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        PRIOR PRINTER'S NO. 3135                      PRINTER'S NO. 3607

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 2300 Session of 1990


        INTRODUCED BY TRELLO, COLAIZZO, CORRIGAN, CIVERA, LUCYK, VEON,
           GIGLIOTTI, PETRONE, PISTELLA, PRESTON, RAYMOND, STABACK,
           STEIGHNER, STISH, TANGRETTI, F. TAYLOR, J. TAYLOR, THOMAS,
           TIGUE, TRICH, VAN HORNE, WOGAN, WOZNIAK, R. C. WRIGHT,
           LEVDANSKY, RICHARDSON, BELARDI, BILLOW, BURD, BURNS,
           CALTAGIRONE, CAPPABIANCA, CAWLEY, DALEY, DeLUCA, DeWEESE,
           DOMBROWSKI, HOWLETT, JAROLIN, JOSEPHS, KASUNIC, KENNEY,
           KOSINSKI, LaGROTTA, LASHINGER, LAUGHLIN, LESCOVITZ, MAYERNIK,
           McNALLY, McVERRY, MICHLOVIC, MRKONIC, OLASZ, TELEK, COHEN,
           JAMES, COLAFELLA AND WILLIAMS, MARCH 13, 1990

        AS REPORTED FROM COMMITTEE ON FINANCE, HOUSE OF REPRESENTATIVES,
           AS AMENDED, MAY 30, 1990

                                     AN ACT

     1  Providing for control and licensing of video poker machines in
     2     this Commonwealth; creating the Video Poker Machine Control
     3     Commission and providing for its powers and duties; and
     4     providing for local option and for distribution of revenues.

     5                         TABLE OF CONTENTS
     6  Section 1.  Short title.
     7  Section 2.  Definitions.
     8  Section 3.  Video Poker Machine Control Commission.
     9  Section 4.  Qualifications.
    10  Section 5.  Chairman of commission; quorum.
    11  Section 6.  Director.
    12  Section 7.  Powers and duties of commission.
    13  Section 8.  Use of enforcement agents.
    14  Section 9.  Unlawful use by minors.


     1  Section 10.  Direct dispensing.
     2  Section 11.  Local options.
     3  Section 12.  Authority to license.
     4  Section 13.  Distribution of proceeds.
     5  Section 14.  Government revenues.
     6  Section 15.  Creation of account.
     7  Section 16.  Preemption of local taxes and license fees.
     8  Section 17.  Prohibition and Penalties.
     9  Section 18.  Exemption from State gambling laws.
    10  Section 19.  Exemption from Federal regulation.
    11  Section 20.  Effective date.
    12     The General Assembly of the Commonwealth of Pennsylvania
    13  hereby enacts as follows:
    14  Section 1.  Short title.
    15     This act shall be known and may be cited as the Video Poker
    16  Machine Control Law.
    17  Section 2.  Definitions.
    18     The following words and phrases when used in this act shall
    19  have the meanings given to them in this section unless the
    20  context clearly indicates otherwise:
    21     "Commission."  The Video Poker Machine Control Commission
    22  created by this act.
    23     "Distributor."  An individual, partnership or corporation
    24  licensed under this act to buy, sell, lease or distribute video
    25  poker machines. The term excludes machine owners and
    26  manufacturers.
    27     "Gross proceeds."  The total amount of money placed into
    28  video poker machines.
    29     "Incentive."  A consideration, including a premium or bonus
    30  in cash or advance commission or merchandise, offered from a
    19900H2300B3607                  - 2 -

     1  machine owner to a licensed establishment in order to solicit
     2  its business.
     3     "Licensed establishment."  A restaurant, bar, tavern, hotel
     4  or club which has a valid liquor OR MALT BEVERAGE license under   <--
     5  the act of April 12, 1951 (P.L.90, No.21), known as the Liquor
     6  Code, and which is located within a participating political
     7  subdivision: PROVIDED, HOWEVER, THAT THE PROVISIONS OF THIS ACT   <--
     8  SHALL NOT APPLY TO ACTIVITIES RELATING TO SPECIAL OCCASION
     9  PERMITS.
    10     "Machine owner."  An individual, partnership or corporation
    11  which is licensed under this act and which owns, services and
    12  maintains video poker machines for placement in licensed
    13  establishments.
    14     "Manufacturer."  An individual, partnership or corporation
    15  which is licensed under this act and which manufacturers or
    16  assembles video poker machines.
    17     "MUNICIPALITY."  A CITY, BOROUGH, INCORPORATED TOWN OR         <--
    18  TOWNSHIP OR A HOME RULE MUNICIPALITY FORMERLY CLASSIFIED AS A
    19  CITY, BOROUGH, INCORPORATED TOWN OR TOWNSHIP.
    20     "Net profits."  Gross proceeds after awards have been paid.
    21     "Participating political subdivisions."  Any city,
    22  incorporated town, township, borough or home rule municipality
    23  where video poker machines are in use in accordance with this
    24  act.
    25     "Person."  Includes a corporation, partnership and
    26  association, as well as a natural person.
    27     "Video poker machines."  A device or machine which, upon
    28  insertion of a coin or currency, will play or simulate the play
    29  of the game of poker, utilizing a video display and
    30  microprocessors and in which, by the skill of the player or by
    19900H2300B3607                  - 3 -

     1  chance, the player may receive free games or credits which may
     2  be redeemed for cash. No machine shall directly dispense any
     3  coins, cash, tokens or anything of value.
     4  Section 3.  Video Poker Machine Control Commission.
     5     (a)  Commission created.--An independent commission, to be
     6  known as the Video Poker Machine Control Commission is hereby
     7  created. The commission shall consist of five members, one to be
     8  appointed by the Governor, one by the Speaker of the House of
     9  Representatives, one by the President pro tempore of the Senate,
    10  one by the Minority Leader of the House of Representatives and
    11  one by the Minority Leader of the Senate.
    12     (b)  Members.--Of the original members, two shall be
    13  appointed for a term of two years, two for a term of four years
    14  and one for a term of six years. Those appointed by the Minority
    15  Leader of the House of Representatives and the Minority Leader
    16  of the Senate shall serve the initial two-year term. Those
    17  appointed by the Speaker of the House of Representatives and the
    18  President pro tempore of the Senate shall serve the initial
    19  four-year terms. The Governor's appointment shall serve the
    20  initial six-year term. Thereafter, all appointments shall be for
    21  terms of six years or until successors are appointed and
    22  qualified. All successors shall be appointed by the same
    23  appointing authority as the members whom they are replacing.
    24     (c)  Salaries and expenses.--The members of the commission     <--
    25  shall receive salaries as determined by the Executive Board and
    26  shall be reimbursed for all actual and necessary expenses
    27  performed in the course of their duties.
    28     (C)  COMPENSATION AND EXPENSES.--THE MEMBERS OF THE            <--
    29  COMMISSION SHALL BE COMPENSATED AT A RATE OF $125 PER DAY AND
    30  SHALL RECEIVE REIMBURSEMENT FOR THEIR ACTUAL AND NECESSARY
    19900H2300B3607                  - 4 -

     1  EXPENSES WHILE PERFORMING THE BUSINESS OF THE COMMISSION.
     2  Section 4.  Qualifications.
     3     (a)  Citizenship and residency.--Each member of the
     4  commission, at the time of appointment and qualification, shall
     5  be a citizen of the United States and a resident of this
     6  Commonwealth and shall have been a qualified elector in this
     7  Commonwealth for a period of at least two years preceding the
     8  member's appointment.
     9     (b)  Offices.--No member of the commission shall, during the
    10  member's period of service, hold any other office under the laws
    11  of this Commonwealth or the United States or seek elected office
    12  of any kind within this Commonwealth of the United States.
    13  Section 5.  Chairman of commission; quorum.
    14     (a)  Appointment.--The member appointed by the Governor shall
    15  serve as chairman. The chairman shall, when present, preside at
    16  all meetings. In the chairman's absence, a member designated by
    17  the commission shall preside.
    18     (b)  Quorum.--Three members of the commission shall
    19  constitute a quorum, and any action or order of the commission
    20  shall require the approval of at least three members.
    21  Section 6.  Director.
    22     The commission shall appoint an executive director to hold
    23  office at its pleasure. The director shall have powers and
    24  duties as the commission shall prescribe and shall receive
    25  compensation as the commission shall determine. The director
    26  shall have the authority to employ personnel necessary to carry
    27  out the duties of office.
    28  Section 7.  Powers and duties of commission.
    29     (a)  General powers and duties.--The commission shall:
    30         (1)  Provide for licensing and for distribution of
    19900H2300B3607                  - 5 -

     1     revenue.
     2         (2)  Prescribe all necessary application and reporting
     3     forms.
     4         (3)  Grant or deny license applications.
     5         (4)  Prescribe types of video poker machines to be used.
     6     (b)  License approval.--The commission may not deny any
     7  application or limit, condition or restrict any license except
     8  for nonconformance with this act. An applicant shall not be
     9  granted a license unless:
    10         (1)  If the applicant is an individual:
    11             (i)  The applicant is of good character, honesty and
    12         integrity and in all respects is qualified and has
    13         adequate financing from suitable sources.
    14             (ii)  The applicant has been a citizen of the United   <--
    15         States and a resident of this Commonwealth for at least
    16         two years prior to the application.
    17             (II)  IF THE APPLICANT IS A DISTRIBUTOR, MACHINE       <--
    18         OWNER OR LICENSED ESTABLISHMENT, THE APPLICANT HAS BEEN A
    19         CITIZEN OF THE UNITED STATES AND A RESIDENT OF THIS
    20         COMMONWEALTH FOR AT LEAST TWO YEARS PRIOR TO THE
    21         APPLICATION.
    22         (2)  If the applicant is a partnership, all partners
    23     qualify as individuals under paragraph (1).
    24         (3)  If the applicant is a DISTRIBUTOR, MACHINE OWNER OR   <--
    25     LICENSED ESTABLISHMENT AND A corporation:
    26             (i)  It is a registered Pennsylvania corporation for
    27         at lease one year.
    28             (ii)  At least 50% of its directors have been
    29         Pennsylvania residents for at least two years.
    30             (iii)  All officers qualify as individuals under
    19900H2300B3607                  - 6 -

     1         paragraph (1).
     2             (iv)  All stockholders are individuals.
     3     (c)  Hearing and appeals.--Any person who was denied a
     4  license shall have the right to a hearing before the commission.
     5  The hearing shall be conducted in accordance with the provisions
     6  of 2 Pa.C.S. (relating to administrative law and procedure). An
     7  aggrieved party shall have the right to appeal the decision on
     8  license denial to the court of common pleas in the judicial
     9  district having jurisdiction over the applicant and/or the
    10  licensed premises.
    11     (d)  Winning percentage.--The commission shall prescribe
    12  winning percentages and necessary machine accounting
    13  information. IF CENTRAL AUDITING IS REQUIRED, THE COMMISSION      <--
    14  SHALL PROVIDE LICENSED MANUFACTURERS OR MANUFACTURERS APPLYING
    15  FOR LICENSURE THE PROTOCOL DOCUMENTATION NECESSARY TO ENABLE
    16  THEIR VIDEO POKER MACHINES TO COMMUNICATE WITH THE COMMISSION'S
    17  CENTRAL COMPUTER IN PROVIDING THE AUDITING PROGRAM INFORMATION
    18  AND CONTROLS APPROVED BY THE COMMISSION. All video poker
    19  machines will be set at a minimum win percentage of 80%. All
    20  video poker machines will have metering devices to verify the
    21  winning percentages.
    22     (e)  Violations.--The commission shall investigate licensees
    23  for violations of this act and shall hold hearings in which to
    24  consider these matters. Hearings and appeals shall be conducted
    25  in the same manner as set forth in subsection (c). The
    26  commission shall have authority to suspend or revoke a license
    27  if it finds that a violation of this act has occurred. No
    28  license shall be suspended or revoked until a hearing is
    29  completed. The fine for a violation of provisions of this act or
    30  of regulations adopted under this act shall not exceed $5,000
    19900H2300B3607                  - 7 -

     1  for the first offense and $15,000 for each subsequent violation.
     2     (f)  Standards of conduct.--The commission shall prescribe
     3  rules and regulations for the conduct of the officers, employees
     4  and agents of the commission.
     5     (g)  Regulation.--The commission shall promulgate regulations
     6  to carry out the provisions of this act.
     7  Section 8.  Use of enforcement agents.
     8     (a)  Powers.--Employees of the commission designated as
     9  enforcement agents shall be empowered to investigate the
    10  background and associates of every license applicant to whatever
    11  extent is judged necessary by the commission. No investigation
    12  shall be undertaken prior to the submission of an application
    13  for a license by a party, and no investigation shall continue
    14  subsequent to the grant of a license, the denial of a license or  <--
    15  the withdrawal of a license application.
    16     (b)  Authority.--Enforcement agents are peace officers and
    17  shall have police power and authority throughout this
    18  Commonwealth to arrest, on view or under warrant, any person
    19  tampering with video poker machines, attempting or conspiring to
    20  manipulate the outcome or the payoff of any machine, or
    21  manipulating the outcome or payoff of any machine by physical
    22  tampering or through the interference of the lawful or proper
    23  functioning of the mechanism by any means whatsoever.
    24     (c)  Investigation and report.--Enforcement agents may
    25  investigate any alleged illegal activities concerning video
    26  poker machines and their operation, maintenance and placement.
    27  Findings shall be reported in writing to the commission, which
    28  shall relay any suspected criminal activity or violations of the
    29  law to the district attorney for prosecution.
    30     (d)  State and local police.--In addition to any other person
    19900H2300B3607                  - 8 -

     1  authorized to enforce the provisions of this act, the
     2  Pennsylvania State Police and police of participating political
     3  subdivisions are empowered to enforce this act.
     4  Section 9.  Unlawful use by minors.
     5     (a)  Minors.--No person under 21 years of age may use or play
     6  a video poker machine. A minor using or playing or attempting to
     7  use or play a video poker machine commits a summary offense.
     8     (b)  Licensees.--A licensed establishment in which a person
     9  under 21 years of age plays or uses a video poker machine,
    10  whether or not that licensed establishment is actually aware of
    11  the minor's age, commits a summary offense and shall, upon
    12  conviction, pay a fine of not more than $5,000. The
    13  establishment of any of the following facts by a person allowing
    14  a minor to operate the video poker machines constitutes a
    15  defense to prosecution under this subsection:
    16         (1)  The minor falsely represented in writing that the
    17     minor was 21 years of age or older.
    18         (2)  The appearance of the minor was such that an
    19     ordinary person of prudent judgment would believe the minor
    20     to be 21 years of age or older.
    21  Section 10.  Direct dispensing.
    22     A video poker machine may not directly dispense coins, cash,
    23  tokens or any other article of exchange or value except for
    24  receipt tickets. Such tickets shall be dispensed by pressing the
    25  ticket dispensing button on the machine at the end of one's turn
    26  or play. The ticket shall indicate the total amount of credits
    27  and the cash award, and the player shall turn in this ticket to
    28  the appropriate person at the licensed establishment to receive
    29  the cash award. The cost of the credit shall be 25¢, and the
    30  number of credits played per game shall not exceed eight. No
    19900H2300B3607                  - 9 -

     1  cash award for any individual game shall exceed $500. All video
     2  poker machines shall be designed and manufactured with total
     3  accountability, to include gross proceeds, net profits, winning
     4  percentages and any other information the commission requires.
     5  Section 11.  Local options.
     6     (a)  Election to be held.--In any municipality, an election    <--
     7  may be held on the date of the primary election immediately
     8  preceding any municipal election, but not more than once in four
     9  years, to determine the will of the electors with respect to the
    10  issuance of licenses within the limits of such municipality
    11  under the provisions of this act. Where an election had been
    12  held at the primary election preceding a municipal election in
    13  any year, another election may be held under the provisions of
    14  this act at the primary election occurring the fourth year after
    15  such prior election. When electors equal to at least 25% of the
    16  highest vote cast for any office in the municipality at the last
    17  preceding general election file a petition with the county board
    18  of elections of the county, or when the governing body of the
    19  municipality adopts, by a majority vote, a resolution to place a
    20  question on the ballot and a copy of the resolution is filed
    21  with the board of elections of the county, for a referendum on
    22  the question of issuing licenses, the county board of elections
    23  shall cause a question to be placed on the ballot or on the
    24  voting machine board and submitted at the primary election
    25  immediately preceding the municipal election.
    26     (A)  ELECTION TO BE HELD.--IN ANY MUNICIPALITY, AN ELECTION    <--
    27  MAY BE HELD ON THE DATE OF A PRIMARY, MUNICIPAL OR GENERAL
    28  ELECTION TO DETERMINE THE WILL OF THE ELECTORS WITH RESPECT TO
    29  THE ISSUANCE OF LICENSES WITHIN THE LIMITS OF SUCH MUNICIPALITY
    30  UNDER THE PROVISIONS OF THIS ACT. WHENEVER ELECTORS EQUAL TO AT
    19900H2300B3607                 - 10 -

     1  LEAST 25% OF THE HIGHEST VOTE CAST FOR ANY OFFICE IN THE
     2  MUNICIPALITY AT THE LAST PRECEDING GENERAL ELECTION SHALL FILE A
     3  PETITION WITH THE COUNTY BOARD OF ELECTIONS OF THE COUNTY, OR
     4  THE GOVERNING BODY OF THE MUNICIPALITY ADOPTS, BY A MAJORITY
     5  VOTE, A RESOLUTION TO PLACE SUCH A QUESTION ON THE BALLOT AND A
     6  COPY OF THE RESOLUTION IS FILED WITH THE BOARD OF ELECTIONS OF
     7  THE COUNTY, FOR A REFERENDUM ON THE QUESTION OF ISSUING
     8  LICENSES, THE COUNTY BOARD OF ELECTIONS SHALL CAUSE A QUESTION
     9  TO BE PLACED ON THE BALLOT OR ON THE VOTING MACHINE BOARD AND
    10  SUBMITTED AT THE NEXT FOLLOWING PRIMARY, MUNICIPAL OR GENERAL
    11  ELECTION. THE QUESTION SHALL BE IN THE FOLLOWING FORM:
    12         DO YOU FAVOR THE ISSUANCE OF LICENSES TO PERMIT THE PLAY
    13         OF VIDEO POKER IN THE                OF                 ?
    14     (b)  Vote.--If a majority of the electors voting on the
    15  question under subsection (a) vote "yes", then licenses shall be
    16  issued by the licensing authority COMMISSION in such              <--
    17  municipality, but if a majority of the electors voting on such
    18  question vote "no", then the licensing authority COMMISSION       <--
    19  shall have no power to issue or to renew, upon their expiration,
    20  any licenses in such municipality, unless and until, at a later
    21  election, a majority of the voting electors vote "yes" on such
    22  question.
    23     (c)  Voting procedures.--Proceedings under this section shall
    24  be in accordance with the provisions of the act of June 3, 1937
    25  (P.L.1333, No.320), known as the Pennsylvania Election Code.
    26     (d)  Applicability.--This act applies only to those licensed
    27  establishments located in municipalities which have adopted the
    28  provisions of this act by an affirmative vote in a municipal
    29  referendum in accordance with the provisions of this section.
    30     (e)  Withdrawal of approval.--The referendum procedure
    19900H2300B3607                 - 11 -

     1  contained in this section shall also be available to withdraw
     2  the approval of the issuance of licenses within the municipality
     3  which was granted through a prior referendum.
     4  Section 12.  Authority to license.
     5     (a)  Type of licenses.--After approving the proper
     6  applications, the commission shall issue the following licenses:
     7         (1)  A manufacturer's license to a person that
     8     manufactures or assembles video poker machines for use in
     9     Pennsylvania. The annual fee shall be $25,000.
    10         (2)  A distributor's license to a person that buys or
    11     sells video poker machines in Pennsylvania other than an
    12     operator. The annual fee shall be $10,000.
    13         (3)  A machine owner's license to a person who owns,
    14     services and maintains video poker machines for placement in
    15     licensed establishments. The annual fee shall be $25,000 for
    16     the first 50 individual poker machine licenses. For each
    17     additional video poker machine, the annual fee shall be $500
    18     per machine. Every video poker machine in use in this
    19     Commonwealth must have a current $500 license displayed.
    20     Every video poker machine licensed under this act must be
    21     manufactured by an individual, partnership or corporation
    22     licensed under paragraph (1).
    23         (4)  A licensed establishment must obtain a license under
    24     this act in order to have video poker machines on its
    25     premises. The annual fee for the license shall be $300 for
    26     each machine per year.
    27     (b)  Commercial LICENSED establishment requirements.--For any  <--
    28  commercial LICENSED establishment which is approved by the        <--
    29  Commonwealth and which uses video poker machines, the maximum
    30  number of video poker machines allowed per location shall be
    19900H2300B3607                 - 12 -

     1  five THREE. No video poker machines may be placed in any          <--
     2  commercial LICENSED establishment unless the owner of a           <--
     3  commercial LICENSED establishment has entered into a contract     <--
     4  with an operator for the placement of the machine or machines
     5  for a minimum term of one year.
     6     (c)  Limitations.--                                            <--
     7         (1)  No machine owner shall be issued more than one
     8     license.
     9         (2)  No person may hold more than one class of license,
    10     directly or indirectly, or have any interest therein.
    11     (C)  LIMITATIONS.--NO PERSON MAY HOLD MORE THAN ONE CLASS OF   <--
    12  LICENSE, DIRECTLY OR INDIRECTLY, OR HAVE ANY INTEREST THEREIN.
    13     (d)  Incentives.--No machine owner may give and no licensed
    14  establishment may receive an incentive.
    15  Section 13.  Distribution of proceeds.
    16     (a)  Collection.--Gross proceeds shall be collected by the
    17  machine owner for each licensed video poker machine.
    18     (b)  Distribution of net profits.--From the effective date of  <--
    19  this act, for a two-year period, the THE net profits derived      <--
    20  from a video poker machine shall be distributed by the machine
    21  owner as follows:
    22         (1)  40% to the machine owner.                             <--
    23         (2)  40% to the licensed establishment where the machine
    24     is located.
    25         (3)  20% to the treasurer of the county in which the
    26     machine is located, to be distributed as set forth in section
    27     14.
    28     (c)  Manner of distribution after two-year period.--After the
    29  two-year period set forth in subsection (b), the net profits
    30  derived from a video poker machine shall be distributed by the
    19900H2300B3607                 - 13 -

     1  machine owner as follows:
     2         (1)  35% to the machine owner.
     3         (2)  35% to the licensed establishment where the machine
     4     is located.
     5         (3)  30% to the treasurer of the county in which the
     6     machine is located, to be distributed as set forth in section
     7     14.
     8     (d) (C)  Reports.--The machine owner shall make a monthly      <--
     9  duplicate report to the county treasurer and to the commission
    10  with the following information:
    11         (1)  The serial number of each video poker machine.
    12         (2)  The name and address of premises where machine is
    13     located.
    14         (3)  A computer printout of the net profits of each
    15     machine.
    16         (4)  ANY OTHER INFORMATION THAT THE COMMISSION DEEMS       <--
    17     NECESSARY.
    18  Section 14.  Government revenues.
    19     Those net profits collected by the county treasurer, as set
    20  forth in section 13, shall be distributed as follows:
    21         (1)  2% 10% to the county treasurer for the county for     <--
    22     collecting and distributing funds as directed by this act.
    23         (2)  44% 40% to the political subdivision where the video  <--
    24     poker machine is located.
    25         (3)  44% 40% to the school district where the video poker  <--
    26     machine is located.
    27         (4)  10% to the office of Attorney General to be used for
    28     drug enforcement and/or drug education.
    29  Section 15.  Creation of account.
    30     All revenues from licenses and fines shall be placed in a
    19900H2300B3607                 - 14 -

     1  restricted revenue account to fund the total operation of the
     2  commission, including, but not limited to, salaries and
     3  administrative expenses. The commission shall allocate a minimum
     4  of $1,000,000 annually to be used for the treatment of
     5  compulsive behaviors in accordance with regulations adopted by
     6  the commission. THE FIRST SUCH ALLOCATION SHALL BE MADE IN THE    <--
     7  FIRST FISCAL YEAR COMMENCING ONE YEAR FOLLOWING THE EFFECTIVE
     8  DATE OF THIS ACT.
     9  Section 16.  Preemption of local taxes and license fees.
    10     Video poker machines and coin-operated amusement machines
    11  shall be exempt from taxes levied under the act of August 5,
    12  1932 (Sp.Sess., P.L.45, No.45), referred to as the Sterling Act,
    13  the act of December 31, 1965 (P.L.1257, No.511), known as The
    14  Local Tax Enabling Act, or the act of April 13, 1972 (P.L.184,
    15  No.62), known as the Home Rule Charter and Optional Plans Law,
    16  or under any other statute which confers taxing authority to any
    17  political subdivision.
    18  Section 17.  Prohibition and penalties.
    19     (a)  Manufacture.--A person may not manufacture, assemble or
    20  produce a video poker machine in this Commonwealth unless the
    21  person has a valid manufacturer's license issued under section
    22  12(a)(1).
    23     (b)  Distribution.--A person may not sell, distribute, lease
    24  or market a video poker machine in this Commonwealth unless the
    25  person has a valid distributor's license issued under section
    26  12(a)(2).
    27     (c)  License required.--A person may not own, service,
    28  maintain, lease or place a video poker machine unless he has a
    29  valid owner's license issued under section 12(a)(3).
    30     (d)  Use.--A person may not offer, enable or allow the
    19900H2300B3607                 - 15 -

     1  playing of video poker at an establishment unless that
     2  establishment has a valid establishment license issued under
     3  section 12(a)(4). A person with a valid establishment license
     4  may not have more than five video poker machines in a licensed
     5  establishment at the same time.
     6     (e)  Tampering.--A person may not manipulate the outcome or
     7  payoff of a video poker machine through interference with the
     8  proper functioning of the mechanism.
     9     (f)  Penalties.--
    10         (1)  A person who violates this section commits a
    11     misdemeanor of the third degree and shall, upon conviction,
    12     be sentenced to pay a fine of $1,000, or to imprisonment for
    13     not more than one year, or both.
    14         (2)  A person who violates this section a second time
    15     commits a misdemeanor of the second degree and shall, upon
    16     conviction, be sentenced to pay a fine of $2,000, or to
    17     imprisonment for not more than two years, or both.
    18         (3)  A person who violates this section a third or
    19     subsequent time commits a misdemeanor of the first degree and
    20     shall, upon conviction, be sentenced to pay a fine of $5,000,
    21     or to imprisonment for not more than five years, or both.
    22  Section 18.  Exemption from State gambling laws.
    23     Video poker machines and their use are exempt from 18 Pa.C.S.
    24  § 5513 (relating to gambling devices, gambling, etc.).
    25  Section 19.  Exemption from Federal regulation.
    26     The General Assembly declares that the Commonwealth is exempt
    27  from section 2 of the Gambling Devices Transportation Act (64
    28  Stat. 1134, 15 U.S.C. § 1172). Shipments of video devices into
    29  this Commonwealth in compliance with sections 3 and 4 of the
    30  Gambling Devices Transportation Act (64 Stat. 1134, 15 U.S.C. §§
    19900H2300B3607                 - 16 -

     1  1173 and 1174) shall be deemed legal shipments into this
     2  Commonwealth.
     3  Section 20.  Effective date.
     4     This act shall take effect in 60 days.


















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