Regular Session 2021-2022 House Bill 1292 P.N. 1383

PRINTER'S NO. 1383

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1292

Session of

2021

INTRODUCED BY MASSER, MILLARD, ROWE, SAYLOR, DRISCOLL, JOZWIAK

AND SAINATO, APRIL 27, 2021

REFERRED TO COMMITTEE ON GAMING OVERSIGHT, APRIL 27, 2021

AN ACT

Amending the act of December 19, 1988 (P.L.1262, No.156),

entitled "An act providing for the licensing of eligible

organizations to conduct games of chance, for the licensing

of persons to distribute games of chance, for the

registration of manufacturers of games of chance, and for

suspensions and revocations of licenses and permits;

requiring records; providing for local referendum by

electorate; and prescribing penalties," in preliminary

provisions, further providing for definitions; in games of

chance, further providing for distributor licenses and for

registration of manufacturers; in enforcement, further

providing for enforcement; and, in tavern gaming, further

providing for definitions, for licenses, for application, for

approval, for change in ownership, for tavern raffle, for

distribution of net revenue, for tavern games tax, for host

municipality tavern games tax, for reports, for enforcement

and for prohibitions.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definition of "tavern games" in section 103

of the act of December 19, 1988 (P.L.1262, No.156), known as the

Local Option Small Games of Chance Act, is amended and the

section is amended by adding definitions to read:

Section 103. Definitions.

The following words and phrases when used in this act shall,

except as provided under section 902, have the meanings given to

them in this section unless the context clearly indicates

otherwise:

* * *

"Tavern daily drawing." A game in which:

(1) an individual at a tavern selects or is assigned a

number for a chance at a prize with the winner determined by

random drawing to take place at the tavern during the same

operating day;

(2) a winner may be determined with the aid of a passive

selection device or reference to drawings conducted by the

department under the act of August 26, 1971 (P.L.351, No.91),

known as the State Lottery Law;

(3) chances are not sold for an amount in excess of $1;

and

(4) no more than one chance per individual is sold per

drawing.

"Tavern games." Pull-tabs, tavern daily drawings, tavern

weekly drawings and tavern raffles.

"Tavern raffle." A raffle held in part for a charitable or

public purpose in accordance with section 908.1.

"Tavern weekly drawing." A game in which:

(1) an individual at a tavern selects or is assigned a

number for a chance at a prize with the winner determined by

random drawing to take place at the tavern at the end of a

seven-day period;

(2) a winner may be determined with the aid of a passive

selection device or reference to drawings conducted by the

department under the act of August 26, 1971 (P.L.351, No.91),

known as the State Lottery Law;

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(3) chances are not sold for an amount in excess of $1;

and

(4) no more than one chance per individual is sold per

drawing.

* * *

Section 2. Sections 304(i), 305(d) and 702(b) of the act are

amended to read:

Section 304. Distributor licenses.

* * *

(i) Exception.--This section shall not apply to the

manufacture or distribution of raffle tickets, 50/50 drawings,

daily drawings, weekly drawings, tavern daily drawings, tavern

weekly drawings, tavern raffles or pools.

Section 305. Registration of manufacturers.

* * *

(d) Exception.--This section shall not apply to the

manufacture or distribution of raffle tickets, 50/50 drawings,

daily drawings, weekly drawings, tavern daily drawings, tavern

weekly drawings, tavern raffles or pools.

Section 702. Enforcement.

* * *

(b) Bureau of Liquor Control Enforcement.--If the licensee

is a club licensee [or a licensee under Chapter 9], the Bureau

of Liquor Control Enforcement may enforce the provisions of this

act in accordance with subsection (g). An administrative law

judge under section 212 of the act of April 12, 1951 (P.L.90,

No.21), known as the Liquor Code, may impose the penalties under

subsection (d) following the issuance of a citation by the

bureau. The Bureau of Liquor Control Enforcement shall have no

jurisdiction to enforce the provisions of this act on any

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special occasion permit holder under section 408.4 of the Liquor

Code. The Bureau of Liquor Control Enforcement shall retain all

powers and duties to enforce the provisions of the Liquor Code

on a special occasion permit holder.

* * *

Section 3. The definition of "net revenue" in section 902 of

the act is amended and the section is amended by adding

definitions to read:

Section 902. 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:

* * *

"Eating place licensee." An eating place as defined in

section 102 of the act of April 12, 1951 (P.L.90, No.21), known

as the Liquor Code, that is licensed to sell liquor under the

Liquor Code.

* * *

"Net revenue." As follows:

(1) For tavern games required to be purchased from a

licensed distributor under this act, the difference between:

(i) the amount of the face value, as indicated by

the manufacturer, minus the cost of the game, collectible

by a licensee from a tavern game; and

(ii) the maximum amount of prizes payable, as

indicated by the manufacturer, by a licensee from a

tavern game.

(2) For tavern games not required to be purchased from a

licensed distributor, the term has the same meaning as

proceeds.

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* * *

"Tavern weekly drawing." A game in which:

(1) an individual at a tavern selects or is assigned a

number for a chance at a prize with the winner determined by

random drawing to take place at the tavern at the end of a

seven-day period;

(2) a winner may be determined with the aid of a passive

selection device or reference to drawings conducted by the

department under the act of August 26, 1971 (P.L.351, No.91),

known as the State Lottery Law;

(3) chances are not sold for an amount in excess of $1;

and

(4) no more than one chance per individual is sold per

drawing.

Section 4. Sections 903, 904, 905, 906, 908.1, 909,

909.1(a), (c) and (h), 909.2(c) and (g), 912, 913 and 914 of the

act are amended to read:

Section 903. Licenses.

(a) Application.--A restaurant licensee or eating place

licensee may apply to the [board] department for a license to

conduct tavern games at a licensed premises located in a

municipality that has adopted a referendum to allow small games

of chance under section 703.

(b) Information.--The application under subsection (a) shall

include the following information:

(1) The name, address and photograph of the applicant.

(2) A current tax lien certificate issued by the

department and a certificate from the Department of Labor and

Industry of payment of all workers' compensation and

unemployment compensation owed.

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(3) The details of any license issued under 4 Pa.C.S.

Pt. II (relating to gaming), the act of April 12, 1951

(P.L.90, No.21), known as the Liquor Code, or this act which

was applied for or in which the applicant or other owner has

an interest.

(4) Certified consent by the applicant, including each

owner and officer of the restaurant licensee or eating place

licensee, to a background investigation by the [bureau]

department.

(5) Relating to criminal information, disclosure of all

arrests and citations of the applicant, including nontraffic

summary offenses. The information shall include all of the

following:

(i) A brief description of the circumstances

surrounding the arrest or issuance of the citation.

(ii) The specific offense charged.

(iii) The ultimate disposition of the charge,

including any dismissal, plea bargain, conviction,

sentence[, pardon, expungement] or order of Accelerated

Rehabilitative Disposition.

(6) Financial interests and transactions as required by

the [bureau] department.

(7) Relating to citations of the applicant issued under

the Liquor Code.

(8) Relating to disclosure of conditional license

agreements entered into under the Liquor Code.

(9) Any other information required by the [board]

department.

shall conduct a background investigation of each applicant, the

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scope of which shall be determined by the [bureau] department.

(d) Review.--Within six months of [receipt of] the

background investigation report [from the bureau] under

subsection (c), the [board] department shall approve or

disapprove the application.

(e) Background investigation.--Each applicant shall include

information and documentation as required to establish personal

and financial suitability, honesty and integrity. Information

shall include:

(1) [Criminal history record information.] A criminal

history record information check obtained from the

Pennsylvania State Police, as defined in 18 Pa.C.S. § 9102

(relating to definitions) and permitted by 18 Pa.C.S. §

9121(b) (relating to general regulations), for the applicant

or any other person required by the department.

(2) Financial background information.

(3) Regulatory history before the [board] department or

other Commonwealth agency.

(4) Other information required by the [bureau]

department.

(f) Personal interview.--If the [bureau] department

determines that the results of the background report

investigation warrant additional review of the individual, the

[bureau] department shall conduct a personal interview with the

applicant and may request information and interviews from other

personal or professional associates.

(g) Cooperation.--The applicant shall cooperate with the

[bureau] department as requested during the conduct of the

background investigation. Any refusal to provide the information

required under this section or to consent to a background

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investigation shall result in the immediate denial of a license

by the [board] department.

(h) Costs.--The applicant shall reimburse the [bureau]

department for the actual costs of conducting the background

investigation. The [board] department shall not approve an

applicant that has not fully reimbursed the [bureau] department

for the investigation.

(i) Approval.--[The bureau shall transmit the investigative

report and may make a recommendation to the board. The board]

The department shall review the information obtained under this

section to determine if the applicant possesses the following:

(1) Financial stability, integrity and responsibility.

(2) Sufficient business experience and ability to

effectively operate tavern games as part of the restaurant

licensee's operator or eating place licensee's operator.

(3) Character, honesty and integrity to be licensed to

operate tavern games in a responsible and lawful manner.

(j) Disapproval.--The [board] department may disapprove the

issuance of a tavern gaming license for the following reasons:

(1) A license shall not be issued to a restaurant

licensee or eating place licensee whose liquor license is in

safekeeping pursuant to section 474.1 of the Liquor Code.

(2) A license shall not be issued to a location that is

subject to a pending objection under section 470(a.1) of the

Liquor Code.

(3) A license shall not be issued to a location that is

subject to:

(i) a pending license suspension under section 471

of the Liquor Code; or

(ii) a one-year prohibition on the issuance or

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transfer of a license under section 471(b) of the Liquor

Code.

Section 904. Application.

[(a) Application fee.--]An applicant shall pay the [board]

department a nonrefundable application fee of $1,000.

[(b) Investigative fee.--An applicant shall pay an

investigative fee of $1,000 to the bureau.

applicant and any owner and officer of the applicant shall pay

for the actual costs of a background investigation conducted by

the bureau that exceed the application fee. The bureau may:

(1) Charge an estimated amount to be provided prior to

the background investigation.

(2) Submit for reimbursement from the applicant for the

additional costs incurred in the background investigation.

(d) Funds.--Funds collected under subsections (b) and (c)

shall augment the funds appropriated to the Pennsylvania Gaming

Control Board under 4 Pa.C.S. (relating to amusements).]

Section 905. Approval.

(a) Issuance.--Upon being satisfied that the requirements of

section 903 have been met, the [board] department may approve

the application and issue a tavern games license for a period of

one year. The [board] department may enter into an agreement

with the licensee concerning additional restrictions on the

license, and this agreement shall be binding on the licensee.

Failure of the licensee to adhere to the agreement will be cause

for penalties under section 913(c) and for the nonrenewal of the

license under section 913(f).

(b) Renewal.--A license shall be renewed annually. A license

renewal shall not require review of the [bureau, unless

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requested by the board] department. The [board] department may

refuse to renew a tavern gaming license for the following

reasons:

(1) A license shall not be issued to a restaurant

licensee or eating place licensee whose liquor license is in

safekeeping under section 474.1 of the act of April 12, 1951

(P.L.90, No.21), known as the Liquor Code.

(2) A license shall not be issued to a location that is

subject to a pending objection under section 470(a.1) of the

Liquor Code.

(3) A license shall not be issued to a location that is

subject to:

(i) a pending license suspension under section 471

of the Liquor Code; or

(ii) a one-year prohibition on the issuance or

transfer of a license under section 471(b) of the Liquor

Code.

an annual renewal license fee [to be deposited in the General

Fund] of $500. The department shall deposit the annual renewal

license fee [shall be $1,000] into the General Fund.

(d) Entitlement.--Nothing under this chapter shall be

construed to create an entitlement to a license by a person. The

[board] department shall have sole discretion to issue, renew,

condition, suspend, revoke or deny a license based on the

requirements of this chapter and whether the issuance and

maintenance of the license are in the best interests of the

Commonwealth.

(e) Nontransferability.--A license shall be a grant of

privilege to conduct tavern games. A license may not be sold,

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transferred or assigned to any other person. A licensee may not

pledge or otherwise grant a security interest in or lien on the

license. The [board] department shall have the sole discretion

to issue, renew, condition or deny the issuance of a license.

Section 906. Change in ownership.

(a) Notice.--A licensee shall notify the [board] department

of a change of ownership of the premises or sale or transfer of

the restaurant license.

(b) Qualification.--The purchaser or transferee of the

assets or premises of a licensee must independently qualify for

a license[,] and pay the [license fee and undergo and pay fees

and costs for a background investigation under section 903.]

application fee under section 904.

Section 908.1. Tavern raffle.

The following shall apply to a tavern raffle:

(1) No more than one tavern raffle may be held in a

calendar month.

(2) A tavern raffle must be held for a designated

charitable purpose.

(3) Each individual participating in the tavern raffle

must be informed of the charitable purpose involved.

(4) At least 50% of the net revenues from the tavern

raffle shall be transmitted to the designated charity within

seven days of the tavern raffle.

(5) Any net revenues not transmitted under paragraph (4)

shall be distributed as follows:

(i) [Sixty] Fifty percent shall be paid to the

Commonwealth.

(ii) [Thirty-five] Forty-five percent may be

retained by the licensee.

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(iii) Five percent shall be paid to the Commonwealth

and deposited into the restricted receipts account

established in section 909.3.

(6) A tavern raffle prize remaining unclaimed by a

winner 60 days after the tavern raffle was held shall be

donated by the licensee within 30 days to the designated

charitable organization for which the tavern raffle was

conducted.

Section 909. Distribution of net revenue.

Beginning January 1, 2014, the net revenue from tavern games

received by a licensee shall be distributed as follows:

(1) [Sixty] Fifty percent of the net revenue obtained in

any calendar year shall be paid to the Commonwealth.

(2) [Thirty-five] Forty-five percent of the net revenue

obtained in any calendar year may be retained by the

licensee.

(3) Five percent shall be paid to the Commonwealth and

deposited into the restricted receipts account established in

section 909.3.

Section 909.1. Tavern games tax.

(a) Imposition.--There is imposed a tax of [60%] 55% of the

net revenue from tavern games sold by a licensed distributor to

a licensee within this Commonwealth.

* * *

not required to be purchased from a licensed distributor under

this act, a tax of [60%] 55% is imposed upon the net revenue

from tavern daily drawings, tavern weekly drawings and tavern

raffles under section 908.1 and must be paid to the Commonwealth

by the licensee.

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* * *

(h) Penalties and interest.--If a licensee or licensed

distributor fails to file the return required under subsection

(e) or fails to pay the tax imposed under subsection (a) or (c),

the department may do the following:

(1) assess the amount of tax due;

(2) impose and assess an administrative penalty equal to

10% of the tax due but unpaid for each quarter or fraction

thereof that the tax remains unpaid together with interest at

the rate established under section 806 of the act of April 9,

1929 (P.L.343, No.176), known as The Fiscal Code, on the tax

from the time the tax became due. The penalty provided in

this paragraph must be added to the tax and assessed and

collected at the same time and in the same manner as a part

of the tax. Unless otherwise specified, the tax must be

assessed, collected and enforced by the department under the

provisions of Article II of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971;

(3) [notify the board that a licensee has not filed

returns or has not paid tax. The board may] suspend or revoke

a licensee's license; or

(4) revoke a licensed distributor's license.

* * *

Section 909.2. Host municipality tavern games tax.

* * *

not required to be purchased from a licensed distributor under

this act, a tax of 5% is imposed upon the net revenue from

tavern daily drawings, tavern weekly drawings and tavern raffles

under section 908.1 and must be paid to the Commonwealth and

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deposited into the restricted receipts account established in

section 909.3.

* * *

(g) Penalties and interest.--If a licensee or licensed

distributor fails to file the return required under subsection

(e) or fails to pay the tax imposed under subsection (a) or (c),

the department may do the following:

(1) assess the amount of tax due;

(2) impose and assess an administrative penalty equal to

10% of the tax due but unpaid for each quarter or fraction

thereof that the tax remains unpaid together with interest at

the rate established under section 806 of the act of April 9,

1929 (P.L.343, No.176), known as The Fiscal Code, on the tax

from the time the tax became due. The penalty provided in

this paragraph must be added to the tax and assessed and

collected at the same time and in the same manner as a part

of the tax. Unless otherwise specified, the tax must be

assessed, collected and enforced by the department under the

provisions of Article II of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971;

(3) [notify the board that a licensee has not filed

returns or has not paid tax. The board may] suspend or revoke

a licensee's license; or

(4) revoke a licensed distributor's license.

* * *

Section 912. Reports.

A licensee shall submit an annual report to the [board and

the] department for the preceding year on a form and in a manner

prescribed by the department. The department shall develop a

schedule for the submission of the annual report. The report

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shall include:

(1) Prizes awarded as required under section 335 of the

act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform

Code of 1971.

[(2) Net revenue received from each tavern game

conducted, itemized by week.

(3) Amount of prizes paid from all tavern games,

itemized by week.]

(4) Amount of tax remitted to the department.

(5) Amount given to designated charities from tavern

raffles.

(6) Other information as required by the department.

Section 913. Enforcement.

(a) [Board] Department.--The [board] department may,

following notice and hearing, impose penalties or suspend or

revoke a license under this chapter.

[(b) Authority of department.--Notwithstanding any law to

the contrary, the department may report violations of this

chapter to the board and to the Bureau of Liquor Control

Enforcement.]

impose a civil penalty for a violation of this chapter in

accordance with the following:

(1) Up to [$2,000] $100 for an initial violation.

(2) Up to [$3,000] $500 for a second violation.

(3) Up to [$5,000] $1,000 for a third violation.

[(d) Criminal penalty.--A violation of this chapter shall be

a misdemeanor of the third degree. A second or subsequent

offense shall be a misdemeanor of the second degree.

(e) Administrative law judge.--An administrative law judge

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under section 212 of the act of April 12, 1951 (P.L.90, No.21),

known as the Liquor Code, may impose the penalties under this

section following the issuance of a citation by the Bureau of

Liquor Control Enforcement.]

(f) Suspension, revocation or failure to renew.--

(1) In addition to any other sanctions the [board]

department may impose under this chapter [or under the Liquor

Code], the [board] department may, at its discretion,

suspend, revoke or deny renewal of any license issued under

this chapter if it receives any information from any source

and determines that:

(i) The applicant or any of its officers, directors,

owners or employees:

(A) Is in violation of any provision of this

chapter.

(B) Furnished the [board] department with false

or misleading information.

(ii) The information contained in the applicant's

initial application or any renewal application is no

longer true and correct.

(2) In the event of a revocation, suspension or failure

to renew, the applicant's authorization to conduct the

previously approved activity shall immediately cease, and all

fees paid in connection therewith shall be deemed to be

forfeited. In the event of a suspension, the applicant's

authorization to conduct the previously approved activity

shall immediately cease until the [board] department has

notified the applicant that the suspension is no longer in

effect.

(3) The department shall immediately and permanently

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revoke a license issued under this chapter if the licensee

has committed four or more violations of this chapter in a

two-year period.

(g) Law enforcement officials.--Nothing in this chapter may

restrict or limit the power of a State, county or local law

enforcement official to conduct investigations and file criminal

charges under this chapter.

(h) Violations.--

(1) Except as provided in paragraph (2), a violation of

this chapter by a restaurant licensee or eating place

licensee shall not constitute a violation of the act of April

12, 1951 (P.L.90, No.21), known as the Liquor Code.

(2) If a restaurant licensee or eating place licensee

has committed four or more violations of this act, the bureau

may enforce a violation of this chapter as a violation of the

Liquor Code.

(3) A violation of this chapter shall not constitute

a violation of the Liquor Code for the purposes of section

471(c) of the Liquor Code.

Section 914. Prohibitions.

The following shall apply to any license authorized or issued

under this chapter:

(1) No license may be issued to a restaurant licensee or

eating place licensee whose place of business is located in a

licensed facility as defined in 4 Pa.C.S. § 1103 (relating to

definitions).

(2) No license may be issued to a place of business on

the grounds of a facility where a major league sports team

conducts games or races.

(3) No license may be issued to a place of business that

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has been decreed a nuisance pursuant to section 611 of the

act of April 12, 1951 (P.L.90, No.21), known as the Liquor

Code.

(4) The [board] department shall be prohibited from

issuing a license to any person who has been convicted of a

felony offense or misdemeanor gambling offense in any

jurisdiction unless 15 years have elapsed from the date of

conviction of the offense.

(5) It shall be unlawful for an individual under 21

years of age to play or attempt to play or otherwise

participate in a tavern game.

(6) It shall be unlawful for a licensee to permit an

employee under 18 years of age to operate tavern games.

(7) It shall be unlawful for an owner, officer or

employee of a licensee to sell, operate or otherwise

participate in the conduct of tavern games if the employee

has been convicted in any jurisdiction of a felony or a

misdemeanor gambling offense unless 15 years have elapsed

from the date of conviction of the offense.

(8) It shall be unlawful for an owner or officer of a

licensee or for an employee of the licensee who operates the

tavern game to participate in the game. This paragraph shall

not apply to a raffle.

Section 5. This act shall take effect in 60 days.

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