Regular Session 2023-2024 Senate Bill 1263 P.N. 1746

PRINTER'S NO. 1746

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1263

Session of

2024

INTRODUCED BY ROBINSON, LANGERHOLC, REGAN, FONTANA AND

BARTOLOTTA, JUNE 20, 2024

REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,

JUNE 20, 2024

AN ACT

Amending the act of December 19, 1988 (P.L.1262, No.156),

entitled "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 prize limits, for sales

limited, for distributor licenses, for registration of

manufacturers and for regulations of department; in club

licensees, further providing for club licensee and for

distribution of proceeds; in enforcement, further providing

for revocation of licenses, for local option and for

advertising; in tavern gaming, further providing for

licenses, for application, for approval, for prize limits,

for distribution of net revenue, for tavern games tax, for

invoice, for reports and for enforcement.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definitions of "games of chance," "passive

selection device" and "tavern games" 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, are amended and 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:

* * *

"Electronic pull-tab." An electronic facsimile of a paper

pull-tab that is played on an electronic pull-tab device and

purchased from a licensed distributor.

"Electronic pull-tab device." A hand-held portable

electronic passive device, including, but not limited to, a cell

phone or tablet, owned by the individual playing an electronic

pull-tab game or a tablet owned by the manufacturer and supplied

to the licensee at no additional fee and to which the following

apply:

(1) The device must access an electronic pull-tab

software application from the licensee that can only be

played on-site at the licensee's location through a router or

similar computer hardware that links the device so that

electronic pull-tabs can be viewed and played.

(2) The device requires a coded entry from the licensee

to activate credits, but does not allow the use of coins,

currency or tokens to activate credits.

(3) The device requires a player to activate or open

each electronic pull-tab ticket.

(4) The device does not determine the outcome of an

electronic pull-tab game, but is merely a device used to view

electronic pull-tabs that are provided randomly to the player

the same as a paper pull-tab, except in an electronic format.

(5) The device maintains credit play accumulated that

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may be applied to games in play or redeemed at the licensee

location upon termination of play.

(6) The device may incorporate an amusement feature as

part of the game, but may not require additional

consideration or award a prize or other benefit for that

feature.

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).

* * *

"Games of chance." Punchboards, daily drawings, weekly

drawings, 50/50 drawings, raffles, tavern games, pools, race

night [games and pull-tabs] games, pull-tabs and electronic

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] an electronic pull-

tab device, dispensing machine or passive selection device,

including an electronic pull-tab, 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.

(Def. amended Nov. 27, 2013, P.L.1045, No.90 and Nov. 27, 2013,

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P.L.1062, No.92)

* * *

"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 for electronic pull-tabs. 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.

* * *

"Tavern games." Pull-tabs, electronic pull-tabs, tavern

daily drawings and tavern raffles.

* * *

Section 2. Sections 302, 303, 304(a) and (g), 305 and 306(a)

of the act are amended to read:

Section 302. Prize limits.

(a) Individual prize [limit].--Except as provided under

subsections (d) and (d.1), [the] there is no maximum prize which

may be awarded for any single chance [shall be $2,000].

(b) Aggregate prize [limit].--[No more than $35,000 in

prizes shall be] There is no limit on prizes awarded from games

of chance by a licensed eligible organization in any seven-day

period.

awarded in raffles in any calendar month.

[(c.1) Total limit.--All prizes awarded under this section

shall be subject to the aggregate prize limits under subsection

(b).]

(d) Exception for raffles.--Notwithstanding subsection [(b)

or] (c), a licensed eligible organization may conduct a raffle

under section 308 and award a prize or prizes valued in excess

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of $3,000 each only under the following conditions:

(1) The licensing authority has issued a special permit

for the raffle under section 308.

(2) A licensed eligible organization shall be eligible

to receive no more than ten special permits in any licensed

term except that a volunteer fire, ambulance, rescue or

conservation organization that is not a club licensee shall

be eligible to receive 12 special permits in any licensed

term.

(3) Only one raffle may be conducted under each special

permit issued under section 308.

(4) Except as provided under subsection (d.1), the total

of all prizes awarded under this subsection shall be no more

than $150,000 per calendar year, which shall not be subject

to the aggregate limit under subsection (b) or (c).

(5) The prize limit of any individual raffle ticket

shall be 500 times the amount of the purchase price of the

ticket, with the maximum prize not to exceed $5,000.

(d.1) Additional award.--A volunteer fire, ambulance, rescue

or conservation organization may, in addition to the total under

subsection (d)(4), award up to $100,000 from raffles which shall

not be subject to the aggregate limit under subsection (b), (c)

or (d).

(f) Daily drawing carryover.--[The prize limitation

contained in subsections (a) and (b) may be exceeded by a daily

drawing under the following circumstances: a] A daily drawing

may award a prize in excess of $2,000 if such prize is the

result of a carryover of a drawing which resulted from the

winning number in such drawing not being among the eligible

entrants in such drawings. Nothing contained herein shall

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authorize the prize limitation as contained in [subsections (a)

and (b)] subsection (c) to be exceeded as a result of a failure

to conduct a drawing on an operating day during which chances

were sold for a daily drawing or for a daily drawing for which

chances were sold in excess of $1 or for which more than one

chance was sold to an eligible participant.

(g) Additional exception.--When a daily drawing or weekly

drawing is set up or conducted in such a manner as to pay out or

award 100% of the gross revenues generated from such drawing,

the limitation contained in subsection [(b)] (c) shall not

apply.

(h) Weekly drawing carryover exception.--Weekly drawings

shall be governed by the prize limitation contained in

subsection [(b)] (c). The prize limitation contained in

subsection [(b)] (c) may be exceeded by a weekly drawing under

the following circumstances: a weekly drawing may award a prize

where the cash value is in excess of $35,000 if such prize is

the result of a carryover of a drawing or drawings which

resulted from the winning number or numbers in such drawing or

drawings not being among the eligible entrants in such drawings.

Nothing contained in this chapter shall authorize the prize

limitation under subsection [(b)] (c) to be exceeded as a result

of a failure to conduct a drawing for a week during which

chances were sold for a weekly drawing or for a weekly drawing

for which chances were sold in excess of $1.

(i) Concurrent operation.--Nothing under this act shall

prohibit the concurrent operation of daily or weekly drawings.

Section 303. Sales limited.

[(a) General rule.--]No person shall sell, offer for sale or

furnish games of chance for use within this Commonwealth except

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to an eligible organization or licensed distributor under this

chapter.

[(b) Limitation.--No game of chance, other than a raffle

under section 302(d), sold, offered for sale or furnished to a

licensed eligible organization for use within this Commonwealth

shall contain, permit, depict or designate a prize having a

prize limit in excess of $2,000.]

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. A registered manufacturer may obtain a distributor

license.

* * *

(g) Ineligibility.--The department shall not issue or renew

a distributor license for the sale of games of chance to a

person, including any corporation, [firm or partnership] firm,

partnership or entity which has as an officer, director,

shareholder, person related by blood or through marriage 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] ten 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),

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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

statutes listed under subparagraphs (i), (ii), (iii) and

(iv).

* * *

Section 305. Registration of manufacturers.

(a) Registration required.--No manufacturer of games of

chance shall sell any games of chance to any person, eligible

organization or tavern unless the manufacturer has registered

with the department and has been issued a certificate of

registration. A registered manufacturer may apply to be a

licensed distributor.

(b) Annual certificate; fee.--A certificate under this

section shall be valid for one year. The annual fee for

registration shall be $2,000.

of chance to any person not licensed as a distributor unless the

manufacturer is also a licensed distributor.

(c.1) Requirements for software.--Software supplied by a

manufacturer of electronic pull-tabs must meet the following

requirements:

(1) Software used in a passive selection device must be

owned by the manufacturer, including the designs of the

central system, database, program architecture and source

code used in the passive selection device. A manufacturer

shall not license from or pay any other person, corporation,

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entity, firm or partnership an ongoing or continuing fee of

any kind for the software used in a passive selection device.

(2) Software to be used must first be tested and

certified, at the cost of the manufacturer, by an authorized

third-party testing laboratory approved by the department.

(c.2) Ineligibility.--The department shall not issue or

renew a manufacturer certificate of registration for the

manufacture of games of chance, including software for

electronic pull-tabs, to a person, including any corporation,

firm, partnership or any entity which has as an officer,

director, shareholder, person related by blood or through

marriage or other person in a supervisory or management

position, or employee of the manufacturer, who:

(1) has been convicted of a felony in any state or

Federal court within the past ten 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

statutes listed under subparagraphs (i), (ii), (iii) and

(iv).

(d) Exception.--This section shall not apply to the

manufacture or distribution of raffle tickets, 50/50 drawings,

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daily drawings, weekly drawings or pools.

Section 306. Regulations of department.

(a) Authorization.--The department shall promulgate

regulations to:

(1) Impose minimum standards and restrictions applicable

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 deems necessary

for the purposes of this chapter. The department 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

licensure on forms which the department 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] officer, manager and shareholder

of the manufacturer's or distributor's organization,

including any relative related by blood or through marriage

thereof, and for any other individual specified by the

department. 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

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violations of this act or regulations of the department.

(3.1) Establish procedures to ensure that race night

games are secure, random and totally dependent upon chance.

(3.2) Require distributors and manufacturers of

electronic pull-tabs to have the electronic pull-tab device

and software tested under the standards used by a laboratory

approved by the department.

(4) Carry out other provisions of this act.

* * *

Section 3. Section 501(a) of the act is amended by adding a

paragraph to read:

Section 501. Club licensee.

(a) Report.--

* * *

(4) If a licensee offers the use of electronic pull-

tabs:

(i) the licensed distributor of the electronic pull-

tab device or software shall:

(A) provide the department with the financial

reporting information generated by the manufacturer's

software required under this chapter; and

(B) be responsible for any penalties for failure

to provide the accurate financial reporting

information generated by the manufacturer's software

to both the Commonwealth and the licensee.

(ii) licensees utilizing the electronic pull-tab

device or software shall:

(A) use the manufacturer's reporting information

for any reporting required by the Commonwealth;

(B) be responsible for supplying the

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Commonwealth with all required reports; and

to provide the Commonwealth with required reports.

* * *

Section 4. Sections 502(a), 701(a)(9)(ii) and 703(a) of the

act are amended to read:

Section 502. Distribution of proceeds.

(a) Distribution.--The proceeds from games of chance

received by a club licensee shall be distributed as follows:

(1) No less than [60%] 35% of the proceeds shall be paid

for public interest purposes within one year of the end of

the calendar year in which the proceeds were obtained.

(2) No more than [40%] 65% of the proceeds obtained in a

calendar year may be retained by a club licensee.

* * *

Section 701. Revocation of licenses.

(a) Grounds.--The following shall be grounds for suspension,

revocation or nonrenewal of a license:

* * *

(9) The eligible organization conducts the games of

chance under a lease which calls for:

* * *

(ii) leasing such premises from the owner thereof

under a written agreement at a rental which is determined

by the [amount] number of receipts realized from the

playing of games of chance.

* * *

Section 703. Local option.

(a) Election to be held.--In any municipality, an election

may be held on the date of the primary election immediately

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preceding any municipal election, but not more than once in four

years, to determine the will of the electors with respect to the

issuance of club licenses within the limits of such municipality

under the provisions of this act. Where an election shall have

been held at the primary election preceding a municipal election

in any year, another election may be held under the provisions

of this act at the primary election occurring the fourth year

after such prior election. Whenever electors equal to at least

25% of the highest vote cast for any office in the municipality

at the last preceding general election shall file a petition

with the county board of elections of the county, or the

governing body of the municipality adopts, by a majority vote, a

resolution to place such a question on the ballot and a copy of

the resolution is filed with the board of elections of the

county, for a referendum on the question of issuing licenses,

the county board of elections shall cause a question to be

placed on the ballot or on the voting machine board and

submitted at the primary election immediately preceding the

municipal election. The question shall be in the following form:

Do you favor the issuance of licenses

to conduct small games of chance in the

of ?

* * *

Section 5. Section 704 of the act is repealed:

[Section 704. Advertising.

It shall be unlawful for any eligible organization or person

to advertise the prizes or their dollar value to be awarded in

games of chance, provided that prizes may be identified on

raffle tickets. Notwithstanding the prohibition of advertising

contained within this section, an eligible organization may

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advertise prizes and values thereof in periodic publications

which are limited in their circulation to members of the

eligible organization.]

Section 6. Sections 903(h), 904, 905(c), 907, 909, 909.1(a),

911, 912 and 913(c) and (d) of the act are amended to read:

Section 903. Licenses.

* * *

(h) Costs.--The applicant shall reimburse the bureau up to

$250 for the actual costs of conducting the background

investigation. The board shall not approve an applicant that has

not fully reimbursed the bureau, up to $250, for the

investigation.

* * *

Section 904. Application.

(a) Application fee.--An applicant shall pay the board a

nonrefundable application fee of [$1,000] $250.

(b) Investigative fee.--An applicant shall pay an

investigative fee of [$1,000] no more than $250 to the bureau.

applicant and any owner and officer of the applicant shall pay

for the actual costs of a background investigation conducted by

the bureau that exceed the application fee.] The bureau may:

(1) Charge an estimated amount to be provided prior to

the background investigation, which shall not exceed $250.

(2) Submit for reimbursement from the applicant for the

additional costs incurred in the background investigation,

provided the total cost for the background investigation for

the applicant does not exceed $250.

(d) Funds.--Funds collected under subsections (b) and (c)

shall augment the funds appropriated to the Pennsylvania Gaming

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Control Board under 4 Pa.C.S. (relating to amusements).

Section 905. Approval.

* * *

$250 license fee to be deposited in the General Fund. The annual

renewal fee shall be [$1,000] $2,000.

* * *

Section 907. Prize limits.

(a) Individual prize limit.--[The maximum] There shall be no

maximum prize which may be awarded for any single chance [shall

be $2,000. No tavern game sold, offered for sale or furnished

may contain, permit, depict or designate a prize having a prize

limit in excess of $2,000].

(b) Aggregate prize limit.--[No more than $35,000 in prizes]

There shall be no prize limit for prizes that may be awarded

from tavern games by a licensee [in a seven-day period].

Section 909. Distribution of net revenue.

Beginning January 1, 2014, the net revenue from tavern games

received by a licensee shall be distributed as follows:

(1) [Sixty] Forty-five percent of the net revenue

obtained in any calendar year shall be paid to the

Commonwealth.

(2) [Thirty-five] Fifty percent of the net revenue

obtained in any calendar year may be retained by the

licensee.

(3) Five percent shall be paid to the Commonwealth and

deposited into the restricted receipts account established in

section 909.3.

Section 909.1. Tavern games tax.

(a) Imposition.--There is imposed a tax of [60%] 45% of the

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net revenue from tavern games sold by a licensed distributor to

a licensee within this Commonwealth.

* * *

Section 911. Invoice.

A sale of a tavern game by a licensed distributor or

registered manufacturer to a licensee must be documented by an

invoice listing the names and types of games sold, quantities of

each game sold, the net revenue of each game and the aggregate

amount of tax due on the net revenue on each invoice. Failure to

provide a correct invoice shall result in a penalty of 50% of

the tax amount due payable to the Commonwealth.

Section 912. Reports.

(a) Report required.--A licensee shall submit an annual

report to the board and the department for the preceding year on

a form and in a manner prescribed by the department. The

department shall develop a schedule for the submission of the

annual report. The report shall include:

(1) Prizes awarded as required under section 335 of the

act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform

Code of 1971.

(2) Net revenue received from each tavern game

conducted, itemized by week.

(3) Amount of prizes paid from all tavern games,

itemized by week.

(4) Amount of tax remitted to the department.

(5) Amount given to designated charities from tavern

raffles.

(6) Other information as required by the department.

(b) Electronic pull-tabs.--For a licensee using electronic

pull-tabs, the licensed distributor of the electronic pull-tabs

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shall be responsible for submitting the report regarding the

electronic pull-tabs under subsection (a). A licensed

distributor that fails to submit the report shall be liable to

any applicable penalty under section 913.

Section 913. Enforcement.

* * *

including against a licensed distributor that provides

electronic pull-tabs to a licensee, for a violation of this

chapter in accordance with the following:

(1) Up to $2,000 for an initial violation.

(2) Up to $3,000 for a second violation.

(3) Up to $5,000 for a third violation.

(d) Criminal penalty.--A violation of this chapter,

including by a licensed distributor that provides electronic

pull-tabs to a licensee, shall be a misdemeanor of the third

degree. A second or subsequent offense shall be a misdemeanor of

the second degree.

* * *

Section 7. This act shall take effect in 60 days.

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