See other bills
under the
same topic
PRIOR PRINTER'S NOS. 748, 767
PRINTER'S NO. 2574
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
649
Session of
2015
INTRODUCED BY PAYNE, KOTIK, ADOLPH, HELM, KILLION, KORTZ,
BARRAR, COHEN, D. COSTA, DAVIS, DeLUCA, EVERETT, HACKETT,
MICCARELLI, MOUL, PASHINSKI, STURLA, DUNBAR, YOUNGBLOOD,
FLYNN, P. DALEY AND NEILSON, FEBRUARY 26, 2015
AS REPORTED FROM COMMITTEE ON GAMING OVERSIGHT, HOUSE OF
REPRESENTATIVES, AS AMENDED, NOVEMBER 24, 2015
AN ACT
Amending Title 4 (Amusements) of the Pennsylvania Consolidated
Statutes, providing for authorized interactive gaming and for
duties of Pennsylvania Gaming Control Board and Department of
Health; and imposing an interactive gaming tax and
prescribing penalties. IN GENERAL PROVISIONS, FURTHER
PROVIDING FOR LEGISLATIVE INTENT AND FOR DEFINITIONS; IN
PENNSYLVANIA GAMING CONTROL BOARD, FURTHER PROVIDING FOR
GENERAL AND SPECIFIC POWERS, FOR LICENSED GAMING ENTITY
APPLICATION APPEALS FROM BOARD, FOR BOARD MINUTES AND
RECORDS, FOR REGULATORY AUTHORITY OF BOARD, FOR SLOT MACHINE
LICENSE FEE AND FOR REPORTS OF BOARD, PROVIDING FOR FANTASY
SPORTS REPORT AND FURTHER PROVIDING FOR DIVERSITY GOALS OF
BOARD; IN LICENSEES, FURTHER PROVIDING FOR CATEGORY 3 SLOT
MACHINE LICENSE, FOR SLOT MACHINE LICENSE APPLICATION, FOR
SUPPLIER LICENSES, FOR MANUFACTURER LICENSES, FOR SLOT
MACHINE TESTING AND CERTIFICATION STANDARDS AND FOR LICENSE
RENEWALS; IN TABLE GAMES, FURTHER PROVIDING FOR AUTHORIZATION
TO CONDUCT TABLE GAMES, FOR TABLE GAME TOURNAMENTS, FOR OTHER
FINANCIAL TRANSACTIONS, FOR TABLE GAME DEVICE AND ASSOCIATED
EQUIPMENT TESTING AND CERTIFICATION STANDARDS AND FOR LOCAL
SHARE ASSESSMENT; PROVIDING FOR INTERACTIVE GAMING, FOR
CASINO SIMULCASTING AND FOR SLOT MACHINES AT NONPRIMARY
LOCATIONS; IN REVENUES, FURTHER PROVIDING FOR ESTABLISHMENT
OF STATE GAMING FUND AND NET SLOT MACHINE REVENUE
DISTRIBUTION; IN ADMINISTRATION AND ENFORCEMENT, FURTHER
PROVIDING FOR RESPONSIBILITY AND AUTHORITY OF THE DEPARTMENT
OF REVENUE, FOR WAGERING ON CREDIT, FOR COMPULSIVE AND
PROBLEM GAMBLING PROGRAM, PROVIDING FOR CHILD ENDANGERMENT
PROTECTION, FURTHER PROVIDING FOR FINANCIAL AND EMPLOYMENT
INTERESTS, FOR REGULATION REQUIRING EXCLUSION OR EJECTION OF
CERTAIN PERSONS, FOR REPEAT OFFENDERS EXCLUDABLE FROM
<--
<--
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
31
LICENSED GAMING FACILITY, FOR LIST OF PERSONS SELF EXCLUDED
FROM GAMING ACTIVITIES, FOR INVESTIGATIONS AND ENFORCEMENT,
FOR PROHIBITED ACTS AND PENALTIES AND FOR LIQUOR LICENSES AT
LICENSED FACILITIES AND PROVIDING FOR CASINO LIQUOR LICENSE;
IN MISCELLANEOUS PROVISIONS, FURTHER PROVIDING FOR
APPROPRIATIONS; MAKING AN EDITORIAL CHANGE; AND MAKING A
RELATED REPEAL.
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 a chapter to read:
CHAPTER 13B
AUTHORIZED INTERACTIVE GAMING
Sec.
13B01. Legislative policy.
13B02. Definitions.
13B03. Regulation and enforcement by the board.
13B04. Prohibition on unauthorized Internet gaming.
13B05. Application for license.
13B06. Board consideration of application.
13B07. Institutional investors.
13B08. Licensing fee.
13B09. Accounting and operational internal controls.
13B10. Interactive gaming tax.
13B11. Prohibition on Internet cafes.
13B12. Testing of hardware, software and equipment.
13B13. Expanded compulsive and problem gambling programs.
13B14. Application of other provisions of this part.
§ 13B01. Legislative policy.
The General Assembly recognizes the following public policy
purposes and declares that the following objectives of the
Commonwealth are to be served by this chapter:
(1) The legalization of slot machines and table games in
20150HB0649PN2574 - 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
31
32
33
Pennsylvania has delivered substantial benefits to the
Commonwealth, including tax revenue for property tax relief
and general economic development, the creation of more than
15,000 jobs and significant contributions to the horse racing
and agricultural industries.
(2) Developments in technology and recent legal
decisions have created an opportunity to legalize interactive
gaming as a means to further enhance and complement the
benefits delivered by casino gaming, licensed facilities and
the communities in which they operate.
(3) Interactive gaming operates by having players
establish and draw funds from an individual account to place
a wager in authorized games through the Internet and similar
communications media. The Commonwealth currently authorizes
gaming in the form of slot machines and banking and
nonbanking table games, including poker. These gaming
operations provide licensed entities in this Commonwealth the
appropriate level of experience to introduce a platform for
interactive gaming that protects the player and the integrity
of the game.
(4) It is a vital public interest that licensed entities
retain responsibility for the interactive gaming software and
hardware which shall remain under their ultimate supervisory
control. Vendors' ability to provide the interactive gaming
platform must depend solely on, and be tied to, the status of
the licensed entity for which they are providing their
services. Any interactive gaming enforcement and regulatory
structure must begin from the premise that participation in a
lawful and licensed gaming industry is a privilege, not a
right and that regulatory oversight is intended to safeguard
20150HB0649PN2574 - 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
the integrity of the games and participants and to ensure
accountability.
(5) The Commonwealth has entrusted the control and
regulation of gaming to the Pennsylvania Gaming Control Board
for the past seven years. Based on that experience, it is now
appropriate to delegate the responsibility for the
implementation and regulation of interactive gaming to the
board.
(6) Authorized interactive gaming, once fully developed,
will allow persons in this Commonwealth to participate in
interactive gaming, not only with other persons in this
Commonwealth, but with persons in other cooperating United
States jurisdictions where interactive gaming has been
authorized.
(7) The expansion of gaming through the authorization of
interactive gaming requires the Commonwealth to take steps to
increase awareness of problem gambling across interactive
channels and to implement effective strategies for
prevention, assessment and treatment of this behavioral
disorder.
§ 13B02. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Affiliate." As defined in section 1103 (relating to
definitions). The term does not include an individual.
"Authorized game." Any interactive game approved by the
board under this chapter.
"Authorized participant." A person placing a wager who is
either physically present in this Commonwealth or located in a
20150HB0649PN2574 - 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
jurisdiction with which the Commonwealth has negotiated an
interactive gaming agreement. The intermediate routing of
electronic data in connection with interactive games may not
determine the location or locations in which a wager is
initiated, received or otherwise made.
"Gross interactive gaming revenue." The total of all cash or
cash equivalents paid by authorized participants to a licensee
in consideration for the play of interactive games minus:
(1) The total of cash or cash equivalents paid out to
players as winnings.
(2) Promotional gaming credits.
(3) The cash equivalent value of any personal property
or other noncash item of value included in a drawing, contest
or tournament and distributed to players.
(4) Taxes paid to other states or territories of the
United States pursuant to interactive gaming agreements
implemented under this chapter.
(5) Revenues from nongaming sources, including food,
beverages, souvenirs, advertising, clothing or other
nongaming sources.
Amounts deposited with a licensee for purposes of interactive
gaming and amounts taken in fraudulent acts perpetrated against
a licensee for which the licensee is not reimbursed may not be
considered to have been paid to the licensee for purposes of
calculating gross interactive gaming revenue.
"Interactive game." Any gambling game offered through the
use of communications technology that allows a person, utilizing
money, checks, electronic checks, electronic transfers of money,
credit cards, debit cards or any other instrumentality, to
transmit electronic information to assist in the placing of a
20150HB0649PN2574 - 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
wager and corresponding information related to the display of
the game, game outcomes or other similar information. The term
does not include the conduct of gaming that occurs entirely
among participants located within the licensed facility of the
licensee or its affiliate, to the extent that the gaming may be
authorized by the board, or nongambling games that do not
otherwise require a license under the laws of this Commonwealth.
For purposes of this definition, "communications technology"
means any method used and the components employed by an
establishment to facilitate the transmission of information,
including transmission and reception by systems based on wire,
cable, radio, microwave, light, optics or computer data
networks, including the Internet and intranets.
"Interactive gaming agreement." A negotiated agreement
between the Commonwealth and one or more of the states or
territories of the United States in which interactive gaming is
legally authorized that permits persons located in the other
jurisdictions to place wagers on interactive games with
licensees in this Commonwealth or to permit persons located in
this Commonwealth to place wagers on interactive games with
licensees in the other jurisdictions, or both. Agreements may
contain other provisions the board deems appropriate, except
that only authorized games may be permitted to be offered to
persons located in this Commonwealth under the agreement.
"Interactive gaming license." A license issued by the board
under this chapter which authorizes the holder to offer
authorized games for play by, and to accept bets and wagers
associated with authorized games from, authorized participants.
"Interactive gaming platform." The combination of hardware
and software designed and used to manage, conduct or record
20150HB0649PN2574 - 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
interactive games or the wagers associated with those games and
which has been approved by the board for purposes of the conduct
of authorized games.
"Interactive gaming skin." The portal to an interactive
gaming platform or Internet website through which an authorized
game is made available to customers in this Commonwealth.
"Internet." A computer network of interoperable packet-
switched data networks.
"Key interactive gaming employee." An individual employed by
a licensee, significant vendor or applicant, or by a holding or
intermediary company of a licensee, significant vendor or
applicant, who is involved in the operation of, or of the wagers
associated with, interactive gaming and who is empowered to make
discretionary decisions that regulate interactive gaming
operations.
"Licensee." A licensed entity that holds an interactive
gaming license.
"Promotional gaming credit." Any bonus, promotion or amount
received by a licensee from an authorized participant for which
the licensee can demonstrate that it or its affiliate has not
received cash.
"Significant vendor." A person who offers or proposes to
offer any of the following services with respect to interactive
gaming:
(1) management, administration or control of wagers or
of the interactive games themselves;
(2) development, maintenance, provision or operation of
an interactive gaming platform or any discrete component
thereof;
(3) sale, licensing or other receipt of compensation for
20150HB0649PN2574 - 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
selling or licensing a database or customer list of
individuals residing in the United States selected, in whole
or in part, because they placed wagers or participated in
gambling games with or through an Internet website or
operator or any derivative of such a database or customer
list;
(4) provision of any product, service or asset to a
licensee or significant vendor in return for a percentage of
interactive gaming revenue, not including fees to financial
institutions and payment providers for facilitating a deposit
or withdrawal by an authorized participant; or
(5) provision of any trademark, trade name, service mark
or similar intellectual property under which a licensee or
significant vendor identifies to customers the authorized
games, the website or equivalent hosting the authorized
games, any interactive gaming skin or the interactive gaming
platform, but excluding intellectual property of a person
providing only art or graphics.
The term does not include any key interactive gaming employee of
a licensee or significant vendor. A significant vendor must be
licensed by the board to provide these services.
§ 13B03. Regulation and enforcement by the board.
(a) General rule.--The board shall promulgate regulations
for the operation and conduct of interactive gaming in this
Commonwealth and shall enforce the regulations.
(b) Powers and duties.--
(1) The board shall authorize licensees and significant
vendors to conduct interactive gaming involving authorized
participants, subject to the provisions of this chapter and
other applicable provisions of law. The board shall also
20150HB0649PN2574 - 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
develop standards for evaluating and approving interactive
gaming platforms for use with interactive gaming.
(2) The board may determine in its discretion the
categories of employees who satisfy the definition of "key
interactive employee" and may exclude from the scope of this
definition any particular licensee, significant vendor,
applicant or employee or category of employee it deems
appropriate.
(c) Delegated authority.--The board is designated as the
agency of the Commonwealth with the power and authority to
negotiate and enter into interactive gaming agreements on behalf
of the Commonwealth consistent with this chapter.
(d) Interactive gaming agreements.--To the extent
practicable, the board shall negotiate interactive gaming
agreements with other states, territories or possessions of the
United States in which interactive gaming has been authorized to
allow players in this Commonwealth to participate in authorized
games with players in other jurisdictions.
§ 13B04. Prohibition on unauthorized Internet gaming.
(a) Unauthorized gaming.--
(1) It shall be unlawful for any person to willfully and
knowingly operate, carry on, offer or expose for play any
interactive game or to accept a bet or wager associated with
an interactive game from any person physically located in
this Commonwealth at the time of play that is not within the
scope of a valid and current license issued by the board
under this chapter or by another state, territory or
possession of the United States with which the Commonwealth
has an interactive gaming agreement that permits the
activity.
20150HB0649PN2574 - 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
(2) It shall be unlawful for any person to willfully and
knowingly provide services with respect to any interactive
game, bet or wager specified in paragraph (1).
(b) Grading of offense.--A person who violates subsection
(a) commits a misdemeanor of the first degree. For a second or
subsequent violation of subsection (a), a person commits a
felony of the second degree.
(c) Penalties.--
(1) For a first violation of subsection (a), a person
shall be sentenced to pay a fine of:
(i) not less than $75,000 nor more than $150,000, if
the person is an individual;
(ii) not less than $150,000 nor more than $300,000,
if the person is a licensed manufacturer or supplier; or
(iii) not less than $300,000 nor more than $600,000,
if the person is a licensed gaming entity.
(2) For a second or subsequent violation of subsection
(a), a person shall be sentenced to pay a fine of:
(i) not less than $150,000 nor more than $300,000,
if the person is an individual;
(ii) not less than $300,000 nor more than $600,000,
if the person is a licensed manufacturer or supplier; or
(iii) not less than $600,000 nor more than
$1,200,000, if the person is a licensed gaming entity.
(d) Forfeiture.--If a person places a wager on an
interactive game from a location in which the activity is
unauthorized, the person shall forfeit all entitlement to any
winnings and the money associated with any forfeited winnings
shall be deposited by the licensee into the Compulsive and
Problem Gambling Treatment Fund established under section
20150HB0649PN2574 - 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
1509(b) (relating to compulsive and problem gambling program).
(e) Tax liability.--An unlicensed person offering
interactive games to persons in this Commonwealth shall be
liable for all taxes required by this chapter in the same manner
and amounts as if the person were a licensee. Timely payment of
the taxes may not constitute a defense to any prosecution or
other proceeding in connection with unauthorized interactive
gaming, except for a prosecution or proceeding alleging failure
to make such payment.
§ 13B05. Application for license.
(a) Filing of application.--Ninety days from the effective
date of this section the board shall permit filing of
applications for licenses under this chapter. The application
shall include, as applicable:
(1) The name and business address of the applicant,
including an organizational chart which identifies the
applicant's relationship to any person that holds a slot
machine license and a table game operation certificate issued
by the board.
(2) Identification of and a detailed description of the
qualifications of any proposed significant vendors. Detailed
information shall be provided describing the specific
operational responsibilities of significant vendors and the
nature of the economic relationship with those significant
vendors.
(3) A detailed description of the technical protocols
and parameters of the interactive gaming platform proposed to
be utilized.
(4) Identification and a description of the interactive
games the applicant proposes to make available.
20150HB0649PN2574 - 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
(5) Other information as the board, in its discretion,
may determine to require.
(b) Temporary authorization.--
(1) During the first 18 months from the effective date
of this section, the board may issue temporary authorizations
to applicants for licensing as a significant vendor, which
may remain in effect until the shorter of 12 months after the
date of issue or the date by which the board considers the
subject application. Temporary authorizations may be renewed
not more than once, upon a showing of good cause. Temporary
authorization shall allow the applicant to engage in all of
the functions of a fully licensed significant vendor for the
duration of the temporary authorization.
(2) No temporary authorization may be issued unless:
(i) The applicant has submitted a complete license
application.
(ii) The applicant agrees to pay the fee prescribed
in section 13B08 (relating to licensing fee) within 60
days of issuance of the temporary authorization, which
may be refundable in the event a permanent license is not
issued. Failure to make timely payment shall result in
revocation of the temporary authorization.
(iii) The bureau has stated that it has no objection
to the issuance of a temporary authorization to the
applicant.
(3) Within 45 days of the date that the bureau receives
the completed application of an applicant for investigation,
the bureau shall conduct a preliminary investigation of the
applicant and any key interactive gaming employee of the
applicant, which shall include a criminal background
20150HB0649PN2574 - 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
investigation of the applicant and any key interactive gaming
employees of the applicant.
(4) If the bureau's preliminary investigation discloses
no material adverse information, then the bureau shall issue
to the executive director a statement of no objection to the
issuance of a temporary authorization to the applicant.
(5) If the bureau's preliminary investigation discloses
material adverse information, it shall register an objection
and no temporary authorization may be issued until the
material concern is resolved.
(6) If the bureau's full investigation of an applicant
discloses material adverse information, the temporary
authorization of the applicant may be suspended or withdrawn
upon a showing of cause by the bureau.
§ 13B06. Board consideration of application.
(a) Suitability.--A holder, or an affiliate of a holder, of
a slot machine license and table game operation certificate,
whose license and certificate are in good standing, shall be
considered suitable to be issued an interactive gaming license
by the board without additional investigation.
(b) Significant vendors.--The board shall determine the
suitability of any significant vendors, consistent with the
requirements of this chapter.
(c) Qualifications.--A review of the suitability of a person
to hold a license as a licensee or significant vendor shall
include the review and determination of whether:
(1) The person possesses the requisite experience and
skill to perform the functions consistent with the
requirements of this chapter.
(2) The applicant is a person of good character, honesty
20150HB0649PN2574 - 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
and integrity.
(3) The applicant is a person whose prior activities,
criminal record, if any, reputation, habits and associations
do not:
(i) pose a threat to the public interest or to the
effective regulation and control of interactive gaming;
or
(ii) create or enhance the dangers of unsuitable,
unfair or illegal practices, methods and activities in
the conduct of interactive gaming or in the carrying on
of the business and financial arrangements incidental to
gaming.
(d) Owners and key interactive gaming employees.--In
connection with an application for a license as a licensee or
significant vendor, the applicant shall identify and the board
shall determine the suitability of an applicant's owners, chief
executive officer, chief financial officer, any other officer
whom the board deems significantly involved in the management or
control of the applicant and all key interactive gaming
employees.
(e) Issuance of order.--The board shall issue an order
granting or denying an application for a license as a licensee
or significant vendor within 120 days of the date on which a
properly completed application and any additional information
that the board may require is filed. If the board approves an
application, it may impose reasonable conditions of licensure
consistent with the requirements of this chapter.
§ 13B07. Institutional investors.
(a) Declaration of investment intent.--
(1) An institutional investor holding less than 25% of
20150HB0649PN2574 - 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
the equity securities of a licensee's, significant vendor's
or applicant's holding or intermediary companies, shall be
granted a waiver of any investigation of suitability or other
requirement if the securities are those of a corporation,
whether publicly traded or privately held, and the holdings
of the securities were purchased for investment purposes
only. The institutional investor shall file a certified
statement that it has no intention of influencing or
affecting the affairs of the licensee, significant vendor,
applicant or its holding or intermediary companies. However,
an institutional investor shall be permitted to vote on
matters put to the vote of the outstanding security holders.
(2) The board may grant a waiver to an institutional
investor holding a higher percentage of securities upon a
showing of good cause and if the conditions specified in
paragraph (1) are met.
(3) An institutional investor granted a waiver under
this subsection who subsequently decides to influence or
affect the affairs of the licensee, significant vendor or
applicant's holding or intermediary company shall provide not
less than 30 days' notice of intent and shall file with the
board a request for determination of suitability before
taking any action that may influence or affect the affairs of
the issuer. An institutional investor shall be permitted to
vote on matters put to the vote of the outstanding security
holders.
(4) If an institutional investor changes its investment
intent or if the board finds reasonable cause to believe that
the institutional investor may be found unsuitable, no action
other than divestiture shall be taken by the institutional
20150HB0649PN2574 - 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
investor with respect to its security holdings until there
has been compliance with any requirements established by the
board, which may include the execution of a trust agreement.
(5) The licensee or significant vendor or applicant and
its relevant holding, intermediary or subsidiary company
shall notify the board immediately of any information about,
or actions of, an institutional investor holding its equity
securities where the information or action may impact the
eligibility of the institutional investor for a waiver under
this subsection.
(b) Failure to declare.--If the board finds:
(1) that an institutional investor holding any security
of a holding or intermediary company of a licensee or
significant vendor or applicant or, where relevant, of
another subsidiary company of a holding or intermediary
company of a licensee or significant vendor or applicant
which is related in any way to the financing of the licensee
or significant vendor or applicant, fails to comply with the
provisions of subsection (a); or
(2) by reason of the extent or nature of its holdings,
an institutional investor is in a position to exercise such a
substantial impact upon the controlling interests of a
licensee or significant vendor or applicant that
investigation and determination of suitability of the
institutional investor is necessary to protect the public
interest;
then the board may take any necessary action otherwise
authorized under this chapter to protect the public interest.
§ 13B08. Licensing fee.
If the board grants an application under section 13B05
20150HB0649PN2574 - 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
(relating to application for license) within 60 days of entry of
the board's order, the successful applicant shall pay a
licensing fee of $5,000,000 if a licensee or $1,000,000 if a
significant vendor.
§ 13B09. Accounting and operational internal controls.
Each interactive gaming license applicant shall submit to the
board and department, in such manner as the board shall require,
a description of its administrative and accounting procedures in
detail, including its written system of internal control. In
addition to other standards that the board, in its discretion,
may choose to require, the board shall require licensees to
implement appropriate safeguards:
(1) To ensure, to a reasonable degree of certainty, that
authorized participants are not less than 21 years of age.
(2) To ensure, to a reasonable degree of certainty, that
authorized participants are physically located within this
Commonwealth or another jurisdiction that is permissible
under this chapter.
(3) To protect, to a reasonable degree of certainty, the
privacy and online security of authorized participants.
(4) To ensure, to a reasonable degree of certainty, that
the interactive games are fair and honest and that
appropriate measures are in place to deter, detect and, to
the extent reasonably possible, to prevent cheating,
including collusion, and use of cheating devices, including
the use of software programs, sometimes referred to as
"bots," that make bets or wagers according to algorithms.
(5) To minimize compulsive gambling and to provide
notice to authorized participants of resources to help
problem gamblers.
20150HB0649PN2574 - 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
(6) To ensure authorized participants' funds are held in
accounts segregated from the funds of licensees and otherwise
are protected from corporate insolvency, financial risk or
criminal or civil actions against the licensee.
§ 13B10. Interactive gaming tax.
(a) Weekly taxation.--Each licensee shall report to the
department and pay from its daily gross interactive gaming
revenue, on a form and in a manner prescribed by the department,
a tax of 14% of its daily gross interactive gaming revenue,
which shall be payable to the department on a weekly basis and
shall be based upon gross interactive gaming revenue for the
previous week.
(b) Taxes on out-of-State wagering.--The tax rate which
shall be assessed and collected by the department with respect
to any wagers placed by residents of this Commonwealth with an
interactive gaming operator outside of this Commonwealth, but
authorized under an interactive gaming agreement shall be
governed by the agreement but may not exceed 14% of gross
interactive gaming revenue derived from residents of this
Commonwealth.
(c) Taxes held in trust.--All funds owed to the Commonwealth
under this section shall be held in trust for the Commonwealth
by the licensee until the funds are paid to the department.
Unless otherwise agreed to by the board, a licensee shall
establish a separate bank account into which the funds shall be
deposited and maintained until paid to the department.
(d) Federal presumption.--In the event Federal law
authorizes interactive gaming which establishes a tax based on
gross interactive gaming revenue, deposits or the substantial
equivalent of or intended substitute for either of them, of
20150HB0649PN2574 - 18 -
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
which a portion is allocated to the states, that tax shall
supersede, in its entirety, the tax imposed by this section.
§ 13B11. Prohibition on Internet cafes.
(a) General rule.--No organization or commercial enterprise,
other than a licensee, shall operate a place of public
accommodation, club, including a club or association limited to
dues-paying members or similar restricted groups, or similar
establishment in which computer terminals or similar access
devices are advertised or made available to be used principally
for the purpose of accessing interactive games.
(b) Construction.--Nothing in this section shall be
construed to require the owner or operator of a hotel or motel
or other public place of general use in this Commonwealth to
prohibit or block guests from playing interactive games.
§ 13B12. Testing of hardware, software and equipment.
(a) Testing by the board.--The board may expand its testing
facility, utilize the services of a private testing facility or
adopt the testing and certification standards of another
jurisdiction and may approve computer hardware, software or
associated equipment based on the prior approval of a private
testing facility or of another jurisdiction whose standards the
board reasonably determines are adequate and comparable to those
required by this chapter. Costs associated with the expansion of
its own testing facility shall be assessed on significant
vendors licensed to provide interactive gaming platforms.
(b) Approval.--
(1) No interactive gaming platform may be utilized by a
licensee unless approved by the board or its testing and
certification facility under this section. The board shall
not approve an interactive gaming platform unless the
20150HB0649PN2574 - 19 -
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
platform is subject to the control, and is the ultimate
responsibility, of the licensee.
(2) This subsection shall not be construed to prohibit a
licensee from licensing use or delegating daily operation of
the interactive gaming platform from or to a significant
vendor.
§ 13B13. Expanded compulsive and problem gambling programs.
(a) Expanded programs.--
(1) The board and the Department of Health shall jointly
develop expanded programs to address compulsive and problem
gambling issues relating to interactive gaming.
(2) Licensees shall address compulsive and problem
gambling issues in the context of interactive gaming in their
respective compulsive and problem gambling plans on file with
the board.
(b) Message.--Licensees shall permanently and continuously
display the following message to persons at the time of logging
on to the Internet websites of the licensees or any interactive
gaming skin:
If you or someone you know has a gambling problem and
wants help, call 1-800-GAMBLER.
§ 13B14. Application of other provisions of this part.
The following sections of this part, which are expressly
applicable to the conduct or operation of slot machines or table
games, are also deemed applicable to interactive gaming under
this chapter:
(1) The board's power and duty to require that licensees
prohibit persons under 21 years of age from playing
interactive games under section 1207(8) (relating to
regulatory authority of board).
20150HB0649PN2574 - 20 -
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) The obligation to include information on interactive
gaming in the board's annual report under section 1211(a.1)
(relating to reports of board).
(3) The procedures, parameters and time frames for
promulgating temporary regulations under section 13A03(a) and
(b) (relating to temporary table game regulations).
(4) Manufacturing licensing requirements under section
1317.1 (relating to manufacturer licenses).
(5) Gaming service provider requirements under section
1317.2 (relating to gaming service provider).
(6) Permit renewal requirements under section 1326
(relating to license renewals).
(7) Section 1402 (relating to gross terminal revenue
deductions), except that recovery of the costs and expenses
of regulating interactive gaming under this chapter shall be
limited to 1% of gross interactive gaming revenue.
(8) The declaration that it shall be unlawful for an
individual under 21 years of age to wager, play or attempt to
play an interactive game under section 1518(a)(13.1)
(relating to prohibited acts; penalties).
Section 2. This act shall take effect in 60 days.