THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY SOLOBAY, CALTAGIRONE, BELFANTI, BEYER, BRENNAN, BUXTON, CARROLL, DALEY, FABRIZIO, FRANKEL, GALLOWAY, GEORGE, GRELL, GRUCELA, HALUSKA, HARKINS, HORNAMAN, KOTIK, KULA, LONGIETTI, MAHONEY, MANN, MELIO, PALLONE, PETRARCA, ROCK, SIPTROTH, SWANGER, VULAKOVICH, WHITE, YOUNGBLOOD, D. COSTA, GIBBONS, KORTZ, GEIST, GOODMAN, KAUFFMAN, DeLUCA, SAINATO, MARSICO AND M. KELLER, MARCH 4, 2009

AS REPORTED FROM COMMITTEE ON GAMING OVERSIGHT, HOUSE OF REPRESENTATIVES, AS AMENDED, APRIL 20, 2009   

AN ACT

Amending the act of December 19, 1988 (P.L.1262, No.156),

entitled, as amended, "An act providing for the licensing of

eligible organizations to conduct games of chance, for the

licensing of persons to distribute games of chance, for the

registration of manufacturers of games of chance, and for

suspensions and revocations of licenses and permits;

requiring records; providing for local referendum by

electorate; and prescribing penalties," further providing for

definitions, for permitted games of chance, for prize limits,

for insured games, for limited sales, for recordkeeping, for

eligible organizations' use of locations for conducting small

games of chance, for separate individual prize limitations, 

<--

for enforcement and for advertising.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The definitions of "daily drawing" and "games of

chance" in section 3 of the act of December 19, 1988 (P.L.1262,

No.156), known as the Local Option Small Games of Chance Act,

amended December 19, 1990 (P.L.812, No.195) and October 18, 2000

(P.L.602, No.79), are amended and the section is amended by

adding definitions to read:

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Daily drawing."  A game in which a bona fide member selects

or is assigned a number for a chance at a prize with the winner

determined by [a] random drawing to take place on the eligible

organization's premises [during the same operating day]. The

term includes games commonly known as "member sign-in lotteries"

and "half-and-half lotteries." Nothing in this act shall be

construed to prohibit the carrying over of a jackpot where the

winning number has not been entered in the game on a particular

operating day. Daily drawing winners may be determined with the

aid of a passive selection device or reference to drawings

conducted by the department pursuant to the act of August 26,

1971 (P.L.351, No.91), known as the State Lottery Law. Daily

drawing chances may not be sold for an amount in excess of $1,

and no more than one chance per individual may be sold [to an

individual during the same operating day.] per drawing. Nothing

in this definition shall restrict an eligible organization from

conducting more than one drawing per day.

* * *

"Games of chance."  Punchboards, daily drawings, weekly

drawings, monthly drawings, raffles, vertical wheel games and

<--

pull-tabs, as defined in this act, provided that, except for

<--

vertical wheel games, no such game shall be played by or with

the assistance of any mechanical or electrical devices or media

other than a dispensing machine or passive selection device and

further provided that the particular chance taken by any person

in any such game shall not be made contingent upon any other

occurrence or the winning of any other contest, but shall be

determined solely at the discretion of the purchaser. This

definition shall not be construed to authorize any other form of

gambling currently prohibited under any provision of Title 18 of

the Pennsylvania Consolidated Statutes (relating to crimes and

offenses). Nothing in this act shall be construed to authorize

games commonly known as "slot machines" or "video poker."

"General operating expenses."  The following operating

expenses associated with the real property owned or leased by an

eligible organization and used for public interest purposes or

for conducting small games of chance:

(1)  Real property taxes.

(2)  Utilities.

(3)  Heating and air conditioning.

(4)  Water and sewer.

(5)  Property insurance.

(6)  Liability insurance.

(7)  Mortgage payments.

(8)  Interior and exterior repairs, including parking lot

repairs.

(9)  New facility construction.

(10)  Any other expense as provided in regulations

promulgated by the department.

The term shall not include wages, alcohol purchases or payment

of any fine levied against the eligible organization.

* * *

"Monthly drawing."  A game in which a bona fide member

selects or receives a number or numbers for chance at a prize

with the winner determined by a random drawing to take place on

the eligible organization's premises during any operating month.

Nothing in this act shall be construed to prohibit the carrying

over of a jackpot where the winning number has not been entered

in the game in a particular month. Monthly drawing winners may

be determined with the aid of a passive selection device or

reference to drawings conducted by the Department of Revenue

pursuant to the act of August 26, 1971 (P.L.351, No.91), known

as the State Lottery Law. Monthly drawing chances may not be

sold for an amount in excess of $1.

* * *

"Vertical wheel game."  A game in which a participant places

<--

a coin or chip on a color, number or word or purchases a ticket

containing a color, number or word and watches a spinning

vertical wheel until the pointer of the wheel rests on a section

of the wheel designating a winner.

* * *

Section 2.  Section 4 of the act, amended December 19, 1990

(P.L.812, No.195), is amended to read:

Section 4.  Games of chance permitted.

Every eligible organization to which a license has been

issued under the provisions of this act may conduct games of

chance for the purpose of raising funds for general operating

expenses and for public interest purposes. [All proceeds of

games of chance shall be used exclusively for public interest

purposes or for the purchase of games of chance as permitted by

this act.] Proceeds of games of chance shall be used as follows:

(1)  Fifty-five percent of proceeds shall be used for

public interest purposes.

(2)  Forty percent of proceeds shall be used for general

operating expenses.

(3)  Five percent of proceeds shall be remitted to the

department headquarters of the eligible organization.

Section 3.  Section 5 of the act, amended December 19, 1990

(P.L.812, No.195) and October 18, 2000 (P.L.602, No.79), is

amended to read:

Section 5.  Prize limits.

(a)  Individual prize limit.--[The] Except as provided for in

subsection (j), the maximum cash value which may be awarded for

any single chance shall be [$500] $1,000.

(b)  Weekly limit.--No more than [$5,000] $25,000 in cash or

merchandise shall be awarded by any eligible organization in any

seven-day period. Payouts of less than $26 shall not be counted

toward the weekly limit.

(c)  Limit on raffles.--No more than $5,000 in cash or

merchandise shall be awarded in raffles in any calendar month.

(d)  Exception.--An eligible organization may conduct a

raffle and award a prize or prizes valued in excess of [$500] 

$1,000 each only under the following conditions:

(1)  The licensing authority has issued a special permit

for the raffle under section 11.

(2)  Eligible organizations shall be eligible to receive

no more than [two] three special permits in any licensed year

[except that volunteer fire, ambulance and rescue

organizations shall be eligible to receive no more than three

special permits in any licensed year].

(3)  Only one raffle may be conducted under each special

permit.

(4)  The total cash value of all prizes shall be no more

than $100,000 per calendar year.

(e)  Limit on daily drawings.--Daily drawings shall be

governed by the prize [limitations] limitation contained in

[subsections (a) and (b)] subsection (a). [An eligible

organization shall not conduct daily drawings during a period

when a weekly drawing is taking place.]

(f)  Exception.--The prize limitation contained in

[subsections (a) and (b)] subsection (a) may be exceeded by a

daily drawing under the following circumstances: a daily drawing

may award a prize where the cash value is in excess of [$500] 

$1,000 if such prize is the result of a carryover of a drawing

or drawings which resulted from the winning number in such

drawing or drawings not being among the eligible entrants in

such drawings. Nothing contained herein shall authorize the

prize [limitations] limitation as contained in [subsections (a)

and (b)] subsection (a) to be exceeded as a result of a failure

to conduct a drawing on an operating day during which chances

were sold for a daily drawing or for a daily drawing for which

chances were sold in excess of $1 or for which more than one

chance was sold to an eligible participant.

(g)  Daily drawing and weekly drawing exception.--When a

daily drawing or weekly drawing is set up or conducted in such a

manner as to pay out or award 100% of the gross revenues

generated from such drawing, the limitations contained in

subsection (b) shall not apply.

(h)  Limit on weekly drawings.--Weekly drawings shall be

governed by the prize limitations contained in subsection (b).

The prize limitation contained in subsection (b) may be exceeded

by a weekly drawing under the following circumstances: a weekly

drawing may award a prize where the cash value is in excess of

[$5,000] $25,000 if such prize is the result of a carryover of a

drawing or drawings which resulted from the winning number or

numbers in such drawing or drawings not being among the eligible

entrants in such drawings. Nothing contained in this act shall

authorize the prize limitations as contained in subsection (b)

to be exceeded as a result of a failure to conduct a drawing for

a week during which chances were sold for a weekly drawing or

for a weekly drawing for which chances were sold in excess of

$1. [An eligible organization shall not conduct weekly drawings

during a period when a daily drawing is taking place.]

(i)  Limit on monthly drawings.--No more than $50,000 in cash

or merchandise may be awarded in any calendar month except under

the following circumstances: a monthly drawing may award a prize

where the cash value is in excess of $50,000 if the prize is the

result of a carryover of a drawing or drawings that resulted

from the winning number or numbers in the drawing or drawings

not being among the eligible entrants in the drawing. Nothing

contained in this act shall authorize the prize limitations to

be exceeded as a result of a failure to conduct a drawing for a

month during which chances were sold for a monthly drawing or

for a monthly drawing for which chances were sold in excess of

$1.

(j)  Progressive games.--Progressive games shall be permitted

with a maximum cash value of $5,000. Contributions to the pot

shall be counted against the limit for the week in which the

contribution is made except that when the limit is reached the

amount awarded shall be counted toward the limit only to the

extent it was not previously counted toward a prior week's

limit. For the purpose of this section, progressive games are

those in which a winning ticket awards the ticket holder an

additional chance at another game or games.

(k)  Emergency services fundraiser.--Notwithstanding any

other provision of this section, an eligible organization that

performs emergency services shall be permitted to conduct one

drawing per year with an award of $50,000 for the purpose of

raising funds to purchase emergency services equipment.

Section 4.  The act is amended by adding a section to read:

Section 5.1.  Insured games.

Notwithstanding any provision of this act to the contrary, an

eligible organization may conduct small games of chance using

insured games. Insured games sold by a licensed distributor

shall be backed by a valid insurance contract issued by an

insurance company licensed to do business in this Commonwealth.

Proof of the insurance contract must be provided to the

department prior to the game being sold. The license of a

distributor and an insurance company issuing a contract for an

insured game may be suspended or revoked for failure to pay an

award. For the purposes of this section, an insured game is a

game in which the distributor or other licensed third party

guarantees making the payment on a win of a jackpot.

Section 5.  Section 6 of the act, amended December 19, 1990

(P.L.812, No.195), is amended to read:

Section 6.  Sales limited.

No person shall sell, offer for sale or furnish games of

chance for use within this Commonwealth except to an eligible

organization or distributor licensed under this act. No game of

chance, other than a raffle, sold, offered for sale or furnished

for use within this Commonwealth shall contain, permit, depict

or designate a prize having a cash value in excess of [$500] 

$1,000.

Section 6.  Section 7 of the act is amended by adding a

subsection to read:

Section 7.  Distributor licenses.

* * *

(j)  Tax surcharge.--A licensed distributor shall pay a 1% 

surcharge on the amount of all games sales, to be paid directly

to the General Fund.

Section 7.  Section 9(b) of the act, amended December 19,

1990 (P.L.812, No.195), is amended to read:

Section 9.  Regulations of department.

* * *

(b)  Limitation on recordkeeping requirements.--This section

shall not be construed to authorize the department to promulgate

regulations providing for recordkeeping requirements for

eligible organizations which require unreasonable or unnecessary

information or a repetitious listing of information. The

department shall strive to keep such recordkeeping requirements

from being an undue hardship or burden on eligible

organizations. Under no circumstances shall the department

require the retention of records for a period in excess of [two

years] one year. Each eligible organization shall report to the

department prizes awarded as required by section 335 of the act

of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

1971.

Section 8.  Section 10 of the act, amended December 19, 1990

(P.L.812, No.195) and October 18, 2000 (P.L.602, No.79), is

amended to read:

Section 10.  Licensing of eligible organizations to conduct

games of chance.

(a)  License required.--No eligible organization shall

conduct or operate any games of chance unless such eligible

organization has obtained and maintains a valid license issued

pursuant to this section. Auxiliary groups within eligible

organizations shall be eligible to conduct small games of chance

using the license issued to the eligible organization provided

that the auxiliary group or groups are listed on the application

and license of the eligible organization. No additional

licensing fee shall be charged for an auxiliary group's

eligibility under this act. Auxiliary groups shall not include

branches, lodges or chapters of a Statewide organization.

(b)  Issuance and fees.--The licensing authority shall

license, upon application, within 30 days any eligible

organization meeting the requirements for licensure contained in

this act to conduct and operate games of chance at such

locations within the county or in such manner as stated on the

application as limited by subsection (b.1). The license fee to

be charged to each eligible organization shall be [$100] $300,

except for limited occasion licenses which shall be [$10] $30.

Licenses shall be renewable [annually] on a biennial basis upon

<--

the anniversary of the date of issue.

(b.1)  Location of small games of chance.--Where there exists

a location or premises which is the normal business or operating

site of the eligible organization and is owned or leased by that

eligible organization to conduct its normal business, that site

shall be the licensed premises for small games of chance

conducted by the eligible organization. If that location

consists of more than one building and the eligible organization

wishes to conduct its games in a different building at that

location from the one that is listed on its application and

license, the eligible organization must notify, in writing, the

district attorney and the licensing authority of the change in

building site and the dates and times that will be affected.

When an eligible organization does not own or lease a specific

location to conduct its normal business, that eligible

organization may use another eligible organization's premises to

conduct its games or may make such other arrangements that are

consistent with this act, including, but not limited to, leasing

a premise under a written agreement for a rental which is not

determined by either the amount of receipts realized from the

playing of games of chance nor the number of people attending

except that an eligible organization may lease a facility for a

banquet where a per head charge is applied in connection with

the serving of a meal. When such eligible organization changes

the site of its games from that which is listed on its

application and license, the eligible organization must notify,

in writing, the district attorney and licensing authority of the

change in their games' site and dates and times that will be

affected. More than one organization may use the same location,

provided that each organization has its own license and that the

prize limitations of this act shall apply separately to each

organization.

(b.2)  Off-premises games of chance.--Notwithstanding any

other provisions of this section, an eligible organization may

conduct small games of chance at a location off its premises

when such games are part of an annual carnival, fair, picnic or

banquet held or participated in by that eligible organization on

a historical basis. The eligible organization must notify, in

writing, the district attorney and licensing authority of the

location, date and times of such events where it will be

conducting small games of chance.

(b.3)  Limited occasion licenses.--Eligible organizations

which do not own their own premises or which do not lease a

specific location to conduct their normal business may apply for

a limited occasion license to conduct small games of chance on

not more than three occasions covering a total of seven days

during a licensed year. A limited occasion license entitles

eligible organizations holding such a license to conduct no more

than two raffles during a licensed year where prizes may not

exceed the established limits for regular monthly raffles.

Holders of limited occasion licenses may not apply or be granted

any other license or special permit under this act. No holder of

a regular license or special permit under this act shall apply

or be granted a limited occasion license.

(b.4)  Gambling facility prohibited.--It shall be unlawful

for a person, corporation, association, partnership or other

business entity to offer for rent or offer for use a building or

facility to be used exclusively for the conducting of small

games of chance. It shall also be unlawful for any eligible

organization to lease under any terms a facility or building

which is used exclusively for the conducting of small games of

chance.

(c)  Display.--Licenses issued pursuant to this section shall

be publicly displayed at the site of the small games of chance.

(d)  Operation.--Each licensed eligible organization shall

comply with the following restrictions and rules governing the

operation of games of chance:

(1)  No person under 18 years of age shall be permitted

to operate or play games of chance.

(2)  No eligible organization shall permit any person who

has been convicted of a felony in a Federal or State court

within the past five years or has been convicted in a Federal

or State court within the past ten years of a violation of

the act of July 10, 1981 (P.L.214, No.67), known as the Bingo

Law, or of this act to manage, set up, supervise or

participate in the operation of games of chance.

(3)  No eligible organization shall pay any compensation

to any person for conducting any games of chance. Games of

chance may only be conducted by managers, officers,

directors, bar personnel and bona fide members of the

eligible organization.

(4)  Games shall be conducted only on the licensed

premises or as otherwise provided by this act.

(5)  The eligible organization shall not lease such

premises under either an oral or a written agreement for a

rental which is determined by either the amount of receipts

realized from the playing of games of chance or the number of

people attending, except that an eligible organization may

lease a facility for a banquet where a per head charge is

applied in connection with the serving of a meal. An eligible

organization shall not lease such premises from any person

who has been convicted of a violation of this act within the

past ten years.

(6)  Games, other than raffles, daily drawings [and], 

weekly drawings and monthly drawings, shall be purchased only

from manufacturers and distributors approved by the

department.

(7)  No licensed eligible organization shall permit its

premises to be used for small games of chance by another

licensed eligible organization at the same time that it is

conducting small games of chance on the premises. When a

licensed eligible organization is permitting another licensed

eligible organization to use its premises for purposes of

small games of chance, it must cease the operation of its own

small games of chance during the period that the other

licensed eligible organization is conducting its games on the

premises.

(8)  Raffle tickets may be sold off the licensed premise

in any municipality in this Commonwealth which has adopted

the provisions of this act by an affirmative vote in a

municipal referendum. A licensed eligible organization which

plans to sell raffle tickets in a municipality located in a

county other than the county in which the eligible

organization is licensed must notify that county's district

attorney and licensing authority as to the location and the

dates that the eligible organization plans to sell raffle

tickets.

(9)  The eligible organization shall keep a bank account

to hold the proceeds of small games of chance, which shall be

separate from all other funds belonging to the eligible

organization. Account records shall show all expenditures and

income, and these records shall be retained by the eligible

organization for no less than one year in a fire-proof

container.

(e)  Application for license.--Each eligible organization

shall apply to the licensing authority for a license on a form

to be prescribed by the Secretary of Revenue. The form shall

contain an affidavit to be affirmed by the executive officer or

secretary of the eligible organization stating that:

(1)  No person under 18 years of age will be permitted by

the eligible organization to operate or play games of chance.

(2)  The facility in which the games of chance are to be

played has adequate means of ingress and egress and adequate

sanitary facilities available in the area.

(3)  The eligible organization is not leasing such

premises from the owner thereof under an oral agreement, nor

is it leasing such premises from the owner thereof under a

written agreement at a rental which is determined by the

amount of receipts realized from the playing of games of

chance or by the number of people attending, except that an

eligible organization may lease a facility for a banquet

where a per head charge is applied in connection with the

serving of a meal.

(4)  The eligible organization has a separate bank

account to hold all proceeds of small games of chance.

(e.1)  Supplemental materials to accompany application.--An

annual financial report limited to the operation of games of

chance detailing gross profit, allowable expenses, rent, staff

per diem, cost of supplies, net profit and contributions to

charitable causes shall be filed with the licensing authority

and submitted with the application. This report shall be filed

with the application for license and shall be filed by the

<--

midterm anniversary date of the license in nonapplication years.

This report shall be prepared on a one-page form to be designed

by the department. The report shall contain information for the

12-month period immediately preceding a date 60 days prior to

the filing of the report. Failure to file the report by the

<--

midterm anniversary date of the license shall result in the

automatic suspension of the license until the county treasurer

certifies the report has been filed in compliance with this act.

(f)  List of licensees.--The licensing authority, on a

semiannual basis, shall send a copy of all licensees to the

Department of Revenue.

(g)  List of municipalities.--The licensing authority shall

include with any license or renewal issued to an eligible

organization, an up-to-date listing of those municipalities

within the licensing county which have approved the referendum

question on small games of chance.

(h)  Background checks.--Each application shall include

criminal history records obtained from the Pennsylvania State

Police for the executive officer or secretary of the eligible

organization making the application and all other responsible

persons listed on the application.

Section 8.1.  Section 13 of the act is amended to read:

<--

Section 13.  Enforcement.

(a)  District attorney.--The district attorney shall

investigate alleged violations of this act. If the district

attorney finds probable cause to believe that a violation has

occurred, he may file a complaint against the alleged violator

in the court of common pleas of said county, except in counties

of the first class where the complaint may be filed in the

municipal court. In addition, the district attorney shall

prosecute said complaint in the manner provided by law.

(b)  Other law enforcement officials.--Nothing in this act

shall be interpreted to restrict the power of State, county or

local law enforcement officials to conduct investigations [and

enforce the provisions] of this act[.] and provide the results

of those investigations to the district attorney for enforcement

pursuant to subsection (a).

Section 9.  Section 15 of the act, amended December 19, 1990

(P.L.812, No.195), is amended to read:

Section 15.  Advertising.

It shall not be unlawful for any eligible organization or

person to advertise the prizes or their dollar value to be

awarded in games of chance, provided that [prizes may be

identified on raffle tickets. Notwithstanding the prohibition of

advertising contained within this section, an eligible

organization may advertise prizes and values thereof in periodic

publications which are limited in their circulation to members

of the eligible organization.] such advertisements shall contain

the date, time, location, whether cash or merchandise prizes

will be awarded and the name of the eligible organization

licensed to conduct games of chance and the name of the person

who conducts the games of chance.

Section 10.  The amendment or addition of section 10(b),

(e.1) and (h) of the act shall apply to applications filed more

than two years after the effective date of this section.

Section 11.  This act shall take effect as follows:

(1)  The following provisions shall take effect

immediately:

(i)  The amendment or addition of section 10(b),

(e.1) and (h) of the act.

(ii)  Section 10 of this act.

(iii)  This section.

(2)  The remainder of this act shall take effect in 60

days.