conduct of Table Games is authorized or
in a restricted area designated to be used for the inspection, service, repair or storage of Table Game equipment by the Table
Game Retailer or in an area used for employee training and instruction by the Table Game Retailer.

 

(viii) Ensure that
drop boxes are brought into or removed from an area where Table Games are conducted or locked or unlocked in accordance with procedures
established by the Division.

 

(ix) Designate secure
locations for the inspection, service, repair or storage of Table Game equipment and for employee training and instruction to be
approved by the Division.

 

(7) Establishing the size and uniform color by denomination
of Table Game chips used in the conduct of Table Games, including tournaments, and a policy for the use of promotional or commemorative
chips used in the conduct of certain Table Games. All types of Table Game chips shall be approved by the Division prior to being
used for play at a Table Game.

 

    - 16 -

     

    

  

(8) Establishing the
procedure to be used by a Table Game Retailer to determine and extract a Rake for the purposes of generating Net Table Game Revenue
from nonbanking games.

 

(9) Establishing minimum
standards relating to the acceptance of tips or gratuities by dealers at a Table Game, which shall include:

 

(i) The requirement
that tips or gratuities accepted by dealers at banking Table Games be placed in a common pool for complete distribution pro rata
among all dealers based on the daily collection of such tips or gratuities; provided however, the Division may establish an alternative
distribution method for tips or gratuities at a banking Table Game upon submission by the Table Game Retailer of a proposal acceptable
to the division to modify the existing distribution method for tips or gratuities.

 

(ii) The requirement
that tips or gratuities accepted by dealers at nonbanking Table Games are not required to be pooled and may be retained by the
dealers; provided however, the Division may establish an alternative distribution method for tips or gratuities at a nonbanking
Table Game upon submission by the Table Game Retailer of a proposal acceptable to the division to modify the existing distribution
method for tips or gratuities.

 

(10) Establishing the
minimal proficiency requirements for Table Game personnel, including without limitation Table Game dealers. The foregoing requirements
of this subsection (10) shall not affect any rules or regulations of the Rhode Island Department of Business Regulation requiring
licensing of personnel of state-operated gaming facilities.

 

(11) Establishing the practices and procedures governing the
conduct of Table Game tournaments.

 

    - 17 -

     

    

  

(12) Establishing appropriate
eligibility requirements and standards for traditional Table Game equipment suppliers.

 

(13) Any other matters
necessary for conducting Tables Games.

 

(b) The Division shall
promulgate the Table Game regulations authorized by this section on or before March 31, 2013.

 

(c) A Table Game Retailer
shall reimburse and pay to the Division (or to such other entities as the Division may identify) all reasonable costs and expenses
associated with the Division’s review of the business or operations of the Table Game Retailer, including, but not limited
to, such items as ongoing auditing, legal, investigation services, compulsive and problem gambling programs, and other related
matters.

 

(d) The Table Game
Retailer shall provide secure, segregated facilities as required by the Division on the premises for the exclusive use of the Lottery
staff and the State Police. Such space shall be located proximate to the gaming floor and shall include surveillance equipment,
monitors with full camera control capability, as well as other office equipment that may be deemed necessary by the Division. The
location and size of the space shall be subject to the approval of the Division.

 

SECTION 6. Sections
42-61.2-5, 42-61.2-8 and 42-61.2-12 of the General Laws in Chapter 42-61.2 entitled “Video Lottery Terminal” are hereby
amended to read as follows.

 

42-61.2-5. Exclusion of minors. – No person
under the age of eighteen (18) years may play a video lottery game or a Table Game authorized by this chapter, nor shall any licensed
video lottery or Table Game retailer knowingly permit a minor to play a video lottery machine or Table Game or knowingly pay a
minor with respect to a video lottery credit slip or Table Game chip. Violation of this section shall be punishable by a fine of
five hundred dollars ($500).

 

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42-61.2-8. Penalty
for manipulation or tampering. – Any person who, with intent to manipulate the outcome, payoff, and/or operation
of a video lottery terminal or Table Game, manipulates the outcome, prize, or operation of a video lottery terminal or Table Game
by physical or electronic means shall be guilty of a felony punishable by imprisonment for not more than ten (10) years or by a
fine of not less than ten thousand ($10,000) dollars or both.

 

42-61.2-12. Prize
‒ Set-off for child support debts. – Notwithstanding the provisions of section 42-61-7 relating to assignment
of prizes, the following set off provisions shall apply to the payment of any prize requiring the issuance of Internal Revenue
Service Form W-2G by a video lottery retailer (whether or not a Table Game Retailer) to a patron:

 

(1) With respect to
a person entitled to receive the prize who has an unpaid child support order(s) arrearages in excess of five hundred dollars ($500),
as provided by the department of human services pursuant to subsection 42-61-7.1(3), the division of state lottery:

 

(i) Shall establish
rules and regulations pursuant to section 42-61.2-3 and section 42-61.2-3.1) providing for the establishment and operation of a
system whereby the division of state lottery shall have the ability to communicate such information to video lottery retailers
so as to identify a person entitled to receive a prize requiring the issuance of Internal Revenue Service Form W-2G who has an
unpaid child support order(s) arrearage(s).

 

(ii) Upon receipt of information indicating an unpaid child
support arrearage the video lottery retailer shall set off against the amount due to that person an amount up to the balance of
the child support arrearage(s). The video lottery retailer shall then make payment as prescribed by the division of lottery to
the Rhode Island family court in the case of child support arrearage(s) which shall deposit the amount set off into the registry
of the family court for a period of forty-five (45) days, or if any application for review has been filed pursuant to subsection
27-57-1(d), until final disposition of the application until further order of the court.

 

    - 19 -

     

    

  

(iii) The video lottery
retailer shall pay to this person the remaining balance of the prize amount, if any, after reduction of the amount set off above
for child support.

 

(2) The division of
lottery, the lottery director and the video lottery retailer shall be discharged of all further liability upon payment of a prize
pursuant to this section. Except in the case of gross negligence, the division of lottery, the lottery director and the video lottery
retailer shall not be liable to any party or person for failure to make such a set-off.

 

(3) The department
of human services shall periodically within each year furnish the director with a list or compilation of names of individuals,
together with any other identifying information and in a form that the director shall require, who as of the date of the list or
compilation, have an unpaid child support order arrearage in excess of five hundred dollars ($500) as shown on the Rhode Island
family court decrees department of human services child support enforcement computer system (“CSE system”). For the
purposes of this section, the terms used in this section shall be given the meaning and definitions specified in section 15-16-2.

 

(4) Any party aggrieved
by any action taken under this section may within thirty (30) days of the withholding of the payment by the lottery director seek
judicial review in the family court, which may, in its discretion, issue a temporary order prohibiting the disbursement of funds
under this section, pending final adjudication.

 

(5) Notwithstanding any other general or special law to the
contrary, this section shall apply to all existing gambling facilities within the state as of the time of enactment and also to
any gambling facility within this state which is established after the date of enactment.

 

    - 20 -

     

    

  

SECTION 7. Chapter
42-61.2 of the General Laws entitled “Video Lottery Terminal” is hereby amended by adding thereto the following sections:

 

42-61.2-13. Table
game enforcement. – (a) Whoever violates sections 42-61.2-2.1 or 42-61.2-3.1, or any rule or regulation, policy or
procedure, duly promulgated thereunder, or any administrative order issued pursuant to sections 42-61.2-2.1 or 42-61.2-3.1 , shall
be punishable as follows:

 

(1) In the Division
director’s discretion, the Division director may impose an administrative penalty of not more than one thousand dollars ($1,000)
for each violation. Each day of continued violation shall be considered as a separate violation if the violator has knowledge of
the facts constituting the violation and knows or should know that such facts constitute or may constitute a violation. Lack of
knowledge regarding such facts or violation shall not be a defense to a continued violation with respect to the first day of its
occurrence. Written notice detailing the nature of the violation, the penalty amount, and effective date of the penalty will be
provided by the Division director. Penalties shall take effect upon notification. A written request for a hearing must be submitted
in writing to the Division director within thirty (30) days of notification of violation.

 

(2) (a) In the Division
director’s discretion, the Division director may endeavor to obtain compliance with requirements of this chapter by written
administrative order. Such order shall be provided to the responsible party, shall specify the complaint, and propose a time for
correction of the violation.

 

(b) The Division director shall enforce this chapter. Such enforcement
shall include, but not be limited to, referral of suspected criminal activity to the Rhode Island state police for investigation.

 

    - 21 -

     

    

  

(c) Any interest, costs
or expense collected under this section shall be appropriated to the Division for administrative purposes.

 

(d) Any penalty imposed
by the Division pursuant to this Section 42-61.2-13 shall be appealable to Superior Court.

 

42-61.2-14. Compulsive
and problem gambling program. – The Division and the State acknowledge that the vast majority of gaming patrons can
enjoy gambling games responsibly, but that there are certain societal costs associated with gaming by some individuals who have
problems handling the product or services provided. The Division and the State further understand that it is their duty to act
responsibly toward those who cannot participate conscientiously in gaming. Pursuant to the foregoing, Twin River and Newport Grand,
in cooperation with the State, shall offer compulsive and problem gambling programs that include, but are not limited to (a) problem
gambling awareness programs for employees; (b) player self-exclusion program; and (c) promotion of a problem gambling hotline.
Twin River and Newport Grand shall modify their existing compulsive and problem-gambling programs to include Table Games to the
extent such games are authorized at such facilities. Twin River and Newport Grand shall reimburse and pay to the Division no less
than one hundred thousand dollars ($100,000) in aggregate annually for compulsive and problem gambling programs established by
the Division. The contribution from each facility shall be determined by the Division.

 

42-61.2-15. Table game hours of operation. –
To the extent Table Games are authorized at Twin River, such Table Games may be offered at Twin River for all or a portion of the
days and times that VLTs are offered. To the extent Table Games are authorized at Newport Grand, such Table Games may be offered
at Newport Grand for all or a portion of the days and times that VLTs are offered.

 

    - 22 -

     

    

  

SECTION 8. Authorized
Procurement of Third Amendment to the UTGR Master Contract.

 

(a) Notwithstanding
any provision of the general or Public Laws to the contrary, within ninety (90) days of the enactment of this Act, the Division
is hereby expressly authorized and directed to enter into with UTGR a Third Amendment to the UTGR Master Contract to effectuate
the terms and conditions of this Act relative to video lottery terminals, including, without limitation, the following:

 

(1) There is hereby
authorized a Supplementary Promotional Points Program at Twin River (in addition to the Initial Promotional Points Program), pursuant
to the terms and conditions established from time to time by the Division during the term of the UTGR Contract. The approved amount
of the Supplementary Promotional Points Program shall not exceed six percent (6%) of Twin River net terminal income of the Prior
Marketing Year. For avoidance of doubt, the aggregate approved amount of the Initial and Supplementary Promotional Points Programs,
in total, shall therefore not exceed ten percent (10%) of the amount of net terminal income of Twin River of the Prior Marketing
Year, plus an additional seven hundred and fifty thousand dollars ($750,000) allocated pursuant to the terms of Chapter 151, Article
25 of the Public Laws of 2011, Section 8(a)(i).

 

(2) The requirements of this Section 8 related to the Supplementary
Promotional Points Program shall take effect on and after July 1, 2012.

 

    - 23 -

     

    

  

SECTION 9. Authorized
Procurement of Third Amendment to the Newport Grand Master Contract.

 

(a) Notwithstanding
any provision of the general or Public Laws to the contrary, within ninety (90) days of the enactment of this Act, the Division
is hereby expressly authorized and directed to enter into with Newport Grand, LLC a Third Amendment to the Newport Grand Master
to effectuate the terms and conditions of this Act relative to video lottery terminals, including, without limitation, the following:

 

(1) There is hereby
authorized a Supplementary Promotional Points Program at Newport Grand (in addition to the Initial Promotional Points Program),
pursuant to the terms and conditions established from time to time by the Division during the term of the Newport Grand Master
Contract. The approved amount of the Supplementary Promotional Points Program shall not exceed six percent (6%) of Newport Grand
net terminal income of the Prior Marketing Year. For avoidance of doubt, the aggregate approved amount of the Initial and Supplementary
Promotional Points Programs, in total, shall therefore not exceed ten percent (10%) of the amount of net terminal income of Newport
Grand of the Prior Marketing Year, plus an additional seven hundred and fifty thousand dollars ($750,000) allocated pursuant to
the terms of Chapter 151, Article 25 of the Public Laws of 2011, Section 8(a)(i).

 

(2) The requirements
of this Section 9 related to the Supplementary Promotional Points Program shall take effect on and after July 1, 2012.

 

SECTION 10. This act
shall take effect upon passage, except for section 7. With respect to Twin River, Section 7 shall take effect only if Casino Gaming
at Twin River is approved statewide and by the Town of Lincoln pursuant to Article 25, Chapter 151, Section 4 of the Public Laws
of 2011. With respect to Newport Grand, Section 7 shall take effect only if Casino Gaming at Newport Grand is approved statewide
and by the City of Newport pursuant to Section 1 of Chapters 24 and 25 of the Public Laws of 2012. Voter approval or non-approval
with respect to one facility shall be independent of voter approval or non-approval with respect to the other facility.

 

    - 24 -

     

    

 

EXPLANATION

 

BY THE LEGISLATIVE COUNCIL

 

OF

 

AN ACT

 

RELATING TO REVENUE PROTECTION

 

***

 

This act would make
several amendments regarding gaming in Rhode Island, and specifically table. The act would provide for the regulation of table
gaming. The act also would revise the allocation of revenue in the event table gaming is approved at Newport Grand and/or Twin
River by appropriate vote.

 

This act would take
effect upon passage, except for section 7. With respect to Twin River, Section 7 shall take effect only if Casino Gaming at Twin
River is approved statewide and by the Town of Lincoln pursuant to Article 25, Chapter 151, Section 4 of the Public Laws of 2011.
With respect to Newport Grand, Section 7 shall take effect only if Casino Gaming at Newport Grand is approved statewide and by
the City of Newport pursuant to Section 1 of Chapters 24 and 25 of the Public Laws of 2012. Voter approval or non-approval with
respect to one facility shall be independent of voter approval or non-approval with respect to the other facility.

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