THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY SCHRODER, TURZAI, SAYLOR, VEREB, M. O'BRIEN, BAKER, BARRAR, CARROLL, D. COSTA, GROVE, MURPHY, RAPP, REESE, ROAE, SWANGER, VULAKOVICH, WATSON, PICKETT AND MURT, JANUARY 24, 2011

AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES, MAY 2, 2012   

AN ACT

Amending Title 4 (Amusements) of the Pennsylvania Consolidated

Statutes, providing for Internet gambling public awareness

campaign and for revocation and auction of slot machine

license; further providing for Category 2 slot machine

license, for number of slot machine licenses and for table

game taxes; and providing for prohibition on use of State

funds.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Title 4 of the Pennsylvania Consolidated Statutes

is amended by adding sections to read:

§ 1207.1.  Internet gambling public awareness campaign.

(a)  General rule.--The board shall establish an Internet

gambling public awareness campaign in order to promote awareness

among the general public of issues relating to Internet

gambling.

(b)  Campaign.--The public awareness campaign shall include

the development and implementation of public awareness and

outreach efforts to inform the public about Internet gambling,

including, but not limited to, the following subjects:

(1)  The legal status of Internet gambling in this

Commonwealth.

(2)  The fact that Internet gambling is unregulated by

the Commonwealth, and that the fairness and integrity of

Internet gambling cannot be guaranteed.

(3)  The risks of being defrauded of potentially large

amounts of money when gambling on the Internet.

(4)  The risks to personal safety and bodily harm when

using personal identification on the Internet.

(5)  The risks of identity theft when using personal

identification or financial information to gamble on the

Internet.

(6)  Special risks for underage and problem gamblers when

gambling on the Internet.

(7)  Access to services for problem gamblers, including

contact information for the Council on Compulsive Gambling

and the Department of Health.

(c)  Agency coordination.--The board shall coordinate its

efforts with any activities being undertaken by other State

agencies to provide information to the public about Internet

gambling.

(d)  Written information.--The board, within the limits of

funds available for this purpose, shall seek to utilize both

electronic and print media, and may prepare and disseminate such

written information as it deems necessary to accomplish the

purposes of this section.

(e)  Electronic information.--The board shall make available

electronically on its Internet website in both English and

Spanish, and any other language it deems necessary and

appropriate, information about Internet gambling as described in

subsection (b).

(f)  Resources.--The board may accept, for the purposes of

the public awareness campaign, any special grant of funds,

services or property from the Federal Government or any of its

agencies, or from any foundation, organization or other entity.

(g)  Report.--The board shall report to the Governor and the

General Assembly, not later than 18 months after the effective

date of this section, on the activities and accomplishments of

the Internet gambling public awareness campaign.

§ 1209.1.  Revocation and auction of slot machine license.

(a)  General rule.--

(1)  Within 30 days after the revocation of a slot

machine license, the board shall initiate a public auction of

the slot machine license and table game operation certificate

for the highest responsible bid proposal that will provide

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the greatest amount of projected total revenue to the

Commonwealth, and otherwise serves the interests of the

citizens of Pennsylvania. The awarding of the slot machine

license and table game operation certificate shall be

conditional on the successful prospective licensee's ability

to satisfy the qualifications as provided in this part and

board regulations. The auction shall be conducted in such a

manner as to maximize the price for each slot machine license 

and table game operation certificate. In no case may a

Category 1 slot machine license and table game operation

certificate be awarded for a fee lower than $66,500,000. In

no case may a Category 2 slot machine license and table game

operation certificate be awarded for a fee lower than

$66,500,000. In no case may a Category 3 slot machine license 

and table game operation certificate be awarded for a fee

lower than $12,500,000.

(1.1)  For purposes of this section only, the ownership

or financial interest restrictions in section 1330 (relating

to multiple slot machine license prohibition) shall not

apply.

(2)  The board shall adopt procedures and regulations to

facilitate the conduct of the public auction in such a manner

as to maximize the price for each slot machine license and

table game operation certificate.

(b)  Bidding Auction procedures.--The open and competitive

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bidding auction process shall adhere to the following

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procedures:

(1)  The board shall make applications for the slot

machine license available to applicants pursuant to section

1309 (relating to slot machine license application) and allow

a reasonable time for applicants to submit applications as

well as petitions for authorization to conduct table games

pursuant to section 13A12 (relating to petition requirements) 

to the board.

(2)  During the filing period of slot machine license

applications and petitions to conduct table games, the board

shall retain the services of a financial advisory firm to

assist the board in conducting the open and competitive

bidding auction process.

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(3)  A prospective licensee must submit a definitive,

noncontingent binding proposal to accept the award of the

slot machine license and table game operation certificate.

The binding proposal must include the following:

(i)  The consideration to be paid by the prospective

licensee.

(ii)  Identification of all sources of external

financing involved in the transaction and submission of

all relevant commitment letters and other evidence of

financing.

(iii)  Identification of the proposed location of the

new licensed facility.

(iv)  Details of agreements with the municipality

where the licensed facility is to be located, including:

(A)  Evidence of municipal approval to the

applicant for the licensed facility.

(B)  Background and status of any discussions and

agreements with municipalities regarding the

construction of a licensed facility.

(v)  A list of any regulatory, corporate or other

approvals required to consummate a transaction.

(vi)  Information responsive to any other request for

information made by the board or the financial advisory

firm.

(vii)  A description of the proposed ownership

structure, including any other equity participants in the

binding proposal.

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(viii)  A business plan for the proposed licensed

facility, including:

(A)  General statement of financial viability.

(B)  Proposed corporate involvement in charitable

activity.

(ix)  Projected financial statements for five years

following the projected date to commence gaming

operations at the licensed facility.

(x) Date by which the prospective licensee will

commit to commence gaming operations at the licensed

facility.

 (xi)  A projected date until which the prospective

licensee agrees to keep such binding proposal open and

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irrevocable.

(4)  Within five days of its receipt of all of the bid 

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proposals, the board shall disclose the content of all of the

proposals in a public forum, including:

(i)  owners' names;

(ii)  venture partners, if any; and

(iii)  in the case of applicants for owners'

licenses, the locations of the proposed development

sites.

(5)  No later than 30 business days following the opening

of the binding proposals, the financial advisory firm shall

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deliver to the board a summary analysis of each binding 

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proposal as such has been refined and clarified by the

prospective owners.

(6)  The board shall evaluate the proposals within a

reasonable time and select no more than three final

applicants to participate in an auction.

(7)  Following the selection of the three final

applicants, the board shall do all of the following:

(i)  Hold public hearings under section 1205

(relating to license or permit application hearing

process; public input hearings).

(ii)  Evaluate the winning bid proposals of the three

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final applicants within a reasonable period of time for

license suitability in accordance with all applicable

statutory and regulatory criteria, including compliance

with sections 1310 (relating to slot machine license

application character requirements), 1313 (relating to

slot machine license application financial fitness

requirements), 1316 (relating to bond for issuance of

slot machine license) and proof of financial ability as

required by section 13A12(b)(9).

 (8)  By agreeing to participate in the auction or by

making a presentation to the board if so requested, each

prospective licensee is agreeing that a binding proposal, as

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refined and clarified, shall remain open and irrevocable

until the date indicated by such prospective licensee in such

proposal. The date indicated shall in no event be less than

30 days following the auction.

 (9)  After the auction and following the presentations,

the board shall identify a prospective licensee as the

winning prospective licensee for the auction.

(10)  If the winning prospective licensee is unable or

otherwise fails to consummate the transaction, including if

the board determines that the winning bidder prospective

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licensee does not satisfy the suitability requirements

pursuant to this part, the board may, on the same criteria,

select from the remaining prospective licensees.

(c)  Collusion among prospective licensees.--Collusion among

prospective licensees is unlawful. Any contract or conspiracy

which unreasonably results in underbidding is unlawful. When any

person has reason to believe collusion or other anticompetitive

practices have occurred among any prospective licensees, a

notice of the relevant facts shall be transmitted to the

Attorney General, who shall investigate the reports. A

prospective licensee who violates this section shall be

penalized pursuant to section 1518(b)(ii) (relating to

prohibited acts; penalties).

(d)  Proceeds.--The proceeds of the sale or auction of the

slot machine license and table game operation certificate shall

be deposited into the Property Tax Relief Fund.

(e)  Temporary regulations.--

(1)  In order to facilitate the prompt implementation of

this section, regulations promulgated by the board shall be

deemed temporary regulations which shall expire not later

than two years following the publication of the temporary

regulation. The board may promulgate temporary regulations

not subject to any of the following:

(i)  Sections 201, 202, 203, 204 and 205 of the act

of July 31, 1968 (P.L.769, No.240), referred to as the

Commonwealth Documents Law.

(ii)  Section 204(b) of the act of October 15, 1980

(P.L.950, No.164), known as the Commonwealth Attorneys

Act.

(iii)  The act of June 25, 1982 (P.L.633, No.181),

known as the Regulatory Review Act.

(2)  The board's authority to promulgate temporary

regulations under paragraph (1) shall expire one year after

the effective date of this section. Regulations adopted after

this period shall be promulgated as provided by law.

 (f)  Definition.--As used in this section, "revocation"

means a decision by the board to revoke a slot machine license

that is final, binding, nonappealable and is not subject to a

pending legal challenge.

Section 2.  Sections 1304(b) and 1307 of Title 4 are amended

to read:

§ 1304.  Category 2 slot machine license.

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(b)  Location.--

(1)  [Two] (i)  Subject to the provisions of paragraph

(1.1), not more than two Category 2 licensed facilities

[and no more shall] may be located by the board within a

city of the first class, and not more than one Category 2

licensed facility [and no more shall] may be located by

the board within a city of the second class.

(ii)  No Category 2 licensed facility located by the

board within a city of the first class shall be within

ten linear miles of a Category 1 licensed facility

regardless of the municipality where the Category 1

licensed facility is located. Except for any Category 2

licensed facility located by the board within a city of

the first class or a city of the second class, no

Category 2 licensed facility shall be located within 30

linear miles of any Category 1 licensed facility that has

conducted over 200 racing days per year for the two

calendar years immediately preceding the effective date

of this part and not within 20 linear miles of any other

Category 1 licensed facility. Except for any Category 2

licensed facility located by the board within a city of

the first class, no Category 2 licensed facility shall be

located within 20 linear miles of another Category 2

licensed facility.

(1.1)  In the event that a license for a Category 2

licensed facility to be located within a city of the first

class, which license was issued prior to the effective date

of this paragraph, is revoked by the board prior to

commencement of operations of the Category 2 licensed

facility, then the board shall reissue the revoked Category 2

slot machine license, pursuant to section 1209.1 (relating to

revocation and action of slot machine license) to another

applicant located anywhere in this Commonwealth for a

Category 2 licensed facility, provided that:

(i)  no more than two Category 2 licensed facilities

may be located within a city of the first class;

(ii)  no more than one Category 2 licensed facility

may be located in a city of the second class; and

(iii)  the provisions of paragraph (1)(ii) are

satisfied.

(2)  Within five days of approving a license for an

applicant with a proposed licensed facility consisting of

land designated a subzone, an expansion subzone or an

improvement subzone under the Keystone Opportunity Zone,

Keystone Opportunity Expansion Zone and Keystone Opportunity

Improvement Zone Act for a slot machine license under this

section, the board shall notify the Department of Community

and Economic Development. The notice shall include a

description of the land of the proposed licensed facility

which is designated a subzone, an expansion subzone or an

improvement subzone. Within five days of receiving the notice

required by this paragraph, the Secretary of Community and

Economic Development shall decertify the land of the proposed

licensed facility as being a subzone, an expansion subzone or

an improvement subzone. Upon decertification in accordance

with this paragraph and notwithstanding Chapter 3 of the

Keystone Opportunity Zone, Keystone Opportunity Expansion

Zone and Keystone Opportunity Improvement Zone Act, a

political subdivision may amend the ordinance, resolution or

other required action which granted the exemptions,

deductions, abatements or credits required by the Keystone

Opportunity Zone, Keystone Opportunity Expansion Zone and

Keystone Opportunity Improvement Zone Act to repeal the

exemptions, deductions, abatements or credits for the land

decertified.

(3)  Notwithstanding any other provision of law, the

governing body of a city of the first class shall not exempt

from real property taxation or provide any real property tax

abatement under the act of December 1, 1977 (P.L.237, No.76),

known as the Local Economic Revitalization Tax Assistance

Act, to a Category 2 licensed facility located within the

city, or any improvements to such facility, unless the owner

of the licensed facility enters into or has entered into a

tax settlement agreement or payment in lieu of taxes

agreement with the city, including any amendments,

supplements or modifications of such agreements.

§ 1307.  Number of slot machine licenses.

The board may license no more than seven Category 1 licensed

facilities and no more than five Category 2 licensed facilities,

as it may deem appropriate, as long as [two, and not more ,] not

more than two Category 2 licensed facilities are located by the

board within the city of the first class and [that one, and not

more,] not more than one Category 2 licensed facility is located

by the board within the city of the second class, except in the

case of license revocation, wherein the provisions of section

1304(b)(1.1) (relating to Category 2 slot machine license) shall 

apply. The board may at its discretion increase the total number

of Category 2 licensed facilities permitted to be licensed by

the board by an amount not to exceed the total number of

Category 1 licenses not applied for within five years following

the effective date of this part. Except as permitted by section

1328 (relating to change in ownership or control of slot machine

licensee), any Category 1 license may be reissued by the board

at its discretion as a Category 2 license if an application for

issuance of such license has not been made to the board. The

board may license no more than three Category 3 Licensed

facilities.

Section 3.  Section 13A62(a)(1) and (3) of Title 4 are

amended and subsection (b) is amended by adding a paragraph to

read:

§ 13A62.  Table game taxes.

(a)  Imposition.--

(1)  Except as provided in paragraphs (2) and (3), each

certificate holder shall report to the department and pay

from its daily gross table game revenue, on a form and in the

manner prescribed by the department, a tax of [12%] 14% of

its daily gross table game revenue.

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[(3)  The tax reported and payable under paragraph (1) by

each certificate holder shall be 14% of daily gross table

game revenue for a period of two years following commencement

of table games operations at its licensed facility.]

(b)  Deposits and distributions.-–

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(4)  Beginning with fiscal year 2012-2013, the department

shall make an annual distribution of 2% of each certificate

holder's daily gross table game revenue to the Property Tax

Relief Fund.

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Section 4.  Title 4 is amended by adding a section to read:

§ 1410.  Prohibition on use of State funds.

(a)  General rule.--No moneys of any fund in the State

Treasury may be used directly or indirectly by a Commonwealth

agency for the relocation of a licensed facility, and no

Commonwealth agency shall provide State funds to any

municipality or instrumentality thereof for the purpose of

relocating a licensed facility.

(b)  Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection:

"Commonwealth agency."  The term shall have the meaning given

to it in section 102 of the act of February 14, 2008 (P.L.6,

No.3), known as the Right-to-Know Law.

Section 4.1.  Applicability is as follows:

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(1)  The addition of 4 Pa.C.S. § 1209.l shall apply:

(i)  retroactively to a slot machine revocation in

effect on the effective date of this section; and

(ii)  to a slot machine revocation which occurs after

the effective date of this section.

(2)  For a slot machine license revocation under

paragraph (1)(i), the 30-day time period in 4 Pa.C.S. §

1209.1(a)(1) shall commence on the effective date of this

section.

Section  5.  This act shall take effect immediately.