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

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:




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, licensed facilities and
23the communities in which they operate.

24(3) Interactive gaming operates by having players
25establish and draw funds from an individual account to place
26a wager in authorized games through the Internet and similar
27communications media. The Commonwealth currently authorizes
28gaming in the form of slot machines and banking and
29nonbanking table games, including poker. These gaming
30operations provide licensed entities in this Commonwealth the

1appropriate level of experience to introduce a platform for
2interactive gaming that protects the player and the integrity
3of the game.

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

16(5) Poker is unlike banking games in important respects
17that make it well suited for interactive gaming. Poker
18operators are not participants in the games and are
19indifferent to the outcome because winnings come not from the
20house, but from the pool of other players, not the house. In
21addition, winning at poker involves some measure of skill.
22Skillful poker players can earn winnings in the long term,
23while players of banking games play against odds favoring the

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

1(7) With 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 after the enactment of the Unlawful Internet
11Gambling Enforcement Act should be regarded differently from
12those that continued to flout Federal and State law. Granting
13licenses or allowing the use of the assets of persons who
14ignored Federal and State law would reward unlawful gaming
15activity, permit manifestly unsuitable persons to profit from
16their unlawful gaming activity and create unfair competition
17with licensees that respected Federal and State law.

18(8) The Commonwealth has entrusted the control and
19regulation of gaming to the Pennsylvania Gaming Control Board
20for the past seven years. Based on that experience, it is now
21appropriate to delegate the responsibility for the
22implementation and regulation of interactive gaming to the

24(9) Authorized interactive gaming, once fully developed,
25will allow persons in this Commonwealth to participate in
26interactive poker, not only with other persons in this
27Commonwealth, but with persons in other cooperating United
28States jurisdictions where interactive poker has been

30(10) The expansion of gaming through the authorization

1of interactive gaming requires the Commonwealth to take steps
2to increase awareness of problem gambling across interactive
3channels and to implement effective strategies for
4prevention, assessment and treatment of this behavioral

6§ 13B02. Definitions.

7"Affiliate." As defined in 51 Pa.C.S. § 2252 (relating to
8definitions) The term does not include an individual.

9"Authorized game." Any interactive game approved by the
10board pursuant to this chapter.

11"Authorized participant." A person placing a wager who is
12either physically present in this Commonwealth or located in a
13jurisdiction with which the Commonwealth has negotiated an
14interactive gaming agreement. The intermediate routing of
15electronic data in connection with interactive games shall not
16determine the location or locations in which a wager is
17initiated, received or otherwise made.

18"Covered asset." Any of the following categories of assets,
19if specifically designed for use and knowingly and willfully
20used in connection with wagers or gambling games, using the
21Internet and involving customers located in the United States
22after December 31, 2006, unless licensed by a Federal or State
23authority to engage in such activity:

24(1) any trademark, trade name, service mark or similar
25intellectual property that is used to identify any aspect of
26the Internet website or the operator offering the wagers or
27interactive games to its customers;

28(2) any database or customer list of individuals
29residing in the United States who placed wagers or
30participated in interactive games with or through an Internet

1website or operator not licensed by a Federal or state
2authority to engage in such activity;

3(3) any derivative of a database or customer list
4described in paragraph (2); or

5(4) software, including any derivative, update or
6customization of such software, or hardware relating to the
7management, administration, development, testing or control
8of the Internet website, the interactive games or wagers
9offered through the website or the operator.

10"Gross interactive gaming revenue." The total of all cash or
11cash equivalents paid by authorized participants to a licensee
12in consideration for the play of interactive games minus:

13(1) The total of cash or cash equivalents paid out to
14players as winnings.

15(2) Promotional gaming credits.

16(3) The cash equivalent value of any personal property
17or other noncash item of value included in a drawing, contest
18or tournament and distributed to players.

19(4) Taxes paid to other states or territories of the
20United States pursuant to interactive gaming agreements
21implemented under this chapter.

22(5) Revenues from nongaming sources, such as food,
23beverages, souvenirs, advertising, clothing or other
24nongaming sources.

25Amounts deposited with a licensee for purposes of interactive
26gaming and amounts taken in fraudulent acts perpetrated against
27a licensee for which the licensee is not reimbursed shall be
28considered to have been paid to the licensee for purposes of
29calculating gross interactive gaming revenue.

30"Interactive game." Any game offered through the use of

1communications technology that allows a person, utilizing money,
2checks, electronic checks, electronic transfers of money, credit
3cards, debit cards or any other instrumentality, to transmit to
4electronic information to assist in the placing of a wager and
5corresponding information related to the display of the game,
6game outcomes or other similar information. The term does not
7include the conduct of gaming that occurs entirely among
8participants located within the licensed facility of the
9licensee or its affiliate, to the extent that any such gaming
10may be authorized by the board or noninteractive games that do
11not otherwise require a license under the laws of this
12Commonwealth. For purposes of this definition, "communications
13technology" means any method used and the components employed by
14an establishment to facilitate the transmission of information,
15including, but not limited to, transmission and reception by
16systems based on wire, cable, radio, microwave, light, optics or
17computer data networks, including, but not limited to, the
18Internet and intranets.

19"Interactive gaming agreement." A negotiated agreement
20between the Commonwealth and one or more of the states or
21territories of the United States in which interactive gaming is
22legally authorized that permits persons located in such other
23jurisdictions to place wagers on interactive games with
24licensees in this Commonwealth or to permit persons located in
25this Commonwealth to place wagers on interactive games with
26licensees in such other jurisdictions, or both. Agreements may
27contain other provisions the board deems appropriate, except
28that only authorized games may be permitted to be offered to
29persons located in this Commonwealth pursuant to an agreement.

30"Interactive gaming license." A license issued by the board

1pursuant to this chapter which authorizes the holder to offer
2authorized games for play by, and to accept bets and wagers
3associated with authorized games from, authorized participants.

4"Interactive gaming platform." The combination of hardware
5and software designed and used to manage, conduct or record
6interactive games or the wagers associated with those games and
7which has been approved by the board for purposes of the conduct
8of authorized games.

9"Interactive gaming skin." The portal to an interactive
10gaming platform or Internet website through which an authorized
11game is made available to customers in this Commonwealth.

12"Internet." A computer network of interoperable packet-
13switched data networks.

14"Key interactive gaming employee." An individual employed by
15a licensee, significant vendor or applicant, or by a holding or
16intermediary company of a licensee, significant vendor or
17applicant, who is involved in the operation of, or of the wagers
18associated with, interactive gaming and who is empowered to make
19discretionary decisions that regulate interactive gaming

21"Licensee." A licensed entity that holds an interactive
22gaming license.

23"Poker." Any of several card games traditionally known as
24poker, in which players compete against each other and not
25against the person operating the game, including a game using an
26electronic device that simulates a deck of cards. The term
27includes cash games and tournaments. Licensees may assess a rake
28or any other type of fee associated with the game, contest or
29tournament but may not wager with or against any player.

30"Promotional gaming credit." Any bonus, promotion or amount

1received by a licensee from an authorized participant for which
2the licensee can demonstrate that it or its affiliate has not
3received cash.

4"Significant vendor." A person who offers or proposes to
5offer any of the following services with respect to interactive

7(1) management, administration or control of wagers or
8of the interactive games themselves;

9(2) development, maintenance, provision or operation of
10an interactive gaming platform or any discrete component

12(3) sale, licensing or other receipt of compensation for
13selling or licensing a database or customer list of
14individuals residing in the United States selected, in whole
15or in part, because they placed wagers or participated in
16gambling games with or through an Internet website or
17operator or any derivative of such a database or customer

19(4) provision of any product, service or asset to a
20licensee or significant vendor in return for a percentage of
21interactive gaming revenue, not including fees to financial
22institutions and payment providers for facilitating a deposit
23or withdrawal by an authorized participant; or

24(5) provision of any trademark, trade name, service mark
25or similar intellectual property under which a licensee or
26significant vendor identifies to customers the authorized
27games, the website or equivalent hosting the authorized
28games, any interactive gaming skin or the interactive gaming
29platform, but excluding intellectual property of a person
30providing only art or graphics.

1The term does not include any key interactive gaming employee of
2a licensee or significant vendor. A significant vendor must be
3licensed by the board to provide these services.

4§ 13B03. Regulation and enforcement by the board.

5(a) General rule.--The board shall promulgate regulations
6for the operation and conduct of interactive gaming in this
7Commonwealth and shall enforce the regulations.

8(b) Powers and duties.--

9(1) The board shall authorize licensees and significant
10vendors to conduct interactive gaming involving authorized
11participants, subject to the provisions of this chapter and
12other applicable provisions of law. The board shall also
13develop standards for evaluating and approving interactive
14gaming platforms for use with interactive gaming.

15(2) The board may determine in its discretion the
16categories of employees who satisfy the definition of "key
17interactive employee" and may exclude from the scope of this
18definition any particular licensee, significant vendor,
19applicant or employee or category of employee it deems

21(c) Delegated authority.--The board is designated as the
22agency of the Commonwealth with the power and authority to
23negotiate and enter into interactive gaming agreements on behalf
24of the Commonwealth consistent with this chapter.

25(d) Interactive gaming agreements.--To the extent
26practicable, the board shall negotiate interactive gaming
27agreements with other states, territories or possessions of the
28United States in which interactive gaming has been authorized to
29allow players in this Commonwealth to participate in authorized
30games with players in such other jurisdictions.

1§ 13B04. Prohibition on unauthorized Internet gaming.

2(a) Unauthorized gaming.--

3(1) It shall be unlawful for any person to willfully and
4knowingly operate, carry on, offer or expose for play any
5interactive game or to accept any bet or wager associated
6with any interactive game from any person physically located
7in this Commonwealth at the time of such play that is not
8within the scope of a valid and current license issued by the
9board pursuant to this chapter or by another state, territory
10or possession of the United States with which the
11Commonwealth has an interactive gaming agreement that permits
12such activity.

13(2) It shall be unlawful for any person to willfully and
14knowingly provide services with respect to any interactive
15game, bet or wager specified in paragraph (1).

16(b) Grading of offense.--A person who violates subsection
17(a) commits a misdemeanor of the first degree. For a second or
18subsequent violation of subsection (a), a person commits a
19felony of the second degree.

20(c) Penalties.--

21(1) For a first violation of subsection (a), a person
22shall be sentenced to pay a fine of:

23(i) Not less than $75,000 nor more than $150,000, if
24the person is an individual;

25(ii) Not less than $150,000 nor more than $300,000,
26if the person is a licensed manufacturer or supplier; or

27(iii) Not less than $300,000 nor more than $600,000,
28if the person is a licensed gaming entity.

29(2) For a second or subsequent violation of subsection
30(a), a person shall be sentenced to pay a fine of:

1(i) Not less than $150,000 nor more than $300,000,
2if the person is an individual.

3(ii) Not less than $300,000 nor more than $600,000,
4if the person is a licensed manufacturer or supplier.

5(iii) Not less than $600,000 nor more than
6$1,200,000, if the person is a licensed gaming entity.

7(d) Forfeiture.--If a person places a wager on an
8interactive game from a location in which such activity is
9unauthorized, the person shall forfeit all entitlement to any
10winnings and the moneys associated with any such forfeited
11winnings shall be deposited by the licensee into the Compulsive
12and Problem Gambling Treatment Fund established under section
131509(b) (relating to compulsive and problem gambling program).

14(e) Tax Liability.--An unlicensed person offering
15interactive games to persons in this Commonwealth shall be
16liable for all taxes required by this chapter in the same manner
17and amounts as if such person were a licensee. Timely payment of
18such taxes shall not constitute a defense to any prosecution or
19other proceeding in connection with unauthorized interactive
20gaming, except for a prosecution or proceeding alleging failure
21to make such payment.

22§ 13B05. Application for license.

23(a) Filing of application.--Ninety days from the effective
24date of this section the board shall permit filing of
25applications for licenses pursuant to this chapter. (???
26temporary regulations.) The application shall include, as

28(1) The name and business address of the applicant,
29including an organizational chart which identifies the
30applicant's relationship to any person that holds a slot

1machine license and a table game operation certificate issued
2by the board.

3(2) Identification of and a detailed description of the
4qualifications of any proposed significant vendors. Detailed
5information shall be provided describing the specific
6operational responsibilities of significant vendors and the
7nature of the economic relationship with those significant

9(3) A detailed description of the technical protocols
10and parameters of the interactive gaming platform proposed to
11be utilized.

12(4) Identification and a description of the interactive
13games the applicant proposes to make available.

14(5) Such other information as the board, in its
15discretion, shall determine to require.

16(b) Temporary authorization.--

17(1) During the first 18 months from the effective date
18of this section, the board may issue temporary authorizations
19to applicants for licensing as a significant vendor, which
20may remain in effect until the shorter of 12 months after the
21date of issue or the date by which the board considers the
22subject application. Temporary authorizations may be renewed
23not more than once, upon a showing of good cause. Temporary
24authorization shall allow the applicant to engage in all of
25the functions of a fully licensed significant vendor for the
26duration of the temporary authorization.

27(2) No temporary authorization may be issued unless:

28(i) The applicant has submitted a complete license

30(ii) The applicant agrees to pay the fee prescribed

1in section 13B09 (relating to licensing fee) within 60
2days of issuance of the temporary authorization, which
3may be refundable in the event a permanent license is not
4issued. Failure to make timely payment shall result in
5revocation of the temporary authorization.

6(iii) The bureau has stated that it has no objection
7to the issuance of a temporary authorization to the

9(3) Within 45 days of the date that the bureau receives
10the completed application of an applicant for investigation,
11the bureau shall conduct a preliminary investigation of the
12applicant and any key interactive gaming employee of the
13applicant, which shall include:

14(i) a criminal background investigation of the
15applicant and any key interactive gaming employee of the
16applicant; and

17(ii) any investigation necessary to determine
18whether the applicant or any key interactive gaming
19employee of the applicant may fall within the scope of
20section 13B08 (relating to presumption of unsuitability).

21(4) If the bureau's preliminary investigation discloses
22no material adverse information, then the bureau shall issue
23to the executive director a statement of no objection to the
24issuance of a temporary authorization to the applicant.

25(5) If the bureau's preliminary investigation discloses
26material adverse information or if the bureau is unable to
27confirm that section 13B08 does not apply, it shall register
28an objection and no temporary authorization may be issued
29until the material concern is resolved or, if applicable,
30confirmation that section 13B08 does not apply is received.

1(6) If the bureau's full investigation of an applicant
2discloses material adverse information, the temporary
3authorization of any applicant may be suspended or withdrawn
4upon a showing of cause by the bureau.

5§ 13B06. Board consideration of application.

6(a) Suitability.--A holder, or an affiliate of a holder, of
7a slot machine license and table game operation certificate,
8whose license and certificate are in good standing, shall be
9considered suitable to be issued an interactive gaming license
10by the board without additional investigation, subject to the
11provisions of section 13B08 (relating to presumption of

13(b) Significant vendors.--The board shall determine the
14suitability of any significant vendors, consistent with the
15requirements of this chapter.

16(c) Qualifications.--A review of the suitability of a person
17to hold a license as a licensee or significant vendor shall
18include the review and determination of whether:

19(1) The person possesses the requisite experience and
20skill to perform the functions consistent with the
21requirements of this chapter.

22(2) The applicant is a person of good character, honesty
23and integrity.

24(3) The applicant is a person whose prior activities,
25criminal record, if any, reputation, habits and associations
26do not:

27(i) pose a threat to the public interest or to the
28effective regulation and control of interactive gaming;

30(ii) create or enhance the dangers of unsuitable,

1unfair or illegal practices, methods and activities in
2the conduct of interactive gaming or in the carrying on
3of the business and financial arrangements incidental to
4such gaming; and

5(4) The applicant has disclosed to the board all known
6affiliations or relationships, whether direct or indirect,
7with persons and covered assets of persons described by
8section 13B08.

9(d) Owners and key interactive gaming employees.--In
10connection with an application for a license as a licensee or
11significant vendor, the applicant shall identify and the board
12shall determine the suitability of an applicant's owners, chief
13executive officer, chief financial officer, any other officer
14whom the board deems significantly involved in the management or
15control of the applicant and all key interactive gaming

17(e) Brand transparency.--The board may not approve the
18application of any prospective licensee and shall suspend the
19license of any licensee if the licensee's Internet website
20through which authorized games are offered to customers in this
21Commonwealth or any interactive gaming skin with which the
22licensee is associated is identified by a brand or name that is
23not owned or controlled by the licensee or an affiliate of the

25(f) Issuance of order.--The board shall issue an order
26granting or denying an application for a license as a licensee
27or significant vendor within 120 days of the date on which a
28properly completed application and any additional information
29that the board may require is filed. If the board approves an
30application, it may impose reasonable conditions of licensure

1consistent with the requirements of this chapter.

2§ 13B07. Institutional investors.

3(a) Declaration of investment intent.--

4(1) An institutional investor holding less than 25% of
5the equity securities of a licensee's, significant vendor's
6or applicant's holding or intermediary companies, shall be
7granted a waiver of any investigation of suitability or other
8requirement if the securities are those of a corporation,
9whether publicly traded or privately held, and the holdings
10of the securities were purchased for investment purposes
11only. The institutional investor shall file a certified
12statement that it has no intention of influencing or
13affecting the affairs of the licensee, significant vendor,
14applicant or its holding or intermediary companies. However,
15an institutional investor shall be permitted to vote on
16matters put to the vote of the outstanding security holders.

17(2) The board may grant a waiver to an institutional
18investor holding a higher percentage of such securities upon
19a showing of good cause and if the conditions specified in
20paragraph (1) are met.

21(3) An institutional investor granted a waiver under
22this subsection who subsequently decides to influence or
23affect the affairs of the licensee, significant vendor or
24applicant's holding or intermediary company shall provide not
25less than 30 days' notice of such intent and shall file with
26the board a request for determination of suitability before
27taking any action that may influence or affect the affairs of
28the issuer. An institutional investor shall be permitted to
29vote on matters put to the vote of the outstanding security

1(4) If an institutional investor changes its investment
2intent or if the board finds reasonable cause to believe that
3the institutional investor may be found unsuitable, no action
4other than divestiture shall be taken by the institutional
5investor with respect to its security holdings until there
6has been compliance with any requirements established by the
7board, which may include the execution of a trust agreement.

8(5) The licensee or significant vendor or applicant and
9its relevant holding, intermediary or subsidiary company
10shall notify the board immediately of any information about,
11or actions of, an institutional investor holding its equity
12securities where such information or action may impact the
13eligibility of the institutional investor for a waiver
14pursuant to this subsection.

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

16(1) that an institutional investor holding any security
17of a holding or intermediary company of a licensee or
18significant vendor or applicant or, where relevant, of
19another subsidiary company of a holding or intermediary
20company of a licensee or significant vendor or applicant
21which is related in any way to the financing of the licensee
22or significant vendor or applicant, fails to comply with the
23provisions of subsection (a); or

24(2) by reason of the extent or nature of its holdings,
25an institutional investor is in a position to exercise such a
26substantial impact upon the controlling interests of a
27licensee or significant vendor or applicant that
28investigation and determination of suitability of the
29institutional investor is necessary to protect the public

1then the board may take any necessary action otherwise
2authorized under this chapter to protect the public interest.

3§ 13B08. Presumption of unsuitability.

4(a) General rule.--The board may not issue a license to or
5otherwise find suitable any prospective licensee or significant
6vendor, or key interactive gaming employee of a licensee or
7significant vender, who has:

8(1) At any time, either directly or through a third
9party whom it controlled or owned in whole or in significant
10part, knowingly or willfully:

11(i) accepted or made available wagers on interactive
12games using the Internet from persons located in the
13United States after December 31, 2006, unless licensed by
14a Federal or state authority to engage in such activity;

16(ii) facilitated or otherwise provided services with
17respect to wagers or interactive games using the Internet
18involving persons located in the United States for a
19person described in subparagraph (i), if such activities
20or services would cause such person to be considered a
21significant vendor if those activities or services were
22provided with respect to interactive games pursuant to
23this chapter, and if such person acted with knowledge of
24the fact that such wagers or interactive games involved
25persons located in the United States.

26(2) Purchased or acquired, directly or indirectly, in
27whole or in significant part, a third party described in
28paragraph (1) or will use that third party or a covered asset
29in connection with interactive gaming.

30(b) Appeal procedures.--A prospective licensee, significant

1vendor or key interactive gaming employee may appeal a
2determination by the board that it is within the scope of
3subsection (a) only in accordance with the following procedures:

4(1) The board shall afford the prospective licensee or
5significant vendor a hearing at which such person may provide
6evidence to support the basis on which it seeks relief.

7(2) The prospective licensee or significant vendor must
8demonstrate by a preponderance of the evidence that:

9(i) its conduct in connection with interactive games
10and wagers involving persons located in the United States
11was not unlawful; and

12(ii) if applicable, the covered assets to be used or
13that are being used by such person in connection with
14interactive gaming were not used in a manner that was
15unlawful, in each case under Federal law and the laws of
16each state in which persons making the wagers or playing
17the games were located.

18(3) The determination of the board shall be made without
19regard to whether the person has been prosecuted under the
20criminal laws of any state, the United States or other
21jurisdiction or has been prosecuted and the proceeding
22terminated in a manner other than with a conviction.

23(4) If the prohibition is waived, the prospective
24licensee or significant vendor shall satisfy all otherwise
25applicable license and suitability requirements.

26§ 13B09. Licensing fee.

27If the board grants an application under section 13B05
28(relating to application for license) within 60 days of entry of
29the board's order, the successful applicant shall pay a
30licensing fee of $5,000,000 if a licensee or ????, if a

1significant vendor.

2§ 13B10. Accounting and operational internal controls.

3Each interactive gaming license applicant shall submit to the
4board and department, in such manner as the board shall require,
5a description of its administrative and accounting procedures in
6detail, including its written system of internal control. In
7addition to other such standards that the board, in its
8discretion, may choose to require, the board shall require
9licensees to implement appropriate safeguards:

10(1) To ensure, to a reasonable degree of certainty, that
11authorized participants are not less than 21 years of age.

12(2) To ensure, to a reasonable degree of certainty, that
13authorized participants are physically located within this
14Commonwealth or such other jurisdiction that is permissible
15under this chapter.

16(3) To protect, to a reasonable degree of certainty, the
17privacy and online security of authorized participants.

18(4) To ensure, to a reasonable degree of certainty, that
19the interactive games are fair and honest and that
20appropriate measures are in place to deter, detect and, to
21the extent reasonably possible, to prevent cheating,
22including collusion, and use of cheating devices, including
23the use of software programs, sometimes referred to as
24"bots," that make bets or wagers according to algorithms.

25(5) To minimize compulsive gambling and to provide
26notice to authorized participants of resources to help
27problem gamblers.

28(6) To ensure authorized participants' funds are held in
29accounts segregated from the funds of licensees and otherwise
30are protected from corporate insolvency, financial risk or

1criminal or civil actions against the licensee.

2§ 13B11. Interactive gaming tax.

3(a) Weekly taxation.--Each licensee shall report to the
4department and pay from its daily gross interactive gaming
5revenue, on a form and in a manner prescribed by the department,
6a tax of 14% of its daily gross interactive gaming revenue,
7which shall be payable to the department on a weekly basis and
8shall be based upon gross interactive gaming revenue for the
9previous week.

10(b) Taxes on out-of-State wagering.--The tax rate which
11shall be assessed and collected by the department with respect
12to any wagers placed by residents of this Commonwealth with an
13interactive gaming operator outside of this Commonwealth, but
14authorized pursuant to an interactive gaming agreement shall be
15governed by the agreement but may not exceed 14% of gross
16interactive gaming revenue derived from residents of this

18(c) Taxes held in trust.--All funds owed to the Commonwealth
19under this section shall be held in trust for the Commonwealth
20by the licensee until the funds are paid to the department.
21Unless otherwise agreed to by the board, a licensee shall
22establish a separate bank account into which such funds shall be
23deposited and maintained until paid to the department.

24(d) Federal presumption.--In the event Federal law
25authorizes interactive gaming which establishes a tax based on
26gross interactive gaming revenue, deposits or the substantial
27equivalent of or intended substitute for either of them, of
28which a portion is allocated to the states, that tax shall
29supersede, in its entirety, the tax imposed by this section.

30§ 13B12. Prohibition on Internet cafes.

1(a) General rule.--No organization or commercial enterprise,
2other than a licensee, shall operate a place of public
3accommodation, club, including a club or association limited to
4dues-paying members or similar restricted groups, or similar
5establishment in which computer terminals or similar access
6devices are advertised or made available to be used principally
7for the purpose of accessing interactive games.

8(b) Construction.--Nothing in this section shall be
9construed to require the owner or operator of a hotel or motel
10or other public place of general use in this Commonwealth to
11prohibit or block guests from playing interactive games.

12§ 13B13. Testing of hardware, software and equipment.

13(a) Testing by the board.--The board may expand its testing
14facility, utilize the services of a private testing facility or
15adopt the testing and certification standards of another
16jurisdiction and may approve computer hardware, software or
17associated equipment based on the prior approval of a private
18testing facility or of another jurisdiction whose standards the
19board reasonably determines are adequate and comparable to those
20required by this part. Costs associated with the expansion of
21its own testing facility shall be assessed on significant
22vendors licensed to provide interactive gaming platforms.

23(b) Approval.--

24(1) No interactive gaming platform may be utilized by a
25licensee unless approved by the board or its testing and
26certification facility under this section. The board shall
27not approve an interactive gaming platform unless the
28platform is subject to the control, and is the ultimate
29responsibility, of the licensee.

30(2) This subsection shall not be construed to prohibit a

1licensee from licensing use or delegating daily operation of
2the interactive gaming platform from or to a significant

4§ 13B14. Expanded compulsive and problem gambling programs.

5(a) Expanded programs.--

6(1) The board and the Department of Health shall jointly
7develop expanded programs to address compulsive and problem
8gambling issues relating to interactive gaming.

9(2) Licensees shall address compulsive and problem
10gambling issues in the context of interactive gaming in their
11respective compulsive and problem gambling plans on file with
12the board.

13(b) Message.--Licensees shall permanently and continuously
14display the following message to persons at the time of logging
15on to the Internet websites of the licensees or any interactive
16gaming skin:

17If you or someone you know has a gambling problem and
18wants help, call 1-800-GAMBLER.

19§ 13B15. Application of other provisions of this part.

20The following sections of this part, which are expressly
21applicable to the conduct or operation of slot machines or table
22games, are also deemed applicable to interactive gaming under
23this chapter:

24(1) The board's power and duty to require the licensees
25prohibit persons under 21 years of age from playing
26interactive games under section 1207(8) (relating to
27regulatory authority of board).

28(2) The obligation to include information on interactive
29gaming in the board's annual report under section 1211(a.1)
30(relating to reports of board).

1(3) The procedures, parameters and time frames for
2promulgating temporary regulations under section 13A03(a) and
3(b) (relating to temporary table game regulations).

4(4) Manufacturing licensing requirements pursuant to
5section 1317.1 (relating to manufacturer licenses).

6(5) Gaming service provider requirements pursuant to
7section 1317.2 (relating to gaming service provider).

8(6) Permit renewal requirements pursuant to section 1326
9(relating to license renewals).

10(7) Section 1402 (relating to gross terminal revenue
11deductions), except that recovery of the costs and expenses
12of regulating interactive gaming under this chapter shall be
13limited to 1% of gross interactive gaming revenue.

14(8) The declaration that it shall be unlawful for an
15individual under 21 years of age to wager, play or attempt to
16play an interactive game under section 1518(a)(13.1)
17(relating to prohibited acts; penalties).

18Section 2. This act shall take effect in 60 days.