Current through Register Vol. XLI, No. 36, September 6, 2024
Section 179-5-2 - Definitions of terms and words2.1. "Advertising" as used in West Virginia Code § 29-22B-702(13) and § 29-22B-706(12) means a media advertisement, utilizing social media, an outdoor sign, or a sign inside the licensee's premises that may be seen from the outside of the premises, that conveys to the average reader or hearer that limited video lottery gaming is available at the retail establishment or from the licensed operator.2.2. "ABCA" means the office and agency known as the alcohol beverage control commissioner created in W. Va. Code § 60-2-1.2.3. "Act" and "the act" mean the Limited Video Lottery Act codified in W. Va. Code § 29-22B-1et seq.2.4. "Central computer", "central control computer" or "central site system" means any central site computer provided to and controlled by the commission to which video lottery terminals communicate for purposes of information retrieval and terminal activation and to disable programs. "Central computer" includes the computer at the commission's hot backup site when it is functioning as the central control computer.2.5. "Control" means the authority to direct the management and policies of an applicant for a license or a holder of a license. The following persons are considered to have control of an applicant: 2.5.a. Each person associated with a corporate applicant, including any corporate holding company, parent company or subsidiary company of the applicant, except that: 2.5.a.1 A bank or other licensed lending institution that holds a mortgage or other lien acquired in the ordinary course of business does not have control of the applicant;2.5.a.2 An investment advisor who is registered with the United States Securities and Exchange Commission and whose beneficial interest in the applicant is held strictly for investment purposes, who has the ability to control the activities of the corporate applicant or to elect a majority of the board of directors of that corporation does not have control of the applicant; and2.5.a.3 An institutional investor who is registered with the United States Securities and Exchange Commission and whose beneficial interest in the applicant is held strictly for investment purposes, who has the ability to control the activities of the corporate applicant or to elect a majority of the board of directors of that corporation. The applicant or licensee has the burden of proving that the interest is held for investment and not for direct or indirect control of the applicant or licensee; and2.5.b. Each person associated with a noncorporate applicant who directly or indirectly holds any beneficial or proprietary interest in the applicant or who the commission determines to have the ability to control the applicant; and2.5.c. Key personnel of an applicant, including any executive, employee or agent, having the power to exercise significant influence over decisions concerning any part of the applicant's business operation.2.6. "Gross profits" means the portion of gross terminal income collected by the commission from the permittee that remains after the commission deducts two percent of gross terminal income for administrative expenses.2.7. "Gross terminal income" means the total amount of cash inserted into video lottery terminals operated by a licensee, minus the total value of game credits which are cleared from the video lottery terminals in exchange for winning redemption tickets printed by the video lottery terminals. Gross terminal income may also be determined by subtracting total credits won from total credits played. Either method will yield the same gross terminal income for the period.2.8. "Incomplete applications" as used in W.Va. Code §29-22B-509(b) means applications that have not included one or more of the required elements for licensure: 2.8.a. Fingerprint information;2.8.b. All lottery forms completely filled in;2.8.c. Payment of the non-refundable fee for license; and2.8.d. An ABCA private club liquor license number or class "A" nonintoxicating beer license number.2.9. "Indirect ownership" means an interest a person owns in an entity or in property solely as a result of application of constructive ownership rules without regard to any direct ownership interest (or other beneficial interest) in the entity or property. "Indirect ownership" shall be determined under the rules applicable to determining whether a gain or loss between related parties is recognized for federal income tax purposes as provided for in 26 U.S.C. § 267 of the Internal Revenue Code and regulations of the Secretary of the United States Treasury.2.10. "License" or "video lottery license" means the written authorization granted by the commission pursuant to the Act and this rule that permits the person named in the license to engage in the activity for which the license was issued during the period of time for which the license was issued, unless the license is surrendered by the licensee, or is cancelled or revoked by the director or the commission, before its expiration date. The activity for which the license was issued may not be engaged in during any period of time for which the license has been suspended by the director or the commission. The commission issues four types of licenses: (A) a limited video lottery retailer's license,(B) a manufacturer's license,(C) an operator's license and(D) a service technician's license.2.11. "Licensed limited video lottery location approved by the commission" as it appears in W. Va. Code, § 29-22B-1201(a) includes:2.11.1. A location approved by the commission that is in excess of one hundred fifty feet from a business in accordance with W. Va. Code § 29-22B-1202 that sells petroleum products capable of being used as fuel in an internal combustion engine as determined by the commission during the license application review; or2.11.2. A location approved by the commission that is a separate room or building which is a part of, contiguous to, or adjoining an "Authorized West Virginia Truck Stop." 2.11.2.a. An Authorized West Virginia Truck Stop is a facility that (i) is also a convenience store, (ii) has separate diesel islands for fueling commercial vehicles, (iii) has overnight parking spaces for commercial vehicles, (iv) is open 24 hours, and (v) has at least fifty (50) parking spaces.2.11.2.b. The applicant must attest to all qualification requirements prior to licensure of a limited video lottery retailer to operate video lottery terminals at the location of an Authorized West Virginia Truck Stop, and provide sufficient proof of compliance with all requirements in subdivision 2.12.2 of this subsection.2.11.3. The provisions of any interpretive rule providing restrictions within the definition of the term "licensed limited video lottery location approved by the commission" shall continue in full force and effect except as to any such restriction that is explicitly superseded or modified by the provisions of this subsection.2.12. "Modified terminal not approved by the commission" as used in subsection 15.1 of this rule, means a video lottery terminal whose assembly or operational functions are not identical to the video lottery terminal that was tested by the commission's independent testing laboratory and approved by the commission for sale or lease to a permittee in West Virginia.2.13. "Operating video lottery terminals" as the term is used in subsection 27.1 of this rule means terminals that are accepting and processing limited video lottery wagers in a day. A video lottery terminal that does not accept and process any limited video lottery wagers during a day will not be counted as operating on that day.2.14. "Other act beyond the control of the permittee," as used in W.Va. Code § 29-22B-1113(b), means a natural or man-made occurrence that was not caused by any person having direct or indirect ownership or control of the permittee. These occurrences include, but are not limited to, the following:2.14.1. Failure of the electric power utility, the telephone utility, the water utility or the natural gas utility to provide electric power, telephone service, water or (if needed) natural gas to the restricted access adult-only facility;2.14.2. The rendering of the restricted access adult-only facility uninhabitable by reason of smoke or water damage from a fire in an adjacent location of the building or structure in which the restricted access adult-only facility is located;2.14.3. A declaration of a civil emergency that closes the premises in which the restricted access adult-only facility is located; or2.14.4. A hardware or software malfunction in a video lottery terminal that can be corrected only by the licensed manufacturer that built the video lottery terminal, if the malfunction is registered by the manufacturer with the commission before the downtime limit expires.2.15. "Petroleum products" as used in W.Va. Code § 29-22B-328(b) and elsewhere in this rule means gasoline and special fuels as those terms are defined by W.Va. Code § 11-14C-2.2.16. "Pin ball machine" as it appears in W.Va. Code § 29-22B-331 means an electromechanical amusement device in which a solid metal ball propelled by a plunger scores points as it rolls down a slanting surface among pins and targets. Flippers located on each side of the slanted surface allow the person playing the machine to keep the ball in play thereby scoring more points. "Pinball machine" does not include any electronic simulation that does not use a mechanical plunger, mechanical flippers or a physical solid metal ball to operate the game.2.17. "Restricted access adult-only facility" means and is limited to:2.17.a. A private club licensed by the ABCA under W. Va. Code § 60-7-1et seq. that is also licensed by the commission as a limited video lottery retailer to allow members and their guests to play video lottery games, subject to the following restrictions: 2.17.a.1. When a private club is frequented by minors and their parents, the private club is not a restricted access adult-only facility unless all of its video lottery terminals are located in a separate room suitable for the location of video lottery terminals with adult-only restricted access, the interior of which is not visible to persons outside the room. The commission shall determine whether the separate room is suitable for the location of video lottery terminals.2.17.a.2. When a place of business includes a private club licensed under W. Va. Code § 60-7-1et seq. and the place of business sells petroleum products, the private club may not have a limited video lottery retailer's license. This restriction applies even though the video lottery terminals would be located in a separate room, or in a building that is part of, contiguous to or adjoining a place of business that sells petroleum products. This restriction applies even though the private club or the business that sells petroleum products, or both businesses, are located in owned or leased space and even though the private club and the business that sells petroleum products are owned or operated by unrelated parties for purposes of application of 26 U.S.C. § 267 of the Internal Revenue Code.2.17.b. A place of business that (A) does not sell petroleum products, (B) has a Class "A" nonintoxicating beer license issued by the ABCA under W. Va. Code § 11-16-1et seq. allowing the holder to sell nonintoxicating beer for consumption on the premises, and (C) meets all of the following: 2.17.b.1. The business derives at least 40% of its annual gross receipts at that location from sales of nonintoxicating beer to consumers and of the gross receipts from sales of nonintoxicating beer, at least 80% are from sales of nonintoxicating beer for consumption on the premises.2.17.b.1.A. Example 1. ZXY pizza shop has a Class "A" nonintoxicating beer license. Annual gross receipts at that location from all sources is $2 million. Of this amount, $750,000 is from sales of nonintoxicating beer. Because gross receipts from sales of nonintoxicating beer is less than 40 percent of gross receipts from all sales of goods and services, the pizza shop is not eligible for a limited video lottery license.2.17.b.1.B. Example 2. ZXY pizza shop has a Class "A" nonintoxicating beer license. Annual gross receipts at that location from all sources is $2 million. Of this amount, $850,000 is from sales of nonintoxicating beer. Annual gross receipts from sales of nonintoxicating beer for consumption on the premises is $637,500 while annual gross receipts from sales of nonintoxicating beer for off-premises consumption is $212,500. In this example, more than 40 percent of annual gross receipts are from sales of nonintoxicating beer. However, because annual gross receipts from sales of nonintoxicating beer for consumption on the premises is less than 80 percent of gross receipts from all sales of nonintoxicating beer, the pizza shop is not eligible for a limited video lottery license.2.17.b.1.C. A business that has a Class "A" nonintoxicating beer license and wants to obtain or retain a limited video lottery license shall make and retain adequate records of its sales of goods and services. At a minimum, the records shall show, for each business location, total annual gross receipts, total annual gross receipts from all sales of nonintoxicating beer and total annual gross receipts from sales of nonintoxicating beer for consumption on the premises. When the business location has a Class "A" nonintoxicating beer license, the records separately shall show for each business day gross receipts derived from sales of nonintoxicating beer for consumption on the premises and gross receipts derived from sales of nonintoxicating beer for consumption off the premises. Whether nonintoxicating beer is sold for consumption on or off the premises is determined at the time nonintoxicating beer is sold to the customer. If nonintoxicating beer is sold for consumption off the premises, the sale is to be recorded as a sale for off-premises consumption even though the customer, after receiving the nonintoxicating beer in a sealed container, opens the container and consumes the product in whole or in part on the premises.2.17.b.1.D. In the absence of adequate records, the commission shall presume that annual gross receipts from sales of nonintoxicating beer is less than 40 percent of total annual gross receipts from all sales of goods and services at the business location.2.17.b.1.E. When the business does not keep adequate books and records of gross receipts from sales on nonintoxicating beer for consumption on the premises and of gross receipts from sales of nonintoxicating beer for consumption off the premises, the commission shall presume that gross receipts from sales of nonintoxicating beer for consumption on the premises is less than 80 percent of all sales on nonintoxicating beer.2.17.b.2. The business maintains a suitable kitchen and dining facility and related equipment for serving meals for on-premises consumption;2.17.b.3. The business regularly prepares and sells meals for consumption on the premises;2.17.b.4. The business has a separate room suitable for the location of video lottery terminals with adult-only restricted access, the interior of which is not visible to persons outside the room. The commission shall determine whether the separate room is suitable for the location of video lottery terminals; and2.17.b.5. The business meets any additional requirement(s) or standard developed by the commission for a Class AA" beer licensee.2.18. "Ten days after the date the ticket is printed," as that phrase is used in subsection 7.1 of this rule, is calculated by excluding the day the ticket was printed and including the tenth subsequent day until the close of video lottery gaming that began on the tenth subsequent day.