1Amending Title 4 (Amusements) of the Pennsylvania Consolidated
2Statutes, providing for authorized interactive gaming and for
3duties of Pennsylvania Gaming Control Board and Department of
4Health; imposing an interactive gaming tax and prescribing
5penalties.

6The General Assembly of the Commonwealth of Pennsylvania
7hereby enacts as follows:

8Section 1. Title 4 of the Pennsylvania Consolidated Statutes
9is amended by adding a chapter to read:

10CHAPTER 13B

11AUTHORIZED INTERACTIVE GAMING

12Sec.

1313B01. Legislative policy.

1413B02. Definitions.

1513B03. Regulation and enforcement by the board.

1613B04. Prohibition on unauthorized Internet gaming.

1713B05. Application for license.

1813B06. Board consideration of application.

1913B07. Institutional investors.

113B08. Presumption of unsuitability.

213B09. Licensing fee.

313B10. Accounting and operational internal controls.

413B11. Interactive gaming tax.

513B12. Prohibition on Internet cafes.

613B13. Testing of hardware, software and equipment.

713B14. Expanded compulsive and problem gambling programs.

813B15. Application of other provisions of this part.

9§ 13B01. Legislative policy.

10The General Assembly recognizes the following public policy
11purposes and declares that the following objectives of the
12Commonwealth are to be served by this chapter:

13(1) The legalization of slot machines and table games in
14Pennsylvania has delivered substantial benefits to the
15Commonwealth, including tax revenue for property tax relief
16and general economic development, the creation over 15,000
17jobs and significant contributions to the horse racing and
18agricultural industries.

19(2) Developments in technology and recent legal
20decisions have created an opportunity to legalize interactive
21poker as a means to further enhance and complement the
22benefits delivered by casino gaming and licensed facilities
23to or for the benefit of the communities in which they
24operate.

25(3) Interactive gaming operates by having players
26establish and draw funds from an individual account to place
27a wager in authorized games through the Internet and similar
28communications media. The Commonwealth currently authorizes
29gaming in the form of slot machines and banking and
30nonbanking table games, including poker. These gaming

1operations provide licensed entities in this Commonwealth the
2appropriate level of experience to introduce a platform for
3interactive gaming that protects the player and the integrity
4of the game.

5(4) It is a vital public interest that licensed entities
6retain responsibility for the interactive gaming software and
7hardware which shall remain under their ultimate operational
8and supervisory control. Vendors' ability to provide the
9interactive gaming platform must depend solely on, and be
10tied to, the status of the licensed entity for which they are
11providing their services. To ensure that actual control and
12supervision remains with the licensed entity, the licensed
13entity's publicly accessible Internet website or similar
14public portal must be marketed and made available to the
15public under the licensed entity's own name and brands and
16not the brands of third parties.

17(5) Poker is unlike banking games in important respects
18that make it well suited for interactive gaming. Poker
19operators are not participants in the games and are
20indifferent to the outcome because winnings come from the
21pool of other players, not the house. In addition, winning at
22poker involves some measure of skill. Skillful poker players
23can earn winnings in the long term, while players of banking
24games play against odds favoring the house.

25(6) Any interactive gaming enforcement and regulatory
26structure must begin from the premise that participation in a
27lawful and licensed gaming industry is a privilege, not a
28right and that regulatory oversight is intended to safeguard
29the integrity of the games and participants and to ensure
30accountability.

1(7) The passage of the Unlawful Internet Gambling
2Enforcement Act of 2006, codified at 31 U.S.C. Ch. 53, Subch.
3IV (relating to prohibition on funding of unlawful Internet
4gambling), clarified issues concerning the scope and
5interpretation of State law, including the importance of the
6location of the wager, wagering activity and website. For
7purposes of suitability for licensing under this act, persons
8who provided goods or services related to Internet gaming
9involving citizens of this Commonwealth that ceased
10operations as a result of the enactment of the Unlawful
11Internet Gambling Enforcement Act should be regarded
12differently from those that continued to flout Federal and
13State law. Granting licenses or allowing the use of the
14assets of persons who ignored Federal and State law would
15reward unlawful gaming activity, permit manifestly unsuitable
16persons to profit from their unlawful gaming activity and
17create unfair competition with licensees that respected
18Federal and State law.

19(8) The Commonwealth has entrusted the control and
20regulation of gaming to the Pennsylvania Gaming Control Board
21for the past seven years. Based on that experience, it is now
22appropriate to delegate the responsibility for the
23implementation and regulation of interactive gaming to the
24board.

25(9) Authorized interactive gaming, once fully developed,
26will allow persons in this Commonwealth to participate in
27interactive poker, not only with other persons in this
28Commonwealth, but with persons in other cooperating United
29States jurisdictions where interactive gaming has been
30authorized.

1(10) The expansion of gaming through the authorization
2of interactive gaming requires the Commonwealth to take steps
3to increase awareness of problem gambling across interactive
4channels and to implement effective strategies for
5prevention, assessment and treatment of this behavioral
6disorder.

7§ 13B02. Definitions.

8The following words and phrases when used in this chapter
9shall have the meanings given to them in this section unless the
10context clearly indicates otherwise:

11"Affiliate." As defined in section 1103 (relating to
12definitions). The term does not include an individual.

13"Authorized game." Any interactive poker game approved by
14the board pursuant to this chapter.

15"Authorized participant." A person placing a wager who is
16either physically present in this Commonwealth or located in a
17jurisdiction with which the Commonwealth has negotiated an
18interactive gaming agreement. The intermediate routing of
19electronic data in connection with interactive games shall not
20determine the location or locations in which a wager is
21initiated, received or otherwise made.

22"Covered asset." Any of the following categories of assets,
23if specifically designed for use and knowingly and willfully
24used in connection with wagers or gambling games, using the
25Internet and involving customers located in the United States
26after December 31, 2006, unless licensed by a Federal or State
27authority to engage in such activity:

28(1) any trademark, trade name, service mark or similar
29intellectual property that is used to identify any aspect of
30the Internet website or the operator offering the wagers or

1interactive games to its customers;

2(2) any database or customer list of individuals
3residing in the United States who placed wagers or
4participated in interactive games with or through an Internet
5website or operator not licensed by a Federal or state
6authority to engage in such activity;

7(3) any derivative of a database or customer list
8described in paragraph (2); or

9(4) software, including any derivative, update or
10customization of such software, or hardware relating to the
11management, administration, development, testing or control
12of the Internet website, the interactive games or wagers
13offered through the website or the operator.

14"Gross interactive gaming revenue." The total of all cash or
15cash equivalents paid by authorized participants to a licensee
16in consideration for the play of interactive games minus:

17(1) The total of cash or cash equivalents paid out to
18players as winnings.

19(2) Promotional gaming credits.

20(3) The cash equivalent value of any personal property
21or other noncash item of value included in a drawing, contest
22or tournament and distributed to players.

23(4) Taxes paid to other states or territories of the
24United States pursuant to interactive gaming agreements
25implemented under this chapter.

26(5) Revenues from nongaming sources, such as food,
27beverages, souvenirs, advertising, clothing or other
28nongaming sources.

29Amounts deposited with a licensee for purposes of interactive
30gaming and amounts taken in fraudulent acts perpetrated against

1a licensee for which the licensee is not reimbursed shall be
2considered to have been paid to the licensee for purposes of
3calculating gross interactive gaming revenue.

4"Interactive game." Any game offered through the use of
5communications technology that allows a person, utilizing money,
6checks, electronic checks, electronic transfers of money, credit
7cards, debit cards or any other instrumentality, to transmit to
8electronic information to assist in the placing of a wager and
9corresponding information related to the display of the game,
10game outcomes or other similar information. The term does not
11include the conduct of gaming that occurs entirely among
12participants located within the licensed facility of the
13licensee or its affiliate, to the extent that any such gaming
14may be authorized by the board, or nongambling games that do not
15otherwise require a license under the laws of this Commonwealth.
16For purposes of this definition, "communications technology"
17means any method used and the components employed by an
18establishment to facilitate the transmission of information,
19including, but not limited to, transmission and reception by
20systems based on wire, cable, radio, microwave, light, optics or
21computer data networks, including, but not limited to, the
22Internet and intranets.

23"Interactive gaming agreement." A negotiated agreement
24between the Commonwealth and one or more of the states or
25territories of the United States in which interactive gaming is
26legally authorized that permits persons located in such other
27jurisdictions to place wagers on interactive games with
28licensees in this Commonwealth or to permit persons located in
29this Commonwealth to place wagers on interactive games with
30licensees in such other jurisdictions, or both. Agreements may

1contain other provisions the board deems appropriate, except
2that only authorized games may be permitted to be offered to
3persons located in this Commonwealth pursuant to an agreement.

4"Interactive gaming license." A license issued by the board
5pursuant to this chapter which authorizes the holder to offer
6authorized games for play by, and to accept bets and wagers
7associated with authorized games from, authorized participants.

8"Interactive gaming platform." The combination of hardware
9and software designed and used to manage, conduct or record
10interactive games or the wagers associated with those games and
11which has been approved by the board for purposes of the conduct
12of authorized games.

13"Interactive gaming skin." The portal to an interactive
14gaming platform or Internet website through which an authorized
15game is made available to customers in this Commonwealth.

16"Internet." A computer network of interoperable packet-
17switched data networks.

18"Key interactive gaming employee." An individual employed by
19a licensee, significant vendor or applicant, or by a holding or
20intermediary company of a licensee, significant vendor or
21applicant, who is involved in the operation of, or of the wagers
22associated with, interactive gaming and who is empowered to make
23discretionary decisions that regulate interactive gaming
24operations.

25"Licensee." A licensed entity that holds an interactive
26gaming license.

27"Poker." Any of several card games traditionally known as
28poker, in which players compete against each other and not
29against the person operating the game, including a game using an
30electronic device that simulates a deck of cards. The term

1includes cash games and tournaments. Licensees may assess a rake
2or any other type of fee associated with the game, contest or
3tournament but may not wager with or against any player.

4"Promotional gaming credit." Any bonus, promotion or amount
5received by a licensee from an authorized participant for which
6the licensee can demonstrate that it or its affiliate has not
7received cash.

8"Significant vendor." A person who offers or proposes to
9offer any of the following services with respect to interactive
10gaming:

11(1) management, administration or control of wagers or
12of the interactive games themselves;

13(2) development, maintenance, provision or operation of
14an interactive gaming platform or any discrete component
15thereof;

16(3) sale, licensing or other receipt of compensation for
17selling or licensing a database or customer list of
18individuals residing in the United States selected, in whole
19or in part, because they placed wagers or participated in
20gambling games with or through an Internet website or
21operator or any derivative of such a database or customer
22list;

23(4) provision of any product, service or asset to a
24licensee or significant vendor in return for a percentage of
25interactive gaming revenue, not including fees to financial
26institutions and payment providers for facilitating a deposit
27or withdrawal by an authorized participant; or

28(5) provision of any trademark, trade name, service mark
29or similar intellectual property under which a licensee or
30significant vendor identifies to customers the authorized

1games, the website or equivalent hosting the authorized
2games, any interactive gaming skin or the interactive gaming
3platform, but excluding intellectual property of a person
4providing only art or graphics.

5The term does not include any key interactive gaming employee of
6a licensee or significant vendor. A significant vendor must be
7licensed by the board to provide these services.

8§ 13B03. Regulation and enforcement by the board.

9(a) General rule.--The board shall promulgate regulations
10for the operation and conduct of interactive gaming in this
11Commonwealth and shall enforce the regulations.

12(b) Powers and duties.--

13(1) The board shall authorize licensees and significant
14vendors to conduct interactive gaming involving authorized
15participants, subject to the provisions of this chapter and
16other applicable provisions of law. The board shall also
17develop standards for evaluating and approving interactive
18gaming platforms for use with interactive gaming.

19(2) The board may determine in its discretion the
20categories of employees who satisfy the definition of "key
21interactive employee" and may exclude from the scope of this
22definition any particular licensee, significant vendor,
23applicant or employee or category of employee it deems
24appropriate.

25(c) Delegated authority.--The board is designated as the
26agency of the Commonwealth with the power and authority to
27negotiate and enter into interactive gaming agreements on behalf
28of the Commonwealth consistent with this chapter.

29(d) Interactive gaming agreements.--To the extent
30practicable, the board shall negotiate interactive gaming

1agreements with other states, territories or possessions of the
2United States in which interactive gaming has been authorized to
3allow players in this Commonwealth to participate in authorized
4games with players in such other jurisdictions.

5§ 13B04. Prohibition on unauthorized Internet gaming.

6(a) Unauthorized gaming.--

7(1) It shall be unlawful for any person to willfully and
8knowingly operate, carry on, offer or expose for play any
9interactive game or to accept any bet or wager associated
10with any interactive game from any person physically located
11in this Commonwealth at the time of such play that is not
12within the scope of a valid and current license issued by the
13board pursuant to this chapter or by another state, territory
14or possession of the United States with which the
15Commonwealth has an interactive gaming agreement that permits
16such activity.

17(2) It shall be unlawful for any person to willfully and
18knowingly provide services with respect to any interactive
19game, bet or wager specified in paragraph (1).

20(b) Grading of offense.--A person who violates subsection
21(a) commits a misdemeanor of the first degree. For a second or
22subsequent violation of subsection (a), a person commits a
23felony of the second degree.

24(c) Penalties.--

25(1) For a first violation of subsection (a), a person
26shall be sentenced to pay a fine of:

27(i) Not less than $75,000 nor more than $150,000, if
28the person is an individual;

29(ii) Not less than $150,000 nor more than $300,000,
30if the person is a licensed manufacturer or supplier; or

1(iii) Not less than $300,000 nor more than $600,000,
2if the person is a licensed gaming entity.

3(2) For a second or subsequent violation of subsection
4(a), a person shall be sentenced to pay a fine of:

5(i) Not less than $150,000 nor more than $300,000,
6if the person is an individual.

7(ii) Not less than $300,000 nor more than $600,000,
8if the person is a licensed manufacturer or supplier.

9(iii) Not less than $600,000 nor more than
10$1,200,000, if the person is a licensed gaming entity.

11(d) Forfeiture.--If a person places a wager on an
12interactive game from a location in which such activity is
13unauthorized, the person shall forfeit all entitlement to any
14winnings and the moneys associated with any such forfeited
15winnings shall be deposited by the licensee into the Compulsive
16and Problem Gambling Treatment Fund established under section
171509(b) (relating to compulsive and problem gambling program).

18(e) Tax Liability.--An unlicensed person offering
19interactive games to persons in this Commonwealth shall be
20liable for all taxes required by this chapter in the same manner
21and amounts as if such person were a licensee. Timely payment of
22such taxes shall not constitute a defense to any prosecution or
23other proceeding in connection with unauthorized interactive
24gaming, except for a prosecution or proceeding alleging failure
25to make such payment.

26§ 13B05. Application for license.

27(a) Filing of application.--Ninety days from the effective
28date of this section the board shall permit filing of
29applications for licenses pursuant to this chapter. The
30application shall include, as applicable:

1(1) The name and business address of the applicant,
2including an organizational chart which identifies the
3applicant's relationship to any person that holds a slot
4machine license and a table game operation certificate issued
5by the board.

6(2) Identification of and a detailed description of the
7qualifications of any proposed significant vendors. Detailed
8information shall be provided describing the specific
9operational responsibilities of significant vendors and the
10nature of the economic relationship with those significant
11vendors.

12(3) A detailed description of the technical protocols
13and parameters of the interactive gaming platform proposed to
14be utilized.

15(4) Identification and a description of the interactive
16games the applicant proposes to make available.

17(5) Such other information as the board, in its
18discretion, shall determine to require.

19(b) Temporary authorization.--

20(1) During the first 18 months from the effective date
21of this section, the board may issue temporary authorizations
22to applicants for licensing as a significant vendor, which
23may remain in effect until the shorter of 12 months after the
24date of issue or the date by which the board considers the
25subject application. Temporary authorizations may be renewed
26not more than once, upon a showing of good cause. Temporary
27authorization shall allow the applicant to engage in all of
28the functions of a fully licensed significant vendor for the
29duration of the temporary authorization.

30(2) No temporary authorization may be issued unless:

1(i) The applicant has submitted a complete license
2application.

3(ii) The applicant agrees to pay the fee prescribed
4in section 13B09 (relating to licensing fee) within 60
5days of issuance of the temporary authorization, which
6may be refundable in the event a permanent license is not
7issued. Failure to make timely payment shall result in
8revocation of the temporary authorization.

9(iii) The bureau has stated that it has no objection
10to the issuance of a temporary authorization to the
11applicant.

12(3) Within 45 days of the date that the bureau receives
13the completed application of an applicant for investigation,
14the bureau shall conduct a preliminary investigation of the
15applicant and any key interactive gaming employee of the
16applicant, which shall include:

17(i) a criminal background investigation of the
18applicant and any key interactive gaming employee of the
19applicant; and

20(ii) any investigation necessary to determine
21whether the applicant or any key interactive gaming
22employee of the applicant may fall within the scope of
23section 13B08 (relating to presumption of unsuitability).

24(4) If the bureau's preliminary investigation discloses
25no material adverse information, then the bureau shall issue
26to the executive director a statement of no objection to the
27issuance of a temporary authorization to the applicant.

28(5) If the bureau's preliminary investigation discloses
29material adverse information or if the bureau is unable to
30confirm that section 13B08 does not apply, it shall register

1an objection and no temporary authorization may be issued
2until the material concern is resolved or, if applicable,
3confirmation that section 13B08 does not apply is received.

4(6) If the bureau's full investigation of an applicant
5discloses material adverse information, the temporary
6authorization of any applicant may be suspended or withdrawn
7upon a showing of cause by the bureau.

8§ 13B06. Board consideration of application.

9(a) Suitability.--A holder, or an affiliate of a holder, of
10a slot machine license and table game operation certificate,
11whose license and certificate are in good standing, shall be
12considered suitable to be issued an interactive gaming license
13by the board without additional investigation, subject to the
14provisions of section 13B08 (relating to presumption of
15unsuitability).

16(b) Significant vendors.--The board shall determine the
17suitability of any significant vendors, consistent with the
18requirements of this chapter.

19(c) Qualifications.--A review of the suitability of a person
20to hold a license as a licensee or significant vendor shall
21include the review and determination of whether:

22(1) The person possesses the requisite experience and
23skill to perform the functions consistent with the
24requirements of this chapter.

25(2) The applicant is a person of good character, honesty
26and integrity.

27(3) The applicant is a person whose prior activities,
28criminal record, if any, reputation, habits and associations
29do not:

30(i) pose a threat to the public interest or to the

1effective regulation and control of interactive gaming;
2or

3(ii) create or enhance the dangers of unsuitable,
4unfair or illegal practices, methods and activities in
5the conduct of interactive gaming or in the carrying on
6of the business and financial arrangements incidental to
7such gaming; and

8(4) The applicant has disclosed to the board all known
9affiliations or relationships, whether direct or indirect,
10with persons and covered assets of persons described by
11section 13B08.

12(d) Owners and key interactive gaming employees.--In
13connection with an application for a license as a licensee or
14significant vendor, the applicant shall identify and the board
15shall determine the suitability of an applicant's owners, chief
16executive officer, chief financial officer, any other officer
17whom the board deems significantly involved in the management or
18control of the applicant and all key interactive gaming
19employees.

20(e) Brand transparency.--The board may not approve the
21application of any prospective licensee and shall suspend the
22license of any licensee if the licensee's Internet website
23through which authorized games are offered to customers in this
24Commonwealth or any interactive gaming skin with which the
25licensee is associated is identified by a brand or name that is
26not owned or controlled by the licensee or an affiliate of the
27licensee.

28(f) Issuance of order.--The board shall issue an order
29granting or denying an application for a license as a licensee
30or significant vendor within 120 days of the date on which a

1properly completed application and any additional information
2that the board may require is filed. If the board approves an
3application, it may impose reasonable conditions of licensure
4consistent with the requirements of this chapter.

5§ 13B07. Institutional investors.

6(a) Declaration of investment intent.--

7(1) An institutional investor holding less than 25% of
8the equity securities of a licensee's, significant vendor's
9or applicant's holding or intermediary companies, shall be
10granted a waiver of any investigation of suitability or other
11requirement if the securities are those of a corporation,
12whether publicly traded or privately held, and the holdings
13of the securities were purchased for investment purposes
14only. The institutional investor shall file a certified
15statement that it has no intention of influencing or
16affecting the affairs of the licensee, significant vendor,
17applicant or its holding or intermediary companies. However,
18an institutional investor shall be permitted to vote on
19matters put to the vote of the outstanding security holders.

20(2) The board may grant a waiver to an institutional
21investor holding a higher percentage of such securities upon
22a showing of good cause and if the conditions specified in
23paragraph (1) are met.

24(3) An institutional investor granted a waiver under
25this subsection who subsequently decides to influence or
26affect the affairs of the licensee, significant vendor or
27applicant's holding or intermediary company shall provide not
28less than 30 days' notice of such intent and shall file with
29the board a request for determination of suitability before
30taking any action that may influence or affect the affairs of

1the issuer. An institutional investor shall be permitted to
2vote on matters put to the vote of the outstanding security
3holders.

4(4) If an institutional investor changes its investment
5intent or if the board finds reasonable cause to believe that
6the institutional investor may be found unsuitable, no action
7other than divestiture shall be taken by the institutional
8investor with respect to its security holdings until there
9has been compliance with any requirements established by the
10board, which may include the execution of a trust agreement.

11(5) The licensee or significant vendor or applicant and
12its relevant holding, intermediary or subsidiary company
13shall notify the board immediately of any information about,
14or actions of, an institutional investor holding its equity
15securities where such information or action may impact the
16eligibility of the institutional investor for a waiver
17pursuant to this subsection.

18(b) Failure to declare.--If the board finds:

19(1) that an institutional investor holding any security
20of a holding or intermediary company of a licensee or
21significant vendor or applicant or, where relevant, of
22another subsidiary company of a holding or intermediary
23company of a licensee or significant vendor or applicant
24which is related in any way to the financing of the licensee
25or significant vendor or applicant, fails to comply with the
26provisions of subsection (a); or

27(2) by reason of the extent or nature of its holdings,
28an institutional investor is in a position to exercise such a
29substantial impact upon the controlling interests of a
30licensee or significant vendor or applicant that

1investigation and determination of suitability of the
2institutional investor is necessary to protect the public
3interest;

4then the board may take any necessary action otherwise
5authorized under this chapter to protect the public interest.

6§ 13B08. Presumption of unsuitability.

7(a) General rule.--The board may not issue a license to or
8otherwise find suitable any prospective licensee or significant
9vendor, or key interactive gaming employee of a licensee or
10significant vender, who has:

11(1) At any time, either directly or through a third
12party whom it controlled or owned in whole or in significant
13part, knowingly or willfully:

14(i) accepted or made available wagers on interactive
15games using the Internet from persons located in the
16United States after December 31, 2006, unless licensed by
17a Federal or state authority to engage in such activity;
18or

19(ii) facilitated or otherwise provided services with
20respect to wagers or interactive games using the Internet
21involving persons located in the United States for a
22person described in subparagraph (i), if such activities
23or services would cause such person to be considered a
24significant vendor if those activities or services were
25provided with respect to interactive games pursuant to
26this chapter, and if such person acted with knowledge of
27the fact that such wagers or interactive games involved
28persons located in the United States.

29(2) Purchased or acquired, directly or indirectly, in
30whole or in significant part, a third party described in

1paragraph (1) or will use that third party or a covered asset
2in connection with interactive gaming.

3(b) Appeal procedures.--A prospective licensee, significant
4vendor or key interactive gaming employee may appeal a
5determination by the board that it is within the scope of
6subsection (a) only in accordance with the following procedures:

7(1) The board shall afford the prospective licensee or
8significant vendor a hearing at which such person may provide
9evidence to support the basis on which it seeks relief.

10(2) The prospective licensee or significant vendor must
11demonstrate by a preponderance of the evidence that:

12(i) its conduct in connection with interactive games
13and wagers involving persons located in the United States
14was not unlawful; and

15(ii) if applicable, the covered assets to be used or
16that are being used by such person in connection with
17interactive gaming were not used in a manner that was
18unlawful, in each case under Federal law and the laws of
19each state in which persons making the wagers or playing
20the games were located.

21(3) The determination of the board shall be made without
22regard to whether the person has been prosecuted under the
23criminal laws of any state, the United States or other
24jurisdiction or has been prosecuted and the proceeding
25terminated in a manner other than with a conviction.

26(4) If the prohibition is waived, the prospective
27licensee or significant vendor shall satisfy all otherwise
28applicable license and suitability requirements.

29§ 13B09. Licensing fee.

30If the board grants an application under section 13B05

1(relating to application for license) within 60 days of entry of
2the board's order, the successful applicant shall pay a
3licensing fee of $5,000,000 if a licensee or $50,000 if a
4significant vendor.

5§ 13B10. Accounting and operational internal controls.

6Each interactive gaming license applicant shall submit to the
7board and department, in such manner as the board shall require,
8a description of its administrative and accounting procedures in
9detail, including its written system of internal control. In
10addition to other such standards that the board, in its
11discretion, may choose to require, the board shall require
12licensees to implement appropriate safeguards:

13(1) To ensure, to a reasonable degree of certainty, that
14authorized participants are not less than 21 years of age.

15(2) To ensure, to a reasonable degree of certainty, that
16authorized participants are physically located within this
17Commonwealth or such other jurisdiction that is permissible
18under this chapter.

19(3) To protect, to a reasonable degree of certainty, the
20privacy and online security of authorized participants.

21(4) To ensure, to a reasonable degree of certainty, that
22the interactive games are fair and honest and that
23appropriate measures are in place to deter, detect and, to
24the extent reasonably possible, to prevent cheating,
25including collusion, and use of cheating devices, including
26the use of software programs, sometimes referred to as
27"bots," that make bets or wagers according to algorithms.

28(5) To minimize compulsive gambling and to provide
29notice to authorized participants of resources to help
30problem gamblers.

1(6) To ensure authorized participants' funds are held in
2accounts segregated from the funds of licensees and otherwise
3are protected from corporate insolvency, financial risk or
4criminal or civil actions against the licensee.

5§ 13B11. Interactive gaming tax.

6(a) Weekly taxation.--Each licensee shall report to the
7department and pay from its daily gross interactive gaming
8revenue, on a form and in a manner prescribed by the department,
9a tax of 14% of its daily gross interactive gaming revenue,
10which shall be payable to the department on a weekly basis and
11shall be based upon gross interactive gaming revenue for the
12previous week.

13(b) Taxes on out-of-State wagering.--The tax rate which
14shall be assessed and collected by the department with respect
15to any wagers placed by residents of this Commonwealth with an
16interactive gaming operator outside of this Commonwealth, but
17authorized pursuant to an interactive gaming agreement shall be
18governed by the agreement but may not exceed 14% of gross
19interactive gaming revenue derived from residents of this
20Commonwealth.

21(c) Taxes held in trust.--All funds owed to the Commonwealth
22under this section shall be held in trust for the Commonwealth
23by the licensee until the funds are paid to the department.
24Unless otherwise agreed to by the board, a licensee shall
25establish a separate bank account into which such funds shall be
26deposited and maintained until paid to the department.

27(d) Federal presumption.--In the event Federal law
28authorizes interactive gaming which establishes a tax based on
29gross interactive gaming revenue, deposits or the substantial
30equivalent of or intended substitute for either of them, of

1which a portion is allocated to the states, that tax shall
2supersede, in its entirety, the tax imposed by this section.

3§ 13B12. Prohibition on Internet cafes.

4(a) General rule.--No organization or commercial enterprise,
5other than a licensee, shall operate a place of public
6accommodation, club, including a club or association limited to
7dues-paying members or similar restricted groups, or similar
8establishment in which computer terminals or similar access
9devices are advertised or made available to be used principally
10for the purpose of accessing interactive games.

11(b) Construction.--Nothing in this section shall be
12construed to require the owner or operator of a hotel or motel
13or other public place of general use in this Commonwealth to
14prohibit or block guests from playing interactive games.

15§ 13B13. Testing of hardware, software and equipment.

16(a) Testing by the board.--The board may expand its testing
17facility, utilize the services of a private testing facility or
18adopt the testing and certification standards of another
19jurisdiction and may approve computer hardware, software or
20associated equipment based on the prior approval of a private
21testing facility or of another jurisdiction whose standards the
22board reasonably determines are adequate and comparable to those
23required by this part. Costs associated with the expansion of
24its own testing facility shall be assessed on significant
25vendors licensed to provide interactive gaming platforms.

26(b) Approval.--

27(1) No interactive gaming platform may be utilized by a
28licensee unless approved by the board or its testing and
29certification facility under this section. The board shall
30not approve an interactive gaming platform unless the

1platform is subject to the control, and is the ultimate
2responsibility, of the licensee.

3(2) This subsection shall not be construed to prohibit a
4licensee from licensing use or delegating daily operation of
5the interactive gaming platform from or to a significant
6vendor.

7§ 13B14. Expanded compulsive and problem gambling programs.

8(a) Expanded programs.--

9(1) The board and the Department of Health shall jointly
10develop expanded programs to address compulsive and problem
11gambling issues relating to interactive gaming.

12(2) Licensees shall address compulsive and problem
13gambling issues in the context of interactive gaming in their
14respective compulsive and problem gambling plans on file with
15the board.

16(b) Message.--Licensees shall permanently and continuously
17display the following message to persons at the time of logging
18on to the Internet websites of the licensees or any interactive
19gaming skin:

20If you or someone you know has a gambling problem and
21wants help, call 1-800-GAMBLER.

22§ 13B15. Application of other provisions of this part.

23The following sections of this part, which are expressly
24applicable to the conduct or operation of slot machines or table
25games, are also deemed applicable to interactive gaming under
26this chapter:

27(1) The board's power and duty to require that licensees
28prohibit persons under 21 years of age from playing
29interactive games under section 1207(8) (relating to
30regulatory authority of board).

1(2) The obligation to include information on interactive
2gaming in the board's annual report under section 1211(a.1)
3(relating to reports of board).

4(3) The procedures, parameters and time frames for
5promulgating temporary regulations under section 13A03(a) and
6(b) (relating to temporary table game regulations).

7(4) Manufacturing licensing requirements pursuant to
8section 1317.1 (relating to manufacturer licenses).

9(5) Gaming service provider requirements pursuant to
10section 1317.2 (relating to gaming service provider).

11(6) Permit renewal requirements pursuant to section 1326
12(relating to license renewals).

13(7) Section 1402 (relating to gross terminal revenue
14deductions), except that recovery of the costs and expenses
15of regulating interactive gaming under this chapter shall be
16limited to 1% of gross interactive gaming revenue.

17(8) The declaration that it shall be unlawful for an
18individual under 21 years of age to wager, play or attempt to
19play an interactive game under section 1518(a)(13.1)
20(relating to prohibited acts; penalties).

21Section 2. This act shall take effect in 60 days.