PRINTER'S NO. 1154
No. 1001 Session of 1983
INTRODUCED BY PETRONE, KUKOVICH, VAN HORNE, HALUSKA, LASHINGER,
PRATT, DeWEESE, TIGUE, KOSINSKI, CAWLEY, PISTELLA, PERZEL,
CALTAGIRONE, JAROLIN, TRELLO AND PRESTON, MAY 11, 1983
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE, MAY 11, 1983
AN ACT
1 Providing for licensing and placement of video gaming machines
2 in this Commonwealth; creating the Gaming Commission;
3 providing powers and duties; providing for enforcement
4 agents; prohibiting use by minors; and providing for
5 distribution of fees.
6 TABLE OF CONTENTS
7 Section 1. Short title.
8 Section 2. Definitions.
9 Section 3. Gaming Commission.
10 Section 4. Qualifications.
11 Section 5. Chairman of the commission; quorum.
12 Section 6. Director.
13 Section 7. Bonds.
14 Section 8. Powers and duties of commission.
15 Section 9. Enforcement agents.
16 Section 10. Authority to issue licenses to public operators.
17 Section 11. Unlawful use by minors.
18 Section 12. Distribution of revenues.
19 Section 13. Fee.
1 Section 14. Unlawful acts.
2 Section 15. Exemption from Federal regulation.
3 Section 16. Effective date.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Gaming
8 Machine Law.
9 Section 2. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Commission." The Gaming Commission created by this act.
14 "Video gaming machine." Any electronic device or machine
15 displaying poker hands which, upon insertion of a coin, token or
16 other representation of value, or upon payment of any
17 consideration, is available to play or operate, and the play or
18 operation utilizes video displays of a microprocessor controlled
19 poker game in which, whether by reason of the skill of the
20 operator or application of the element of chance, or both, the
21 person playing may become entitled to receive cash, premiums,
22 merchandise or any thing of value.
23 Section 3. Gaming Commission.
24 (a) Commission created.--An independent commission to be
25 known as the Gaming Commission is hereby created. The commission
26 shall consist of five members to be appointed by the Governor,
27 with the advice and consent of two-thirds of the Senate.
28 (b) Members.--Of the original members, one shall be
29 appointed for a term of two years, one for a term of three
30 years, one for a term of four years, one for a term of five
19830H1001B1154 - 2 -
1 years and one for a term of six years. Thereafter, all
2 appointments shall be for terms of six years or until successors
3 are appointed and qualified.
4 (c) Registration.--No more than three members of the
5 commission shall be registered under the same political party.
6 (d) Salary.--Each member of the commission shall receive an
7 annual salary as fixed by law.
8 Section 4. Qualifications.
9 (a) Citizenship and residency.--Each member of the
10 commission at the time of appointment and qualification shall be
11 a citizen of the United States and a resident of this
12 Commonwealth, shall have been a qualified elector in the
13 Commonwealth for a period of at least one year preceding his
14 appointment and shall be not less than 30 years of age.
15 (b) Offices.--No member of the commission shall, during his
16 period of service, hold any other office under the laws of this
17 Commonwealth or the United States or seek elected office of any
18 kind within the Commonwealth or the United States.
19 Section 5. Chairman of the commission; quorum.
20 (a) Election.--The commission shall elect one of its members
21 as chairman. The chairman shall, when present, preside at all
22 meetings. In his absence a designated member shall preside.
23 (b) Quorum.--Three members of the commission shall
24 constitute a quorum and any action or order of the commission
25 shall require the approval of at least three members.
26 Section 6. Director.
27 The commission may appoint a director to hold office at its
28 pleasure. The director, if appointed, shall have powers and
29 duties as the commission shall prescribe, and shall receive
30 compensation as the commission, with the approval of the
19830H1001B1154 - 3 -
1 Governor, shall determine. The director shall have the authority
2 to designate a deputy director to perform the duties of the
3 director during his absence.
4 Section 7. Bonds.
5 (a) Requirement.--Before entering upon the duties of their
6 respective offices or positions, each member of the commission
7 and the director shall execute and file with the State Treasurer
8 a bond in such sum as shall be fixed by the Executive Board of
9 this Commonwealth upon recommendation of the Governor, but the
10 amount of any bond shall not be less than $50,000. Bonds in such
11 sums as shall be fixed by the Executive Board shall be executed
12 and filed with the State Treasurer by the Gaming Commission as
13 the head of such board shall, with the approval of the Executive
14 Board, prescribe. Bonds shall be payable to the Commonwealth and
15 shall be conditioned for the faithful performance of the
16 members', secretary's or employees' duties imposed by law and
17 that the person bonded will not knowingly violate the provisions
18 of this act.
19 (b) Approval and cost.--All bonds required shall, before
20 being accepted by the State Treasurer, be approved by the Office
21 of Attorney General. Unless the Commonwealth establishes its own
22 indemnity fund, all bonds shall be given with security approved
23 by the Office of Attorney General. If the Commonwealth
24 establishes its own indemnity fund, the Executive Board may,
25 nevertheless, require any bond given to be executed by a surety
26 or sureties satisfactory to the Office of Attorney General. The
27 cost of bonds required to be executed by a surety or sureties
28 shall be borne by the commission as part of its operating
29 expense.
30 Section 8. Powers and duties of commission.
19830H1001B1154 - 4 -
1 The commission shall have the power and its duty shall be to:
2 (1) Provide for licensing procedures for video gaming
3 machines and manufacturers, distributors, operators and
4 locations for operation of video gaming machines.
5 (2) Prescribe the form for licensing applications and
6 for licenses.
7 (3) Grant or deny license applications. The commission
8 may deny any application or limit, condition or restrict any
9 license for cause deemed reasonable by the commission. The
10 burden of proving qualification to receive any license is
11 upon the applicant. An application shall not be granted
12 unless the commission is satisfied that:
13 (i) The applicant is of good character, honesty and
14 integrity and in all respects is qualified to operate,
15 manufacture, repair or distribute video gaming machines,
16 as the case may be, and that the proposed financing of
17 the applicant is adequate for the nature of the proposed
18 operation and from a suitable source.
19 (ii) The applicant has no affiliations or
20 associations which, because of reputation, prior
21 activities or current actions, create or enhance the
22 danger of unsuitable or illegal conduct in the carrying
23 on of gaming, or pose a threat to the public interest or
24 the effective regulation and control of gaming.
25 (4) Prescribe the rules and regulations for the video
26 games, types of video gaming machines permissible, and the
27 supervision and placement of the video gaming machines.
28 (5) Set the winning percentages to be paid out by the
29 machines over time. No machines may pay off to the public at
30 a rate of less than 83%.
19830H1001B1154 - 5 -
1 (6) Set requirements for security and auditing
2 mechanisms and devices in the video gaming machines.
3 (7) Investigate, suspend and revoke licenses or fine
4 licensees for violations of this act or rules and regulations
5 and hold hearings in which to consider such matters. The fine
6 for a violation of the provisions of this act or of
7 regulations adopted pursuant to this act shall not exceed
8 $100,000 for the first violation and $250,000 for each
9 subsequent violation by a licensee.
10 (8) Monitor the use, maintenance and service of the
11 video gaming machines.
12 (9) Prescribe rules and regulations for the conduct of
13 the officers, employees and agents of the commission.
14 (10) Prescribe rules and regulations as may be necessary
15 to carry out the provisions of this act.
16 (11) Require the applicant to pay all costs of
17 investigation for his application. The commission shall
18 collect from each applicant an amount of money sufficient to
19 pay the costs incurred in the investigation before taking any
20 action by way of grant or denial of the application.
21 Section 9. Enforcement agents.
22 (a) Powers.--Employees of the commission designated
23 "enforcement agents" shall be empowered to investigate the
24 background and associates of every license applicant to whatever
25 extent is judged necessary by the commission. No investigation
26 shall be undertaken prior to the submission of an application
27 for a license by a party and no investigation shall continue
28 subsequent to the grant of a license, the denial of a license or
29 the withdrawal of a license application.
30 (b) Authority.--Enforcement agents are empowered to be peace
19830H1001B1154 - 6 -
1 officers and shall have police power and authority throughout
2 this Commonwealth to arrest on view, or under warrant, any
3 person tampering with video gaming machines, attempting or
4 conspiring to manipulate the outcome or the payoff of any
5 machine, or of manipulating the outcome or payoff of any
6 machine, by physical tampering or through the interference of
7 the lawful and proper functioning of the mechanism by any means
8 whatsoever.
9 (c) Investigation and report.--Enforcement agents may
10 investigate any alleged illegal activities concerning video
11 gaming machines and their operation, maintenance and placement.
12 Findings shall be reported in writing to the commission, which
13 shall relay any suspected criminal activity or violations of the
14 law to the district attorney for prosecution.
15 Section 10. Authority to issue licenses to public operators.
16 The commission shall have authority to issue a video gaming
17 machine license for any premises kept or operated by a hotel,
18 restaurant or club, entitling the specified establishment to
19 install, operate and make available to the general public such
20 video gaming machines as the commission shall permit, but each
21 hotel, restaurant or club must possess a valid liquor license as
22 issued by the Pennsylvania Liquor Control Board prior to
23 application for and issuance of the video gaming machine
24 license. Video gaming machine and liquor licenses shall be
25 maintained in good standing at all times. The revocation,
26 suspension, sale, termination or transfer, in any fashion, of
27 the video gaming machine license, shall operate to cancel the
28 video gaming machine license immediately.
29 Section 11. Unlawful use by minors.
30 (a) Minors.--No person less than 21 years of age shall use
19830H1001B1154 - 7 -
1 or play the video gaming machines. Any minor using or playing a
2 video gaming machine, or attempting to use or play a video
3 gaming machine shall, upon conviction, be liable for a fine not
4 in excess of $1,000.
5 (b) Licensees.--Any licensee who permits a person less than
6 21 years of age to play or use the video gaming machines in any
7 fashion, whether that licensee is actually aware of the minor's
8 age or not, shall, upon conviction, be liable for a fine not in
9 excess of $5,000, except that the establishment of all the
10 following facts by a person allowing such minor to operate the
11 video gaming machines shall constitute a defense to any
12 prosecution under this subsection:
13 (1) That the minor falsely represented in writing that
14 he was 21 years of age or over.
15 (2) That the appearance of the minor was such that an
16 ordinary person of prudent judgment would believe him to be
17 21 years of age or over.
18 (3) That the permission to operate the video gaming
19 machines was made in good faith, relying upon written
20 representation and appearance, and in the reasonable belief
21 that the minor was actually 21 years of age or over.
22 Section 12. Distribution of revenues.
23 (a) State Treasurer.--The net revenues derived from the
24 operator's licensing fee collected by the Commonwealth shall be
25 held by the State Treasurer until such time as they are to be
26 distributed.
27 (b) Distribution.--The net revenues shall be distributed as
28 follows:
29 (1) Fifty percent of the net revenues shall be annually
30 distributed to the municipality in which the machines are
19830H1001B1154 - 8 -
1 operated.
2 (2) Fifty percent of the net revenues shall be annually
3 distributed to the General Fund to be used exclusively for
4 education.
5 Section 13. Fee.
6 As an operator's license fee, the Commonwealth shall receive
7 $1,000 for each video gaming machine, payable annually. Failure
8 to timely pay said fee for any machine shall result in the
9 automatic expiration of the operator's license at the location.
10 Section 14. Unlawful acts.
11 It is unlawful for any person to operate any video gaming
12 device in this State without first obtaining a license for each
13 machine as required by this act or regulations of the commission
14 pursuant to this act. The first violation of this section shall
15 be a felony of the second degree punishable by imprisonment of
16 not more than 10 years or a fine of not more than $250,000, or
17 both.
18 Section 15. Exemption from Federal regulation.
19 The General Assembly declares that it is exempt from the
20 provisions of section 2 of the act of January 2, 1981 (64 Stat.
21 1134, 15 U.S.C. § 1172). All shipments of video gaming devices
22 into this Commonwealth in compliance with sections 3 and 4 of
23 that act shall be deemed legal shipments into this Commonwealth.
24 Section 16. Effective date.
25 This act shall take effect in 60 days.
D14L4RAW/19830H1001B1154 - 9 -