PRINTER'S NO. 1936
No. 1266 Session of 2004
INTRODUCED BY PICCOLA, ARMSTRONG, WENGER, M. WHITE, RAFFERTY,
DENT, WONDERLING, CORMAN, GORDNER, PUNT, EARLL, GREENLEAF,
PIPPY AND LEMMOND, NOVEMBER 15, 2004
REFERRED TO JUDICIARY, NOVEMBER 15, 2004
AN ACT
1 Amending Title 4 (Amusements) of the Pennsylvania Consolidated
2 Statutes, further providing, as relates to gaming, for
3 legislative intent, for definitions, for general and specific
4 powers of the Pennsylvania Gaming Control Board, for license
5 or permit application hearing process, for regulatory
6 authority of the Pennsylvania Gaming Control Board, for
7 license or permit prohibition, for slot machine license
8 application, for slot machine accounting controls and audits
9 and for license or permit issuance; providing for copies of
10 applications and reports; and further providing for
11 regulation requiring exclusion of certain persons and for
12 enforcement.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 1102(8) of Title 4 of the Pennsylvania
16 Consolidated Statutes, added July 5, 2004 (P.L.572, No.71), is
17 amended to read:
18 § 1102. Legislative intent.
19 The General Assembly recognizes the following public policy
20 purposes and declares that the following objectives of the
21 Commonwealth are to be served by this part:
22 * * *
1 (8) [Strictly] An integral and essential element of the
2 regulatory process and control of gaming rests in the public
3 confidence and trust in the credibility and integrity of the
4 regulatory process and of gaming operations. To further such
5 public confidence and trust, strictly monitored and enforced
6 control over all limited gaming authorized by this part by
7 the Pennsylvania State Police, the Division of Gaming
8 Enforcement of the Office of Attorney General and the
9 Pennsylvania Gaming Control Board shall be provided through
10 regulation, licensing and appropriate enforcement actions of
11 specified locations, persons, associations, practices,
12 activities, licensees and permittees.
13 * * *
14 Section 2. Section 1103 of Title 4 is amended by adding a
15 definition to read:
16 § 1103. Definitions.
17 The following words and phrases when used in this part shall
18 have the meanings given to them in this section unless the
19 context clearly indicates otherwise:
20 * * *
21 "Division." The Division of Gaming Enforcement of the Office
22 of Attorney General.
23 * * *
24 Section 3. Sections 1202(b)(17), 1205, 1207(2), 1213,
25 1309(a)(9) and 1322 of Title 4, added July 5, 2004 (P.L.572,
26 No.71), are amended to read:
27 § 1202. General and specific powers.
28 * * *
29 (b) Specific powers.--The board shall have the specific
30 power and duty:
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1 * * *
2 (17) [To create a Bureau of Investigations and
3 Enforcement within the board. The board shall promulgate
4 regulations pertaining to the operation of the bureau which
5 shall insure separation of functions between the bureau and
6 the board. The board shall provide the employees necessary to
7 the bureau for enforcement of this part.] To cooperate fully
8 with the Pennsylvania State Police and the division in the
9 monitoring and enforcement of this part.
10 * * *
11 § 1205. License or permit application hearing process.
12 The board shall conduct a public hearing on license
13 applications. The board's consideration and resolution of all
14 license or permit applications shall be conducted in accordance
15 with [procedures adopted by order of the board. Notwithstanding
16 the mandates of 2 Pa.C.S. §§ 504 (relating to hearing and
17 record) and 505 (relating to evidence and cross-examination),
18 said procedures adopted by order of the board shall provide
19 parties before it with a documentary hearing, but the board may,
20 at its discretion, resolve disputed material facts without
21 conducting an oral hearing where constitutionally permissible.]
22 2 Pa.C.S. (relating to administrative law and procedure).
23 § 1207. Regulatory authority of board.
24 The board shall have the power and its duties shall be to:
25 * * *
26 (2) Restrict access to confidential information in the
27 possession of the board which has been obtained under this
28 part and ensure that the confidentiality of information is
29 maintained and protected. Records shall be retained by the
30 board for seven years. The restrictions under this paragraph
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1 do not apply to the Pennsylvania State Police and the
2 division.
3 * * *
4 [§ 1213. License or permit prohibition.
5 No applicant for a license or permit under this part,
6 including directors, owners and key employees, that has been
7 convicted in any jurisdiction of a felony or gambling offense
8 within the past 15 years shall be issued a license or permit
9 under this part or be found qualified to serve in a position as
10 a director, owner or key employee of or associated with any
11 licensee or permittee.]
12 § 1309. Slot machine license application.
13 (a) General requirements.--In addition to any other
14 information required under this part or as may be required by
15 the board, the application for any category of slot machine
16 license shall include at a minimum:
17 * * *
18 (9) The consent to conduct a background investigation by
19 the [board, the scope of which shall be determined by the
20 board in its discretion] Pennsylvania State Police consistent
21 with the provisions of this part, and a release signed by all
22 persons subject to the investigation of all information
23 required to complete the investigation.
24 * * *
25 § 1322. Slot machine accounting controls and audits.
26 (a) Approval.--Except as otherwise provided by this part,
27 each slot machine license applicant shall, in addition to
28 obtaining a slot machine license, obtain approval from the board
29 in consultation with the Pennsylvania State Police, the division
30 and the department of its proposed site plans and internal
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1 control systems and audit protocols prior to the installation
2 and operation of slot machines at the licensed facility.
3 (b) Minimum requirements.--At a minimum, the applicant's or
4 person's proposed internal controls and audit protocols shall:
5 (1) Safeguard its assets and revenues, including, but
6 not limited to, the recording of cash and evidences of
7 indebtedness related to the slot machines.
8 (2) Provide for reliable records, accounts and reports
9 of any financial event that occurs in the operation of a slot
10 machine, including reports to the board, the Pennsylvania
11 State Police and the division related to the slot machines.
12 (3) Ensure as provided in section 1323 (relating to
13 central control computer system) that each slot machine
14 directly provides or communicates all required activities and
15 financial details to the central control computer as set by
16 the board.
17 (4) Provide for accurate and reliable financial records.
18 (5) Ensure any financial event that occurs in the
19 operation of a slot machine is performed only in accordance
20 with the management's general or specific authorization, as
21 approved by the board.
22 (6) Ensure that any financial event that occurs in the
23 operation of a slot machine is recorded adequately to permit
24 proper and timely reporting of gross revenue and the
25 calculation thereof and of fees and taxes and to maintain
26 accountability for assets.
27 (7) Ensure that access to assets is permitted only in
28 accordance with management's specific authorization, as
29 approved by the board.
30 (8) Ensure that recorded accountability for assets is
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1 compared with actual assets at reasonable intervals and
2 appropriate action is taken with respect to any
3 discrepancies.
4 (9) Ensure that all functions, duties and
5 responsibilities are appropriately segregated and performed
6 in accordance with sound financial practices by competent,
7 qualified personnel.
8 (c) Internal control.--Each slot machine license applicant
9 shall submit to the board, the Pennsylvania State Police, the
10 division and department, in such manner as the board shall
11 require, a description of its administrative and accounting
12 procedures in detail, including its written system of internal
13 control. Each written system of internal control shall include:
14 (1) Records of direct and indirect ownership in the
15 proposed slot machine licensee, its affiliate, intermediary,
16 subsidiary or holding company.
17 (2) An organizational chart depicting appropriate
18 segregation of functions and responsibilities.
19 (3) A description of the duties and responsibilities of
20 each position shown on the organizational chart.
21 (4) A detailed narrative description of the
22 administrative and accounting procedures designed to satisfy
23 the requirements of this section.
24 (5) Record retention policy.
25 (6) Procedure to ensure that assets are safeguarded,
26 including mandatory count procedures.
27 (7) A statement signed by the chief financial officer of
28 the proposed licensed gaming entity or other competent person
29 and the chief executive officer of the proposed licensed
30 gaming entity or other competent person attesting that the
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1 officer believes, in good faith, that the system satisfies
2 the requirements of this section.
3 (8) Any other item that the board may require in its
4 discretion.
5 Section 4. Section 1325(a) of Title 4 is amended and the
6 section is amended by adding subsections to read:
7 § 1325. License or permit issuance.
8 (a) General rule.--A person is not eligible to hold a
9 license or occupation permit if the person:
10 (1) Has been convicted in any jurisdiction of a felony
11 or gambling offense.
12 (2) Has failed to provide information, documentation or
13 assurances required by this part or requested by the board,
14 division or Pennsylvania State Police or failed to reveal any
15 material fact, or supplied information which is untrue or
16 misleading.
17 (3) Is being prosecuted for a felony or gambling offense
18 in any jurisdiction. However, at the request of the
19 applicant, the board may defer decision upon the application
20 during the pendency of the charge.
21 (4) Has pursued economic gain in an occupational manner
22 or context which is in violation of the criminal or civil
23 laws of this Commonwealth or any jurisdiction, if the pursuit
24 creates a reasonable belief that the participation of the
25 person in gaming operations would be inimical to this part.
26 (5) Has been identified as a career offender or a member
27 of a career offender cartel or an associate of a career
28 offender or career offender cartel in a manner which creates
29 a reasonable belief that the association with the career
30 offender or career offender cartel is of a nature as to be
20040S1266B1936 - 7 -
1 inimical to this part.
2 (6) Has defied any legislative investigatory body or
3 other official investigatory body of any state or of the
4 United States when the investigatory body is engaged in the
5 investigation of crimes relating to gaming, official
6 corruption or organized crime activity.
7 [(a)] (a.1) Issuance.--In addition to any other criteria
8 provided under this part, any licensed gaming entity, supplier,
9 manufacturer, gaming employee or other person that the board
10 approves as qualified to receive a license or a permit under
11 this part shall be issued a license or permit upon the payment
12 of any fee required and upon the fulfillment of any conditions
13 required by the board or provided for in this part. Nothing
14 contained in this part is intended or shall be construed to
15 create an entitlement to a license or permit by any person. The
16 board shall in its sole discretion issue, renew, condition or
17 deny a slot machine license based upon the requirements of this
18 part and whether the issuance of a license will enhance tourism,
19 economic development or job creation is in the best interests of
20 the Commonwealth and advances the purposes of this part.
21 * * *
22 (d) Definitions.--The following words and phrases when used
23 in this section shall have the meanings given to them in this
24 subsection unless the context clearly indicates otherwise:
25 "Career offender." Any person whose behavior is pursued in
26 an occupational manner or context for the purpose of economic
27 gain, utilizing methods for which the person was convicted of
28 criminal violations in this Commonwealth or any jurisdiction.
29 "Career offender cartel." Any group of persons who operate
30 together as career offenders.
20040S1266B1936 - 8 -
1 "Occupational manner or context." The systematic planning,
2 administration, management or execution of an activity for
3 financial gain.
4 Section 5. Title 4 is amended by adding a section to read:
5 § 1332. Copies of applications and reports.
6 The board shall provide the Pennsylvania State Police and the
7 division with timely copies of all applications and reports
8 required by this chapter.
9 Section 6. Sections 1514 and 1517 of Title 4, added July 5,
10 2004 (P.L.572, No.71), are amended to read:
11 § 1514. Regulation requiring exclusion of certain persons.
12 (a) General rule.--The [board] division shall by regulation
13 provide for the establishment of a list of persons who are to be
14 excluded or ejected from any licensed facility. The provisions
15 shall define the standards for exclusion and shall include
16 standards relating to persons who are career or professional
17 offenders as defined by regulations of the [board] division or
18 whose presence in a licensed facility would, in the opinion of
19 the [board] division, be inimical to the interest of the
20 Commonwealth or of licensed gaming therein, or both.
21 (b) Categories to be defined.--The [board] division shall
22 promulgate definitions establishing those categories of persons
23 who shall be excluded pursuant to this section, including cheats
24 and persons whose privileges for licensure or registration have
25 been revoked.
26 (c) Discrimination prohibited.--Race, color, creed, national
27 origin or ancestry or sex shall not be a reason for placing the
28 name of any person upon a list under this section.
29 (d) Sanctions.--The board may impose sanctions upon a
30 licensed gaming entity in accordance with this part if the
20040S1266B1936 - 9 -
1 licensed gaming entity knowingly fails to exclude or eject from
2 the premises of any licensed facility any person placed by the
3 [board] division on the list of persons to be excluded or
4 ejected.
5 (e) List not all-inclusive.--Any list compiled by the
6 [board] division of persons to be excluded or ejected shall not
7 be deemed an all-inclusive list, and a licensed gaming entity
8 shall have a duty to keep from the licensed facility persons
9 known to it to be within the classifications declared in this
10 section and the regulations promulgated under this section whose
11 presence in a licensed facility would be inimical to the
12 interest of the Commonwealth or of licensed gaming therein, or
13 both, as defined in standards established by the [board]
14 division.
15 (f) Notice.--Whenever the [board] division places the name
16 of any person on a list pursuant to this section, the [board]
17 division shall serve notice of this fact to such person by
18 personal service or certified mail at the last known address of
19 the person.
20 (g) Hearing.--Within 30 days after notice in accordance with
21 subsection (f), the person named for exclusion or ejection may
22 demand a hearing before the board, at which hearing the [board]
23 division shall have the affirmative obligation to demonstrate
24 that the person named for exclusion or ejection satisfies the
25 criteria for exclusion established by this section and the
26 [board's] division's regulations. Failure to demand a hearing
27 within 30 days after service shall be deemed an admission of all
28 matters and facts alleged in the [board's] division's notice and
29 shall preclude a person from having an administrative hearing,
30 but shall in no way affect the right to judicial review as
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1 provided in this section.
2 (h) Review.--If, upon completion of a hearing on the notice
3 of exclusion or ejection, the board determines that placement of
4 the name of the person on the exclusion list is appropriate, the
5 board shall make and enter an order to that effect, which order
6 shall be served on all slot machine licensees. The order shall
7 be subject to review by the Commonwealth Court in accordance
8 with the rules of court.
9 § 1517. Enforcement.
10 [(a) Powers and duties.--The Bureau of Investigations and
11 Enforcement shall have the following powers and duties:
12 (1) Promptly investigate all licensees, permittees and
13 applicants as directed by the board in accordance with the
14 provisions of section 1202 (relating to general and specific
15 powers).
16 (2) Enforce the rules and regulations promulgated under
17 this part.
18 (3) Initiate proceedings for administrative violations
19 of this part or regulations promulgated under this part.
20 (4) Provide the board with all information necessary for
21 all action under this part and for all proceedings involving
22 enforcement of this part or regulations promulgated under
23 this part.
24 (5) Investigate the circumstances surrounding any act or
25 transaction for which board approval is required.
26 (6) Conduct administrative inspections on the premises
27 of a licensed racetrack or nonprimary location or licensed
28 facility to ensure compliance with this part and the
29 regulations of the board and, in the course of inspections,
30 review and make copies of all documents and records that may
20040S1266B1936 - 11 -
1 be required through onsite observation and other reasonable
2 means to assure compliance with this part and regulations
3 promulgated under this part.
4 (7) Receive and take appropriate action on any referral
5 from the board relating to any evidence of a violation.
6 (8) Conduct audits of slot machine operations at such
7 times, under such circumstances and to such extent as the
8 bureau determines. This paragraph includes reviews of
9 accounting, administrative and financial records and
10 management control systems, procedures and records utilized
11 by a slot machine licensee.
12 (9) Request and receive information, materials and other
13 data from any licensee, permittee or applicant.
14 (10) Refer for investigation all possible criminal
15 violations to the Pennsylvania State Police and cooperate
16 fully in the investigation and prosecution of a criminal
17 violation arising under this part.]
18 (b) Powers and duties of department.--
19 (1) The department shall at all times have the power of
20 access to examination and audit of any equipment and records
21 relating to all aspects of the operation of slot machines
22 under this part.
23 (2) Notwithstanding the provisions of section 353(f) of
24 the act of March 4, 1971 (P.L.6, No.2), known as the Tax
25 Reform Code of 1971, the department shall supply the board,
26 the [bureau,] division and the Pennsylvania State Police [and
27 the Office of Attorney General] with information concerning
28 the status of delinquent taxes owned by the applicant,
29 licensee or permittee.
30 (c) Powers and duties of [the] Pennsylvania State Police.--
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1 The Pennsylvania State Police shall have the following powers
2 and duties:
3 (1) Promptly investigate all licensees, permittees and
4 applicants as directed by the board in accordance with the
5 provisions of section 1202 (relating to general and specific
6 powers.
7 (2) Enforce the rules and regulations promulgated under
8 this part.
9 (3) Initiate proceedings for any violations of this part
10 or regulations promulgated under this part.
11 (4) Provide the board with all information necessary for
12 all actions under this part for all proceedings involving
13 enforcement of this part or regulations promulgated under
14 this part.
15 (5) Inspect a licensee's or permittee's person and
16 personal effects present in a licensed facility under this
17 part while that licensee or permittee is present at a
18 licensed facility.
19 (6) Enforce the criminal provisions of this part and all
20 other criminal laws of the Commonwealth.
21 (7) Fingerprint applicants for licenses and permits.
22 (8) Exchange fingerprint data with and receive national
23 criminal history record information from the [FBI] Federal
24 Bureau of Investigation for use in investigating applications
25 for any license or permit under this part.
26 (9) Receive and take appropriate action on any referral
27 from the board relating to criminal conduct.
28 (10) Require the production of any information, material
29 and other data from any licensee, permittee or applicant.
30 (11) Conduct administrative inspections on the premises
20040S1266B1936 - 13 -
1 of licensed racetrack or nonprimary location or licensed
2 facility to ensure compliance with this part and the
3 regulations of the board and, in the course of inspections,
4 review and make copies of all documents and records required
5 by the inspection through onsite observation and other
6 reasonable means to assure compliance with this part and
7 regulations promulgated under this part.
8 (12) Conduct audits or verification of information of
9 slot machine operations at such times, under such
10 circumstances and to such extent as the [bureau] division
11 determines. This paragraph includes reviews of accounting,
12 administrative and financial records and management control
13 systems, procedures and records utilized by a slot machine
14 licensee.
15 (13) A member of the Pennsylvania State Police assigned
16 to duties of enforcement under this part shall not be counted
17 toward the complement as defined in the act of December 13,
18 2001 (P.L.903, No.100), entitled "An act repealing in part a
19 limitation on the complement of the Pennsylvania State
20 Police."
21 (c.1) Division established; powers and duties.--Within the
22 Office of Attorney General, the Attorney General shall establish
23 the Division of Gaming Enforcement. The division shall do all of
24 the following:
25 (1) In cooperation with the Pennsylvania State Police,
26 conduct a background investigation of each applicant for a
27 slot machine license, a manufacturer license, a supplier
28 license or an occupation permit. The division may request any
29 information from an applicant that is necessary to conduct
30 the background investigation.
20040S1266B1936 - 14 -
1 (2) Exchange fingerprint data with and receive national
2 criminal history information from the Federal Bureau of
3 Investigation for use in background investigations.
4 (3) File the background investigation report required by
5 paragraph (1) with the board prior to the board's granting a
6 slot machine license, manufacturer license, supplier license
7 or occupation permit to the applicant.
8 (4) If the division determines that the person is
9 ineligible to be licensed or permitted, present testimony and
10 any supporting evidence to the board at a hearing where the
11 applicant's license or occupation permit is being considered.
12 (5) If the division determines that the person is not
13 suitable to furnish services set forth in section
14 1202(b)(10), present testimony and any supporting evidence to
15 the board at a hearing.
16 (6) Inspect a licensee's or occupation permittee's
17 person and personal effects while the licensee or occupation
18 permittee is present at a licensed facility.
19 (7) Conduct administrative inspections of a licensed
20 entity or licensed racing entity to ensure compliance with
21 this part. The division shall review and may make copies of
22 all documents and records in order to assure compliance with
23 this part.
24 (8) Conduct audits or verification of information of
25 licensees at the times and under the circumstances and to the
26 extent that the division determines necessary. The division
27 may review accounting, administrative, personnel and
28 financial records, management control systems, procedures and
29 records of a licensee.
30 (9) Otherwise request the production of information,
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1 materials and other data from licensees and investigate
2 licensees and occupation permittees when appropriate,
3 including upon referral by the board, for violations of this
4 part.
5 (10) Institute, when appropriate, administrative
6 proceedings before the board for violations of this part.
7 (11) If the division finds that a license or occupation
8 permit should be suspended, revoked or conditioned by the
9 board, petition the board to take action upon the license or
10 occupation permit.
11 (12) Investigate and institute criminal proceedings as
12 authorized in subsection (d). The division may receive and
13 take appropriate action on any referral from the board.
14 (d) Criminal action.--
15 (1) The district attorneys of the several counties shall
16 have authority to investigate and to institute criminal
17 proceedings for any violation of this part.
18 (2) In addition to the authority conferred upon the
19 Attorney General by the act of October 15, 1980 (P.L.950,
20 No.164), known as the Commonwealth Attorneys Act, the
21 Attorney General shall have the authority to investigate and
22 to institute criminal proceedings for any violation of this
23 part [or any series of such violations involving any county
24 of this Commonwealth and another state. No]. A person charged
25 with a violation of this part by the Attorney General shall
26 not have standing to challenge the authority of the Attorney
27 General to investigate or prosecute the case, and, if any
28 such challenge is made, the challenge shall be dismissed and
29 no relief shall be available in the courts of this
30 Commonwealth to the person making the challenge.
20040S1266B1936 - 16 -
1 (e) Inspection, seizure and warrants.--
2 (1) The [bureau] division, the department and the
3 Pennsylvania State Police shall have the authority without
4 notice and without warrant to do all of the following in the
5 performance of their duties:
6 (i) Inspect and examine all premises where slot
7 machine operations are conducted, gaming devices or
8 equipment are manufactured, sold, distributed or serviced
9 or where records of these activities are prepared or
10 maintained.
11 (ii) Inspect all equipment and supplies in, about,
12 upon or around premises referred to in subparagraph (i).
13 (iii) Seize, summarily remove and impound equipment
14 and supplies from premises referred to in subparagraph
15 (i) for the purposes of examination and inspection.
16 (iv) Inspect, examine and audit all books, records
17 and documents pertaining to a slot machine licensee's
18 operation.
19 (v) Seize, impound or assume physical control of any
20 book, record, ledger, game, device, cash box and its
21 contents, counting room or its equipment or slot machine
22 operations.
23 (2) The provisions of paragraph (1) shall not be deemed
24 to limit warrantless inspections except in accordance with
25 constitutional requirements.
26 (3) To further effectuate the purposes of this part, the
27 [bureau] division and the Pennsylvania State Police may
28 obtain administrative warrants for the inspection and seizure
29 of property possessed, controlled, bailed or otherwise held
30 by an applicant, licensee, permittee, intermediary,
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1 subsidiary, affiliate or holding company.
2 (f) Information sharing and enforcement referral.--With
3 respect to the administration, supervision and enforcement of
4 this part, the [bureau] division, the department, the
5 Pennsylvania State Police or the Office of Attorney General may
6 obtain or provide pertinent information regarding applicants,
7 licensees or permittees from or to law enforcement entities or
8 gaming authorities of the Commonwealth and other domestic,
9 foreign or federally approved jurisdictions, including the
10 Federal Bureau of Investigation, and may transmit such
11 information to each other electronically.
12 Section 7. This act shall take effect in 90 days.
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