PRINTER'S NO. 3135
No. 2300 Session of 1990
INTRODUCED BY TRELLO, COLAIZZO, CORRIGAN, CIVERA, LUCYK, VEON,
GIGLIOTTI, PETRONE, PISTELLA, PRESTON, RAYMOND, STABACK,
STEIGHNER, STISH, TANGRETTI, F. TAYLOR, J. TAYLOR, THOMAS,
TIGUE, TRICH, VAN HORNE, WOGAN, WOZNIAK, R. C. WRIGHT,
LEVDANSKY, RICHARDSON, BELARDI, BILLOW, BURD, BURNS,
CALTAGIRONE, CAPPABIANCA, CAWLEY, DALEY, DeLUCA, DeWEESE,
DOMBROWSKI, HOWLETT, JAROLIN, JOSEPHS, KASUNIC, KENNEY,
KOSINSKI, LaGROTTA, LASHINGER, LAUGHLIN, LESCOVITZ, MAYERNIK,
McNALLY, McVERRY, MICHLOVIC, MRKONIC, OLASZ AND TELEK,
MARCH 13, 1990
REFERRED TO COMMITTEE ON FINANCE, MARCH 13, 1990
AN ACT
1 Providing for control and licensing of video poker machines in
2 this Commonwealth; creating the Video Poker Machine Control
3 Commission and providing for its powers and duties; and
4 providing for local option and for distribution of revenues.
5 TABLE OF CONTENTS
6 Section 1. Short title.
7 Section 2. Definitions.
8 Section 3. Video Poker Machine Control Commission.
9 Section 4. Qualifications.
10 Section 5. Chairman of commission; quorum.
11 Section 6. Director.
12 Section 7. Powers and duties of commission.
13 Section 8. Use of enforcement agents.
14 Section 9. Unlawful use by minors.
15 Section 10. Direct dispensing.
1 Section 11. Local options.
2 Section 12. Authority to license.
3 Section 13. Distribution of proceeds.
4 Section 14. Government revenues.
5 Section 15. Creation of account.
6 Section 16. Preemption of local taxes and license fees.
7 Section 17. Prohibition and Penalties.
8 Section 18. Exemption from State gambling laws.
9 Section 19. Exemption from Federal regulation.
10 Section 20. Effective date.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Short title.
14 This act shall be known and may be cited as the Video Poker
15 Machine Control Law.
16 Section 2. Definitions.
17 The following words and phrases when used in this act shall
18 have the meanings given to them in this section unless the
19 context clearly indicates otherwise:
20 "Commission." The Video Poker Machine Control Commission
21 created by this act.
22 "Distributor." An individual, partnership or corporation
23 licensed under this act to buy, sell, lease or distribute video
24 poker machines. The term excludes machine owners and
25 manufacturers.
26 "Gross proceeds." The total amount of money placed into
27 video poker machines.
28 "Incentive." A consideration, including a premium or bonus
29 in cash or advance commission or merchandise, offered from a
30 machine owner to a licensed establishment in order to solicit
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1 its business.
2 "Licensed establishment." A restaurant, bar, tavern, hotel
3 or club which has a valid liquor license under the act of April
4 12, 1951 (P.L.90, No.21), known as the Liquor Code, and which is
5 located within a participating political subdivision.
6 "Machine owner." An individual, partnership or corporation
7 which is licensed under this act and which owns, services and
8 maintains video poker machines for placement in licensed
9 establishments.
10 "Manufacturer." An individual, partnership or corporation
11 which is licensed under this act and which manufacturers or
12 assembles video poker machines.
13 "Net profits." Gross proceeds after awards have been paid.
14 "Participating political subdivisions." Any city,
15 incorporated town, township, borough or home rule municipality
16 where video poker machines are in use in accordance with this
17 act.
18 "Person." Includes a corporation, partnership and
19 association, as well as a natural person.
20 "Video poker machines." A device or machine which, upon
21 insertion of a coin or currency, will play or simulate the play
22 of the game of poker, utilizing a video display and
23 microprocessors and in which, by the skill of the player or by
24 chance, the player may receive free games or credits which may
25 be redeemed for cash. No machine shall directly dispense any
26 coins, cash, tokens or anything of value.
27 Section 3. Video Poker Machine Control Commission.
28 (a) Commission created.--An independent commission, to be
29 known as the Video Poker Machine Control Commission is hereby
30 created. The commission shall consist of five members, one to be
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1 appointed by the Governor, one by the Speaker of the House of
2 Representatives, one by the President pro tempore of the Senate,
3 one by the Minority Leader of the House of Representatives and
4 one by the Minority Leader of the Senate.
5 (b) Members.--Of the original members, two shall be
6 appointed for a term of two years, two for a term of four years
7 and one for a term of six years. Those appointed by the Minority
8 Leader of the House of Representatives and the Minority Leader
9 of the Senate shall serve the initial two-year term. Those
10 appointed by the Speaker of the House of Representatives and the
11 President pro tempore of the Senate shall serve the initial
12 four-year terms. The Governor's appointment shall serve the
13 initial six-year term. Thereafter, all appointments shall be for
14 terms of six years or until successors are appointed and
15 qualified. All successors shall be appointed by the same
16 appointing authority as the members whom they are replacing.
17 (c) Salaries and expenses.--The members of the commission
18 shall receive salaries as determined by the Executive Board and
19 shall be reimbursed for all actual and necessary expenses
20 performed in the course of their duties.
21 Section 4. Qualifications.
22 (a) Citizenship and residency.--Each member of the
23 commission, at the time of appointment and qualification, shall
24 be a citizen of the United States and a resident of this
25 Commonwealth and shall have been a qualified elector in this
26 Commonwealth for a period of at least two years preceding the
27 member's appointment.
28 (b) Offices.--No member of the commission shall, during the
29 member's period of service, hold any other office under the laws
30 of this Commonwealth or the United States or seek elected office
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1 of any kind within this Commonwealth of the United States.
2 Section 5. Chairman of commission; quorum.
3 (a) Appointment.--The member appointed by the Governor shall
4 serve as chairman. The chairman shall, when present, preside at
5 all meetings. In the chairman's absence, a member designated by
6 the commission shall preside.
7 (b) Quorum.--Three members of the commission shall
8 constitute a quorum, and any action or order of the commission
9 shall require the approval of at least three members.
10 Section 6. Director.
11 The commission shall appoint an executive director to hold
12 office at its pleasure. The director shall have powers and
13 duties as the commission shall prescribe and shall receive
14 compensation as the commission shall determine. The director
15 shall have the authority to employ personnel necessary to carry
16 out the duties of office.
17 Section 7. Powers and duties of commission.
18 (a) General powers and duties.--The commission shall:
19 (1) Provide for licensing and for distribution of
20 revenue.
21 (2) Prescribe all necessary application and reporting
22 forms.
23 (3) Grant or deny license applications.
24 (4) Prescribe types of video poker machines to be used.
25 (b) License approval.--The commission may not deny any
26 application or limit, condition or restrict any license except
27 for nonconformance with this act. An applicant shall not be
28 granted a license unless:
29 (1) If the applicant is an individual:
30 (i) The applicant is of good character, honesty and
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1 integrity and in all respects is qualified and has
2 adequate financing from suitable sources.
3 (ii) The applicant has been a citizen of the United
4 States and a resident of this Commonwealth for at least
5 two years prior to the application.
6 (2) If the applicant is a partnership, all partners
7 qualify as individuals under paragraph (1).
8 (3) If the applicant is a corporation:
9 (i) It is a registered Pennsylvania corporation for
10 at lease one year.
11 (ii) At least 50% of its directors have been
12 Pennsylvania residents for at least two years.
13 (iii) All officers qualify as individuals under
14 paragraph (1).
15 (iv) All stockholders are individuals.
16 (c) Hearing and appeals.--Any person who was denied a
17 license shall have the right to a hearing before the commission.
18 The hearing shall be conducted in accordance with the provisions
19 of 2 Pa.C.S. (relating to administrative law and procedure). An
20 aggrieved party shall have the right to appeal the decision on
21 license denial to the court of common pleas in the judicial
22 district having jurisdiction over the applicant and/or the
23 licensed premises.
24 (d) Winning percentage.--The commission shall prescribe
25 winning percentages and necessary machine accounting
26 information. All video poker machines will be set at a minimum
27 win percentage of 80%. All video poker machines will have
28 metering devices to verify the winning percentages.
29 (e) Violations.--The commission shall investigate licensees
30 for violations of this act and shall hold hearings in which to
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1 consider these matters. Hearings and appeals shall be conducted
2 in the same manner as set forth in subsection (c). The
3 commission shall have authority to suspend or revoke a license
4 if it finds that a violation of this act has occurred. No
5 license shall be suspended or revoked until a hearing is
6 completed. The fine for a violation of provisions of this act or
7 of regulations adopted under this act shall not exceed $5,000
8 for the first offense and $15,000 for each subsequent violation.
9 (f) Standards of conduct.--The commission shall prescribe
10 rules and regulations for the conduct of the officers, employees
11 and agents of the commission.
12 (g) Regulation.--The commission shall promulgate regulations
13 to carry out the provisions of this act.
14 Section 8. Use of enforcement agents.
15 (a) Powers.--Employees of the commission designated as
16 enforcement agents shall be empowered to investigate the
17 background and associates of every license applicant to whatever
18 extent is judged necessary by the commission. No investigation
19 shall be undertaken prior to the submission of an application
20 for a license by a party, and no investigation shall continue
21 subsequent to the grant of a license, the denial of a license or
22 the withdrawal of a license application.
23 (b) Authority.--Enforcement agents are peace officers and
24 shall have police power and authority throughout this
25 Commonwealth to arrest, on view or under warrant, any person
26 tampering with video poker machines, attempting or conspiring to
27 manipulate the outcome or the payoff of any machine, or
28 manipulating the outcome or payoff of any machine by physical
29 tampering or through the interference of the lawful or proper
30 functioning of the mechanism by any means whatsoever.
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1 (c) Investigation and report.--Enforcement agents may
2 investigate any alleged illegal activities concerning video
3 poker machines and their operation, maintenance and placement.
4 Findings shall be reported in writing to the commission, which
5 shall relay any suspected criminal activity or violations of the
6 law to the district attorney for prosecution.
7 (d) State and local police.--In addition to any other person
8 authorized to enforce the provisions of this act, the
9 Pennsylvania State Police and police of participating political
10 subdivisions are empowered to enforce this act.
11 Section 9. Unlawful use by minors.
12 (a) Minors.--No person under 21 years of age may use or play
13 a video poker machine. A minor using or playing or attempting to
14 use or play a video poker machine commits a summary offense.
15 (b) Licensees.--A licensed establishment in which a person
16 under 21 years of age plays or uses a video poker machine,
17 whether or not that licensed establishment is actually aware of
18 the minor's age, commits a summary offense and shall, upon
19 conviction, pay a fine of not more than $5,000. The
20 establishment of any of the following facts by a person allowing
21 a minor to operate the video poker machines constitutes a
22 defense to prosecution under this subsection:
23 (1) The minor falsely represented in writing that the
24 minor was 21 years of age or older.
25 (2) The appearance of the minor was such that an
26 ordinary person of prudent judgment would believe the minor
27 to be 21 years of age or older.
28 Section 10. Direct dispensing.
29 A video poker machine may not directly dispense coins, cash,
30 tokens or any other article of exchange or value except for
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1 receipt tickets. Such tickets shall be dispensed by pressing the
2 ticket dispensing button on the machine at the end of one's turn
3 or play. The ticket shall indicate the total amount of credits
4 and the cash award, and the player shall turn in this ticket to
5 the appropriate person at the licensed establishment to receive
6 the cash award. The cost of the credit shall be 25¢, and the
7 number of credits played per game shall not exceed eight. No
8 cash award for any individual game shall exceed $500. All video
9 poker machines shall be designed and manufactured with total
10 accountability, to include gross proceeds, net profits, winning
11 percentages and any other information the commission requires.
12 Section 11. Local options.
13 (a) Election to be held.--In any municipality, an election
14 may be held on the date of the primary election immediately
15 preceding any municipal election, but not more than once in four
16 years, to determine the will of the electors with respect to the
17 issuance of licenses within the limits of such municipality
18 under the provisions of this act. Where an election had been
19 held at the primary election preceding a municipal election in
20 any year, another election may be held under the provisions of
21 this act at the primary election occurring the fourth year after
22 such prior election. When electors equal to at least 25% of the
23 highest vote cast for any office in the municipality at the last
24 preceding general election file a petition with the county board
25 of elections of the county, or when the governing body of the
26 municipality adopts, by a majority vote, a resolution to place a
27 question on the ballot and a copy of the resolution is filed
28 with the board of elections of the county, for a referendum on
29 the question of issuing licenses, the county board of elections
30 shall cause a question to be placed on the ballot or on the
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1 voting machine board and submitted at the primary election
2 immediately preceding the municipal election.
3 (b) Vote.--If a majority of the electors voting on the
4 question under subsection (a) vote "yes", then licenses shall be
5 issued by the licensing authority in such municipality, but if a
6 majority of the electors voting on such question vote "no", then
7 the licensing authority shall have no power to issue or to
8 renew, upon their expiration, any licenses in such municipality,
9 unless and until, at a later election, a majority of the voting
10 electors vote "yes" on such question.
11 (c) Voting procedures.--Proceedings under this section shall
12 be in accordance with the provisions of the act of June 3, 1937
13 (P.L.1333, No.320), known as the Pennsylvania Election Code.
14 (d) Applicability.--This act applies only to those licensed
15 establishments located in municipalities which have adopted the
16 provisions of this act by an affirmative vote in a municipal
17 referendum in accordance with the provisions of this section.
18 (e) Withdrawal of approval.--The referendum procedure
19 contained in this section shall also be available to withdraw
20 the approval of the issuance of licenses within the municipality
21 which was granted through a prior referendum.
22 Section 12. Authority to license.
23 (a) Type of licenses.--After approving the proper
24 applications, the commission shall issue the following licenses:
25 (1) A manufacturer's license to a person that
26 manufactures or assembles video poker machines for use in
27 Pennsylvania. The annual fee shall be $25,000.
28 (2) A distributor's license to a person that buys or
29 sells video poker machines in Pennsylvania other than an
30 operator. The annual fee shall be $10,000.
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1 (3) A machine owner's license to a person who owns,
2 services and maintains video poker machines for placement in
3 licensed establishments. The annual fee shall be $25,000 for
4 the first 50 individual poker machine licenses. For each
5 additional video poker machine, the annual fee shall be $500
6 per machine. Every video poker machine in use in this
7 Commonwealth must have a current $500 license displayed.
8 Every video poker machine licensed under this act must be
9 manufactured by an individual, partnership or corporation
10 licensed under paragraph (1).
11 (4) A licensed establishment must obtain a license under
12 this act in order to have video poker machines on its
13 premises. The annual fee for the license shall be $300 for
14 each machine per year.
15 (b) Commercial establishment requirements.--For any
16 commercial establishment which is approved by the Commonwealth
17 and which uses video poker machines, the maximum number of video
18 poker machines allowed per location shall be five. No video
19 poker machines may be placed in any commercial establishment
20 unless the owner of a commercial establishment has entered into
21 a contract with an operator for the placement of the machine or
22 machines for a minimum term of one year.
23 (c) Limitations.--
24 (1) No machine owner shall be issued more than one
25 license.
26 (2) No person may hold more than one class of license,
27 directly or indirectly, or have any interest therein.
28 (d) Incentives.--No machine owner may give and no licensed
29 establishment may receive an incentive.
30 Section 13. Distribution of proceeds.
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1 (a) Collection.--Gross proceeds shall be collected by the
2 machine owner for each licensed video poker machine.
3 (b) Distribution of net profits.--From the effective date of
4 this act, for a two-year period, the net profits derived from a
5 video poker machine shall be distributed by the machine owner as
6 follows:
7 (1) 40% to the machine owner.
8 (2) 40% to the licensed establishment where the machine
9 is located.
10 (3) 20% to the treasurer of the county in which the
11 machine is located, to be distributed as set forth in section
12 14.
13 (c) Manner of distribution after two-year period.--After the
14 two-year period set forth in subsection (b), the net profits
15 derived from a video poker machine shall be distributed by the
16 machine owner as follows:
17 (1) 35% to the machine owner.
18 (2) 35% to the licensed establishment where the machine
19 is located.
20 (3) 30% to the treasurer of the county in which the
21 machine is located, to be distributed as set forth in section
22 14.
23 (d) Reports.--The machine owner shall make a monthly
24 duplicate report to the county treasurer and to the commission
25 with the following information:
26 (1) The serial number of each video poker machine.
27 (2) The name and address of premises where machine is
28 located.
29 (3) A computer printout of the net profits of each
30 machine.
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1 Section 14. Government revenues.
2 Those net profits collected by the county treasurer, as set
3 forth in section 13, shall be distributed as follows:
4 (1) 2% to the county treasurer for the county for
5 collecting and distributing funds as directed by this act.
6 (2) 44% to the political subdivision where the video
7 poker machine is located.
8 (3) 44% to the school district where the video poker
9 machine is located.
10 (4) 10% to the office of Attorney General to be used for
11 drug enforcement and/or drug education.
12 Section 15. Creation of account.
13 All revenues from licenses and fines shall be placed in a
14 restricted revenue account to fund the total operation of the
15 commission, including, but not limited to, salaries and
16 administrative expenses. The commission shall allocate a minimum
17 of $1,000,000 annually to be used for the treatment of
18 compulsive behaviors in accordance with regulations adopted by
19 the commission.
20 Section 16. Preemption of local taxes and license fees.
21 Video poker machines and coin-operated amusement machines
22 shall be exempt from taxes levied under the act of August 5,
23 1932 (Sp.Sess., P.L.45, No.45), referred to as the Sterling Act,
24 the act of December 31, 1965 (P.L.1257, No.511), known as The
25 Local Tax Enabling Act, or the act of April 13, 1972 (P.L.184,
26 No.62), known as the Home Rule Charter and Optional Plans Law,
27 or under any other statute which confers taxing authority to any
28 political subdivision.
29 Section 17. Prohibition and penalties.
30 (a) Manufacture.--A person may not manufacture, assemble or
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1 produce a video poker machine in this Commonwealth unless the
2 person has a valid manufacturer's license issued under section
3 12(a)(1).
4 (b) Distribution.--A person may not sell, distribute, lease
5 or market a video poker machine in this Commonwealth unless the
6 person has a valid distributor's license issued under section
7 12(a)(2).
8 (c) License required.--A person may not own, service,
9 maintain, lease or place a video poker machine unless he has a
10 valid owner's license issued under section 12(a)(3).
11 (d) Use.--A person may not offer, enable or allow the
12 playing of video poker at an establishment unless that
13 establishment has a valid establishment license issued under
14 section 12(a)(4). A person with a valid establishment license
15 may not have more than five video poker machines in a licensed
16 establishment at the same time.
17 (e) Tampering.--A person may not manipulate the outcome or
18 payoff of a video poker machine through interference with the
19 proper functioning of the mechanism.
20 (f) Penalties.--
21 (1) A person who violates this section commits a
22 misdemeanor of the third degree and shall, upon conviction,
23 be sentenced to pay a fine of $1,000, or to imprisonment for
24 not more than one year, or both.
25 (2) A person who violates this section a second time
26 commits a misdemeanor of the second degree and shall, upon
27 conviction, be sentenced to pay a fine of $2,000, or to
28 imprisonment for not more than two years, or both.
29 (3) A person who violates this section a third or
30 subsequent time commits a misdemeanor of the first degree and
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1 shall, upon conviction, be sentenced to pay a fine of $5,000,
2 or to imprisonment for not more than five years, or both.
3 Section 18. Exemption from State gambling laws.
4 Video poker machines and their use are exempt from 18 Pa.C.S.
5 § 5513 (relating to gambling devices, gambling, etc.).
6 Section 19. Exemption from Federal regulation.
7 The General Assembly declares that the Commonwealth is exempt
8 from section 2 of the Gambling Devices Transportation Act (64
9 Stat. 1134, 15 U.S.C. § 1172). Shipments of video devices into
10 this Commonwealth in compliance with sections 3 and 4 of the
11 Gambling Devices Transportation Act (64 Stat. 1134, 15 U.S.C. §§
12 1173 and 1174) shall be deemed legal shipments into this
13 Commonwealth.
14 Section 20. Effective date.
15 This act shall take effect in 60 days.
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