PRINTER'S NO. 3829
No. 2626 Session of 2002
INTRODUCED BY MICHLOVIC, LEVDANSKY, READSHAW, SOLOBAY, ALLEN, COSTA, DeLUCA, DIVEN, HARHAI, HORSEY, JAMES, LaGROTTA, LAUGHLIN, LESCOVITZ, MELIO, PALLONE, PRESTON, RUFFING, TANGRETTI, THOMAS, TRAVAGLIO, TRELLO, WOJNAROSKI, SHANER, TRICH, DALEY, DERMODY, CORRIGAN, SCRIMENTI AND FREEMAN, MAY 6, 2002
REFERRED TO COMMITTEE ON FINANCE, MAY 6, 2002
AN ACT 1 Amending the act of December 17, 1981 (P.L.435, No.135), 2 entitled "An act providing for the regulation of pari-mutuel 3 thoroughbred horse racing and harness horse racing 4 activities; imposing certain taxes and providing for the 5 disposition of funds from pari-mutuel tickets," providing for 6 certain gaming devices to operate at racetracks; imposing 7 additional powers and duties on the State Horse Racing 8 Commission and the State Harness Racing Commission; imposing 9 taxes and licensing fees; and establishing the State Gaming 10 Device Fund. 11 The General Assembly of the Commonwealth of Pennsylvania 12 hereby enacts as follows: 13 Section 1. The title of the act of December 17, 1981 14 (P.L.435, No.135), known as the Race Horse Industry Reform Act, 15 is amended to read: 16 AN ACT 17 Providing for the regulation of pari-mutuel thoroughbred horse 18 racing and harness horse racing activities; authorizing 19 certain gaming devices at racetracks; imposing certain taxes 20 and providing for the disposition of funds from pari-mutuel
1 tickets.
2 Section 2. Section 218-A heading of the act, added May 16,
3 1986 (P.L.205, No.63), is amended to read:
4 Section [218-A] 218.1. Wagering at nonprimary locations.
5 * * *
6 Section 3. Section 234 of the act, amended November 30, 1988
7 (P.L.1090, No.127), is amended to read:
8 Section 234. Simulcasting.
9 The State Horse Racing Commission and the State Harness
10 Racing Commission shall only permit intrastate simulcasting of
11 live racing between two licensed corporations when each
12 continues to schedule 95% of the total number of horse or
13 harness racing days scheduled in 1986 at the facility where each
14 said licensed corporation conducts its horse or harness racing
15 dates, and when the average number of live horse or harness
16 races per race day equals 90% of the average number of live
17 horse or harness races conducted per day in 1985 at the facility
18 where each said licensed corporation conducts its horse or
19 harness racing dates, subject to any actions or activities
20 beyond the control of the licensee: Provided, however, That for
21 any licensed corporation that was granted a permanent license
22 for horse racing and operating at a facility where the average
23 daily handle at the facility at which the licensed corporation
24 conducts racing dates is less than $150,000 in any calendar year
25 after 1985, the State Horse Racing Commission may permit
26 intrastate simulcasting when the licensed corporation first
27 schedules a minimum of 50 racing days in the calendar year in
28 which it wishes to simulcast. A newly licensed corporation
29 racing at the facility may be permitted to intrastate simulcast
30 by the State Horse Racing Commission when it first schedules at
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1 least 50 racing dates in the year in which it wishes to 2 simulcast. If a newly licensed corporation is awarded harness or 3 horse racing dates after 1987 and races those dates at a horse 4 or harness racing facility existing in 1987, other than a 5 facility whose average daily handle is less than $150,000, the 6 respective commissions shall not permit intrastate simulcasting 7 unless the same number of horse or harness dates scheduled at 8 that facility in 1987 are scheduled at that facility in the year 9 that the corporation wishes to simulcast subject to any actions 10 or activities beyond the control of the licensees (i.e. act of 11 God, strike). For a licensed corporation awarded racing dates at 12 a facility which did not conduct horse or harness racing prior 13 to 1987, the respective commissions may permit intrastate 14 simulcasting if the licensed corporation is the only corporation 15 operating that facility when that corporation first schedules a 16 minimum of 125 days of racing dates in the calendar year in 17 which it wishes to simulcast or when more than one such 18 corporation is awarded dates for racing at the same facility 19 when those corporations first schedule a minimum of 200 days of 20 racing in the calendar year in which they wish to simulcast. For 21 purposes of this section a racing day shall consist of a minimum 22 of eight live races, except at thoroughbred tracks on Breeders' 23 Cup Event Day. For any licensed racing corporation engaged in 24 simulcasting, regardless of location or distance from another 25 licensed racing corporation, there shall exist a written 26 agreement with the horsemen's organization representing a 27 majority of the owners and trainers at both the sending and 28 receiving racetracks. If no agreement can be reached, then the 29 licensed corporation may petition the court of common pleas in 30 the county in which the licensed corporation racetrack is 20020H2626B3829 - 3 -
1 located, which may, upon good cause shown by the licensed
2 corporation that failure to consent would be detrimental to the
3 Pennsylvania racing industry, direct the organization
4 representing the horsemen to approve the simulcast agreement.
5 The respective commission may then authorize the simulcasting,
6 if, in the opinion of the appropriate commission, such
7 simulcasting will have significant value to the Pennsylvania
8 racing industry. The simulcast signal shall be encoded, and the
9 racetrack receiving the simulcast signal shall not send this
10 signal anywhere other than public locations authorized under
11 section 218 or [218-A] 218.1. All forms of pari-mutuel wagering
12 described in section 221 shall be allowed on races to be
13 televised by simulcasting under this section. The State Horse
14 Racing Commission and the State Harness Racing Commission may
15 promulgate regulations on wagering and the operation of these
16 races. All money wagered by patrons on these races shall be
17 computed in the amount of money wagered each racing day for
18 purposes of taxation under section 222. In the event the
19 simulcast is between a thoroughbred racetrack and a harness
20 racetrack, both commissions shall have jurisdiction, and any
21 approval required hereunder must be received from both
22 commissions: Provided, however, That if no agreement can be
23 reached between the horsemen's organization aforementioned, then
24 the licensed corporation may petition the court of common pleas
25 in the county in which the licensed corporation racetrack is
26 located, which may, upon good cause shown by the licensed
27 corporation that failure to consent would be detrimental to the
28 Pennsylvania racing industry, direct the organization
29 representing the horsemen to approve the simulcast agreement.
30 The respective commissions may then authorize the simulcasting
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1 if, in the opinions of the respective commission, such 2 simulcasting will have a significant value to the Pennsylvania 3 racing industry. The provisions of this section with regard to 4 the required number of racing days may be waived or modified by 5 the applicable commission if the waiver or modification has been 6 consented to by the horsemen's organization representing a 7 majority of the owners and trainers at the racetrack where the 8 racing days are to be scheduled or raced. 9 Section 4. The act is amended by adding a chapter to read: 10 CHAPTER 2-A 11 GAMING MACHINES AT RACETRACKS 12 Section 201-A. Public policy declarations. 13 The General Assembly hereby finds and declares it to be the 14 public policy of this Commonwealth to: 15 (1) Support and enhance this Commonwealth's horse racing 16 industry, which is a significant element within its 17 agricultural tradition and a contributor to the preservation 18 of open space. 19 (2) Ensure that this Commonwealth's horse racing 20 industry remains competitive with neighboring states. 21 (3) Positively assist this Commonwealth's horse racing 22 industry to produce additional tax revenues and to create new 23 jobs. 24 (4) Promote the further growth of tourism by offering 25 limited forms of regulated gaming at licensed racetracks 26 where live horse racing takes place. 27 (5) Strictly monitor and control any limited gaming 28 activity by the regulation and licensing of all specified 29 locations, persons, associations, practices and activities. 30 (6) Strictly monitor and control the manufacturers and 20020H2626B3829 - 5 -
1 distributors of any gaming devices installed in connection 2 with this chapter. 3 (7) Ensure that public confidence and trust in the form 4 of gaming described in this chapter is maintained by the 5 strict regulations which may be required to protect the 6 public health, safety, morals, good order and general welfare 7 of the inhabitants of this Commonwealth. 8 Section 202-A. Definitions. 9 The following words and phrases when used in this chapter 10 shall have the meanings given to them in this section unless the 11 context clearly indicates otherwise: 12 "Associated equipment." Any equipment or mechanical, 13 electromechanical or electronic contrivance, component or 14 machine used in connection with gaming or with any game that 15 would not otherwise be classified as a gaming device, including 16 links which connect to progressive slot machines, equipment 17 which affects the proper reporting of gross revenue, 18 computerized systems for monitoring gaming devices and devices 19 for weighing or counting money. 20 "Fund." The State Gaming Device Fund established under 21 section 213-A. 22 "Gaming device." Any: 23 (1) mechanical, electromechanical or electronic 24 contrivance used in connection with gaming or any game which 25 affects the result of a wager by determining win or loss; 26 (2) machine that is part of a network of linked machines 27 with an aggregate progression prize or prizes; 28 (3) machine in which bills, coins or tokens are 29 deposited in order to play in a game of chance in which the 30 results, including options available to the player, are 20020H2626B3829 - 6 -
1 randomly and immediately determined by the machine. 2 "Gaming device licensee." A corporation licensed under this 3 act that meets all of the following criteria: 4 (1) Has conducted live horse racing for the one year 5 immediately preceding the enactment of this chapter. 6 (2) Has received a gaming device license under this 7 chapter. 8 (3) Continues to provide for live horse racing after 9 receipt of the gaming device license. 10 "Gaming employee." Any employee, including, but not limited 11 to: 12 (1) Cashiers. 13 (2) Change personnel. 14 (3) Counting room personnel. 15 (4) Floormen. 16 (5) Hosts or other persons empowered to extend credit or 17 complimentary services. 18 (6) Machine mechanics. 19 (7) Security personnel. 20 (8) Supervisors or managers. 21 The term also includes employees of a person holding a 22 supplier's license whose duties are directly involved with 23 manufacture, repair or distribution of gaming devices in this 24 Commonwealth. The term does not include bartenders, cocktail 25 servers or other persons engaged solely in preparing or serving 26 food or beverage, secretarial personnel, janitorial, stage, 27 sound and light technicians and other nongaming personnel. 28 "Gross revenue." The total of cash or the cash equivalent 29 received by a gaming device and cash received in payment for 30 credit extended by a gaming device licensee to a patron for the 20020H2626B3829 - 7 -
1 purpose of playing a gaming device minus the total of: 2 (1) Cash or the cash equivalent paid out to patrons as a 3 result of playing a gaming device. 4 (2) Cash paid to purchase annuities to fund cash paid to 5 patrons over several years by independent administrators as a 6 result of playing a gaming device. 7 (3) Any personal property distributed to a patron as the 8 result of playing a gaming device but not travel expenses, 9 food, refreshments, lodging or services. 10 The term "gross revenue" does not include counterfeit money or 11 tokens, coins of other countries which are received in gaming 12 devices, except to the extent that they are readily convertible 13 to official currency, cash taken in fraudulent acts perpetrated 14 against a gaming device licensee for which the licensee is not 15 reimbursed or cash received as entry fees for contests or 16 tournaments in which the patrons compete for prizes. 17 "Person." A natural person, corporation, organization, 18 business trust, estate, trust, partnership, association and any 19 other legal entity. 20 "Progressive jackpot." A prize that increases as one or more 21 gaming devices are connected to a progressive system conducted 22 by the same licensee. 23 "Progressive system." A computerized system linking gaming 24 devices in one or more licensed establishments and offering one 25 or more common progressive jackpots. 26 "Supplier." A person who manufactures, assembles, produces, 27 programs, sells, leases, markets, offers or otherwise produces, 28 distributes or makes modifications to any gaming device for use 29 or play in this Commonwealth. 30 Section 203-A. Application of other provisions of this act. 20020H2626B3829 - 8 -
1 Unless otherwise restricted by this chapter, the general 2 jurisdiction and general powers conferred upon the State Horse 3 Racing Commission and the State Harness Racing Commission under 4 sections 201 and 202 and under any other provision of this act 5 shall apply to the gaming activities conducted by the licensed 6 corporations granted a gaming device license, gaming device 7 suppliers, gaming employees and any other person who receives a 8 license or approval to participate in the activities provided 9 for under this chapter from the appropriate commission granting 10 the license or approval. 11 Section 204-A. Appointment of management personnel. 12 (a) Appointments.--The Secretary of Agriculture shall 13 appoint, with the approval of the Governor, three separate, 14 individual persons who shall be designated and whose experience, 15 qualifications and duties, performed concurrently for both 16 commissions, shall be as set forth in subsections (b), (c) and 17 (d). 18 (b) Executive director.--The Executive Director for Gaming 19 Activities shall be a person having a minimum of five years of 20 responsible administrative experience in public or business 21 administration, possess broad management skills and devote full 22 time and attention exclusively to gaming activities and the 23 duties imposed by virtue of the appointment. The Executive 24 Director of Gaming Activities shall not pursue any other 25 business or occupation or hold any other office for profit. 26 (c) Auditor.--The Gaming Activities Auditor shall be a 27 certified public accountant licensed to practice in this 28 Commonwealth whose duties shall be those exclusively related to 29 gaming activities. 30 (d) Security and enforcement officer.--The Gaming Activities 20020H2626B3829 - 9 -
1 Security and Enforcement Officer shall possess substantial 2 experience of a senior nature in law enforcement whose duties 3 shall be those exclusively related to gaming activities. 4 (e) Executive director duties.--The Executive Director of 5 Gaming Activities, the Gaming Activities Auditor and the Gaming 6 Activity Security and Enforcement Officer shall: 7 (1) Perform duties which are exclusively related to the 8 gaming activities authorized by both commissions and imposed 9 and assigned to them by the Secretary of Agriculture. 10 (2) Receive salaries fixed by the Secretary of 11 Agriculture. 12 (3) Serve at the pleasure of the Secretary of 13 Agriculture. 14 (4) Not be public officers or party officers as defined 15 under section 211. 16 (5) Not have any interest, pecuniarily or otherwise, in 17 any business in connection with any person who may be 18 required to be licensed or approved under this chapter. 19 (6) Attend all regular and special meetings scheduled by 20 the commissions. 21 (f) Notification.--The commissions shall notify the 22 Executive Director for Gaming Activities, the Gaming Activities 23 Auditor and the Gaming Activities Security and Enforcement 24 Officer of all regular and special meetings and seek their 25 advice and comments in matters related to gaming activities 26 within the purview of the duties imposed and assigned to them by 27 the Secretary of Agriculture. 28 Section 205-A. Regulations. 29 (a) Regulation promulgation.--The State Horse Racing 30 Commission and the State Harness Racing Commission shall, from 20020H2626B3829 - 10 -
1 time to time, promulgate, amend or rescind regulations 2 consistent with the policy, objects and purposes of this 3 chapter, as may deem necessary or desirable in the public 4 interest in carrying out the policy and provisions of this 5 chapter. Each commission to the extent possible shall adopt 6 regulations which are compatible with the regulations of the 7 other commission. 8 (b) Requirements.--Regulations promulgated under this 9 chapter shall: 10 (1) Prescribe the method and form of application which 11 any applicant for a license must follow and complete before 12 consideration of that application by the appropriate 13 commission. 14 (2) Prescribe the information to be furnished by any 15 applicant or licensee concerning the applicant's or 16 licensee's antecedents, habits, character, associates, 17 criminal record, business activities and financial affairs, 18 past or present. 19 (3) Prescribe the information to be furnished by a 20 licensee relating to employees of the licensee. 21 (4) Require any applicant to pay all or any part of the 22 fees and costs of investigation of that applicant as may be 23 determined by the appropriate commission. 24 (5) Prescribe the procedures for the issuance of 25 occupation permits. 26 (6) Prescribe the manner for approval of new gaming 27 devices. 28 (7) Restrict access to confidential information obtained 29 under this chapter and ensure that the confidentiality of 30 information is maintained and protected. 20020H2626B3829 - 11 -
1 (8) Prescribe financial reporting and internal control 2 requirements for licensees. 3 (9) Prescribe the manner in which gross revenue must be 4 computed and reported by the licensee. 5 (10) Require audits of the financial statements of all 6 gaming device licensees. 7 (11) Require periodic financial reports from each gaming 8 device licensee consistent with standards and intervals 9 prescribed by the appropriate commission. 10 (12) Prescribe the procedures to be followed by gaming 11 device licensees for cash transactions. 12 (13) Prescribe criteria and conditions for the operation 13 of progressive systems. 14 (14) Prescribe reasonable hours for the operation of 15 gaming devices. No time period of 24-hour operation is 16 permitted. 17 (15) Prohibit the offering of free alcohol or malt or 18 brewed beverages to patrons operating or using gaming 19 devices. 20 (16) Prescribe any other regulations necessary for the 21 efficient implementation and administration of this chapter. 22 Section 206-A. Gaming device license. 23 (a) Application.--Any licensed corporation that desires to 24 install gaming devices within its primary racetrack enclosure 25 shall apply to the appropriate commission for a gaming device 26 license. 27 (b) Contents.--The application for a license shall include, 28 but not be limited to: 29 (1) The name of the licensed corporation applying for 30 the license. 20020H2626B3829 - 12 -
1 (2) The length of time and the dates upon which the 2 licensed corporation has conducted live racing at its primary 3 racetrack enclosure. 4 (3) The number and type of gaming devices to be 5 installed and operated not to exceed a maximum of 2,000 6 devices per racetrack. 7 (4) The names of all persons directly or indirectly 8 having an interest in the business and the nature of that 9 interest. 10 (5) Any other information and details the appropriate 11 commission may require. 12 (c) License criteria.-- 13 (1) A licensed corporation that the appropriate 14 commission determines is qualified to receive a license under 15 the provisions of this chapter may be issued a license. 16 (2) A gaming device license shall not be granted unless 17 the appropriate commission finds that the licensed 18 corporation has satisfied all of the following criteria: 19 (i) Conducted live racing at its primary racetrack 20 enclosure for a period of at least two years immediately 21 preceding the enactment of this chapter. 22 (ii) Demonstrated its integrity and honesty in the 23 operation of its pari-mutuel business. 24 (iii) Has adequate business probity, competence and 25 experience in either gaming or wagering operations. 26 (iv) Has adequate financing available for the proper 27 installation, operation and maintenance of the gaming 28 devices. 29 (d) Machine specifications.--A machine may use spinning 30 reels or video displays or both and may or may not dispense 20020H2626B3829 - 13 -
1 coins or tokens directly to winning players. A machine shall be 2 considered a gaming device notwithstanding the use of an 3 electronic credit system making the deposit of bills, coins or 4 tokens unnecessary. No gaming device shall be set to pay out 5 less than 87% or more than 95% of all wagers on an average 6 annual basis. 7 Section 207-A. Supplier license. 8 (a) Application.--Any person that desires to supply gaming 9 devices or associated equipment to a gaming device licensee 10 shall apply to the appropriate commission for a supplier 11 license. 12 (b) Contents.--The application for a license shall include, 13 but not be limited to: 14 (1) The name and business address of the person. 15 (2) The length of time the person has been in the 16 business related to the application. 17 (3) The background and financial standing of the person. 18 (4) Details of any supplier license granted by other 19 jurisdictions where gaming is legal. 20 (5) The type of goods and services to be supplied. 21 (6) Any other information and details the appropriate 22 commission may require. 23 (c) License criteria.-- 24 (1) Any supplier that the appropriate commission 25 determines to be qualified to receive a supplier license 26 under the provisions of this chapter may be issued a license. 27 (2) A license shall not be granted unless the commission 28 finds that the applicant satisfies all of the following 29 criteria: 30 (i) The applicant is a person of good character, 20020H2626B3829 - 14 -
1 honesty and integrity. 2 (ii) The applicant is a person whose prior 3 activities, criminal record, if any, reputation, habits 4 and associations do not pose a threat to the public 5 interest or to the effective regulation and control of 6 gaming or create or enhance the dangers of unsuitable, 7 unfair or illegal practices, methods and activities in 8 the conduct of gaming or the carrying on of the business 9 and financial arrangements incidental to it. 10 (iii) The applicant in all other respects is 11 qualified to be licensed or found suitable consistent 12 with the laws of this Commonwealth. 13 Section 208-A. Occupation permit. 14 (a) Application.--Any person that desires to be a gaming 15 employee shall apply to the appropriate commission for an 16 occupation permit. A person may not be employed as a gaming 17 employee unless the person holds an appropriate occupation 18 permit issued under this chapter. 19 (b) Contents.--The application for an occupation permit 20 shall include, but not be limited to: 21 (1) The name and home address of the person. 22 (2) The previous employment history of the person. 23 (3) Any criminal record of the person. 24 (4) The nature and scope of the proposed duties of the 25 person. 26 (5) Any other information and details the commission may 27 require. 28 (c) Permit criteria.-- 29 (1) Any person that the commission determines to be 30 qualified to receive an occupation permit under the 20020H2626B3829 - 15 -
1 provisions of this chapter may be issued a permit. 2 (2) A permit shall not be granted unless the commission 3 finds that the applicant satisfies all of the following 4 criteria: 5 (i) The applicant is a person of good character, 6 honesty and integrity. 7 (ii) The applicant is a person whose prior 8 activities, criminal record, if any, reputation, habits 9 and associations do not pose a threat to the public 10 interest or to the effective regulation and control of 11 gaming or create or enhance the dangers of unsuitable, 12 unfair or illegal practices, methods and activities in 13 the conduct of gaming or the carrying on of the business 14 and financial arrangements incidental to it. 15 (iii) The applicant is in all other respects 16 qualified to be licensed or found suitable consistent 17 with the laws of this Commonwealth. 18 Section 209-A. Other licenses and permits. 19 (a) Suitability.--The commissions may determine the 20 suitability of any person who furnishes services or property to 21 a gaming device licensee under any arrangements under which that 22 person receives payments based directly or indirectly on 23 earnings, profits or receipts from gaming. The appropriate 24 commission may require any person to comply with the 25 requirements of this chapter and the regulations of the 26 commission. 27 (b) License criteria.--The appropriate commission may 28 require the application for a license by any person who is to be 29 associated with the gaming device licensee if that person 30 satisfies any one of the following criteria: 20020H2626B3829 - 16 -
1 (1) The person does business on the premises. 2 (2) The person does business with a gaming device 3 licensee as a ticket purveyor, a tour operator, the operator 4 of a bus program or as the operator of any other type of 5 travel program or promotion. 6 (3) The person provides any goods or services to a 7 gaming device licensee for a compensation which the 8 appropriate commission finds to be disproportionate to the 9 value of the goods or services. 10 (c) Approval of agreement.--Any agreement which entitles a 11 person to conduct a business with a gaming device licensee is 12 subject to the approval by the appropriate commission. Every 13 agreement shall be in writing and include a provision for its 14 termination without liability on the part of the gaming device 15 licensee upon a finding by the commission that the agreement is 16 not approved or that it is terminated. Failure to expressly 17 include this condition in the agreement is not a defense in any 18 action brought under this section to terminate the agreement. 19 Section 210-A. Exclusion or ejection of certain persons by the 20 appropriate commission. 21 (a) Restricted list.--The appropriate commission shall by 22 regulation provide for the establishment of a list of persons 23 who are to be excluded or ejected from a gaming device 24 licensee's gaming establishment. The list may include any person 25 whose presence in the establishment is determined by the 26 appropriate commission to pose a threat to the public interest 27 or to licensed gaming, or both. 28 (b) Considerations.--In making any determination under this 29 section, the commission may consider any: 30 (1) Prior conviction of a crime which is a felony under 20020H2626B3829 - 17 -
1 Federal or State law, a crime involving moral turpitude or a 2 violation of the gaming laws of any jurisdiction. 3 (2) Violation or conspiracy to violate the provisions of 4 this act relating to the failure to disclose an interest in a 5 gaming establishment for which the person must obtain a 6 license or approval or willful evasion of fees or taxes. 7 (3) Notorious or unsavory reputation which would 8 adversely affect public confidence and trust that the gaming 9 industry is free from criminal or corruptive elements. 10 (4) Written orders of any other governmental agency 11 which authorizes the exclusion or ejection of the person from 12 an establishment at which gaming or pari-mutuel wagering is 13 conducted. 14 Section 211-A. Suspension or refusal to issue or renew license. 15 (a) Reason for negative action.--In addition to the reasons 16 set forth under this chapter and section 213 for the refusal by 17 the appropriate commission to issue a license, suspend, refuse 18 to renew or revoke any license or approval issued under section 19 213, the appropriate commission shall refuse to issue a license 20 and may suspend, refuse to renew or revoke a license or approval 21 issued under this section, if that commission determines that 22 the applicant or licensee or person seeking or having obtained 23 approval meets any of the following conditions: 24 (1) Is guilty of any fraud in connection with gaming. 25 (2) Is guilty of any violation or attempt to violate any 26 law, rule or regulation of any jurisdiction for which 27 suspension from any gaming activity might be imposed in that 28 jurisdiction. 29 (3) The experience, character or general fitness of any 30 applicant or licensee is such that the participation of that 20020H2626B3829 - 18 -
1 person in gaming activities or related activities provided 2 for under this chapter is inconsistent with the public 3 interest, convenience or necessity or with the best interest 4 of gaming activities. 5 (b) Hearing.--If the commission refuses to grant any license 6 or approval applied for under this chapter or revokes or 7 suspends any license or approval granted, the applicant or 8 licensee may demand a hearing under section 226. 9 Section 212-A. Internal control systems and internal audits. 10 (a) Adoption.--Each gaming device licensee shall adopt an 11 internal control system which shall include, but not be limited 12 to, provisions for: 13 (1) The safeguarding of its assets and revenues, 14 especially the recording of cash and evidences of 15 indebtedness. 16 (2) The provision of reliable records, accounts and 17 reports of transactions, operations and events, including 18 reports to the commission. 19 (3) Ensuring that all gaming devices within each primary 20 racetrack enclosure are directly connected to each 21 racetrack's central computerized system and can provide 22 details of all transactions including, but not limited to, 23 coin in, coin out, jackpots, machine door openings and power 24 failures. 25 (b) Issues considered.--The internal control system must be 26 designed to reasonably ensure that all of the following issues 27 are addressed: 28 (1) Assets are safeguarded. 29 (2) Financial records are accurate and reliable. 30 (3) Transactions are performed only in accordance with 20020H2626B3829 - 19 -
1 the management's general or specific authorization. 2 (4) Transactions are recorded adequately to permit 3 proper and timely reporting of gaming revenue and of fees and 4 taxes, and to maintain accountability for assets. 5 (5) Access to assets is permitted only in accordance 6 with management's specific authorization. 7 (6) Recorded accountability for assets is compared with 8 actual assets at reasonable intervals and appropriate action 9 is taken with respect to any discrepancies. 10 (7) Functions, duties and responsibilities are 11 appropriately segregated and performed in accordance with 12 sound practices by competent, qualified personnel. 13 (c) Detailed written system.--Each gaming device licensee 14 and each applicant for a gaming device license shall describe, 15 in the manner the appropriate commission may approve or require, 16 its administrative and accounting procedures in detail in a 17 written system of internal control. Each gaming device licensee 18 and applicant for a gaming device license shall submit a copy of 19 its written system to the appropriate commission. Each written 20 system shall include: 21 (1) An organizational chart depicting appropriate 22 segregation of functions and responsibilities. 23 (2) A description of the duties and responsibilities of 24 each position shown on the organizational chart. 25 (3) A detailed, narrative description of the 26 administrative and accounting procedures designed to satisfy 27 the requirements of subsection (a). 28 (4) A written statement signed by the gaming device 29 licensee's chief financial officer and the licensee's chief 30 executive officer attesting that the system satisfies the 20020H2626B3829 - 20 -
1 requirements of this section. 2 (5) If the written system is submitted by an applicant, 3 a letter from a certified public accountant stating that the 4 applicant's written system has been reviewed by the 5 accountant and complies with the requirements of this 6 section. 7 (6) Any other items as the appropriate commission may 8 require. 9 (d) Standards.--The commissions shall adopt and publish 10 minimum standards for internal control procedures. 11 Section 213-A. Gaming device tax and State Gaming Device Fund. 12 (a) Fund established.--There is hereby established the State 13 Gaming Device Fund. 14 (b) Tax imposed.--All gaming device licensees shall pay a 15 tax in the amount of 45% of the gross revenue arising from the 16 operation of the gaming device licensee's gaming devices. 17 (c) Payment.--The tax imposed by this section shall be paid 18 by the gaming device licensee through the Department of Revenue 19 for credit to the State Gaming Device Fund monthly on or before 20 the twentieth day of the month next succeeding the month in 21 which the tax accrues and in the manner prescribed by the 22 regulations of the appropriate commission. 23 (d) Distribution of moneys.--The commissions shall 24 distribute moneys from the State Gaming Device Fund together 25 with the interest earned thereon at least once quarterly, on 26 September 1, 2002, and each quarter thereafter to the State 27 Treasurer for deposit in the following manner: 28 (1) 36% shall be transferred to the Department of 29 Community and Economic Development for grants to 30 municipalities for improvements to existing sewer and water 20020H2626B3829 - 21 -
1 systems to comply with regional metropolitan planning 2 organization plans. No more than 2% of these funds may be 3 used for administrative cost. 4 (2) 36% shall be transferred to the Department of 5 Transportation for regional transit projects to comply with 6 regional metropolitan planning organization plans. No more 7 than 2% of these funds may be used for administrative 8 purposes. 9 (3) 25% shall be transferred to the State Fire 10 Commissioner in order to establish and fund the Volunteer 11 Fire Company Grant Program. This program shall operate under 12 the guidelines and procedures promulgated by an oversight 13 board composed of the State Fire Commissioner and one member 14 appointed by each of the following: the President pro tempore 15 of the Senate, the Minority Leader of the Senate, the Speaker 16 of the House of Representatives and the Minority Leader of 17 the House of Representatives. 18 (4) 1% shall be transferred to the Department of Revenue 19 for cost associated with maintaining the State Gaming Device 20 Fund. 21 (5) 1% shall be distributed to each qualified county 22 based upon the track's percentage of contribution to the 23 fund. A qualified county shall be the county where the 24 facility at which the gaming device licensee schedules live 25 horse racing is located. 26 (6) 1% balance shall be distributed to each qualified 27 municipality based upon the track's percentage of 28 contribution to the fund. A qualified municipality shall be 29 the municipality where the facility at which the gaming 30 device licensee schedules live horse racing is located. If 20020H2626B3829 - 22 -
1 the facility is located in two or more municipalities, the 2 amount available for distribution based on that facility 3 shall be distributed on a pro rata basis determined by the 4 percentage of acreage located in each municipality to the 5 total acreage in all municipalities occupied by the facility. 6 (e) Underpayments and refunds.--If the amount of tax 7 required to be reported and paid pursuant to this section is 8 later determined to be greater or less than the amount actually 9 reported and paid by the gaming device licensee, the commission 10 shall: 11 (1) assess and collect the additional tax determined to 12 be due with interest thereon until paid; or 13 (2) provide for a refund of any overpayment, with 14 interest thereon, to the gaming device licensee. 15 Section 214-A. Additional revenue disbursements. 16 Each gaming licensee after the monthly payment of the gaming 17 device tax shall distribute from the balance of the monthly 18 gross revenues arising from the operation of the gaming devices 19 of that licensee the following amounts: 20 (1) 12% to be used as additional moneys to fund the 21 purses for the live races at the primary racetrack. 22 (2) 2% to be used as additional moneys to fund horsemen 23 and jockey pension funds. 24 (3) 1% to be paid to the appropriate thoroughbred or 25 harness breeders fund. 26 Section 215-A. State license fee. 27 Each gaming device licensee shall annually pay to the 28 Commonwealth a machine license fee of $100 per machine. The 29 license fee shall be deposited into a restricted receipts 30 account to be annually appropriated by the General Assembly for 20020H2626B3829 - 23 -
1 programs to provide treatment to compulsive gamblers. 2 Section 216-A. Referendum. 3 (a) Time of referendum.--A Statewide referendum to determine 4 whether slot machines at horse racetracks, as described in this 5 chapter, shall be permitted in this Commonwealth shall be 6 conducted in every county at the primary, municipal or general 7 election occurring at least 60 days next following the effective 8 date of this chapter. The General Assembly directs that the 9 Secretary of the Commonwealth certify the form of the Statewide 10 referendum question under subsection (b) to the county boards of 11 election, and the county boards of elections shall cause a 12 question to be placed on the ballot. 13 (b) Form of question.--The Statewide referendum shall 14 include the question in substantially in the following form: 15 Do you favor authorizing strictly regulated slot machines 16 only at licensed horse racetracks in Pennsylvania with 17 tax revenues from the slot machines applied to water and 18 sewer disposal infrastructure and regional mass transit 19 projects? 20 Section 217-A. Construction of chapter. 21 Wherever in this act a section specifically refers to the 22 activities of thoroughbred or harness horse racing and related 23 activities, the activity of gaming and related activities 24 referred to in this chapter shall be included, it being the 25 intention of the General Assembly to make all provisions of this 26 act applicable, where appropriate, and not inconsistent with 27 this section, to the gaming activities and related activities 28 referred to in this section. The provisions in section 215 29 referring to security personnel and the provisions in section 30 228 referring to prohibition of wagering by minors shall apply 20020H2626B3829 - 24 -
1 as well to gaming activities and related activities referred to 2 in this chapter with the same force and effect as the other 3 activities specifically referred to. Sections 207, 208, 218, 4 218.1, 219, 221, 222, 223, 224 and 231, however, relating 5 respectively to racing dates, taxes, pari-mutuel wagering, 6 retention of percentages from pari-mutuel pools, distribution of 7 moneys retained from pari-mutuel pools and taxation shall not 8 apply to gaming activities and related activities specifically 9 referred to in this chapter. 10 Section 5. This act shall take effect immediately. D25L04JLW/20020H2626B3829 - 25 -