PRINTER'S NO. 4558
No. 2834 Session of 2008
INTRODUCED BY DERMODY, McGEEHAN, KORTZ, HARHAI, WALKO, FRANKEL,
J. WHITE, M. SMITH AND PETRONE, OCTOBER 29, 2008
REFERRED TO COMMITTEE ON URBAN AFFAIRS, OCTOBER 29, 2008
AN ACT
1 Amending the act of July 28, 1953 (P.L.723, No.230), entitled,
2 as amended, "An act relating to counties of the second class
3 and second class A; amending, revising, consolidating and
4 changing the laws relating thereto," providing for video
5 gaming in counties of the second class.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. The act of July 28, 1953 (P.L.723, No.230), known
9 as the Second Class County Code, is amended by adding an article
10 to read:
11 ARTICLE XXV-B
12 VIDEO GAMING
13 Section 2501-B. Definitions.
14 The following words and phrases when used in this article
15 shall have the meanings given to them in this section unless the
16 context clearly indicates otherwise:
17 "Account." The Video Gaming Account established in section
18 2513-B.
19 "Board." The Second Class County Gaming Control Board.
1 "Board member." A member of the Second Class County Gaming
2 Control Board.
3 "Chairman." The chairman of the Second Class County Gaming
4 Control Board.
5 "Coin-operated amusement machine." A machine that requires
6 the insertion of a coin, currency or tokens to play or activate
7 an amusement game or music machine.
8 "County." A county of the second class.
9 "Distributor." An individual, partnership, association or
10 corporation, licensed by the Second Class County Gaming Control
11 Board to buy, sell, service or distribute video gaming machines.
12 The term does not include a machine vendor or a manufacturer.
13 "Licensed establishment." A restaurant, bar, tavern, hotel
14 or club that has a valid liquor or malt or brewed beverage
15 license under Article IV of the act of April 12, 1951 (P.L.90,
16 No.21), known as the Liquor Code.
17 "Machine vendor." An individual, partnership, association or
18 corporation that:
19 (1) is licensed by the Second Class County Gaming
20 Control Board; and
21 (2) owns, services and maintains video gaming machines
22 for placement in licensed establishments.
23 "Manufacturer." An individual, partnership, association or
24 corporation that:
25 (1) is licensed by the Second Class County Gaming
26 Control Board; and
27 (2) manufactures or assembles video gaming machines.
28 "Party officer." The following members or officers of any
29 political party:
30 (1) A member of a national committee.
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1 (2) A chairman, vice chairman, secretary, treasurer or
2 counsel of a Commonwealth committee.
3 (3) A member of the executive committee of a
4 Commonwealth committee.
5 (4) A county chairman, vice chairman or counsel.
6 (5) A secretary or treasurer of a county committee.
7 (6) A city chairman, vice chairman or counsel.
8 (7) A secretary or treasurer of a city committee.
9 "Video gaming machine." A device or machine:
10 (1) that, upon insertion of a coin or currency, will
11 play or simulate the play of a video poker, bingo, keno,
12 blackjack or other game authorized by the Second Class County
13 Gaming Control Board;
14 (2) that utilizes a video display and microprocessors;
15 and
16 (3) in which, by the skill of the player or by chance,
17 the player may receive free games or credits that may be
18 redeemed for cash.
19 Section 2502-B. Second Class County Gaming Control Board.
20 (a) Establishment.--The county executive of a county, if
21 authorized by the county council, shall establish an independent
22 commission to be known as the Second Class County Gaming Control
23 Board. The board shall consist of five members to be appointed
24 by the county executive.
25 (b) Members.--Of the original members of the board, two
26 shall be appointed for a term of two years, two for a term of
27 four years and one for a term of six years. Thereafter, all
28 appointments shall be for terms of six years or until successors
29 are appointed and qualified. All successors shall be appointed
30 by the county executive.
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1 (c) Compensation and expenses.--The members of the board
2 shall be compensated at a rate of $125 per day and shall receive
3 reimbursement for their actual and necessary expenses while
4 performing the business of the board.
5 (d) Qualifications.--Each member of the board, at the time
6 of appointment and qualification, must be a citizen of the
7 United States and a resident of the county and must have been a
8 qualified elector in this Commonwealth for a period of at least
9 two years preceding the member's appointment.
10 (e) Offices.--No member of the board shall, during the
11 member's period of service, hold any other office under the laws
12 of the United States or this Commonwealth or seek elected office
13 of any kind within the United States or this Commonwealth.
14 (f) Chairman and quorum.--
15 (1) The county executive shall appoint the chairman of
16 the board. The chairman shall, when present, preside at all
17 meetings. In the chairman's absence, a member designated by
18 the board shall preside.
19 (2) Three members of the board shall constitute a
20 quorum, and any action or order of the board shall require
21 the approval of at least three members.
22 (g) Director.--The board may appoint an executive director
23 to hold office at its pleasure. The director shall have powers
24 and duties as the board shall prescribe and shall receive
25 compensation as the board shall determine. The director may
26 employ personnel necessary to carry out the duties of office.
27 (h) Powers and duties.--The board shall:
28 (1) Provide for licensing of vendors, distributors,
29 licensees and for distribution of revenue.
30 (2) Prescribe all necessary application and reporting
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1 forms.
2 (3) Grant or deny license applications.
3 (4) Prescribe types of video gaming machines to be used.
4 (5) Establish fees.
5 Section 2503-B. Video gaming.
6 The board shall provide for video gaming at licensed
7 establishments. With the exception of tickets indicating credits
8 won, which are redeemable for cash, no machine may directly
9 dispense coins, cash, tokens or anything else of value.
10 Section 2504-B. Licensing of manufacturers, distributors and
11 vendors.
12 (a) Background investigation and application fee.--
13 (1) The board shall conduct a background investigation
14 of an applicant for a manufacturer's, distributor's or
15 machine vendor's license as to personal and business
16 character, honesty and integrity.
17 (2) An applicant must pay a nonrefundable application
18 fee of $5,000.
19 (3) The investigation may utilize information on the
20 applicant compiled by the Pennsylvania Liquor Control Board.
21 The investigation shall include the following:
22 (i) An examination of criminal or civil records.
23 (ii) An examination of personal, financial or
24 business records. This subparagraph includes tax returns,
25 bank accounts, business accounts, mortgages and
26 contracts, to which the license applicant is a party or
27 has an interest.
28 (iii) An examination of personal or business
29 relationships which:
30 (A) include a partial ownership or voting
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1 interest in a partnership, association or
2 corporation; and
3 (B) bear on the fitness of the applicant for
4 licensure.
5 (b) Production of information.--In order to become a
6 licensee, an applicant must produce information, documentation
7 and assurances as required by the board. This subsection
8 includes the following:
9 (1) Each license applicant must:
10 (i) consent in writing to and provide for the
11 examination of financial and business accounts, bank
12 accounts, tax returns and related records, in the
13 applicant's possession or under the applicant's control
14 that establish by clear and convincing evidence the
15 financial stability, integrity and responsibility of the
16 license applicant; and
17 (ii) authorize all third parties in possession or
18 control of accounts or records under subparagraph (i) to
19 allow for their examination as deemed necessary by the
20 board in conducting background investigations.
21 (2) Each license applicant must disclose on the
22 application form any criminal convictions for offenses graded
23 above summary offenses covering the ten-year period
24 immediately preceding the filing of the application. The
25 license applicant must also include on the application form
26 any convictions of the gambling laws of any jurisdiction.
27 (3) (i) If the license applicant has conducted a gaming
28 operation in a jurisdiction that permits such activity,
29 the license applicant must produce letters of reference
30 from the gaming or casino enforcement or control agency
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1 that specify the experiences of the agency with the
2 license applicant, the license applicant's associates and
3 the license applicant's gaming operations.
4 (ii) If the license applicant is unable to obtain
5 these letters within 60 days of the request, the license
6 applicant may submit a copy of the letter requesting the
7 information together with a statement under oath or
8 affirmation that, during the period activities were
9 conducted, the license applicant was in good standing
10 with the appropriate gambling or casino enforcement
11 control agency.
12 (4) Each license applicant must provide information,
13 documentation and assurances as required by the board to
14 establish by clear and convincing evidence the license
15 applicant's good character, honesty and integrity.
16 Information under this paragraph may relate to family,
17 habits, character, reputation, business affairs, financial
18 affairs, business associates, professional associates and
19 personal associates, covering the ten-year period immediately
20 preceding the filing of the application.
21 (c) Third-party disclosure.--
22 (1) Each license applicant must accept any risk of
23 adverse public notice, embarrassment, criticism, damages or
24 financial loss, which may result from disclosure or
25 publication by a third party of material or information
26 requested by the board pursuant to action on an application.
27 (2) The license applicant expressly must waive a claim
28 against the board or the county and its employees from
29 damages as a result of disclosure or publication by a third
30 party.
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1 (d) Hearing upon denial.--A person who is denied a license
2 has the right to a hearing before the board.
3 (e) Sole proprietor vendors.--A sole proprietor vendor must
4 comply with all of the following:
5 (1) Be a resident of this Commonwealth for at least two
6 years prior to application for a license.
7 (2) Be of good moral character and reputation in the
8 community.
9 (3) Be at least 18 years of age.
10 (4) (i) Be current in the payment of all taxes,
11 interest and penalties owed to the Commonwealth and
12 political subdivisions.
13 (ii) This paragraph excludes items under formal
14 dispute or appeal under applicable law.
15 (5) Demonstrate sufficient financial resources to
16 support the activities required to place and service video
17 gaming machines.
18 (f) Partnership vendors.--Partnership vendors must comply
19 with all of the following:
20 (1) (i) Be current in the payment of taxes, interest
21 and penalties owed to the Commonwealth and political
22 subdivisions.
23 (ii) This paragraph excludes items under formal
24 dispute or appeal under applicable law.
25 (2) Demonstrate sufficient financial resources to
26 support the activities required to place and service video
27 gaming machines.
28 (3) Have each partner be:
29 (i) Of good moral character and reputation in the
30 community.
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1 (ii) At least 18 years of age.
2 (iii) A resident of this Commonwealth for at least
3 two years prior to application for a license.
4 (4) At all times subsequent to licensing, a majority of
5 the partnership ownership interest must be held by residents
6 of this Commonwealth.
7 (g) Association and corporate vendors.--Association or
8 corporate vendors must comply with all of the following:
9 (1) (i) Be current in the payment of taxes, interest
10 and penalties owed to the Commonwealth and political
11 subdivisions.
12 (ii) This paragraph excludes items under formal
13 dispute or appeal under applicable law.
14 (2) Demonstrate sufficient financial resources to
15 support the activities required to place and service video
16 gaming machines.
17 (3) Have each shareholder holding more than 10% of the
18 stock of a corporation be:
19 (i) Of good moral character and reputation in the
20 community.
21 (ii) At least 18 years of age.
22 (iii) A resident of this Commonwealth for at least
23 two years prior to application.
24 (h) Sole proprietor distributors.--A sole proprietor
25 distributor must comply with all of the following:
26 (1) Be a resident of this Commonwealth for at least one
27 year prior to application.
28 (2) Be of good moral character and reputation in the
29 community.
30 (3) Be at least 18 years of age.
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1 (4) (i) Be current in the payment of taxes, interest
2 and penalties owed to the Commonwealth and political
3 subdivisions.
4 (ii) This paragraph excludes items under formal
5 dispute or appeal under applicable laws.
6 (5) Demonstrate sufficient financial resources to
7 support the activities required to sell and service video
8 gaming machines.
9 (i) Partnership distributors.--Partnership distributors must
10 comply with all of the following:
11 (1) (i) Be current in the payment of taxes, interest
12 and penalties owed to the Commonwealth and political
13 subdivisions.
14 (ii) This paragraph excludes items under formal
15 dispute or appeal under applicable law.
16 (2) Demonstrate sufficient financial resources to
17 support the activities required to sell and service video
18 gaming machines.
19 (3) Have each partner be:
20 (i) Of good moral character and reputation in the
21 community.
22 (ii) At least 18 years of age.
23 (iii) A resident of this Commonwealth for at least
24 one year prior to application.
25 (4) At all times subsequent to licensing, a majority of
26 the partnership ownership interest must be held by residents
27 of this Commonwealth.
28 (j) Association and corporate distributors.--Association or
29 corporate distributors must comply with all of the following:
30 (1) (i) Be current in the payment of taxes, interest
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1 and penalties owed to the Commonwealth and political
2 subdivisions.
3 (ii) This paragraph excludes items under formal
4 dispute or appeal under applicable law.
5 (2) Demonstrate sufficient financial resources to
6 support the activities required to sell and service video
7 gaming machines.
8 (3) Have each shareholder holding more than 10% of the
9 stock of a corporation be:
10 (i) Of good moral character and reputation in the
11 community.
12 (ii) At least 18 years of age.
13 (4) (i) For at least one year immediately prior to
14 application, have maintained and operated a coin machine
15 distributorship office and sales staff within this
16 Commonwealth.
17 (ii) This paragraph does not apply to an association
18 distributor.
19 (k) Sole proprietor manufacturers.--A sole proprietor
20 manufacturer must comply with all of the following:
21 (1) Be of good moral character and reputation in the
22 community.
23 (2) Be at least 18 years of age.
24 (3) (i) Be current in the payment of taxes, interest
25 and penalties owed to the Commonwealth and political
26 subdivisions.
27 (ii) This paragraph excludes items under formal
28 dispute or appeal under applicable law.
29 (4) Demonstrate sufficient financial resources to
30 support the activities required to manufacture and sell video
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1 gaming machines through a licensed distributor.
2 (l) Partnership manufacturers.--Partnership manufacturers
3 must comply with all of the following:
4 (1) (i) Be current in the payment of taxes, interest
5 and penalties owed to the Commonwealth and political
6 subdivisions.
7 (ii) This paragraph excludes items under formal
8 dispute or appeal under applicable law.
9 (2) Demonstrate sufficient financial resources to
10 support the activities required to manufacture and sell video
11 gaming machines through a licensed distributor.
12 (3) Have each partner be:
13 (i) At least 18 years of age.
14 (ii) Of good moral character and reputation in the
15 community.
16 (m) Association and corporate manufacturers.--Association or
17 corporate manufacturers must comply with all of the following:
18 (1) (i) Be current in the payment of taxes, interest
19 and penalties owed to the Commonwealth and political
20 subdivisions.
21 (ii) This paragraph excludes items under formal
22 dispute or appeal under applicable law.
23 (2) Demonstrate sufficient financial resources to
24 support the activities required to manufacture and sell video
25 gaming machines through a licensed distributor.
26 (3) Have each shareholder holding more than 10% of the
27 stock of the corporation or association be:
28 (i) Of good moral character and reputation in the
29 community.
30 (ii) At least 18 years of age.
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1 Section 2505-B. Licensed establishment license.
2 The board shall issue a license to any licensed establishment
3 upon a showing that its liquor or retail dispensers license is
4 valid and is in good standing with the Pennsylvania Liquor
5 Control Board. The annual fee for a licensed establishment shall
6 be $500 per video gaming machine.
7 Section 2506-B. Limitations on licensed establishments.
8 Licensed establishments shall be subject to the following
9 limitations:
10 (1) No licensed establishment may have more than three
11 video gaming machines. A licensed establishment which
12 requests a video gaming machine must receive one machine
13 before any other licensed establishment receives second or
14 subsequent machines.
15 (2) No applicant may hold more than one type of license
16 authorized by this article.
17 (3) Each licensee is responsible for payment of its
18 license fee. Payment of the fee by a person, partnership or
19 corporation other than the licensee is prohibited.
20 Section 2507-B. Central communications system.
21 The board may establish and procure a central communications
22 system capable of monitoring and communicating with each
23 licensed video gaming machine. If a central communications
24 system is established, all licensed video gaming machines must
25 be linked to the central communications system at the board.
26 Section 2508-B. Video gaming machine prototype.
27 The board shall develop a prototype video gaming machine that
28 includes hardware and software specifications. These
29 specifications shall include:
30 (1) Unremovable identification plates on the exterior of
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1 the machine containing the name of the manufacturer and the
2 serial and model number of the machine.
3 (2) Rules of play displayed on the machine face or
4 screen as promulgated by the board.
5 (3) A video gaming machine may not directly dispense
6 coins, cash, tokens or any other article of exchange or value
7 except for tickets. The tickets shall be dispensed by
8 pressing the ticket dispensing button on the machine at the
9 end of one's turn or play. The ticket shall indicate the
10 total amount of credits and the cash award and the player
11 shall turn in the ticket to the appropriate person at the
12 licensed establishment to receive the cash award. The cost of
13 the credit shall be $.25, and the number of credits played
14 per game shall not exceed ten.
15 (4) No cash award for any individual game may exceed
16 $1,000.
17 (5) All video gaming machines must be designed and
18 manufactured with total accountability, to include gross
19 proceeds, net profits, winning percentages and any other
20 information the board requires.
21 (6) Each machine shall pay out a minimum of 80% of the
22 amount wagered.
23 Section 2509-B. Fees.
24 (a) Vendors license and fee.--The annual fee for a machine
25 vendors license shall be $15,000 for the first 50 video gaming
26 machines and an additional $500 per video gaming machine license
27 in excess of 50. A machine vendor license permits the vendor to
28 sell video gaming machines to another licensed machine vendor or
29 licensed distributor.
30 (b) Distributor's license fee.--The annual fee for a
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1 distributor's license shall be $15,000.
2 (c) Manufacturer's license fee.--The annual fee for a
3 manufacturer's license shall be $15,000.
4 Section 2510-B. Unlawful use by minors.
5 (a) Minors.--
6 (1) No individual under 21 years of age may use or play
7 a video gaming machine.
8 (2) An individual who violates this subsection commits a
9 summary offense.
10 (b) Licensees.--
11 (1) A licensed establishment may not, regardless of
12 knowledge or intent, permit an individual under 21 years of
13 age to play or use a video gaming machine.
14 (2) A licensed establishment that violates this
15 subsection commits a misdemeanor of the second degree.
16 (3) The establishment of any of the following facts
17 constitutes a defense to prosecution under this subsection:
18 (i) The minor falsely represented in writing that
19 the minor was 21 years of age or older.
20 (ii) The appearance of the minor was such that an
21 ordinary person of prudent judgment would believe the
22 minor to be 21 years of age or older.
23 Section 2511-B. Inducements prohibited.
24 (a) General rule.--A video gaming machine owner may not
25 offer or give any type of inducement or incentive to a licensed
26 establishment to secure a machine placement agreement.
27 (b) Definition.--As used in this section, the term
28 "inducement" or "incentive" means consideration from a licensed
29 machine vendor to a licensed establishment owner as an
30 enticement to solicit or maintain the licensed establishment
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1 owner's business. The term includes cash, gifts, loans and
2 prepayment of commissions.
3 Section 2512-B. Illegal activities.
4 No person may sell, distribute, service, own, operate or
5 place on location a video gaming machine unless the person is
6 licensed pursuant to this article and is in compliance with all
7 requirements of this article.
8 Section 2513-B. Video gaming account.
9 (a) Establishment.--There is established a separate account
10 in the county treasury to be known as the Video Gaming Account.
11 Fees and fines under this article and the portion of net profits
12 under subsection (b)(2)(iii) shall be deposited in the account.
13 (b) Distribution of net profits.--
14 (1) Net profits shall be calculated by subtracting cash
15 awards from the total consideration played on the machine.
16 (2) The net profits from each video gaming machine shall
17 be distributed in the following manner:
18 (i) 25% to the licensed establishment.
19 (ii) 25% to the licensed vendor.
20 (iii) 49.5% to the account to be used for general
21 government operations in the county.
22 (iv) .5% to a city of the second class.
23 (c) Board funding.--The board shall derive all funding for
24 its operations related to the establishment, enforcement and
25 operation of video gaming from the account.
26 (d) Funds maintained in account.--An annual minimum balance
27 of $500,000 shall be maintained in the account. Money in excess
28 of this amount at the end of each fiscal year shall be
29 distributed to the general fund of a county.
30 (e) Continuous appropriation.--The money in the account is
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1 continuously appropriated to the account and shall not lapse at
2 the end of any fiscal year.
3 Section 2514-B. Preemption of local taxes and license fees.
4 (a) Statutes.--Video gaming machines shall be exempt from
5 taxes levied under the following:
6 (1) The act of December 31, 1965 (P.L.1257, No.511),
7 know as The Local Tax Enabling Act.
8 (2) The provisions of 53 Pa.C.S. Pt. III Subpt. E
9 (relating to home rule and optional plan government).
10 (3) Any statute that confers taxing authority to a
11 political subdivision.
12 (b) Licensing fees.--
13 (1) Video gaming machines are exempt from local
14 licensing fees.
15 (2) Local licensing fees imposed on all other coin-
16 operated amusement machines shall not exceed $150.
17 Section 2515-B. Exemption from State gaming laws.
18 Video gaming machines authorized under this article and their
19 use as authorized under this article are exempt from 18 Pa.C.S.
20 § 5513 (relating to gambling devices, gambling, etc.).
21 Section 2516-B. Exemption from Federal regulation.
22 The General Assembly declares that the Commonwealth is exempt
23 from section 2 of the Gambling Devices Transportation Act (64
24 Stat. 1134, 15 U.S.C. § 1172). Shipments of approved video
25 gaming machines into this Commonwealth in compliance with
26 sections 3 and 4 of the Gambling Devices Transportation Act (15
27 U.S.C. §§ 1173 and 1174) shall be deemed legal shipments into
28 this Commonwealth.
29 Section 2. This act shall take effect in 60 days.
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