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PRINTER'S NO. 1029
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
900
Session of
2015
INTRODUCED BY WARD, TOMLINSON, VOGEL, SCARNATI, BARTOLOTTA AND
STEFANO, JUNE 9, 2015
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,
JUNE 9, 2015
AN ACT
Amending Title 4 (Amusements) of the Pennsylvania Consolidated
Statutes, in licensees, further providing for additional
Category 1 slot machine license requirements, for Category 3
slot machine licenses and providing for casino liquor
licenses and for slot machines at nonprimary or ancillary
locations; and providing for Internet gaming.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1303(b) of Title 4 of the Pennsylvania
Consolidated Statutes is amended to read:
§ 1303. Additional Category 1 slot machine license
requirements.
* * *
(b) Required racing days.--
(1) Except as provided in subsection (a)(2), a Category
1 slot machine licensee must conduct live racing at the
racetrack for at least 100 days per calendar year for each
license held by the licensed racing entity pursuant to the
Race Horse Industry Reform Act, and the aggregate number of
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live racing days at the racetrack where the Category 1 slot
machine licensee conducts live racing shall not be less than
95% of the total number of horse or harness racing days that
were scheduled in 1986 at that racetrack. If a racing day is
canceled for reasons beyond the control of the licensed
racing entity, the appropriate commission shall grant the
licensee the right to conduct that racing day in the same or
next ensuing calendar year. The purse for that racing day
shall not be used for the purse of other scheduled racing
days of that calendar year and must be used for the purse of
such rescheduled day.
(2) Notwithstanding the provisions of paragraph (1), a
Category 1 licensed facility that holds and operates two
licenses at a single racetrack issued under the Race Horse
Industry Reform Act shall only be required to conduct live
racing at the racetrack for not fewer than 100 days per
calendar year.
* * *
Section 2. Section 1305(a)(1)(iv) of Title 4 is amended and
the subsection is amended by adding a paragraph to read:
§ 1305. Category 3 slot machine license.
(a) Eligibility.--
(1) A person may be eligible to apply for a Category 3
slot machine license if the applicant, its affiliate,
intermediary, subsidiary or holding company has not applied
for or been approved or issued a Category 1 or Category 2
slot machine license and the person is seeking to locate a
Category 3 licensed facility in a well-established resort
hotel having no fewer than 275 guest rooms under common
ownership and having substantial year-round recreational
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guest amenities. The applicant for a Category 3 license shall
be the owner or be a wholly owned subsidiary of the owner of
the well-established resort hotel. A Category 3 license may
only be granted upon the express condition that an individual
may not enter a gaming area of the licensed facility if the
individual is not any of the following:
* * *
(iv) [An] Except as provided under paragraph (1.2),
an individual holding a valid membership approved in
accordance with paragraph (1.1) or a guest of such
individual.
* * *
(1.2) The requirements under paragraph (1)(i), (ii) and
(iii) and the membership fee required under paragraphs (1)
(iv) and (1.1) shall not apply to the licensed facility if
the Category 3 slot machine licensee makes a payment to the
Commonwealth for deposit in the General Fund as follows:
(i) For a Category 3 in a first through third class
county, $5,000,000.
(ii) For a Category 3 in a fourth through eighth
class county, $2,500,000.
* * *
Section 3. Title 4 is amended by adding sections to read:
Section 1305.1. Casino liquor license.
(a) Special license.--A Category 1, Category 2 or Category 3
slot machine licensee or other person that holds a restaurant
license issued by the Pennsylvania Liquor Control Board which
permits the sale of liquor or malt or brewed beverages under
section 1521(b) or (c) (relating to liquor licenses at licensed
facilities) and which sells liquor or malt or brewed beverages
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at or adjacent to a gaming facility may convert its restaurant
license to a casino liquor license upon payment of the fees
specified under subsection (b).
(b) Fees.--In order to obtain a casino liquor license the
following fees must be paid:
(1) A slot machine licensee shall pay a one-time
conversion fee of $5,000,000 to the Commonwealth for deposit
in the General Fund.
(2) Each restaurant licensee that does not hold a slot
machine license but operates within or adjacent to the gaming
facility must pay a one-time fee of $10,000 to the
Pennsylvania Liquor Control Board for deposit in the General
Fund.
(3) In addition to any renewal fee imposed by the
Pennsylvania Liquor Control Board on a restaurant license, an
annual renewal fee of $500 must be paid to the Pennsylvania
Liquor Control Board.
(c) Renewal.--
(1) Upon payment of the annual renewal fee under
subsection (b), the casino liquor license shall be deemed
renewed without further action of the Pennsylvania Liquor
Control Board. If the annual renewal fee is not timely paid,
the casino liquor license shall be suspended until the annual
renewal fee is paid.
(2) The fees provided under subsection (b) shall be in
addition to any fee imposed under section 614-A of the act of
April 9, 1929 (P.L.177, No.175), known as The Administrative
Code of 1929.
(d) Provision of liquor and malt or brewed beverages.--
(1) A casino liquor license may not be revoked or
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suspended for a violation of 18 Pa.C.S. § 6310.1 (relating to
selling or furnishing liquor or malt or brewed beverages to
minors) unless the licensee has committed three or more
violations of 18 Pa.C.S. § 6310.1.
(2) A casino liquor license may provide liquor and malt
or brewed beverages for on-premises consumption 24 hours a
day, seven days a week.
(e) Applicability.--This section shall apply to a restaurant
license owned by a slot machine licensee or other person that
sells liquor or malt or brewed beverages at the gaming facility
or a facility physically connected or adjacent to the gaming
facility, including any expansion of the facility.
(f) Transfer prohibited.--A casino liquor license may not be
transferred to a new location. Nothing in this subsection shall
be construed to preclude a transfer of ownership of a casino
liquor license to another eligible person for the same licensed
premises.
§ 1311.3. Slot machines at nonprimary or ancillary locations.
(a) Authorization.--Notwithstanding any other provision of
law, the following licensed gaming entities may apply to the
board for a license to establish nonprimary locations or
ancillary facilities in which to operate slot machines:
(1) a licensed corporation as defined in section 102 of
the act of December 17, 1981 (P.L.435, No.135), known as the
Race Horse Industry Reform Act, that is a licensed gaming
entity and has nonprimary locations approved under section
218 of the Race Horse Industry Reform Act; or
(2) a slot machine licensee that is licensed as a
Category 2 facility under section 1304 (relating to Category
2 slot machine license).
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(b) Number.--
(1) Each licensed corporation under subsection (a)(1)
may operate up to four nonprimary locations for each licensed
racing entity approved under section 218 of the Race Horse
Industry Reform Act and licensed by the board under this
chapter. Notwithstanding any restrictions on the creation of
new or additional nonprimary locations under section 218(g)
of the Race Horse Industry Reform Act, each Category 1 slot
machine licensee may close, open or transfer nonprimary
locations in order to establish up to four nonprimary
locations at which slot machines may be placed.
(2) Each Category 2 slot machine licensee may operate up
to two ancillary facilities at locations licensed by the
board under this chapter.
(3) Notwithstanding any other law, a licensed
corporation that has established nonprimary locations prior
to the effective date of this section shall not be prohibited
from closing current nonprimary locations or from opening new
or relocated locations in order to conduct slot machine
wagering in accordance with this section.
(4) A licensed corporation that operated and closed a
nonprimary location prior to the effective date of this
section must operate at least one of the nonprimary locations
authorized under paragraph (1) in the same county as the one
or more of the original nonprimary locations were located.
The provisions of this paragraph shall not apply to a
nonprimary location that is within 10 linear air miles of a
licensed gaming entity within a city of the first class or
within 20 linear air miles of any other licensed gaming
entity.
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(c) Requirements.--Each nonprimary location or ancillary
facility may, upon remittance of the fee under this subsection,
place and operate no more than 250 slot machines of the
nonprimary location or ancillary facility's total complement of
slot machines under section 1210 (relating to number of slot
machines) in each authorized nonprimary location or ancillary
facility if all of the following apply:
(1) The nonprimary location or ancillary facility is
licensed by the board.
(2) Except as provided under this chapter, the
nonprimary location or ancillary facility is not within 10
linear air miles of a licensed gaming entity located within a
city of the first class or within 20 linear air miles of any
other licensed gaming entity. A nonprimary location or
ancillary facility may be located at a distance that is less
than the distances provided under this subparagraph if the
licensed corporation that owns the nonprimary location or the
licensed gaming entity enters into an agreement with another
licensed gaming entity and the agreement is filed with the
commission and the board.
(3) The licensed corporation that owns the nonprimary
location or licensed Category 2 gaming facility has paid a
fee to the board of $5,000,000 for each nonprimary location
or ancillary facility where the licensed corporation or
ancillary facility will place and operate slot machines.
(d) Application.--An application for a license to operate
slot machines at nonprimary locations or ancillary facilities
must be submitted on a form and in a manner as required by the
board. The application must contain the following:
(1) The proposed location of the nonprimary location or
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ancillary facility.
(2) The number of and justification for slot machines
requested at the location.
(3) The names, addresses, picture and other information
required by the board relating to all principals, key
employees and other personnel who will require a license or
permit from the board. Employees who hold a license from the
commission shall be granted a nongaming, gaming or key
employee license, permit or registration as deemed
appropriate by the board.
(4) The ability to inspect and approve the physical
plant of the nonprimary location or ancillary facility to
ensure the physical plant's adequacy to serve patrons.
(e) Onsite personnel.--The board or the Pennsylvania State
Police shall not have onsite personnel or offices at a
nonprimary location or ancillary facility.
(f) Taxes.--
(1) A nonprimary location or ancillary facility shall
pay a tax of 54% of the nonprimary location's or ancillary
facility's daily gross terminal revenue from the operation of
slot machines. The taxes collected under this subsection
shall be distributed as follows:
(i) Ninety-two percent of the tax shall be deposited
by the department in the General Fund.
(ii) Eight percent shall constitute a local share
assessment and be distributed by the department on a
quarterly basis as follows:
(A) Four percent to the county in which the
nonprimary location or ancillary facility is located.
(B) Four percent to the municipality in which
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the nonprimary location or ancillary facility is
located.
(2) All money owed to the Commonwealth, a county or a
municipality under this section shall be held in trust by the
licensed corporation or licensed gaming entity for the
Commonwealth, county or municipality until all funds are
distributed by the department in accordance with this
subsection.
(g) Enforcement.--The board shall regulate all aspects of
the placement and operation of slot machines in a nonprimary
location or ancillary facility.
Section 4. Title 4 is amended by adding a chapter to read:
CHAPTER 13B
INTERNET GAMING
Sec.
13B01. Scope of chapter.
13B02. Declaration of intent.
13B03. Definitions.
13B04. Permitted acts.
13B05. Board.
13B06. Internet gaming permits.
13B07. Permitting fee.
13B08. Issuance of permit.
13B09. Eligibility and unauthorized Internet gaming.
13B10. Internet controls.
13B11. Location, license, computer and software.
13B12. Platform or software provider.
13B13. Internet gaming accounts.
13B14. Internet gaming account management.
13B15. Prohibited acts.
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13B16. Internet gaming taxes.
13B17. Wagers in this Commonwealth.
13B18. Expanded compulsive and problem gambling programs.
13B19. Report.
13B20. Other law.
§ 13B01. Scope of chapter.
This chapter relates to Internet gaming.
§ 13B02. Declaration of intent.
The General Assembly finds and declares as follows:
(1) Since the development of the Internet, millions of
people have chosen to gamble online through illegal off-shore
operators without regulatory oversight or consumer
protections.
(2) Federal law permits individual states to authorize
intrastate Internet gambling, provided that the wagers are
made exclusively within the authorizing state.
(3) An effective State Internet gaming statute would:
(i) provide public trust in Internet gaming;
(ii) ensure that Internet games are fair and safe;
and
(iii) strictly regulate the conduct of Internet
gaming in this Commonwealth.
(4) The Commonwealth's effective regulation of Internet
gaming will maintain the success of slot machine and table
games gaming at its existing licensed facilities and sustain
the taxes, jobs, investment and economic development produced
by those licensed facilities.
§ 13B03. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
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context clearly indicates otherwise:
"Account applicant." An individual who applies to open an
Internet gaming account.
"Account holder." An individual who has established an
Internet gaming account.
"Applicant." A licensed gaming entity that applies for an
Internet gaming permit.
"Board." The Pennsylvania Gaming Control Board.
"Department." The Department of Revenue of the Commonwealth.
"Eligible operator." A licensed gaming entity that is
eligible to apply for an Internet gaming permit under section
13B06(b) (relating to Internet gaming permits).
"Facility." Licensed premises where Internet gaming is
conducted under regulations of the board.
"Gross Internet gaming revenue." The result of the following
calculation:
(1) Add:
(i) cash or cash equivalent Internet account wagers
received as a result of the conduct of Internet games;
and
(ii) cash received as entry fees for Internet
contests or tournaments, including a rake.
(2) Subtract from the sum under paragraph (1):
(i) the total of cash or cash payment equivalents
paid out to players as a result of playing an Internet
game; and
(ii) the actual cost paid for personal property
distributed to a player to promote Internet account
wagering on the permit holder's Internet gaming system.
"Internet account wager." A wager placed by an account
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holder with, and accepted by, a permittee.
"Internet game." A slot machine, table game or other game
which allows an individual to place wagers using a computer
monitor or mobile device which has the ability to accept wagers
on the Internet. The term includes any game which the board
determines, by regulation or order, to be suitable for use for
wagering through the Internet. The term does not include
telephone account wagering as used in the act of December 17,
1981 (P.L.435, No.135), known as the Race Horse Industry Reform
Act, or advance deposit account wagering as defined in section
1602-B of the act of March 4, 1971 (P.L.6, No.2), known as the
Tax Reform Code of 1971.
"Internet gaming account." An account established by an
individual with a permittee to authorize the account holder to
play an Internet game.
"Internet gaming permit." A permit issued under section
13B08 (relating to issuance of permit) to operate and maintain
an Internet gaming system.
"Internet gaming permit holder." A licensed gaming entity
which:
(1) holds a slot machine license and a table games
certificate; and
(2) has received a permit from the board to conduct
wagering using an Internet gaming system.
"Permittee." An Internet gaming permit holder.
"Vendor." A company that provides computers, Internet
components, software or services which provide or support
Internet gaming systems.
§ 13B04. Permitted acts.
The following are not violations of 18 Pa.C.S. § 5512
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(relating to lotteries, etc.) or 5513 (relating to gambling
devices, gambling, etc.):
(1) Conduct of Internet gaming by a licensed gaming
entity.
(2) Participation in an Internet game offered by an
account holder.
§ 13B05. Board.
(a) Administration.--The board shall regulate the conduct of
Internet gaming in this Commonwealth in accordance with this
chapter and shall promulgate regulations establishing all of the
following:
(1) Standards and procedures for the operation and
maintenance of Internet gaming by licensed facilities,
including wagering, Internet accounts, security and the
offering of Internet games by a licensed gaming entity.
(2) The method for calculating gross Internet gaming
revenue and the daily counting and recording of cash and cash
equivalents received and paid out by an Internet game.
(3) Standards for Internet providers or software
providers including qualifications and security.
(4) Standards relating to the advertising and marketing
of Internet games, including restrictions on marketing to
individuals under 21 years of age.
(b) Internet gaming equipment.--
(1) Computer hardware, software and related equipment to
be utilized by a permittee must be approved by the board.
(2) The manufacture of hardware, servers, software and
related equipment must be licensed as provided under section
1317.1 (relating to manufacturer licenses).
(3) The board may adopt testing and certification
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standards for all hardware, servers, software and related
equipment used in Internet gaming, which may include use of
the services of a private testing facility or the adoption of
testing and certification standards of another jurisdiction
as provided under section 1320 (relating to slot machine
testing and certification standards).
(4) Costs associated with the expansion of the
independent testing and certification facility under section
1320(b) shall be assessed on manufacturers licensed to
manufacture computer hardware, software and related
equipment.
(5) All computer equipment, including hardware, servers,
software and related equipment, shall be located within a
restricted area on the premises of a facility in a manner
that promotes optimum security. The board may promulgate
regulations to allow back-up and storage systems to be
securely maintained at a site in this Commonwealth other than
the facility to be utilized in the event of an emergency or
other event, as defined by the board.
(6) A permittee shall make the permittee's premises
available for placing wagers at the facility using the
Internet.
(c) Temporary regulations.--
(1) Regulations promulgated by the board to implement
oversight of licensed gaming entity Internet games, including
the approval of new games, shall be deemed temporary
regulations which shall expire not later than two years
following the publication of the temporary regulations. The
board may promulgate temporary regulations not subject to any
of the following:
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(i) Sections 201, 202, 203, 204 and 205 of the act
of July 31, 1968 (P.L.769, No.240), referred to as the
Commonwealth Documents Law.
(ii) Sections 204(b) and 301(10) of the act of
October 15, 1980 (P.L.950, No.164), known as the
Commonwealth Attorneys Act.
(iii) The act of June 25, 1982 (P.L.633, No.181),
known as the Regulatory Review Act.
(2) The board's authority to adopt temporary regulations
under paragraph (1) shall expire two years after the
effective date of this subsection. Regulations adopted after
this period shall be promulgated as provided by law.
(3) The board shall publish initial temporary
regulations to implement this chapter within 120 days of the
effective date of this subsection.
§ 13B06. Internet gaming permits.
(a) Requirement.--A licensed gaming entity must obtain an
Internet gaming permit in order to conduct Internet gaming.
(b) Eligible operators.--To apply for an Internet gaming
permit, a licensed gaming entity must hold in good standing:
(1) a Category 1 slot machine license under section 1302
(relating to Category 1 slot machine license) or a Category 2
slot machine license under section 1304 (relating to Category
2 slot machine license); and
(2) a table game operation certificate under section
13A17 (relating to table game operation certificate).
(c) Application.--An eligible operator may apply for only
one Internet gaming permit. The application must include all of
the following:
(1) Name and business address of the permit applicant,
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including an organizational chart which identifies the permit
applicant's relationship to the licensed gaming entity.
(2) Identification of the fictitious, brand or trade
name under which the applicant will conduct Internet gaming.
A fictitious, brand or trade name approved by the board must
be predominately the same name that is utilized by the
licensed gaming entity.
(3) Name, business address and job title of employees
who will be involved in the implementation and operation of
the Internet gaming system.
(4) Identification and detailed description of the
qualifications of each vendor, contractor and supplier that
will be involved in the operation and maintenance of Internet
gaming, including information describing the specific
operational responsibilities of a vendor, contractor or
supplier.
(5) A detailed description of the technical protocols,
parameters and other details relating to the Internet gaming
system proposed to be utilized.
(6) Identification and description of each Internet game
the permit applicant proposes to make available.
(7) A site plan identifying the secure area where all
Internet gaming operations will be located within the
facility and where emergency backup systems will be located.
(8) Identity and nature of professional services
provided by any person in connection with the authorization
or conduct of an Internet game conducted by a licensed gaming
entity.
(d) Review of application.--
(1) The board shall review the suitability of all of the
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following:
(i) The permit applicant.
(ii) The employees of the permit applicant who will
be involved in the operation and maintenance of Internet
gaming. The board may utilize a board suitability review
previously conducted by the board under this chapter.
(iii) Each software or system vendor or contractor
to be utilized by the permit applicant to operate and
maintain an Internet gaming system.
(iv) Each vendor utilized by the permit applicant to
provide equipment or services relating to the operation
and maintenance of an Internet game.
(v) Each employee of a vendor or contractor under
subparagraph (iii) or (iv) who will participate in the
operation and maintenance of the permit applicant's
Internet gaming system.
(2) The board's review of suitability shall include:
(i) the application of all requirements and
standards provided under sections 1309 (relating to slot
machine license application), 1310 (relating to slot
machine license application character requirements),
1311.1 (relating to licensing of principals), 1311.2
(relating to licensing of key employees), 1312 (relating
to divestiture of disqualifying applicant) and 1313
(relating to slot machine license application financial
fitness requirements) to system vendors; and
(ii) a determination of whether the person possesses
the requisite experience and skill to perform the
functions to be performed by the person.
(e) Issuance of order.--
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(1) Within 120 days of the filing of an application
under subsection (c), the board shall issue an order
approving or denying the application. The board may impose
reasonable conditions consistent with this chapter upon an
approval.
(2) Failure to meet the time limit under paragraph (1)
shall be deemed an approval of the application.
§ 13B07. Permitting fee.
If the board approves an application under section 13B06(e)
(relating to Internet gaming permits), the applicant must meet
the following conditions within 60 days of the approval:
(1) Pay a permit fee of $10,000,000.
(2) Reimburse the board for the cost of the review and
approval of the application.
§ 13B08. Issuance of permit.
(a) Initial.--Upon payment of the fee and costs under
section 13B07 (relating to permitting fee), the board shall
issue a permit to conduct Internet gaming at a licensed gaming
entity consistent with this chapter.
(b) Renewal.--An Internet gaming permit is valid for five
years and must be renewed by:
(1) compliance with sections 13B06 (relating to Internet
gaming permits) and 13B07; and
(2) payment of a renewal fee of $1,000,000.
§ 13B09. Eligibility and unauthorized Internet gaming.
A permittee must continue to be an eligible operator under
section 13B06(b)(1) (relating to Internet gaming permits) in
order to conduct Internet gaming. If the slot machine license or
table games certificate of a permittee is suspended, revoked or
otherwise not in good standing, the permittee shall cease
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operation of Internet gaming activities.
§ 13B10. Internet controls.
(a) Requirements.--Prior to being issued a permit under this
chapter, the permittee shall submit a description of the
following procedures and standards:
(1) Accounting controls, including standard forms and
terms to be used in the implementation of Internet gaming.
(2) Job descriptions and responsibilities for all
employees of the licensed gaming entity, including an
Internet gaming manager and an information technology
security officer, engaged in the maintenance and operation of
Internet gaming. Each position of employment created or
utilized to operate and maintain Internet gaming must be
located in this Commonwealth.
(3) Procedures relating to the following:
(i) The establishment of an Internet gaming account,
including authentication of the age and residence of the
account applicant.
(ii) Termination of an Internet gaming account by
the account holder and the return of remaining money in
the account to the account holder.
(iii) Termination of an inactive Internet gaming
account under section 13B14 (relating to Internet gaming
account management ).
(iv) Login and authentication by an Internet account
holder prior to participation in Internet gaming.
(v) Logging off when the account holder has finished
gaming, including an automatic logoff after a specified
period of inactivity.
(vi) Verification of the physical location of each
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Internet gaming account holder at the time the account
holder logs in or submits an Internet account wager
associated with an Internet game to ensure that all
wagers are made within this Commonwealth.
(vii) Crediting and debiting of an Internet gaming
account.
(viii) Redemption of chips, tokens or other cash
equivalents used in Internet gaming.
(ix) Payment of prizes.
(x) Recording of transactions pertaining to an
Internet gaming account.
(xi) Securing information and money in an Internet
gaming account.
(xii) Counting, including the transfer of money from
an Internet gaming account, security for counting and
recording of revenue.
(xiii) The segregation of Internet gaming money from
other money of the permittee.
(xiv) The security of an Internet gaming system
within the facility and the ability of the system to
detect and report behavior such as cheating, theft,
collusion, money laundering or other illegal activity.
(xv) Security of software, computers and other
equipment used to conduct Internet gaming to protect
against tampering by an individual inside or outside of
the facility.
(xvi) Auditing the functions and performance of
software, hardware and other gaming equipment used to
conduct Internet gaming to ensure performance is
consistent with certified parameters for testing gaming
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equipment under section 1320 (relating to slot machine
testing and certification standards).
(xvii) Appropriate responses to tampering with
software, computers or other equipment used to conduct
Internet gaming, including partial or complete suspension
of gaming and accounts.
(xviii) A methodology approved by the board to
ensure secure communication between a client's terminal
and the Internet gaming system.
(4) Other procedures and formulas deemed necessary by
the board.
(b) Approval.--Within 90 days of submission, the board shall
approve the standards and procedures under subsection (a) or
return the standards and procedures for modification. Failure of
the board to act within the time period specified under this
subsection shall be deemed an approval.
(c) Records.--A permittee shall maintain records pertaining
to its Internet gaming system in a manner and location within
this Commonwealth approved by the board.
§ 13B11. Location, license, computer and software.
(a) Servers.--Servers shall be maintained only within the
physical location of a permittee's facility. The specific
location must be inaccessible to the public and specifically
designed as a secure facility. The board may promulgate
regulations to maintain back-up servers and storage equipment at
a site in this Commonwealth, other than the facility, to be
utilized in the event of an emergency or other event.
(b) Board.--The board shall adopt and enforce procedures and
security standards, including the following:
(1) The handling and storage of software, computers and
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other electronic equipment used to conduct Internet wagering.
(2) Procedures for responding to tampering with
software, computers and other gaming equipment used to
conduct Internet gaming.
(3) Procedures for the partial or complete suspension of
Internet wagering when warranted.
(4) The use of closed circuit visual monitoring
according to board specification.
(5) Measures to ensure that individuals under 21 years
of age do not have access to Internet gaming.
(c) Permittee responsibilities.--A permittee must submit a
description of the permittee's system of internal procedures and
administrative and accounting controls for nongaming operations
regarding the Internet website on which wagering is accessed. A
description of any change to the permittee's system of internal
procedures and administrative and accounting controls must be
submitted to the board not later than five days after the change
is made.
§ 13B12. Platform or software provider.
(a) License.--The provider of an Internet gaming platform or
software shall be licensed by the board.
(b) Standards.--The board shall apply the standards provided
under section 1317.1(a), (b) and (c) (relating to manufacturer
licenses) to a person seeking a license under subsection (a).
§ 13B13. Internet gaming accounts.
(a) Eligibility.--
(1) An individual who is at least 21 years of age and
has established an Internet gaming account with a permittee
may place a wager associated with, or play an Internet game
offered or operated by, a permittee.
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(2) An Internet gaming account shall be in the name of
an individual. E xcept as provided under paragraph (4), an
individual must apply to establish an Internet gaming account
at the premises of a permittee's facility and must hold an
active players club membership.
(3) An Internet gaming account may not be in the name of
any beneficiary, custodian, joint trust, corporation,
partnership or other entity.
(4) The board shall promulgate regulations for an
individual who resides at least 20 linear miles from a
facility to allow the individual to become an account holder
using the Internet website of a licensed gaming entity.
(b) Application.--
(1) To establish an Internet gaming account, an
individual must submit an application on a form approved by
the board. The application must include all of the following:
(i) The account applicant's name.
(ii) The account applicant's age, including a form
of proof approved by the board.
(iii) The account applicant's principal residence,
including a form of proof approved by the board.
(iv) The account applicant's e-mail address.
(v) Authentication information approved by the
board.
(vi) A statement that a false statement made in
regard to an application may subject the account
applicant to prosecution.
(vii) The correct response to two or more challenge
questions.
(2) An account applicant who provides false or
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misleading information is subject to rejection of the
application or cancellation of the Internet gaming account by
the permittee.
(c) Authentication.--A permittee shall do one of the
following:
(1) Provide an account applicant with a password to
access the Internet gaming account.
(2) Establish a mechanism to authenticate the account
applicant as the account holder and allow the account holder
access to the Internet gaming account.
(d) Notice.--A permittee shall provide notice to account
applicants that all wagers must be made within this
Commonwealth.
(e) Acceptance or rejection.--
(1) A permittee may accept or reject an application
after receipt and review of the application and verification
of the age and residence of the account applicant.
(2) In reviewing an application, a permittee shall not
open an Internet gaming account with an applicant who is
excluded under section 1515 (relating to repeat offenders
excludable from licensed gaming facility) or 1516 (relating
to list of persons self excluded from gaming activities).
(f) Suspension or closure.--A permittee has the right to
suspend or close an Internet gaming account at its discretion.
(g) Official address.--The residence under subsection
(b) (1) (iii) shall be deemed the account holder's official
address for the purposes of mailing checks, account withdrawals,
notices and other materials.
(h) Nonassignable.--An Internet gaming account shall not be
assignable or transferable.
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§ 13B14. Internet gaming account management.
(a) Credits.--
(1) An account holder's deposits in the account holder's
Internet gaming account shall be submitted by the account
holder to the permittee and shall be in the form of one of
the following:
(i) Cash.
(ii) Check, money order, negotiable order of
withdrawal or wire or electronic transfer, payable and
remitted to the permittee.
(iii) Charge to the account holder's debit or credit
card upon the account holder's direct and personal
instruction given by telephone or other electronic means
to the permittee by the account holder if:
(A) the use of the card has been approved by the
permittee; and
(B) the permittee has verified the account
holder's physical presence in this Commonwealth.
(iv) Any other method approved by the board.
(2) When an account holder wins an Internet account
wager with a permittee, the following apply:
(i) When the Internet account wager is won, the
permittee shall pay to the account holder Internet chips,
tokens or other cash equivalents, in the appropriate
amount pursuant to the rules of that game for the
particular type of Internet account wager.
(ii) When the account holder logs off or cashes out
the Internet chips, tokens or other cash equivalents, the
permittee shall credit the account holder's Internet
gaming account in the amount of the Internet chips,
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tokens or other cash equivalents cashed in.
(3) A permittee may credit an Internet gaming account as
part of a promotional program.
(4) A permittee may refuse, for a valid reason, all or
part of an Internet account wager or deposit to an Internet
gaming account.
(5) Money deposited in an Internet gaming account shall
not bear interest to the account holder.
(b) Debits.--The following apply to debits:
(1) When an account holder accesses the account holder's
Internet gaming account and exchanges account money for
Internet chips, tokens or other cash equivalents, the
permittee shall debit the account holder's Internet gaming
account in the amount of money exchanged.
(2) Upon receipt by a permittee of an Internet gaming
account wager or an account purchase order, the permittee
shall debit the account holder's Internet chips, tokens or
other cash equivalents in the amount of the Internet gaming
account wager or account purchase order.
(3) A permittee may authorize a withdrawal from an
Internet gaming account if the account holder submits to the
permit holder:
(i) proper identification;
(ii) the correct authentication information for
access to the Internet gaming account; and
(iii) a properly completed and executed withdrawal
on a form approved by the board.
(c) Withdrawal.--An account holder may make a withdrawal
from the account holder's Internet gaming account if there is
sufficient money in the Internet gaming account to cover the
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withdrawal in accordance with the following:
(1) The account holder must submit a properly completed
and executed withdrawal form.
(2) Within three business days of receipt of the form
under paragraph (1), the permittee shall pay the appropriate
amount by:
(i) sending the account holder a check payable at
the official address under section 13B13(g) (relating to
Internet gaming accounts); or
(ii) transmitting payment to the account holder
electronically as approved by the board.
(d) Internet account wagers.--
(1) The account holder shall place the Internet account
wager directly with the permittee.
(2) The account holder shall provide the permittee with
the correct authentication information for access to the
Internet gaming account.
(3) The permittee may not accept an Internet account
wager in an amount in excess of money on deposit in the
account, including amounts credited to the account.
(e) Login.--
(1) Each permittee shall establish a login procedure for
each account holder to access the account holder's Internet
gaming account.
(2) A permittee may not allow an account holder to
participate in an Internet game unless all of the following
apply:
(i) The account holder logs in.
(ii) The account holder provides proper
authentication information to access the account holder's
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Internet gaming account.
(iii) The permittee verifies that the account holder
is, at the time of participation, physically present in
this Commonwealth.
(f) Reconciliation.--The following apply to Internet gaming
accounts:
(1) Upon logging in, the account holder may exchange the
amount of money in the Internet gaming account for Internet
chips, tokens or other cash equivalents to be used for
Internet gaming.
(2) Upon logging off, the current amount of the account
holder's Internet chips, tokens or other cash equivalents
shall be credited to the Internet gaming account.
(g) Display.--A permittee shall provide to each account
holder who is logged in access to a display of all of the
following information:
(1) The current amount of money in the account holder's
Internet gaming account, including the current amount of the
account holder's Internet chips, tokens or other cash
equivalents.
(2) The complete text of the rules regarding Internet
games and the conduct of Internet gaming.
(3) Any fee charged by the permittee to the account
holder in connection with the play of an Internet game.
(h) Termination of inactive accounts.--
(1) A permittee may terminate an Internet gaming account
which is inactive for a period of not less than one year and
under conditions as provided by the board.
(2) Before terminating an Internet gaming account, a
permittee must attempt to contact the account holder by mail
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and electronically.
(3) Money remaining in an Internet gaming account
terminated under this subsection shall be transmitted to the
Department of Revenue for deposit in the General Fund.
§ 13B15. Prohibited acts.
(a) Unauthorized gaming.--
(1) A person that does not possess a valid Internet
gaming permit may not do any of the following:
(i) Offer an Internet game for play in this
Commonwealth.
(ii) Accept a wager associated with an Internet game
from any person.
(2) A person who knowingly offers or allows to be
offered an Internet wagering game that has been tampered with
in a way that affects the odds or the payout of a game or
disables the game from operating in accordance with
regulations of the board commits a misdemeanor of the first
degree.
(3) A person who knowingly tampers with any Internet
game or equipment or disables a game from operating commits a
misdemeanor of the first degree.
(4) A person is prohibited from placing a wager on an
Internet game except as provided in this chapter.
(5) Except as provided in paragraphs (2) and (3), a
person that violates this subsection commits a misdemeanor of
the third degree. A violation of this subsection may be
enforced under section 1517(c), (c.1) and (d) (relating to
investigations and enforcement).
(b) Office of Enforcement Counsel.--The Office of
Enforcement Counsel under section 1517(a.2) may bring an action
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to enforce subsection (a). Upon the finding of a violation of
subsection (a)(1), the board may impose an administrative
penalty of not less than $50,000 for each violation. Each day on
which an unauthorized Internet game is offered by a person and
each unauthorized wager accepted by a person shall constitute a
separate violation. In addition to the administrative penalty
provided under this subsection, the board may order the
disgorgement of all funds received by a person that has engaged
in unauthorized Internet gaming as provided under subsection (a)
(1).
§ 13B16. Internet gaming taxes.
(a) Imposition.--
(1) Each permittee shall report on a weekly basis to the
department its daily gross facility Internet gaming revenue
for the previous week on a form prescribed by the department.
(2) Each permittee shall pay to the department a tax on
daily gross facility gaming revenue of 54% of its gross
Internet gaming revenue.
(b) Payment.--A permittee shall pay the tax imposed under
subsection (a) to the department on a weekly basis. The
department shall establish procedures that enable a permittee to
withhold, at the time of payment, the amounts excluded from the
calculation of gross Internet gaming revenue.
(c) Trust.--
(1) Money owed to the department under this section
shall be held in trust for the Commonwealth by the permittee
until payment to the department.
(2) A permittee shall deposit money under paragraph (1)
into a separate bank account until it is remitted to the
department.
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(d) Disposition.--Money collected under this section shall
be deposited into the General Fund.
§ 13B17. Wagers in this Commonwealth.
A wager placed on an Internet game operated by a permittee
shall be deemed to take place at the physical location of the
account holder.
§ 13B18. Expanded compulsive and problem gambling programs.
(a) Development.--
(1) The board and the Department of Health shall
cooperate to develop expanded programs under section 1509
(relating to compulsive and problem gambling program) to
address compulsive and problem gambling issues related to
Internet gaming.
(2) A permittee shall address compulsive and problem
gambling issues related to Internet gaming in amending its
required plan under section 1509(a.2)(1) on file with the
board.
(b) Message.--Each permittee shall permanently and
continuously display the following message to individuals at the
time of logging on to an Internet gaming account:
If you or someone you know has a gambling problem and
wants help, call 1-800-GAMBLER.
§ 13B19. Report.
The board shall submit an annual report to the General
Assembly on the impact of Internet gaming on the casino industry
in this Commonwealth.
§ 13B20. Other law.
(a) State.--The following provisions are deemed applicable
to Internet games under this chapter:
(1) The obligation to include information on Internet
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gaming in the board's annual report under section 1211(a.1)
(relating to reports of board).
(2) Requirements under section 1317.1 (relating to
manufacturer licenses).
(3) Requirements under section 1317.2 (relating to
gaming service provider).
(b) Applicability of Federal law.-- Internet gaming in this
Commonwealth is subject to applicable Federal law.
Section 5. This act shall take effect in 60 days.
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