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Proposed Readoption with Amendments: N.J.A.C. 13:3

Rules of the Office of Amusement Games Control

Authorized By: Legalized Games of Chance Control Commission, Lawrence DeMarzo, Acting Executive Officer.
Authority: N.J.S.A. 5:8-6 and 5:8-79.1.
Calendar Reference: See Summary below for explanation of exemption to calendar requirement.

Proposal Number: PRN 2008-198.
Submit comments by August 15, 2008 to:

Legalized Games of Chance Control Commission
c/o Lawrence DeMarzo, Acting Executive Officer
124 Halsey Street
P.O. Box 46000
Newark, New Jersey 07101

The agency proposal follows:


The Legalized Games of Chance Control Commission (the Commission), proposes to readopt the amusement games rules, which appear at N.J.A.C. 13:3. Pursuant to N.J.S.A. 52:14B-5.1c, this chapter will expire on April 13, 2009. In compliance with Executive Order No. 66 (1978), the Commission has thoroughly reviewed these rules and proposes to readopt N.J.A.C. 13:3. The Commission has found these rules generally to be reasonable, necessary and effective in governing the licensure and regulation of amusement games in the State of New Jersey. Following is a summary of each of the eight subchapters of N.J.A.C. 13:3 and proposed amendments to the rules. Subchapter 1 deals with the issuance of amusement games licenses by municipal governing bodies. The subchapter governs where amusement games may be held and sets forth standards for how amusement games must be conducted. Subchapter 2 contains rules that set forth the manner in which the Commission issues amusement games licenses. The rules specify that municipal approval of a license is not operative until the Commission has issued a State license certificate. Subchapter 3 deals with the conduct of licensees and the operation of games. The rules in this subchapter specify the maximum price that may be charged to play games, prize values, and the types of prizes that may be awarded. The Commission proposes to amend N.J.A.C. 13:3-3.5 to prohibit a licensee from offering a live animal as a prize. The Commission also proposes to amend N.J.A.C. 13:3-3.8 to require licensees to label any item that is not available as a prize in such a way that it is clear that the item cannot be won. Subchapter 4 imposes reporting obligations on licensees. Licensees are required to maintain accurate accounts of money received and expenses. Licensees are also required to maintain records of the receipt of items used as prizes. Licensees are required to report annually to the Commission on the conduct of games. The Commission proposes to amend N.J.A.C. 13:3-4.1 and 4.2 to require that records be made available to the Commission within five business days of receipt of a request to review records. The Commission also proposes to amend N.J.A.C. 13:3-4.4 to permit the Commission to provide reports to any other governmental agency. Subchapter 5 sets forth the procedures the Commission will follow when initiating and pursuing disciplinary action against licensees. Subchapter 6 deals with a licensee's right to appeal action taken by a municipal government and the Commission's powers throughout the appeal process. Subchapter 7 addresses the process for certification of permissible games, criteria for certification, information that must be supplied, and the amendment and decertification process for amusement games. Before any amusement game not already covered by an existing certification can be introduced in the State, application must be made to the Commission for a certification of permissibility. This subchapter also sets forth the nine types of certifications for games. Subchapter 8 is a reserved subchapter. The Commission has determined that the comment period for this proposal shall be 60 days; therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this proposal is excepted from the rulemaking calendar requirement.

Social Impact

Amusement games have been part of the New Jersey tourism industry since construction of the first boardwalk in the late 1800's. Since passage of the Amusement Games Licensing Law in 1959, the industry has become a significant part of the State's multi-billion dollar tourism industry. The Commission is satisfied that readoption of the rules will have a positive social impact upon both the public and the industry by allowing for the continued licensure and regulation of amusement games, helping to ensure that such games are conducted in a fair and safe manner. The proposed amendment to N.J.A.C. 13:3-3.5 brings the rules into compliance with the State's anti-cruelty laws, N.J.S.A. 4:22-26(p), which prohibit the use of animals to solicit or collect money. Further, N.J.A.C. 13:3-3.8 will benefit society by ensuring that consumers are aware when displayed items are not prizes and are not available to be won.

Economic Impact

N.J.A.C. 13:3 provides effective procedures for licensing and regulating amusement games in the State while encouraging the continued viability of the industry. The Amusement Games Licensing Law provides for dual municipal and State licensing. The rules have maintained the balance between ensuring that specific local economic and social needs are addressed and maintaining Statewide uniformity of licensing and regulation of the industry. The rules proposed for readoption have an economic impact on members of the amusement games industry by setting forth the application processes for individual games certification and for municipal and State licensure, including fees for each. Subchapter 3 sets maximum fees for participation in games, limits the type and value of prizes permitted, prohibits redemption of prizes for money, and requires the posting of signs for game rules and instructions. Licensees are required under Subchapter 4 to maintain true books of account to be made available for inspection, to retain for one year invoices for merchandise to be awarded as prizes, and to annually file with the Commission a report of the conduct of games for the preceding year. The costs of complying with these requirements will be borne by licensees. Proposed amendments to N.J.A.C. 13:3-3.8 will require licensees to label items that are not prizes. The minimal costs of labeling these items will be borne by licensees.

Federal Standards Statement

A Federal standards analysis is not required because there are no Federal laws or standards applicable to the proposed readoption of N.J.A.C. 13:3.

Jobs Impact

The Commission does not expect that the rules proposed for readoption with amendments will result in the generation or loss of jobs.

Agriculture Industry Impact

The Commission does not believe that the rules proposed for readoption with amendments will have any impact on the agriculture industry in the State.

Regulatory Flexibility Analysis

Since the holders of amusement games licensees are individually licensed by the Commission, under the Regulatory Flexibility Act (the Act), N.J.S.A. 52:14B-16 et seq., they may be considered "small businesses" for the purposes of the Act. The rules proposed for readoption with amendments will have the same economic impact on small businesses as it has on all businesses as detailed in the Economic Impact Statement above. The Commission does not believe that licensees will need to employ professional services in order to comply with the rules proposed for readoption with amendments. The rules impose compliance, reporting and recordkeeping requirements as detailed in the Summary above. As the rules proposed for readoption with amendments protect the safety and welfare of individuals who participate in amusement games in New Jersey, the Commission believes that they must be applied uniformly to all licensees regardless of the size of the business.

Smart Growth Impact

The Commission does not believe that the rules proposed for readoption with amendments will have an impact upon the achievement of smart growth or upon the implementation of the State Development and Redevelopment Plan.

Full text of the rules proposed for readoption may be found in the New Jersey Administrative Code at N.J.A.C. 13:3.

Full text of the proposed amendments follows (additions indicated in boldface thus; deletions indicated in brackets, [thus]):

13:3-3.5 Types of prizes permitted; value of prize

(a) No licensee shall offer or give, directly or indirectly, any prize in any single amusement game except merchandise other than alcoholic beverages; drug or narcotic paraphernalia; obscene or indecent recordings, printings, writing, pictures or other matter; [or] weapons as defined in N.J.S.A. 2C:39-1r; or any live animals.

(b)-(d) (No change.)

13:3-3.8 Deceptive, fraudulent or misleading advertising or practice; conduct of games

(a)-(c) (No change.)

(d) Licensees shall label items in and around the field of play that are not available to be won as a prize in such a way that it is clear that the item is not a prize and cannot be won.

13:3-4.1 Books of account, entries; inspection

Every licensee shall keep a true book or books of account in which the licensee shall enter all moneys received and the specific source of such receipts, all moneys expended from such receipts, and the name of the person receiving such expenditures, and the purpose for which such expenditures were made. All books and records pertaining to such receipts or expenditures shall be made available for inspection by the Legalized Games of Chance Control Commission and the municipal governing body and their agents within five business days of receipt of a request to review the records.

13:3-4.2 Invoices of cost of prizes retained

Every licensee shall retain for a period of one year from the date thereof, all delivery slips, invoices, manifests, waybills or similar documents received from suppliers of merchandise to be awarded as prizes. These records shall be [readily] made available for inspection by agents of the Commission within five business days of receipt of a request to review the records.

13:3-4.4 Reports confidential

Reports required to be submitted, and the information contained therein, shall not be disclosed by the Commission except [so]:

1. So far as may be necessary for the purpose of carrying out the provisions of the Amusement Games Control Law (P.L. 1959 [c.108] c. 108 and the Amusement Games Licensing Law (P.L. 1959 [c.109] c. 109); or

2. To any other governmental agency to facilitate the discharge of its public responsibilities.

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