PRINTER'S NO. 2940
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1891
Session of
2015
INTRODUCED BY PAYNE, KOTIK, MOUL, DIAMOND, GROVE, PICKETT AND
THOMAS, MARCH 14, 2016
REFERRED TO COMMITTEE ON GAMING OVERSIGHT, MARCH 14, 2016
AN ACT
Amending the act of December 19, 1988 (P.L.1262, No.156),
entitled, as amended, "An act providing for the licensing of
eligible organizations to conduct games of chance, for the
licensing of persons to distribute games of chance, for the
registration of manufacturers of games of chance, and for
suspensions and revocations of licenses and permits;
requiring records; providing for local referendum by
electorate; and prescribing penalties," in preliminary
provisions, further providing for definitions; in games of
chance, further providing for distributor licenses, for major
league sports drawing, for registration of manufacturers, for
regulations of department and for licensing of eligible
organizations and providing for authorized small games; in
club licensees, further providing for club licensee, for
distribution of proceeds and for records; in enforcement,
further providing for revocation of licenses and for
enforcement; and providing for powers and duties of the
Pennsylvania Gaming Control Board.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "games of chance" and "passive
selection device" in section 103 of the act of December 19, 1988
(P.L.1262, No.156), known as the Local Option Small Games of
Chance Act, amended December 19, 1990 (P.L.812, No.195),
February 2, 2012 (P.L.7, No.2), November 27, 2013 (P.L.1045,
No.90) and November 27, 2013 (P.L.1062, No.92), are amended and
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the section is amended by adding definitions to read:
Section 103. Definitions.
The following words and phrases when used in this act shall,
except as provided under section 902, have the meanings given to
them in this section unless the context clearly indicates
otherwise:
* * *
"Authorized small game." A small gambling game authorized by
the board under section 309.
* * *
"Board." The Pennsylvania Gaming Control Board.
* * *
"Games of chance." Punchboards, daily drawings, weekly
drawings, 50/50 drawings, raffles, tavern games, pools, race
night games, authorized small games and pull-tabs, as defined in
this act, provided that no such game shall be played by or with
the assistance of any mechanical or electrical devices or media
other than a dispensing machine or passive selection device and
further provided that the particular chance taken by any person
in any such game shall not be made contingent upon any other
occurrence or the winning of any other contest, but shall be
determined solely at the discretion of the purchaser. This
definition shall not be construed to authorize any other form of
gambling currently prohibited under any provision of 18 Pa.C.S.
(relating to crimes and offenses) or authorized under 4 Pa.C.S.
(relating to amusements). Nothing in this act shall be construed
to authorize games commonly known as "slot machines" or "video
poker" or other games regulated by the Pennsylvania Gaming
Control Board under 4 Pa.C.S.
* * *
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"Passive selection device." A device which is used to hold
or denote the universe of possible winning numbers or entrants
in a daily drawing [or], raffle or authorized small game. Such a
device may not have the capability of being utilized to conduct
or aid in the conducting of unauthorized or illegal forms of
gambling.
* * *
Section 2. Section 304 of the act, amended or added February
2, 2012 (P.L.7, No.2), November 27, 2013 (P.L.1045, No.90) and
November 13, 2013 (P.L.1062, No.92), is amended to read:
Section 304. Distributor licenses.
(a) License required.--No person shall sell, offer for sale
or furnish games of chance to eligible organizations licensed
under this chapter or licensed under Chapter 9 unless such
person shall have obtained a distributor license as provided in
this section.
(b) Application.--An applicant for the grant or renewal of a
distributor license issued pursuant to this section shall
provide to the [department] board, upon the form prescribed, all
of the following:
(1) The applicant's State sales tax number.
(2) The applicant's State corporate tax number.
(3) The applicant's State employer withholding tax
number.
(4) The applicant's unemployment compensation account
number.
(5) A statement that:
(i) all State tax reports have been filed and all
State taxes paid;
(ii) all State taxes are subject to a timely
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administrative or judicial appeal; or
(iii) all State taxes are subject to a duly approved
deferred payment plan.
(6) The names and business addresses of all owners,
officers, directors, partners and sales personnel.
(c) Waiver of confidentiality.--An applicant for the grant
or renewal of a distributor license issued pursuant to this
section shall, by the filing of an application insofar as it
relates to the [department] board, waive any confidentiality
with respect to State tax information in the possession of the
department, the Office of Attorney General or the Department of
Labor and Industry regarding that applicant, regardless of the
source of that information, and shall consent to the providing
of that information to the [department] board by the Office of
Attorney General, department or the Department of Labor and
Industry.
(c.1) Background.--The [department] board shall conduct and
annually update a criminal history record check on each
individual listed under subsection (b)(6).
(d) Review of tax status.--Upon receipt of any application
for the grant or renewal of a distributor license issued
pursuant to this section, the [department] board shall review
the State tax status of the applicant. The [department] board
shall request State tax information regarding the applicant from
the Office of Attorney General, department or the Department of
Labor and Industry and that information shall be provided.
(e) Limitation on approval.--The [department] board shall
not approve any application for the grant or renewal of a
distributor license issued pursuant to this section where the
applicant has failed to:
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(1) provide any of the information required by
subsection (b);
(2) file required State tax reports; or
(3) pay any State taxes not subject to a timely
administrative or judicial appeal or subject to a duly
authorized deferred payment plan.
(f) Records.--A distributor licensee shall keep such
records, reports and books as the [department] board shall
prescribe. Applicants shall be required to make such records,
reports and books available as required by the [department]
board pursuant to regulation.
(g) Ineligibility.--The [department] board shall not issue
or renew a distributor license for the sale of games of chance
to a person, including any corporation, firm or partnership
which has as an officer, director or other person in a
supervisory or management position, or employee eligible to make
sales on behalf of the distributor, who:
(1) has been convicted of a felony in a state or Federal
court within the past five years; or
(2) has been convicted within ten years of the date of
application in a state or Federal court of a violation of any
of the following:
(i) This act.
(ii) The act of July 10, 1981 (P.L.214, No.67),
known as the Bingo Law.
(iii) A gambling-related offense under 4 Pa.C.S.
(relating to amusements).
(iv) A gambling-related offense under 18 Pa.C.S.
(relating to crimes and offenses).
(v) A Federal or State law comparable to the
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statutes listed under subparagraphs (i), (ii), (iii) and
(iv).
(h) License and renewal fees.--The fee for a distributor
license shall be $2,000. Licenses shall be renewable on an
annual basis.
(i) Exception.--This section shall not apply to the
manufacture or distribution of raffle tickets, 50/50 drawings,
daily drawings, weekly drawings or pools.
Section 3. Section 304.1(h) of the act, added November 27,
2013 (P.L.1045, No.90), is amended to read:
Section 304.1. Major league sports drawing.
* * *
(h) Additional recordkeeping.--The [department] board may
require additional recordkeeping or accountability measures for
major league sports drawings.
Section 4. Section 305(a) of the act, amended October 24,
2012 (P.L.1462, No.184), is amended to read:
Section 305. Registration of manufacturers.
(a) Registration required.--No manufacturer of games of
chance shall sell any games of chance to any person unless the
manufacturer has registered with the [department] board and has
been issued a certificate of registration.
* * *
Section 5. Section 306 of the act, amended February 2, 2012
(P.L.7, No.2), October 24, 2012 (P.L.1462, No.184) and November
27, 2013 (P.L.1062, No.92), is amended to read:
Section 306. Regulations of [department] board.
(a) Authorization.--The [department] board shall promulgate
regulations to:
(1) Impose minimum standards and restrictions applicable
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to games of chance manufactured for sale in this
Commonwealth, which may include standards and restrictions
which specify the maximum number of chances available to be
sold for any single game of chance or prize and such other
standards and restrictions as the [department] board deems
necessary for the purposes of this chapter. The [department]
board shall consider standards adopted by the National
Association of Gambling Regulatory Agencies and other
standards commonly accepted in the industry.
(2) Establish procedures by which manufacturers may
register and distributors of games of chance may apply for
licensure on forms which the [department] board shall
provide. Procedures shall include a requirement that
manufacturer and distributor applicants provide criminal
history record information obtained from the Pennsylvania
State Police under 18 Pa.C.S. § 9121(b) (relating to general
regulations) for each officer and manager of the
manufacturer's or distributor's organization and for any
other individual specified by the [department] board. As used
in this paragraph, the term "criminal history record
information" has the meaning given in 18 Pa.C.S. § 9102
(relating to definitions).
(3) Provide for the suspension or revocation of
distribution licenses or manufacturer certificates for
violations of this act or regulations of the [department]
board.
(3.1) Establish procedures to ensure that race night
games are secure, random and totally dependent upon chance.
(4) Carry out other provisions of this act.
(b) Limitation on recordkeeping requirements.--This section
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shall not be construed to authorize the [department] board to
promulgate regulations providing for recordkeeping requirements
for licensed eligible organizations which require unreasonable
or unnecessary information or a repetitious listing of
information. The [department] board shall strive to keep such
recordkeeping requirements from being an undue hardship or
burden on licensed eligible organizations. Except as provided
under section 701(b), the [department] board may not require the
retention of records for a period in excess of two years. If an
individual prize is in excess of $600, the record shall include
the name and address of the winner. An eligible organization
shall provide each winner with a receipt of the value of the
prize when the prize exceeds $600.
(c) (Reserved).
Section 6. Section 307(d)(6),(e) introductory paragraph and
(f) of the act, amended February 2, 2012 (P.L.7, No.2), October
24, 2012 (P.L.1462, No.184) and November 27, 2013 (P.L.1062,
No.92), are amended to read:
Section 307. Licensing of eligible organizations.
* * *
(d) Operation.--Each licensed eligible organization shall be
prohibited from the following:
* * *
(6) Purchasing games of chance, other than raffles,
50/50 drawings, daily drawings and weekly drawings, from any
person other than a registered manufacturer or licensed
distributor approved by the [department] board.
* * *
(e) Application for license.--Each eligible organization
shall apply to the licensing authority for a license on a form
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to be prescribed by the [Secretary of Revenue] board. For a club
license, the application and each renewal application shall
include the most recent annual report filed by the club licensee
under Chapter 5. The form shall contain an affidavit to be
affirmed by the executive officer or secretary of the eligible
organization stating that:
* * *
(f) List of licensees.--The licensing authority, on a
semiannual basis, shall send a copy of all licensees to the
[department] board.
* * *
Section 7. The act is amended by adding a section to read:
Section 309. Authorized small games.
(a) Application.--A registered manufacturer may apply to the
board, on a form and in a manner as the board may prescribe, for
approval of an authorized small game to be offered for sale and
operation in accordance with this act.
(b) Approval.--The board shall approve an application for an
authorized small game for sale and operation if the game
complies with the following:
(1) The game is designed for the purpose of raising
funds for public interest purposes.
(2) The maximum entry fee or cost for an individual to
play the game is $10.
(3) The game is not to be played by or with the
assistance of any mechanical or electrical devices other than
a dispensing machine or passive selection device.
(4) The game complies with the Professional and Amateur
Sports Protection Act (Public Law 102-559, 28 U.S.C. § 3701
et seq.).
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(c) Prohibitions.--No person may offer for sale or operate
an authorized small game until all of the following occur:
(1) The board approves the application for the
authorized small game.
(2) The board promulgates regulations as required by
this section.
(d) Regulations.--The board shall promulgate regulations
providing for the following:
(1) Manufacturing standards.
(2) Recordkeeping requirements.
(3) Rules for the play and operation of the authorized
small game.
(e) Exemption from review.-- In order to facilitate the
prompt approval of authorized small games, regulations
promulgated by the board under this section shall be deemed
temporary regulations, which shall not be subject to:
(1) Sections 201, 202, 203, 204 and 205 of the act of
July 31, 1968 (P.L.769, No.240), referred to as the
Commonwealth Documents Law.
(2) Sections 204(b) and 301(10) of the act of October
15, 1980 (P.L.950, No.164), known as the Commonwealth
Attorneys Act.
(3) The act of June 25, 1982 (P.L.633, No.181), known as
the Regulatory Review Act.
(f) Expiration.--The authority provided to the board to
adopt temporary regulations under subsection (e) shall expire
three years from the effective date of this subsection.
Regulations adopted after that date shall be promulgated as
provided by law.
(g) Fees.--The board shall adopt a schedule establishing
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fees to be accompanied by an application under subsection (a) to
cover costs incurred by the board for the approval of an
authorized small game.
Section 8. Section 501 of the act, amended or added February
2, 2012 (P.L.7, No.2) and November 27, 2013 (P.L.1045, No.90),
is amended to read:
Section 501. Club licensee.
(a) Report.--
(1) Beginning in 2014, a club licensee with proceeds in
excess of $20,000 in a calendar year shall submit annual
reports to the [department] board for the preceding 12-month
period on a form and in a manner prescribed by the
[department] board.
(2) The report under paragraph (1) must be filed under
oath or affirmation of an authorized officer of the club
licensee and shall include all of the following information:
(i) The proceeds received by the club licensee from
each game of chance conducted, itemized by week.
(ii) The amount of prizes paid from all games of
chance, itemized by week.
(iii) Other costs incurred related to the conduct of
games of chance.
(iv) Verification and itemization of amounts
distributed for public interest.
(vii) Other information or documentation required by
the [department] board.
(b) Distribution.--The [department] board shall provide a
copy of the report to the Bureau of Liquor Control Enforcement.
(c) Posting.--The reports under subsection (a) shall be
published on the [department's] board's Internet website.
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Section 9. Sections 502(a.1)(2) and 503 of the act, amended
or added February 2, 2012 (P.L.7, No.2) and November 27, 2013
(P.L.1045, No.90), are amended to read:
Section 502. Distribution of proceeds.
* * *
(a.1) Amounts retained.--
* * *
(2) Amounts retained by a club licensee under subsection
(a)(2) shall be expended within one year of the end of the
calendar year in which the proceeds were obtained unless the
club licensee notifies the [department] board that funds are
being retained for a substantial public interest purchase or
project.
* * *
Section 503. Records.
A club licensee shall maintain records as required by this
act or by the [department] board, including invoices for games
of chance purchased. Records necessary to enforce this act or to
conduct random audits shall be made available to the Bureau of
Liquor Control Enforcement, the [department] board or any other
entity authorized to enforce or conduct audits under this act.
Section 10. Section 701(a)(10) of the act, amended February
2, 2012 (P.L.7, No.2), is amended to read:
Section 701. Revocation of licenses.
(a) Grounds.--The following shall be grounds for suspension,
revocation or nonrenewal of a license:
* * *
(10) False or erroneous information was provided in the
original application or in any information provided to the
licensing authority or the [department] board in any report.
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* * *
Section 11. Section 702(c) of the act, amended February 2,
2012 (P.L.7, No.2), November 27, 2013 (P.L.1045, No.90) and
November 27, 2013 (P.L.1062, No.92), is amended to read:
Section 702. Enforcement.
* * *
(c) Random audits.--The [department] board shall conduct
biennial random audits of 5% of all club licensees.
* * *
Section 12. The following transitional provisions apply:
(1) All personnel, allocations, appropriations,
equipment, files, records, contracts, agreements, obligations
and other materials which are used, employed or expended by
the Department of Revenue in conjunction with the functions
transferred by this act to the Pennsylvania Gaming Control
Board are hereby transferred to the Pennsylvania Gaming
Control Board as if these contracts, agreements and
obligations had been incurred or entered into by the
Pennsylvania Gaming Control Board in the first instance.
(2) The personnel, appropriations, equipment and other
items and material transferred by this section shall include
an appropriate portion of the general administrative,
overhead and supporting personnel, appropriations, equipment
and other material of the Department of Revenue.
(3) All personnel transferred under this section shall
retain any civil service employment status assigned to the
personnel.
(4) All orders, permits, regulations, decisions and
other actions of the Department of Revenue transferred by
this act shall remain in full force and effect until
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modified, repealed, suspended, superseded or otherwise
changed by appropriate action of the Pennsylvania Gaming
Control Board.
Section 13. This act shall take effect as follows:
(1) The following provisions shall take effect
immediately:
(i) This section.
(ii) The addition of section 309(d),(e),(f) and (g)
of the act.
(2) The remainder of this act shall take effect July 1,
2017.
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