Title 58--RECREATION
PENNSYLVANIA GAMING CONTROL BOARD
[58 PA. CODE CHS. 405, 441 AND 443]
Final Temporary Regulations; Category 2 and 3 Slot Machine Licenses
[35 Pa.B. 6407] The Pennsylvania Gaming Control Board (Board), under the authority of 4 Pa.C.S. § 1202(b)(14)) (relating to general and specific powers), adopts temporary regulations to facilitate implementation of 4 Pa.C.S. Part II (relating to gaming), enacted by the act of July 5, 2004 (P. L. 572, No. 71) (Act 71). The Board's temporary regulations will be added to Part VII (relating to Gaming Control Board). Chapter 405, entitled Bureau of Investigations and Enforcement, is added to Subpart A, General Provisions. Sections 441.13 and 441.14, entitled notification of anticipated or actual changes in key employee qualifiers or key employees and notification of new financial sources, are added to Chapter 441, Slot Machine Licenses, of Subpart C, entitled Slot Machine Licensing. Sections 443.4 and 443.5, entitled Category 2 slot machine licenses and Category 3 slot machine licenses are added to Chapter 443, Categories of Licensure, of Subpart C, entitled Slot Machine Licensing.
Purpose and Background
Under 4 Pa.C.S. § 1203 (relating to temporary regulations), the Board is required to promulgate temporary regulations to facilitate the prompt implementation of Act 71. The regulations are necessary to enhance the credibility of the licensed operation of slot machines and associated equipment in this Commonwealth and to carry out the policy and purposes of the Board. In adopting these temporary regulations, the Board has considered the public comments submitted to the Board, including comments from various State agencies, legislators and other interested parties. The Board has also reviewed the regulatory practices of other Commonwealth agencies and other gaming jurisdictions.
To promulgate the temporary regulations in accordance with customary rulemaking procedure, the Board published draft regulations at 35 Pa.B. 4699 (August 13, 2005). A 30-day public comment period was provided.
Under 4 Pa.C.S. § 1203, the temporary regulations adopted by the Board will expire no later than 3 years following the effective date of Act 71 or upon promulgation of regulations as generally provided by the law. These temporary regulations are not subject to sections 201--205 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201--1205), known as the Commonwealth Documents Law (CDL), or to the Regulatory Review Act (71 P. S. §§ 745.1--745.15).
Comment
The Board received public comment from approximately 12 interested parties, including State and local government officials, industry representatives and citizens. The Board thoroughly reviewed and considered all comments submitted. All public comments received by the Board are available for review on the Board's website, www. pgcb.state.pa.us. To respond to the comments in the most efficient manner, the Board has selected representative comments and formulated responses to these comments. These comments and responses are published on the Board's website.
Paperwork
The Board will be publishing Category 2 and Category 3 applications and other necessary forms for the administration of licensing Category 2 and Category 3 slot machine licensees. The Board is developing a docket process to monitor and track submitted applications.
The Board will publish notices in the Pennsylvania Bulletin identifying the filing period for applications, the completion date and those facilities who have been awarded licenses by the Board.
Financial Impact
Act 71 and the regulations will provide for the implementation and management of gaming within this Commonwealth and the collection of fees and taxes from entities and individuals authorized by the Board to be employed by, provide gaming related services to or operate gaming facilities.
The appropriations from the Commonwealth for the implementation of Act 71 and costs of administering 4 Pa.C.S. Part II will be reimbursed by the licensed gaming entities as specified within Act 71. Individuals and entities that wish to obtain licenses as gaming entities shall pay to the gaming fund significant licensing fees to obtain the authority to do business within this Commonwealth. Part of these fees will reimburse the Board and the Pennsylvania State Police for licensing processes and background investigations. The licensing and registration of individuals and other classes of licensees will be reimbursed by the individuals and or licensees through fees established by the Board.
It is anticipated that all expenses of the Board and all associated activities will be reimbursed by the applicants and gaming entities as previously specified. The Board will have no financial impact on the State budget.
Statutory Authority
Section 1203 of 4 Pa.C.S. provides the Board authority to adopt and publish temporary regulations to implement the policies and purposes of Act 71.
Regulatory Review
Under 4 Pa.C.S. § 1203, the Board may adopt temporary regulations that are exempted from the Regulatory Review Act and sections 201--205 of the CDL. Section 1203 of 4 Pa.C.S. provides that the Board's authority to adopt regulations will expire 2 years from the effective date of 4 Pa.C.S. Part II.
Findings
The Board finds that:
(1) Under 4 Pa.C.S. § 1203, the temporary regulations are exempt from the requirements of the Regulatory Review Act and sections 201--205 of the CDL.
(2) A 30-day public comment period was held prior to the adoption of the temporary regulations. All comments received by the Board were reviewed and considered.
(3) The adoption of the temporary regulations provided by this order is necessary and appropriate for the administration of the authorizing statute.
Order
The Board, acting under the authorizing statute, orders that:
(a) The Board acting under the authority of the Act 71, adopts as its final-form temporary regulations, the draft regulations adopted by resolution at the September 28, 2005, Board meeting. The temporary regulations pertain to general licensing standards for slot machine license applicants, specific licensing standards for Category 1 slot machine license applicants and compulsive and problem gambling requirements for slot machine licensees.
(b) The following temporary regulations of the Board, 58 Pa. Code, are added: §§ 405.1--405.5, 441.13--441.14 and 443.4--443.5 to read as set forth in Annex A.
(c) The temporary regulations are effective September 28, 2005.
(d) The temporary regulations will be posted in their entirety on the Board's website and in the Pennsylvania Bulletin.
(e) The temporary regulations will be subject to amendment as deemed necessary by the Board in accordance with the purpose of Act 71 and to further the intent of Act 71.
(f) The Chairperson of the Board will certify the preceding order and deposit the regulations with the Legislative Reference Bureau as required by law.
THOMAS A. DECKER,
Chairperson(Editor's Note: For a document affecting § 443.5, adopted by this order, see 35 Pa.B. 6410 (November 19, 2005).)
Fiscal Note: 125-9. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 58. RECREATION
PART VII. GAMING CONTROL BOARD
Subpart A. GENERAL PROVISIONS
CHAPTER 405. BUREAU OF INVESTIGATIONS AND ENFORCEMENT Sec.
405.1. General duties and powers. 405.2. Information. 405.3. Office of Enforcement Counsel. 405.4. Procedures. 405.5. Conduct. § 405.1. General duties and powers.
The Bureau of Investigations and Enforcement (Bureau) has been established which has the powers and duties set forth in section 1517 of the act (relating to enforcement) including:
(1) The investigation and review of all applicants seeking a license, permit or registration.
(2) The investigation of licensees, permittees, registrants and other persons for potential violations of the act, including potential violations referred to the Bureau by the Board or other persons.
(3) The monitoring of slot machine operations to ensure compliance with the act and the integrity of gaming, including internal controls, exclusion list enforcement, underage gaming and drinking, individual complaints, information systems, integrity and security issues.
(4) The inspection and examination of licensed entities as provided in section 1517(e) of the act. Inspections may include the review and reproduction of any document or record.
(5) The conduct of audits of a licensed entity as necessary to ensure compliance with the act. An audit may include the review of accounting, administrative and financial records, management control systems, procedures and other records utilized by a licensed entity.
(6) The referral of possible criminal violations under the act to the Pennsylvania State Police.
§ 405.2. Information.
(a) An applicant, licensee, permittee or registrant shall provide information, data and documents requested by the Bureau of Investigations and Enforcement (Bureau) under section 1517(a) of the act (relating to enforcement).
(b) A State or local law enforcement agency, including the Pennsylvania State Police and the Office of Attorney General, the Department or other executive agency shall provide information, data and documents requested by the Bureau relating to an applicant, licensee, permittee or registrant.
(c) The Bureau may, upon request, provide pertinent information relating to an applicant, licensee, permittee or registrant to law enforcement agencies, including the Federal Bureau of Investigation or gaming authorities of the Commonwealth or other domestic or foreign agencies or jurisdictions.
(d) Information under this section may be provided or received by electronic distribution.
§ 405.3. Office of Enforcement Counsel.
(a) The Office of Enforcement Counsel has been established within the Bureau of Investigations and Enforcement (Bureau) which has the following powers and duties:
(1) Advise the Bureau on all matters, including the granting of licenses, permits or registrations, the conduct of background investigations, audits and inspections and the investigation of potential violations of the act.
(2) File recommendations and objections relating to the issuance of licenses, permits and registrations on behalf of the Bureau.
(3) Initiate, in its sole discretion, proceedings for violations of the act by filing a complaint or other pleading with the Board seeking civil fines or penalties, the imposition of conditions on licenses, or the suspension or revocation of a license.
(4) The Office of Enforcement Counsel may seek a settlement that may include fines, penalties or other actions subject to approval by the Board.
(b) The Enforcement Counsel is the Director of the Office of Enforcement Counsel. The Enforcement Counsel will be selected by the Board and shall be an attorney admitted to practice before the Pennsylvania Supreme Court.
(c) The Director of the Office of Enforcement Counsel shall report to the Executive Director of the Board on administrative and operational matters.
§ 405.4. Procedures.
(a) The Office of Enforcement Counsel shall act as the prosecutor in all enforcement actions under the act.
(b) The Board's Chief Counsel shall advise the Board in its adjudicatory capacity and represent the Board in appellate actions under the act.
(c) If the Bureau or the licensing Bureau files an objection to any license, permit or registration, an evidentiary record shall be established to allow the Board to reach a decision in accordance with the act.
§ 405.5. Conduct.
(a) An attorney representing the Office of Enforcement Counsel, or an employee involved in the hearing process, may not discuss the case ex parte with a hearing officer, Chief Counsel or Board member.
(b) A hearing officer, the Chief Counsel or a Board member may not discuss or exercise any supervisory responsibility over any employee with respect to an enforcement hearing with which the employee is involved.
(c) If it becomes necessary for the Chief Counsel or Board member to become involved on behalf of the Board in any enforcement proceeding, the Chief Counsel or Board member shall be prohibited from participating in the adjudication of that matter and shall designate appropriate individuals to exercise adjudicatory functions.
Subpart C. SLOT MACHINE LICENSING
CHAPTER 441. SLOT MACHINE LICENSES § 441.13. Notification of anticipated or actual changes in key employee qualifiers or key employees.
Each slot machine licensee or applicant shall immediately notify the Board, in writing, as soon as practicable, of the proposed appointment, appointment, proposed nomination, nomination, election, hiring, intended resignation, resignation, removal, firing, incapacitation or death of any person required to be licensed as a key employee qualifier or key employee under §§ 435.2 and 435.3 (relating to key employee qualifier license; and key employee license). The notice must be addressed to the Office of the Clerk.
§ 441.14. Notification of new financial sources.
Each slot machine licensee or applicant shall immediately notify the Board, in writing, as soon as it becomes aware that it intends to enter into a transaction which would affect any relation to its licensed facility and may result in any new financial backers. The notice must be addressed to the Office of the Clerk.
CHAPTER 443. CATEGORIES OF LICENSURE § 443.4. Category 2 slot machine licenses.
(a) To be eligible to apply for a Category 2 slot machine license, an applicant shall comply with Chapter 441 (relating to slot machine licenses) and submit the following:
(1) A sworn or affirmed statement that neither the applicant, nor any of its affiliates, intermediaries, subsidiaries or holding companies is eligible to seek a Category 1 slot machine license.
(2) A statement detailing the proposed plans and location of the licensed facility.
(3) A statement detailing and establishing that the proposed location is in a revenue or tourism-enhanced location and is in compliance with the geographical requirements of section 1304(b) of the act (relating to Category 2 slot machine license). The statement must include the appropriate business and tourism studies, economic impact studies, projected revenue and business plans.
(4) Other information deemed necessary by the Board.
(b) The Board may issue a Category 2 slot machine license if it determines that the applicant has complied with this section and Chapter 441 and has proven by clear and convincing evidence that it has the financial stability and integrity and the good character, honesty, integrity and responsibility to qualify for a slot machine license.
§ 443.5. Category 3 slot machine license.
(a) The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:
Amenities--Any ancillary activities, services or facilities in which a registered guest or the transient public, in return for non-de minimis consideration, may participate at a resort hotel, including, but not limited to:
(i) Sports and recreational activities and facilities such as a golf course or golf driving range, tennis courts or swimming pool.
(ii) Health spa, convention, meeting and banquet facilities.
(iii) Entertainment facilities.
(iv) Restaurant facilities.
Non-de minimis consideration--A payment of $25 or more per patron paid to a slot machine licensee.
Patron of the amenities--Any individual who is a registered attendee of a convention, meeting or banquet event or a participant in a sport or recreational event or any other social, cultural or business event held at a resort hotel or who participates in one or more of the amenities provided to registered guests of the resort hotel.
Substantial year-round recreational guest amenities--An applicant offers on its premises three or more of the following amenities:
(i) Sports and recreational activities and facilities such as a golf course or golf driving range.
(ii) Tennis courts or swimming pool.
(iii) Health spa.
(iv) Meeting and banquet facilities.
(v) Entertainment facilities.
(vi) Restaurant facilities.
(vii) Downhill or cross-country skiing facilities.
(viii) Bowling lanes.
Well-established resort hotel--A resort hotel having no fewer than 275 guest rooms under common ownership and having substantial year-round recreational guest amenities.
(b) To be eligible to receive a Category 3 slot machine license, an applicant shall comply with Chapter 441 and submit the following:
(1) A sworn or affirmed statement that the applicant, its affiliate, intermediary, subsidiary or holding company has not applied for, has not been approved for and has not been issued a Category 1 or 2 slot machine license.
(2) A statement detailing the proposed plans and location of the licensed facility and confirming that the facility shall be located at a well-established resort hotel.
(3) Documentation satisfactory to the Board proving that the applicant is the owner of the established resort hotel or is a wholly owned subsidiary of the owner of the established resort hotel. Documentation may include, but not be limited to, copies of the following documents:
(i) If a corporation, the applicant shall submit the following:
(A) Articles of incorporation.
(B) Charter.
(C) By-laws.
(ii) If a partnership, the applicant shall submit the following:
(A) Partnership agreements.
(B) Certificates of limited partnership, if applicable.
(iii) If a limited liability company, the applicant shall submit the following:
(A) Certificates of formation, amendment and cancellation.
(B) Operating agreements.
(4) A plan detailing how the applicant, as part of its operational plan, will monitor the gaming area to ensure that only the following persons are permitted to enter the gaming area:
(i) Registered guests who are 21 years of age or older.
(ii) Patrons of one or more of the amenities who are 21 years of age or older.
(iii) Authorized employees who are 18 years of age or older.
(iv) Other persons authorized by the Board.
(5) Information deemed necessary by the Board to determine the operational viability, financial fitness or character of the applicant.
(c) The Board may issue a Category 3 slot machine license if it determines that the applicant has complied with this section and the applicable provisions of Chapter 441 and has proven by clear and convincing evidence that it has the financial stability and integrity and the good character, honesty, integrity and responsibility to qualify for a slot machine license.
[Pa.B. Doc. No. 05-2159. Filed for public inspection November 18, 2005, 9:00 a.m.]
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