AN ACT

 

1Amending the act of December 19, 1988 (P.L.1262, No.156),
2entitled, as amended, "An act providing for the licensing of
3eligible organizations to conduct games of chance, for the
4licensing of persons to distribute games of chance, for the
5registration of manufacturers of games of chance, and for
6suspensions and revocations of licenses and permits;
7requiring records; providing for local referendum by
8electorate; and prescribing penalties," further providing for
<-9definitions, for major league sports drawing and for 
10licensing of eligible organizations to conduct games of 
11chance <-definition applicability, for the definitions of 
12"major league sports drawing" and "major league sports team," 
13for distributor licenses, for major league sports drawing, 
14for club licensee, for distribution of proceeds, for records 
15and for raffle tickets; providing for background checks; 
16further providing for enforcement; providing for tavern 
17gaming and for a transfer; and making an editorial change.

18The General Assembly of the Commonwealth of Pennsylvania
19hereby enacts as follows:

<-20Section 1. The definitions of "affiliated nonprofit
21organization," "major league sports drawing" and "major league
22sports team" in section 103 of act of December 19, 1988
23(P.L.1262, No.156), known as the Local Option Small Games of

1Chance Act, added October 24, 2012 (P.L.1462, No.184), are
2amended and the section is amended by adding definitions to
3read:

4Section 103. Definitions.

5The following words and phrases when used in this act shall
6have the meanings given to them in this section unless the
7context clearly indicates otherwise:

8* * *

9"Affiliated nonprofit organization." An organization
10established by or affiliated with a Major League Baseball,
11National Football League, National Hockey League, National
12Basketball Association or Major League Soccer team, or its
13affiliate, for the purpose of raising funds for charity, which
14is qualified for an exemption under section 501(c)(3) of the
15Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
16101(c)(3).

17* * *

18"Home game." A game of a major league sports team or its
19affiliate, including, but not limited to, a league-sponsored
20game, exhibition, regular season game, All-Star game, play-off
21game, and championship game, held at the home facility of the
22major league sports team or its affiliate.

23["Major league sports drawing." A 50/50 drawing conducted by 
24an affiliated nonprofit organization at a home game of a major 
25league sports team in which 50% of the money collected from 
26ticket sales from the drawing are offered as the prize and the 
27remaining 50% is retained by the affiliated nonprofit 
28organization sponsoring the drawing for distribution to 
29charitable organizations.]

30"Major league sports team." A professional team that is a

1member of Major League Baseball, the National Football League,
2the National Hockey League, the National Basketball Association
3or Major League Soccer.

4* * *

5"Professional sports drawing." A 50/50 drawing conducted by
6an affiliated nonprofit organization at a home game in which 50%
7of the money collected from ticket sales from the drawing is
8offered as the prize and the remaining 50% is retained by the
9affiliated nonprofit organization sponsoring the drawing for
10distribution to charitable organizations.

11* * *

12Section 2. Section 304.1 of the act, added October 24, 2012
13(P.L.1462, No.184), is amended to read:

14Section 304.1. [Major league] Professional sports drawing.

15(a) General rule.--A person may purchase one or more [major
16league] professional sports drawing tickets at a home game, and
17each ticket purchased shall represent one entry in the drawing
18for a winner. A single ticket shall be randomly chosen as the
19winner after a certain number of tickets are sold or a specified
20time period expires as designated by the affiliated nonprofit
21organization.

22(b) Frequency.--An affiliated nonprofit organization may
23conduct no more than one [major league] professional sports
24drawing per home game.

25(b.1) Sales restricted.--Tickets for a [major league]
26professional sports drawing may not be sold in any seating area
27designated as a family section.

28(c) Distribution.--The prize amount of a [major league]
29professional sports drawing shall be 50% of the total amount
30collected from the sale of [major league] professional sports

1drawing tickets. The other 50% of the total amount collected
2from the sale of [major league] professional sports drawing
3tickets shall be donated within seven days from the date of the
4drawing by the affiliated nonprofit organization conducting the
5[major league] professional sports drawing to a designated
6charitable organization for which the drawing was conducted.

7(d) Designated charitable organization.--The affiliated
8nonprofit organization conducting the [major league]
9professional sports drawing shall disclose to all ticket
10purchasers the designated charitable organization for which the
11[major league] professional sports drawing is being conducted.

12(e) Eligibility.--In order to receive proceeds from a [major
13league] professional sports drawing, a charitable organization
14must be in existence and fulfilling its purposes for at least
15two years prior to the drawing and shall be eligible for
16exemption under section 501(c)(3) of the Internal Revenue Code
17of 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3)). A political
18subdivision shall not qualify as a charitable organization under
19this section.

20(f) Unclaimed prizes.--Any [major league baseball]
21professional sports drawing prize remaining unclaimed by a
22winner at the end of the major league sports team's, or its
23affiliate's, season shall be donated within 30 days from the end
24of the season by the affiliated nonprofit organization to the
25designated charitable organization for which the [major league]
26professional sports drawing was conducted.

27(g) Applicability.--The limitations under sections 302,
28303(b), 308 and 704 shall not apply to a [major league]
29professional sports drawing.

30Section 3. Section 307(b.1)(5) of the act, amended October

124, 2012 (P.L.1462, No.184), is amended to read:

2Section 307. Licensing of eligible organizations to conduct
3games of chance.

4* * *

5(b.1) Location of games of chance.--

6* * *

7(5) For purposes of [major league] professional sports
8drawings, the facility at which a major league sports team,
9or its affiliate, conducts its games shall constitute a
10premises for purposes of this act.

11* * *

12Section 4. This act shall take effect in 60 days.

<-13Section 1. The introductory paragraph and the definitions of
14"major league sports drawing" and "major league sports team" in
15section 103 of the act of December 19, 1988 (P.L.1262, No.156),
16known as the Local Option Small Games of Chance Act, amended
17October 24, 2012 (P.L.1462, No.184), are amended to read:

18Section 103. Definitions.

19The following words and phrases when used in this act shall, 
20except as provided under section 901, have the meanings given to
21them in this section unless the context clearly indicates
22otherwise:

23* * *

24"Major league sports drawing." [A 50/50 drawing conducted by
25an affiliated nonprofit organization at a home game of a major
26league sports team in which 50% of the money collected from
27ticket sales from the drawing are offered as the prize and the
28remaining 50% is retained by the affiliated nonprofit
29organization sponsoring the drawing for distribution to
30charitable organizations.] A 50/50 drawing conducted by a
 

1nonprofit affiliate of a major league sports team in accordance 
2with section 304.1.

3"Major league sports team." [A professional team that is a 
4member of Major League Baseball, the National Hockey League, the 
5National Basketball Association or Major League Soccer.] A 
6sports team that is any of the following:

7(1) A member of Major League Baseball, the National
8Hockey League, the National Basketball Association, the
9National Football League or Major League Soccer.

10(2) A professional sports team affiliated with a team
11under paragraph (1).

12(3) Any other professional sports team that has a sports
13facility or an agreement with a sports facility to conduct
14home games at the facility.

15* * *

16Section 1.1. Section 304(a) of the act, amended February 2,
172012 (P.L.7, No.2), is amended to read:

18Section 304. Distributor licenses.

19(a) License required.--No person shall sell, offer for sale
20or furnish games of chance to eligible organizations licensed
21under this chapter or a licensee under chapter 9 unless such
22person shall have obtained a distributor license as provided in
23this section.

24* * *

25Section 1.2. Section 304.1(c) and (f) of the act, added 
26October 24, 2012 (P.L.1462, No.184), are amended and the section 
27is amended by adding subsections to read:

28Section 304.1. Major league sports drawing.

29* * *

30(c) Distribution.--The prize amount of a major league sports

1drawing shall be 50% of the total amount collected from the sale
2of major league sports drawing tickets. The other 50% of the
3total amount collected from the sale of major league sports
4drawing tickets shall be donated within seven days from the date
5of the drawing by the affiliated nonprofit organization
6conducting the major league sports drawing to [a] one or more
7designated charitable [organization] organizations for which the
8drawing was conducted.

9(c.1) Use of funds.--

10(1) The affiliated nonprofit organization may utilize
11nonprize money collected for the following:

12(i) To employ or provide payment to individuals 18
13years of age or older to sell major league sports drawing
14tickets at a professional sporting event.

15(ii) For administrative expenses directly related to
16the conduct of the drawing under this section.

17(2) Authorized expenses under paragraph (1)(ii) may not
18exceed 2% of the total amount collected from the sale of
19major league sports drawing tickets.

20* * *

21(f) Unclaimed prizes.--Any major league [baseball] sports
22drawing prize remaining unclaimed by a winner at the end of the
23major league sports team's season shall be donated within 30
24days from the end of the season by the affiliated nonprofit
25organization to the designated charitable organization for which
26the major league sports drawing was conducted.

27* * *

28(h) Additional recordkeeping.--The department may require
29additional recordkeeping of accountability measures for major
30league sports drawings.

1Section 2. Sections 501(a), 502(a) and (a.1) and 503 of the
2act, added February 2, 2012 (P.L.7, No.2), are amended to read:

3Section 501. Club licensee.

4(a) Report.--

5(1) [Beginning in 2013, a club licensee shall submit
6semiannual reports to the department for the preceding six-
7month period on a form and in a manner prescribed by the
8department.] Beginning January 1, 2014, and each January 1 
9thereafter, a club licensee that has proceeds in excess of 
10$30,000 in a calendar year shall submit an annual report to 
11the department for the preceding year on a form and in a 
12manner prescribed by the department.

13(1.1) The report under paragraph (1) shall include:

14(i) Prizes awarded as required under section 335 of
15the act of March 4, 1971 (P.L.6, No.2), known as the Tax
16Reform Code of 1971.

17(ii) Amounts expended for public interest purposes.

18(2) The report under paragraph (1) must be filed under
19oath or affirmation of an authorized officer of the club
20licensee.

21(3) The report under paragraph (1) shall include all of
22the following information:

23(i) The proceeds received by the club licensee from
24each game of chance conducted, itemized by week.

25(ii) The amount of prizes paid from all games of
26chance, itemized by week.

27(iii) Other costs incurred related to the conduct of 
28games of chance.

29(iv) The verification of amounts distributed for 
30public interest purposes itemized under section
 

1502(a)(1), itemized by the recipient.

2(v) An itemized list of expenditures made or amounts 
3retained and expenditures under section 502(a)(2).

4(vi) The address and the county in which the club 
5licensee is located.

6(vii) Other information or documentation required by 
7the department.

8* * *

9Section 502. Distribution of proceeds.

10(a) Distribution.--The proceeds from games of chance
11received by a club licensee shall be distributed as follows:

12(1) No less than [70%] 60% of the proceeds shall be paid
13to organizations for public interest purposes [in the
14calendar year in which] within one year of the date the
15proceeds were obtained.

16(2) No more than [30%] 40% of the proceeds obtained in a
17calendar year may be retained by a club licensee and used for
18the following operational expenses relating to the club
19licensee:

20(i) Real property taxes.

21(ii) Utility and fuel costs.

22(iii) Heating and air conditioning equipment or
23repair costs.

24(iv) Water and sewer costs.

25(v) Property or liability insurance costs.

26(vi) Mortgage payments.

27(vii) Interior and exterior repair costs, including
28repair to parking lots.

29(viii) New facility construction costs.

30(ix) Entertainment equipment, including television,

1video and electronic games.

2(x) Personnel, other than a bartender or individual
3who operates games of chance.

4[(x)] (xi) Other expenses adopted in regulation by
5the department.

6(a.1) Amounts retained.--Amounts retained by a club licensee
7under subsection (a)(2) shall be expended within [the same
8calendar year] one year from the time the proceeds were obtained
9unless the club licensee notifies the department that funds are
10being retained for a substantial public interest purchase or
11project. [Notification shall include a description of the
12purchase or project, the cost and the anticipated date of the
13purchase or project.]

14* * *

15Section 503. Records.

16A club licensee shall maintain records as required by this
17act or by the department, including invoices for games of chance
18purchased. Records necessary to conduct an audit under section
19702(b) shall be made available to the [Bureau of Liquor Control
20Enforcement] department or other entity authorized to enforce
21this act.

22Section 3. Section 504 of the act, added February 2, 2012
23(P.L.7, No.2), is repealed:

24[Section 504. Raffle tickets.

25A club licensee shall maintain records relating to the 
26printing or purchase of raffle tickets. Records shall include a 
27receipt or invoice from the place of purchase that shows the 
28cost and number or amount of tickets purchased.]

29Section 4. The act is amended by adding a section to read:

30Section 505.1. Background checks.

1Each application for a club license under this act submitted
2by an eligible organization which has proceeds in excess of
3$30,000 in a year shall include the results of a criminal
4history record information check obtained from the Pennsylvania
5State Police, as defined in 18 Pa.C.S. § 9102 (relating to
6definitions) and permitted by 18 Pa.C.S. § 9121(b) (relating to
7general regulations), for the executive officer and secretary of
8the eligible organization making the application for a club
9license or any other person required by the department.

10Section 5. Section 702(c) of the act, amended February 2,
112012 (P.L.7, No.2), is amended to read:

12Section 702. Enforcement.

13* * *

14(c) Random audits.--The [Bureau of Liquor Control
15Enforcement] department shall conduct annual random audits of 5%
16of all club licensees.

17* * *

18Section 6. The act is amended by adding a chapter to read:

19CHAPTER 9

20TAVERN GAMING

21Section 901. Scope of chapter.

22This chapter relates to tavern gaming.

23Section 902. Definitions.

24The following words and phrases when used in this chapter
25shall have the meanings given to them in this section unless the
26context clearly indicates otherwise:

27"Board." The Pennsylvania Liquor Control Board.

28"Bureau." The Bureau of Investigations and Enforcement of
29the Pennsylvania Gaming Control Board.

30"License." A license to conduct tavern games under this

1chapter.

2"Licensee." A person that holds a license under this
3chapter.

4"Pull-tab." A single folded or banded ticket or a strip
5ticket or card with a face covered to conceal one or more
6numbers or symbols, where one or more of each set of tickets or
7cards has been designated in advance as a winner.

8"Restaurant licensee." A for-profit hotel, restaurant,
9privately owned public golf course, brew pub or micro brewery
10eating place licensed to sell liquor under the act of April 12,
111951 (P.L.90, No.21), known as the Liquor Code.

12"Tavern game." The conduct of pull-tab games, daily drawings
13or tavern raffles by a for-profit restaurant licensee in
14accordance with this chapter.

15"Tavern raffle." A raffle held for a charitable or public
16purpose in accordance with section 908.1.

17Section 903. Licenses.

18(a) Application.--A restaurant licensee may apply to the
19board for a license to conduct tavern games at a licensed
20premises in accordance with this chapter.

21(b) Information.--The application under subsection (a) shall
22include the following information regarding the applicant and
23all owners of the restaurant license:

24(1) The name, address and photograph.

25(2) A photograph of the applicant.

26(3) The proposed location of the conduct of tavern
27games.

28(4) A current tax lien certificate issued by the
29department.

30(5) The details of any gaming, slot machine or any

1casino license applied for or in which the applicant or other
2owner has an interest.

3(6) Consent to conduct a background investigation by the
4bureau.

5(7) The following relating to criminal information:

6(i) Disclosure of all arrests and all citations of
7the applicant and all owners of the restaurant license
8for nontraffic summary offenses. The information shall
9include all of the following:

10(A) A brief description of the circumstances
11surrounding the arrest of issuance of the citation.

12(B) The specific offense charged.

13(C) The ultimate disposition of the charge,
14including any dismissal, plea bargain, conviction,
15sentence, pardon, expungement or order of Accelerated
16Rehabilitative Disposition.

17(ii) No applicant shall be required to provide
18documentation relating to a summary offense. Failure of
19the board or the bureau to recover a record of a summary
20offense may not be grounds for denying an application.

21(8) Any other information required by the department.

22(c) Review.--Within six months of receipt of an application
23under subsection (a), the board shall approve or disapprove the
24application.

25(d) Background investigation.--Every applicant and owner of
26a proposed license shall include information and documentation
27as required to establish the applicant's and each owner's
28suitability, honesty and integrity. Information shall include:

29(1) Criminal history record information.

30(2) Financial background information.

1(3) Data investigation by the bureau.

2(4) Regulatory history before the board or other
3Commonwealth agency.

4(5) Other information required by the bureau.

5(e) Personal interview.--If the bureau determines that a
6criminal history record warrants additional review of the
7individual, the bureau shall conduct a personal interview with
8the applicant and may request information from personal or
9professional associates.

10(f) Cooperation.--The bureau shall conduct a background
11investigation of the applicant and all other owners of the
12restaurant license in cooperation with the board.

13(g) Costs.--The applicant and each owner shall reimburse the
14board and the bureau for the actual costs of conducting the
15investigation.

16(h) Approval.--The bureau shall make a recommendation to the
17board. The board shall review the information obtained and the
18recommendation under this section to determine if the applicant
19and other owners of the license possess the following:

20(1) Financial stability, integrity and responsibility.

21(2) Sufficient business experience and ability to
22effectively operate tavern games as part of the restaurant
23licensee's operator.

24(3) Character, honesty and integrity to operate tavern
25games in a responsible and lawful manner.

26Section 904. Application.

27(a) Application fee.--An applicant shall pay an application
28fee of $1,000.

29(b) Costs.--A restaurant licensee and any additional owners
30shall pay for the actual costs of a background investigation

1conducted by the bureau. The bureau may:

2(1) Charge an estimated amount to be provided prior to
3the background investigation.

4(2) Submit for reimbursement for additional costs
5incurred in the background investigation.

6Section 905. Approval.

7(a) Issuance.--Upon being satisfied that the requirements of
8section 903 have been met, the board may approve the application
9and issue an initial license for a period of one year. The board
10may place conditions on the license as it deems appropriate.

11(b) Renewal.--A license shall be renewed annually.

12(c) Fee.--The license fee and renewal fee shall be $1,000.

13(d) Entitlement.--Nothing under this chapter shall be
14construed to create an entitlement to a license by a person. The
15board shall have sole discretion to issue, renew, condition or
16deny a license based on the requirements of this chapter and
17whether the issuance is in the best interests of the
18Commonwealth.

19(e) Nontransferability.--A license shall be a grant of
20privilege to conduct tavern games. A license may not be sold,
21transferred or assigned to any other person. A licensee may not
22pledge or otherwise grant a security interest in or lien on the
23license. The board shall have the sole discretion to issue,
24renew, condition or deny the issuance of a license.

25Section 906. Change in ownership.

26(a) Notice.--A licensee shall notify the board upon becoming
27aware of a proposed or contemplated change of ownership of the
28premises of the restaurant license.

29(b) Qualification.--The purchaser of the assets or premises
30of a licensee must independently qualify for a license, pay the

1license fee and undergo a background investigation under section
2903. A new license fee shall be paid upon the assignment and
3actual change of control or ownership of the license.

4Section 907. Prize limits.

5(a) Individual prize limit.--The maximum prize which may be
6awarded for any single chance shall be $2,000. No tavern game
7sold, offered for sale or furnished may contain, permit, depict
8or designate a prize having a prize limit in excess of $2,000.

9(b) Aggregate prize limit.--No more than $35,000 in prizes
10may be awarded from tavern games by a licensee in a seven-day
11period.

12Section 908. Bank account.

13A licensee shall maintain a bank account to hold the proceeds
14of tavern games which shall be separate from all other funds
15belonging to the licensee. Account records shall show all
16expenditures and income and shall be retained by the licensee
17for at least two years.

18Section 908.1. Tavern raffle.

19The following shall apply to a tavern raffle:

20(1) No more than one tavern raffle may be held in a
21calendar month.

22(2) A tavern raffle must be held for a designated
23charitable purpose.

24(3) Each individual participating in the tavern raffle
25must be informed of the charitable purpose involved.

26(4) At least 50% of the proceeds from the tavern raffle
27shall be transmitted to the designated charity within seven
28days of the tavern raffle.

29(5) Any proceeds not transmitted under paragraph (4)
30shall be distributed as follows:

1(i) Sixty percent shall be paid to the Commonwealth.

2(ii) Forty percent may be retained by the licensee.

3Section 909. Distribution of proceeds.

4Beginning January 1, 2014, the proceeds from tavern games
5received by a licensee shall be distributed as follows:

6(1) Sixty percent of the proceeds obtained in any
7calendar year shall be paid to the Commonwealth.

8(2) Forty percent of the proceeds obtained in any
9calendar year may be retained by the licensee.

10Section 910. Reports.

11(a) Reports.--A licensee shall submit annual reports to the
12board for the preceding year on a form and in a manner
13prescribed by the department. The report shall include:

14(1) Prizes awarded as required under section 335 of the
15act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform 
16Code of 1971.

17(2) Amounts transferred to the General Fund.

18(3) Amounts given to designated charities.

19(4) Other information as required by the department.

20(b) Prizes.--The report shall include prizes awarded as
21required under section 335 of the act of March 4, 1971 (P.L.6,
22No.2), known as the Tax Reform Code of 1971.

23Section 911. Enforcement.

24(a) Board.--The board may, following notice and hearing
25impose the following penalties or suspend or revoke a license
26under this chapter.

27(b) Penalties.--The board may impose a civil penalty for a
28violation of this chapter in accordance with the following:

29(1) Up to $1,000 for an initial violation of this act.

30(2) Up to $3,000 for a second or subsequent violation.

1(c) Criminal penalty.--A violation of this act shall be a
2summary offense.

3(d) Department of Revenue.--The Department of Revenue shall
4enforce the provisions of section 909 as a tax in accordance
5with the enforcement provisions under Article XXVII of the act
6of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
71971.

8Section 7. The act is amended by adding a section to read:

9Section 3101. Transfer from General Fund to State Lottery Fund.

10If, on June 15, 2015, and June 15 of each year thereafter,
11the department determines that a decrease in the revenue
12deposited in that fiscal year in the State Lottery Fund is due
13to the play of small games of chance in retail licensed
14establishments in this Commonwealth, the department shall
15certify the amount of the decrease due to the activity. The
16department's determination shall be based upon an audit or other
17report of an independent expert regarding the decrease.

18Section 8. Section 3101 of the act, added February 2, 2012
19(P.L.7, No.2), is amended to read:

20Section [3101] 3110. Effective date.

21This act shall take effect in 60 days.

22Section 9. This act shall take effect in 60 days.