PRINTER'S NO. 1100
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
901
Session of
2015
INTRODUCED BY HARHAI, THOMAS, COHEN, YOUNGBLOOD, HARKINS,
DeLUCA, KORTZ AND MAHONEY, APRIL 6, 2015
REFERRED TO COMMITTEE ON GAMING OVERSIGHT, APRIL 6, 2015
AN ACT
Providing for the licensing and regulation of video gaming;
prescribing powers and duties of the Pennsylvania State
Police and the Department of Revenue; establishing the State
Video Gaming Fund; and prescribing penalties.
TABLE OF CONTENTS
Section 1. Short title.
Section 2. Scope of act.
Section 3. Definitions.
Section 4. Video gaming.
Section 5. Licensing of manufacturers, operators and service
technicians.
Section 6. Licensed establishment license.
Section 7. Limitations on licensed establishments.
Section 8. Central communications system.
Section 9. Video gaming machine prototype.
Section 10. Fees.
Section 11. Unlawful use by minors.
Section 12. Inducements prohibited.
Section 13. Multiple types of licenses prohibited.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Section 14. Illegal activities.
Section 15. Distribution of net profits.
Section 16. State Video Gaming Fund.
Section 17. Preemption of local taxes and license fees.
Section 18. Exemption from State gaming laws.
Section 19. Exemption from Federal regulation.
Section 20. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Video Gaming
Act.
Section 2. Scope of act.
This act allows for the licensing and regulation of video
gaming in this Commonwealth.
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Coin-operated amusement machine." A machine that requires
the insertion of a coin, currency or tokens to play or activate
a game, the outcome of which is primarily determined by the
skill of the player. The term does not include a video lottery
terminal.
"Department." The Department of Revenue of the Commonwealth.
"Fund." The State Video Gaming Fund established by this act.
"Gaming machine." A device or machine that has the outcome
of play primarily determined by chance. The term includes an
antique slot machine under 18 Pa.C.S. § 5513(c) (relating to
gambling devices, gambling, etc.) when used for profit. The term
20150HB0901PN1100 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
shall not include any of the following:
(1) A coin-operated amusement machine.
(2) A video lottery terminal that has all of its seals
or identification plates.
(3) Slot machines as defined under 4 Pa.C.S. § 1103
(relating to definitions).
(4) A game of chance under the act of December 19, 1988
(P.L.1262, No.156), known as the Local Option Small Games of
Chance Act.
(5) Lottery terminals used under the act of August 26,
1971 (P.L.351, No.91), known as the State Lottery Law.
"Licensed establishment." A restaurant, bar, tavern, hotel
or club that has a valid liquor or malt or brewed beverage
license under Article IV of the act of April 12, 1951 (P.L.90,
No.21), known as the Liquor Code.
"Manufacturer." An individual, partnership, association or
corporation that:
(1) Is licensed by the Department of Revenue.
(2) Manufactures or assembles video gaming machines.
"Net profits." All money put into a video gaming machine
minus the cash awards paid out to players.
"Operator." An individual, partnership, association or
corporation licensed by the Department of Revenue to buy, sell,
own, maintain, service or distribute video gaming machines for
placement in licensed establishments. The term does not include
a manufacturer.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Service technician." An individual holding a service
technician's license issued by the Department of Revenue
allowing the individual to service, maintain and repair video
20150HB0901PN1100 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
gaming machines.
"State Lottery." The lottery established and operated under
the act of August 26, 1971 (P.L.351, No.91), known as the State
Lottery Law.
"Video gaming machine." A device or machine that upon
insertion of a coin or currency will play or simulate the play
of a video poker, keno, blackjack or any other game authorized
by the Department of Revenue that utilizes a video display and
microprocessors and in which by the skill of the player or by
chance the player may receive free games or credits that may be
redeemed for cash. The term shall not include any of the
following:
(1) Small games of chance as authorized under the act of
December 19, 1988 (P.L.1262, No.156), known as the Local
Option Small Games of Chance Act.
(2) Lottery games of the Pennsylvania State Lottery as
authorized under the act of August 26, 1971 (P.L.351, No.91),
known as the State Lottery Law.
(3) Bingo as authorized under the act of July 10, 1981
(P.L.214, No.67), known as the Bingo Law.
(4) Slot machines or table games as authorized under 4
Pa.C.S. (relating to amusements).
Section 4. Video gaming.
(a) Duty of department.--The department shall regulate and
adopt standards for video gaming activities and provide for
video gaming at licensed establishments as authorized under this
act.
(b) Prohibition.--With the exception of tickets indicating
credits won, which are redeemable for cash, no machine may
directly dispense coins, cash, tokens or anything else of value.
20150HB0901PN1100 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Section 5. Licensing of manufacturers, operators and service
technicians.
(a) Eligibility.--A person may apply to the secretary for a
manufacturer's license, an operator's license or a service
technician's license under this section on a form prescribed by
the department.
(b) Requirements.--The following shall apply to licenses
issued under this section:
(1) All licenses shall be issued at the discretion of
the secretary. The secretary shall make a determination
within 60 days of receiving all required information from the
applicant. Nothing in this act is intended or shall be
construed to create an entitlement to a license by any
person.
(2) The secretary may refuse to issue a license under
this section or may suspend or revoke a license if any of the
following apply:
(i) The applicant or the applicant's business is not
in compliance with all laws of this Commonwealth.
(ii) The secretary finds that the experience,
character and general fitness of the applicant and any
officers, directors, stockholders and partners of the
applicant and any other person that shares or will share
in the profits or participates or will participate in the
management of the affairs of the applicant will not be
consistent with the public interest.
(iii) The applicant or an officer, director,
stockholder or partner of the applicant or any other
person that shares or will share in the profits or
participates or will participate in the management of the
20150HB0901PN1100 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
affairs of the applicant has done any of the following:
(A) Failed to comply with the terms of a license
issued under this section.
(B) Violated any rule, regulation or order of
the department.
(iv) A person other than the applicant shares or
will share in the profits of the applicant other than as
a bona fide owner of a financial interest in the
applicant or participates or will participate in the
management of the affairs of the applicant.
(3) The secretary may issue a temporary license upon the
terms and conditions as the secretary deems necessary,
desirable or proper to effectuate the provisions of this act.
(4) The secretary shall refuse to grant or renew a
license issued under this section and may revoke a license if
the applicant is not compliant with the tax laws of this
Commonwealth.
(c) Term and application fees.--
(1) A license issued under this section shall be valid
for a period of three years from the date of issuance and may
be renewed for three-year terms upon application of the
applicant.
(2) An applicant for a license under this section must
pay a nonrefundable initial application fee of $500 and a
nonrefundable renewal application fee of $100.
(d) Suitability.--In addition to any other specifications
and qualifications established by the department, the
Pennsylvania State Police shall conduct a background
investigation of any applicant under this section, as follows:
(1) The applicant shall be required to consent to a
20150HB0901PN1100 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
background investigation of the applicant, its owners,
officers, directors, stockholders and partners and any other
person that shares or will share in the profits or
participates or will participate in the management of the
affairs of the applicant and shall provide any and all
information requested by the Pennsylvania State Police and
consent to a release to obtain any and all information,
including fingerprints, necessary for the completion of the
background investigation.
(2) The background investigation shall include a
security, criminal, credit and suitability investigation by
the Pennsylvania State Police, which shall include records of
criminal arrests and convictions, no matter where occurring,
including Federal criminal history record information. None
of the information obtained by the Pennsylvania State Police
under this subsection shall be disclosed publicly nor be
subject to disclosure under the act of February 14, 2008
(P.L.6, No.3), known as the Right-to-Know Law.
(3) Each application for a license under this section
must be accompanied by a nonrefundable fee in such amount as
established by the Pennsylvania State Police for the cost of
each individual requiring a background investigation. The
reasonable and necessary costs and expenses incurred in any
background investigation shall be reimbursed to the
Pennsylvania State Police by the applicant.
(4) Upon completion of the background investigation, the
Pennsylvania State Police shall determine whether the
experience, character and general fitness of the applicant
and its owners, officers, directors, stockholders and
partners, and any other person that shares or will share in
20150HB0901PN1100 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
the profits or participates or will participate in the
management of the affairs of the applicant, are such that the
participation of the applicant in the operations of video
gaming under this act will be consistent with the public
interest. The Pennsylvania State Police shall notify the
department of its determination and may share information
with the department to the extent permitted by Federal and
State law as determined by the Pennsylvania State Police.
(5) In determining whether participation by an applicant
is consistent with the public interest, the Pennsylvania
State Police's standards shall include whether the applicant
and its owners, officers, directors, stockholders and
partners, and any other person that shares or will share in
the profits or participates or will participate in the
management of the affairs of the applicant:
(i) Have been convicted of a crime involving moral
turpitude.
(ii) Have been convicted of illegal gambling
activities, including with respect to lotteries, gambling
devices, gambling or pool selling under 18 Pa.C.S. §§
5512 (relating to lotteries, etc.), 5513 (relating to
gambling devices, gambling, etc.) or 5514 (relating to
pool selling and bookmaking) or the similar laws of
another state.
(iii) Have been convicted of any fraud or
misrepresentation in any context.
(6) The department may not issue a license to any
applicant whose participation is deemed by the Pennsylvania
State Police to be inconsistent with the public interest.
Determination of suitability by the Pennsylvania State Police
20150HB0901PN1100 - 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
shall not entitle an applicant to receive a license under
this act.
(7) A finding of suitability is a privilege. No
applicant has a vested or property right in being found
suitable for licensure under this section. A determination of
suitability or unsuitability shall not be subject to
challenge or appeal.
(8) Upon any change in the owners, officers, directors,
stockholders and partners, or any other person that shares or
will share in the profits or participates or will participate
in the management of the affairs of an applicant, the
applicant shall consent to an updated background
investigation and updated finding of suitability by the
Pennsylvania State Police under this subsection. The
department shall revoke the license issued to an applicant in
the case of a finding that the applicant is no longer
suitable under this paragraph.
(e) Employees.--
(1) An employee of an applicant who has or will have
access to video gaming machines must receive and maintain a
finding of suitability based on a background check from the
Pennsylvania State Police consistent with the provisions of
subsection (d).
(2) No employee of an applicant shall have access to
video gaming machines until such time as the employee has
received a finding of suitability from the Pennsylvania State
Police.
Section 6. Licensed establishment license.
The department shall issue a license to any licensed
establishment upon showing that its liquor or retail dispenser
20150HB0901PN1100 - 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
license is valid and is in good standing with the Pennsylvania
Liquor Control Board. The annual fee for a licensed
establishment shall be $500 per video gaming machine.
Section 7. Limitations on licensed establishments.
(a) General rule.--Licensed establishments shall be subject
to the following limitations:
(1) No licensed establishment may have more than 10
video gaming machines.
(2) No applicant may hold more than one type of license
authorized by this act.
(3) Each licensee must pay its license fee. Payment of
the fee by a person, partnership or corporation other than
the licensee is prohibited.
(b) Unlawful acts.--
(1) No licensed establishment shall permit:
(i) An individual under 21 years of age to operate
or attempt to operate a video gaming machine.
(ii) An individual under 21 years of age to redeem
or attempt to redeem credits or tickets won or to receive
or attempt to receive cash or prizes from a video gaming
machine.
(iii) A visibly intoxicated person to play a video
gaming machine.
(iv) An individual to tamper with the connection of
a video gaming machine to the central computer.
(2) In addition to any other penalties provided by law,
a person who violates paragraph (1)(i), (ii) or (iii) commits
a summary offense.
(c) Seizure, forfeiture and destruction of gaming
machines.--
20150HB0901PN1100 - 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(1) Gaming machines shall be considered to be per se
illegal. Gaming machines and their proceeds may be seized
upon view as illegal contraband by agents of the department
and any other law enforcement agency.
(2) The owner of a gaming machine shall have no right to
compensation for the seizure and destruction of a gaming
machine or the proceeds of a gaming machine.
(d) Penalties.--
(1) In the case of a gaming machine seized from a
licensed establishment, for a first violation, a penalty of
not less than $1,000 nor more than $5,000 and a suspension of
the licensed establishment owner's liquor license for not
less than seven consecutive days and, for each subsequent
violation, a penalty of $15,000 and a suspension of the
liquor license for not less than 14 consecutive days.
(2) In the case of a gaming machine seized from a place
of business other than a licensed establishment, for a first
violation, a penalty of not less than $1,000 nor more than
$5,000 against the owner of the business from which the
gaming machine was seized and, for each subsequent violation,
a penalty of $15,000.
Section 8. Central computer system.
The department shall utilize the central computer system
utilized by the State Lottery. All licensed video gaming
machines shall be linked to the central computer system at the
State Lottery.
Section 9. Video gaming machine prototype.
(a) General rule.--The department shall develop a prototype
video gaming machine that includes hardware and software
specifications. The specifications shall include the following
20150HB0901PN1100 - 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
provisions:
(1) A video gaming machine shall interact with the
central computer system.
(2) Nonremovable identification plates shall appear on
the exterior of the video gaming machine containing the name
of the manufacturer and the serial number and model number of
the video gaming machine.
(3) Rules of play shall be displayed on the video gaming
machine face or screen as promulgated by regulation of the
department.
(4) A video gaming machine may not directly dispense
coins, cash, tokens or any other article of exchange or value
except for tickets. The tickets shall be dispensed by
pressing the ticket-dispensing button on the machine at the
end of one's turn or play. The ticket shall indicate the
total amount of credits and the cash award and the player
must turn in this ticket to the appropriate person at the
licensed establishment to receive the cash award. The cost of
the credit shall be 25¢ and the number of credits played per
game shall not exceed 10.
(5) No cash award for any individual game may exceed
$1,000.
(6) A video gaming machine shall be designed and
manufactured with total accountability to include gross
proceeds, net profits, winning percentages and any other
information the department requires.
(7) A video gaming machine shall pay out a minimum of
85% of the amount wagered.
(8) A video gaming machine shall contain a prominent
sign on the front of the machine with the following
20150HB0901PN1100 - 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
statement:
If you or someone you know has a gambling problem,
help is available. Call (Toll-free telephone number
provided by the State).
(b) Agreement with Pennsylvania Gaming Control Board.--The
department may enter into an agreement with the Pennsylvania
Gaming Control Board to develop and verify specifications for
video gaming machines.
Section 10. Fees.
(a) Operator license fee.--The annual fee for an operator
license shall be $25,000 for the first 50 video gaming machines
and an additional $500 per video gaming machine license in
excess of 50. An operator license permits the operator to sell
video gaming machines to another licensed operator.
(b) Manufacturer license fee.--The annual fee for a
manufacturer license shall be $10,000.
(c) Service technician license fee.--The annual fee for a
service technician license shall be $100.
(d) Deposit of fees.--All license fees shall be deposited
into the fund.
Section 11. Unlawful use by minors.
(a) Prohibition.--
(1) No individual under 21 years of age may use or play
a video gaming machine.
(2) An individual who violates this subsection commits a
summary offense.
(b) Licensees.--
(1) A licensed establishment may not, regardless of
knowledge or intent, permit an individual under 21 years of
age to play or use a video gaming machine.
20150HB0901PN1100 - 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) A licensed establishment that violates this
subsection commits a misdemeanor of the second degree.
Section 12. Inducements prohibited.
(a) General rule.--No video gaming operator may offer or
give any type of inducement or incentive to a licensed
establishment to secure a machine placement agreement.
(b) Definition.--As used in this section, the term
"inducement" or "incentive" means consideration from a licensed
machine vendor to a licensed establishment owner as an
enticement to solicit or maintain the licensed establishment
owner's business. The term includes cash, gifts, loans and
prepayment of commissions.
Section 13. Multiple types of licenses prohibited.
(a) Manufacturer restriction.--No manufacturer may be
licensed as an operator or own, manage or control a licensed
establishment. A manufacturer may be licensed only to sell to
licensed operators.
(b) Operator restriction.--
(1) No licensed operator may:
(i) be licensed as a manufacturer; or
(ii) own, manage or control a licensed
establishment.
(2) A licensed operator shall be licensed only to
contract with licensed establishments.
(3) Nothing in this subsection shall be construed to
prohibit a licensed operator from selling used equipment to
another licensed operator.
(c) Establishment owner restriction.--No owner of a licensed
establishment may be licensed as a manufacturer or operator. An
owner of a licensed establishment may only contract with an
20150HB0901PN1100 - 14 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
operator or service technician to place and service equipment.
Section 14. Illegal activities.
No person may sell, distribute, service, own, operate or
place on location a video gaming machine unless the person is
licensed under this act and is in compliance with all
requirements of this act.
Section 15. Distribution of net profits.
Net profits shall be calculated by subtracting cash awards
from the total consideration played on the machine. The net
profits from each video gaming machine shall be distributed in
the following manner:
(1) Thirty percent to the licensed establishment.
(2) Thirty percent to the licensed operator.
(3) Forty percent to the fund.
Section 16. State Video Gaming Fund.
(a) Establishment.--The State Video Gaming Fund is
established in the State Treasury.
(b) Deposit of fees.--Fees under section 10(d) and the
portion of net profits under section 15(3) shall be deposited
into the fund.
(c) Deductions.--
(1) The department shall determine costs, expenses or
payments to be deducted from the fund to the appropriate
agency necessary to administer this act.
(2) The deductions made under this subsection shall not
exceed 10% of the total funds available in the fund.
(3) The following costs and expenses shall be paid from
the fund upon appropriation by the General Assembly:
(i) The costs and expenses to be incurred by the
department in administering this act based upon a budget
20150HB0901PN1100 - 15 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
submitted by the department under subsection (d).
(ii) The costs and expenses to be incurred by the
Pennsylvania State Police and the Office of Attorney
General and not otherwise reimbursable under this act in
administering, regulating and enforcing this act based
upon a budget submitted by the department under
subsection (d).
(iii) The costs and expenses to be incurred by the
Pennsylvania Gaming Control Board, if an agreement is
entered into with the department under section 9(b), in
carrying out its responsibilities under this act based
upon a budget submitted by the department under
subsection (d).
(d) Itemized budget reporting.--
(1) The department, the Pennsylvania Gaming Control
Board, the Pennsylvania State Police and the Office of
Attorney General shall prepare and annually submit to the
chairman of the Appropriations Committee of the Senate and
the chairman of the Appropriations Committee of the House of
Representatives an itemized budget consisting of amounts to
be appropriated out of the fund.
(2) As soon as practicable after receiving copies of the
itemized budgets submitted under paragraph (1), the
department shall prepare and submit to the chairman of the
Appropriations Committee of the Senate and the chairman of
the Appropriations Committee of the House of Representatives
analyses of and make recommendations regarding the itemized
budgets.
(3) After determining the appropriate funding based on
paragraphs (1) and (2), the funds shall be appropriated by
20150HB0901PN1100 - 16 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
the General Assembly to the appropriate department or agency.
(e) Funding for compulsive gambling programs.--The
department shall allocate at least $500,000 annually for the
purpose of treating compulsive gambling in this Commonwealth.
This allocation shall be appropriated out of the fund.
(f) Interfund transfers.--Monthly, the State Treasurer shall
transfer the remaining balance in the fund which is not
allocated in subsections (c) or (e) to the State Lottery Fund
established in section 311 under the act of August 26, 1971
(P.L.351, No.91), known as the State Lottery Law.
Section 17. Preemption of local taxes and license fees.
(a) General rule.--Video gaming machines shall be exempt
from taxes levied under the following:
(1) The act of August 5, 1932 (Sp.Sess., P.L.45, No.45),
referred to as the Sterling Act.
(2) The act of December 31, 1965 (P.L.1257, No.511),
known as The Local Tax Enabling Act.
(3) 53 Pa.C.S. Pt. III Subpt. E (relating to home rule
and optional plan government).
(4) Any statute that confers taxing authority to a
political subdivision.
(b) Exemption and limitation.--
(1) Video gaming machines are exempt from local
licensing fees.
(2) Local licensing fees imposed on all other coin-
operated amusement machines shall not exceed $150.
Section 18. Exemption from State gaming laws.
Video gaming machines authorized under this act and their use
as authorized under this chapter are exempt from 18 Pa.C.S. §
5513 (relating to gambling devices, gambling, etc.).
20150HB0901PN1100 - 17 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Section 19. Exemption from Federal regulation.
The General Assembly declares that the Commonwealth is exempt
from section 2 of the Gambling Devices Transportation Act (64
Stat. 1134, 15 U.S.C. § 1172 et seq.). Shipments of approved
video gaming machines into this Commonwealth in compliance with
sections 3 and 4 of the Gambling Devices Transportation Act (64
Stat. 1134, 15 U.S.C. §§ 1173 and 1174) shall be deemed legal
shipments into this Commonwealth.
Section 20. Effective date.
This act shall take effect in 60 days.
20150HB0901PN1100 - 18 -
1
2
3
4
5
6
7
8
9
10