PRINTER'S NO. 2015
No. 1526 Session of 1990
INTRODUCED BY STEWART, BELAN AND LYNCH, MARCH 19, 1990
REFERRED TO FINANCE, MARCH 19, 1990
AN ACT
1 Providing for licensing and placement of video poker machines in
2 this Commonwealth, for powers and duties of the Department of
3 Revenue, for local option and for distribution of revenues.
4 TABLE OF CONTENTS
5 Section 1. Short title.
6 Section 2. Definitions.
7 Section 3. Powers and duties of department.
8 Section 4. Use of enforcement agents.
9 Section 5. Unlawful use by persons under 21 years of age.
10 Section 6. Direct dispensing.
11 Section 7. Local option.
12 Section 8. Authority to license.
13 Section 9. Distribution of license fees.
14 Section 10. Preemption of local taxes and license fees.
15 Section 11. Existing machines.
16 Section 12. Penalty.
17 Section 13. Exemption from State gambling laws.
18 Section 14. Exemption from Federal regulation.
1 Section 15. Effective date.
2 The General Assembly of the Commonwealth of Pennsylvania
3 hereby enacts as follows:
4 Section 1. Short title.
5 This act shall be known and may be cited as the Video Poker
6 Control Law.
7 Section 2. Definitions.
8 The following words and phrases when used in this act shall
9 have the meanings given to them in this section unless the
10 context clearly indicates otherwise:
11 "Club." A nonprofit establishment which has a valid club
12 liquor license under the act of April 12, 1951 (P.L.90, No.21),
13 known as the Liquor Code.
14 "Department." The Department of Revenue of the Commonwealth.
15 "Distributor." An individual, partnership or corporation
16 licensed under this act to buy, sell, lease or distribute video
17 poker machines. The term excludes machine owners and
18 manufacturers.
19 "Establishment." A restaurant, bar, tavern, hotel or club
20 which has a valid liquor license under the act of April 12, 1951
21 (P.L.90, No.21), known as the Liquor Code.
22 "Incentives." A consideration, including a premium or bonus
23 in cash or advance commission or merchandise offered from a
24 machine owner to a licensed establishment in order to solicit
25 its business.
26 "Manufacturer." An individual, partnership or corporation
27 licensed under this act which manufactures or assembles video
28 poker machines.
29 "Net profits." Gross proceeds after prizes and license fees
30 as provided for in section 8(a)(3) have been paid.
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1 "Operator." An establishment licensed under this act to
2 offer video poker by the placing and making available for play
3 of video poker machines.
4 "Participating political subdivision." A city, township,
5 borough or school district where video poker machines are in use
6 under this act.
7 "Video poker machine." A device or machine which, upon
8 insertion of a coin, is available to play or simulate the play
9 of the game of poker utilizing a video display and
10 microprocessors and in which, whether by the skill of the player
11 or by chance, the player may receive free games or credits which
12 can be redeemed for cash or anything of value.
13 Section 3. Powers and duties of department.
14 (a) General powers and duties.--The department has the power
15 and duty:
16 (1) To promulgate regulations to:
17 (i) Provide for licensing procedures under this act.
18 (ii) Prescribe necessary application and reporting
19 forms to be used under this act.
20 (iii) Prescribe electronic accounting devices
21 necessary to verify reports to be used in this act.
22 (iv) Provide pay-out criteria.
23 (v) Provide for placing of embossed seals on video
24 poker machines.
25 (2) To grant or deny license applications.
26 (3) To employ enforcement agents and other employees
27 necessary to carry out the functions of the department under
28 this act. Persons employed must be citizens of the United
29 States, must not have a direct or indirect interest in a
30 person or entity licensed under this act and shall be
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1 fingerprinted and bonded. The department may not employ
2 persons who have been:
3 (i) convicted of or pleaded guilty or no contest to
4 a felony; or
5 (ii) convicted of, pleaded guilty or no contest to,
6 paid a fine for, or forfeited a bond to appear in
7 relation to a violation of a Federal or state statute
8 concerning gambling or lottery devices, equipment or
9 games.
10 (4) Inspect and approve a video poker machine
11 representative of each type of machine to be used in video
12 poker games and conduct spot inspections of video poker
13 machines on the premises where they are being played to
14 ensure that the devices comply with this act and department
15 regulations, and that the devices do not vary in a meaningful
16 manner from the inspected and approved representative device
17 of the same type.
18 (b) License approval.--The department may not issue a
19 license to a machine owner or an establishment unless:
20 (1) If the applicant is an individual all of the
21 following apply:
22 (i) The applicant is an honest person of good
23 character and integrity and is qualified and has adequate
24 financing from suitable sources.
25 (ii) The applicant is a citizen of the United States
26 and a resident of this Commonwealth for at least two
27 years previous to the application.
28 (iii) The applicant has not been convicted of nor
29 pleaded guilty or no contest to a felony.
30 (iv) The applicant has not been convicted of,
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1 pleaded guilty or no contest to, paid a penalty for, nor
2 forfeited a bond to appear in relation to a violation of
3 a Federal or state statute concerning gambling or lottery
4 devices, equipment or games.
5 (v) The applicant has no direct or indirect interest
6 in a person or entity holding a type of license other
7 than the type for which the applicant is applying.
8 (2) If the applicant is a partnership, the partners,
9 general and limited, qualify as individuals under paragraph
10 (1).
11 (3) If the applicant is a corporation all of the
12 following apply:
13 (i) It has been registered as a Pennsylvania
14 corporation for at least two years.
15 (ii) At least 50% of its directors have been
16 Pennsylvania residents for at least two years.
17 (iii) All officers qualify as individuals under
18 paragraph (1).
19 (iv) Its stockholders are individuals.
20 (v) Every stockholder owning 5% or more of the stock
21 of the corporation qualifies as an individual under
22 paragraph (1).
23 (c) Hearing.--A person who was denied a license has the
24 right to a hearing before the department. The hearing shall be
25 conducted under 2 Pa.C.S. Ch. 5 Subch. A (relating to practice
26 and procedure of Commonwealth agencies).
27 (d) Violations.--The department shall investigate, penalize
28 civilly and suspend or revoke licenses for violations of this
29 act and shall hold hearings in which to consider these matters.
30 A license may not be suspended or revoked until a hearing is
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1 completed. The penalty for a violation of this act may not
2 exceed $5,000 for the first violation and $15,000 for each
3 subsequent violation. In addition to the fine, interest on any
4 moneys held improperly, as the department may prescribe, shall
5 be collected.
6 Section 4. Use of enforcement agents.
7 (a) Powers.--Employees of the department designated as
8 enforcement agents are empowered to investigate the background
9 and associates of license applicants to the extent judged
10 necessary by the department. No investigation may be undertaken
11 prior to the submission of an application for a license by a
12 party. The investigation shall be completed prior to the
13 granting of a license. An investigation shall not be continued
14 after denial of a license or withdrawal of a license
15 application.
16 (b) Authority.--Enforcement agents are empowered to be peace
17 officers and shall have police power and authority throughout
18 this Commonwealth to arrest, on view or under warrant, a person
19 who is violating a criminal provision of this act.
20 (c) Investigation and report.--Enforcement agents may
21 investigate alleged illegal activities concerning video poker
22 machines and their operation, maintenance and placement.
23 Findings shall be reported in writing to the department. The
24 department shall relay suspected criminal activity or violations
25 of the law to the appropriate district attorney for prosecution.
26 (d) State and local police.--In addition to any other person
27 authorized to enforce the provisions of this act, the
28 Pennsylvania State Police and police of participating political
29 subdivisions are empowered to enforce this act.
30 Section 5. Unlawful use by persons under 21 years of age.
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1 (a) Persons under 21 years of age.--No person under 21 years
2 of age may use or play a video poker machine. A person under 21
3 years of age who uses, plays or attempts to use or play a video
4 poker machine commits a summary offense and shall, upon
5 conviction, be sentenced to pay a fine of not more than $1,000.
6 (b) Licensees.--A licensed establishment which permits a
7 person under 21 years of age to play or use a video poker
8 machine, commits a summary offense and shall, upon conviction,
9 pay a fine of not more than $5,000. Lack of knowledge that the
10 person was under 21 years of age is not a defense to a charge
11 under this subsection unless the person displayed to the
12 defendant an identification card issued by the Liquor Control
13 Board or a driver's license or identification card issued by the
14 Department of Transportation which the defendant reasonably
15 believed proved the person to be 21 years of age or older.
16 Section 6. Direct dispensing.
17 A video poker machine may not directly dispense coins, cash,
18 tokens or any other article of exchange or value except for
19 receipts tickets. Such tickets shall be dispensed by pressing
20 the ticket-dispensing button on the machine at the end of one's
21 turn of play. The ticket shall indicate the total amount of
22 credits and prize money won, and the player shall turn in this
23 ticket to the appropriate person at the establishment to receive
24 his prize money. The cost of a credit shall be 25¢ and the
25 number of credits played per game shall not exceed four. No
26 prize for any individual game shall exceed $400. A video poker
27 machine shall be designed and manufactured to record all use of
28 the device and the amounts deposited in the device.
29 Section 7. Local option.
30 (a) Placement on ballot.--A majority of the voters of a
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1 county have the option to approve or rescind approval of the
2 placement of video poker machines within its boundaries if
3 approval or rescission of approval is in conformity with the act
4 of June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania
5 Election Code. The question shall be placed upon the ballot of
6 that county for the next regularly-scheduled election if 25% of
7 the registered voters of that county sign a petition requesting
8 that the question be put on the ballot. Votes shall be totaled
9 by municipality and the question shall be considered approved in
10 a particular municipality only if a majority of the voters
11 voting in both the county and that municipality voted
12 affirmatively on the question. The results shall be transmitted
13 to the Secretary of the Commonwealth, who shall have the duty of
14 informing the department of the result.
15 (b) Special election.--No special election shall be held to
16 answer this question. However, if a special election is held to
17 decide other matters, this question may properly be placed on
18 that ballot along with the other matters to be decided.
19 (c) Restriction.--Notwithstanding the provisions of
20 subsections (a) and (b), no election for the purpose of deciding
21 whether video poker machines may be placed in establishments
22 within any municipality in any county or rescinding such a
23 decision may be held within two years of any prior election in
24 which such a question appeared on the ballot.
25 Section 8. Authority to license.
26 (a) Types of license.--After approving the proper
27 applications, the department may issue the following licenses:
28 (1) A manufacturer's license. The annual fee shall be
29 $50,000.
30 (2) A distributor's license. The annual fee shall be
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1 $50,000.
2 (3) An operator's license. The annual fee shall be
3 $4,000 for each video poker machine leased by the operator
4 from the distributor.
5 (4) An owner/operator license. The annual fee shall be
6 $7,000 for each video poker machine owned and operated with
7 the licensed establishment.
8 (b) Requirements.--The number of video poker machines
9 allowed in an establishment shall be limited to two for the
10 first 500 square feet of serving area within the establishment
11 and one for each additional 500 square feet of serving area
12 within the establishment. The maximum number of video poker
13 machines allowed in an establishment shall be ten. No video
14 poker machines may be placed in an establishment unless the
15 owner, or, in the case of a club, the proper authority of the
16 club, has entered into a contract with a licensed distributor
17 for the placement of the machines for a minimum term of one year
18 or unless the operator chooses to buy a video poker machine from
19 a licensed distributor or manufacturer.
20 (c) Licensees.--No person may hold, or have any interest in,
21 more than one type of license, directly or indirectly.
22 (d) Incentives.--Licensed manufacturers, distributors and
23 operators may not give or receive any incentives. A person who
24 violates this subsection commits a misdemeanor of the third
25 degree and shall, upon conviction, be sentenced to pay a fine of
26 $1,000, or to imprisonment for not more than one year, or both.
27 Section 9. Distribution of license fees.
28 Revenues from licenses and fines under this act shall be
29 placed in a restricted revenue account for the following
30 purposes:
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1 (1) To fund the operation of the department as required
2 by this act, including, but not limited to, salaries and
3 administrative expenses.
4 (2) Five percent of the remaining funds shall be
5 allocated for use for treatment of compulsive gamblers by
6 Gamblers Anonymous in accordance with regulations promulgated
7 by the department.
8 (3) The balance shall be paid to the municipalities in
9 which the establishments are located in proportion to the
10 number of video poker machines located in each municipality
11 and shall be used to reduce real estate taxes.
12 Section 10. Preemption of local taxes and license fees.
13 Video poker machines located in participating political
14 subdivisions shall be exempt from taxes levied under the act of
15 August 5, 1932 (Sp.Sess., P.L.45, No.45), referred to as the
16 Sterling Act, the act of December 31, 1965 (P.L.1257, No.511),
17 known as The Local Tax Enabling Act, or the act of April 13,
18 1972 (P.L.184, No.62), known as the Home Rule Charter and
19 Optional Plans Law.
20 Section 11. Existing machines.
21 Video poker machines manufactured and sold to machine owners
22 or distributors prior to the effective date of this act must
23 conform with or be made to conform with this act and the
24 regulations promulgated hereunder, in order to be licensed for
25 use in this Commonwealth.
26 Section 12. Penalty.
27 (a) Manufacture.--A person may not manufacture, assemble or
28 produce a video poker machine in this Commonwealth unless the
29 person has a valid manufacturer's license issued under section
30 8(a)(1).
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1 (b) Distribution.--A person may not sell, distribute, lease
2 or market a video poker machine in this Commonwealth unless the
3 person has a valid distributor's license issued under section
4 8(a)(2).
5 (c) Owning, servicing and maintaining.--No person shall own,
6 service or maintain a video poker machine in a licensed
7 establishment unless the person has a valid distributor,
8 operator or owner/operator license issued under section 8(a)(3).
9 (d) Offering, enabling or allowing the playing.--A person
10 may not offer, enable or allow the playing of video poker at an
11 establishment unless the establishment has a valid establishment
12 license issued under section 8(a)(4). A person may not have more
13 than ten video poker machines in an establishment at the same
14 time. No licensee shall permit any customer to play a video
15 poker machine when the customer is visibly intoxicated.
16 (e) Tampering.--A person may not manipulate the outcome or
17 payoff of a video poker machine through interference with the
18 proper functioning of the mechanism.
19 (f) Classification.--
20 (1) A person who violates this section commits a
21 misdemeanor of the third degree and shall, upon conviction,
22 be sentenced to pay a fine of $1,000, or to imprisonment for
23 not more than one year, or both.
24 (2) A person who violates this section a second time
25 commits a misdemeanor of the second degree and shall, upon
26 conviction, be sentenced to pay a fine of $2,000, or to
27 imprisonment for not more than two years, or both.
28 (3) A person who violates this section a third and
29 subsequent time commits a misdemeanor of the first degree and
30 shall, upon conviction, be sentenced to pay a fine of $5,000,
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1 or to imprisonment for not more than five years, or both.
2 (4) Any person who violates this section shall be liable
3 to any persons on account of any damages incurred by them
4 resulting from any violation of this section.
5 Section 13. Exemption from State gambling laws.
6 Video poker machines and their use are exempt from 18 Pa.C.S.
7 § 5513 (relating to gambling devices, gambling, etc).
8 Section 14. Exemption from Federal regulation.
9 The General Assembly declares that the Commonwealth is exempt
10 from section 2 of the Gambling Devices Transportation Act (64
11 Stat. 1134, 15 U.S.C. § 1172). Shipments of video devices into
12 this Commonwealth in compliance with sections 3 and 4 of the
13 Gambling Devices Transportation Act (64 Stat. 1134, 15 U.S.C. §§
14 1173 and 1174) shall be deemed legal shipments into this
15 Commonwealth.
16 Section 15. Effective date.
17 This act shall take effect in 60 days.
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