PENNSYLVANIA GAMING CONTROL BOARD
[58 PA. CODE CHS 405, 421, 423 AND 441]
Temporary Regulations
[36 Pa.B. 3945]
[Saturday, July 22, 2006]The Pennsylvania Gaming Control Board (Board), under 4 Pa.C.S. § 1203(a) (relating to temporary regulations), 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). Section 405.7, entitled enforcement action, is added to Chapter 405, entitled Bureau of Investigations and Enforcement, under Subpart A, entitled general provisions. Section 421.5, entitled monopolization of economic opportunities and control, is added to Chapter 421, entitled general provisions, under Subpart B, entitled licensing, registering, certifying and permitting. Section 423.6, entitled restriction on application after denial or revocation, is added to Chapter 423, entitled applications, under Subpart B. Section 441.23, entitled slot machine license agreements, is added to Chapter 441, entitled slot machine licenses, under Subpart C, entitled slot machine licensing.
Purpose and Background
Under 4 Pa.C.S. § 1203(a), the Board is authorized 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 within this Commonwealth and to carry out the policy and purposes of the Board.
Under 4 Pa.C.S. § 1203(b), the temporary regulations adopted by the Board 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 shall not be subject to sections 201--205 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201--1208), known as the Commonwealth Documents Law (CDL), or to the Regulatory Review Act (71 P. S. §§ 745.1--745.15).
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 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 shall reimburse the Board and the Pennsylvania State Police for licensing processes and background investigations. The licensing, registration, certification and permitting of individuals and other classes of applicants will be reimbursed by the applicants through fees established by the Board. It is anticipated that all expenses of the Board and all associated activities shall be reimbursed by the applicants and gaming entities as previously specified. The Board shall have no financial impact on the State budget.
Statutory Authority
The Board is authorized under 4 Pa.C.S. § 1203(a) to adopt and publish temporary regulations to implement the policies and purposes of Act 71.
Regulatory Review
Under 4 Pa.C.S. § 1203(b), the Board's authority to adopt temporary regulations expires 2 years from the effective date of Act 71.
Findings
The Board finds that:
(1) Under 4 Pa.C.S. § 1203(a), the temporary regulations are exempt from the requirements of the Regulatory Review Act and sections 201--205 of the CDL.
(2) 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 Act 71, adopts as its final-form temporary regulations the temporary regulations pertain to enforcement actions, monopolization of economic opportunities and control, restrictions on application after denial or revocation and slot machine license agreements.
(b) The temporary regulations of the Board, 58 Pa. Code Chapters 405, 421, 423 and 441 are amended by adding §§ 405.7, 421.5, 423.6 and 441.23 to read as set forth in Annex A.
(c) The temporary regulations are effective June 28, 2006.
(d) The temporary regulations shall be posted in their entirety on the Board's website and published in the Pennsylvania Bulletin.
(e) The temporary regulations shall 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 shall certify this order and deposit the regulations with the Legislative Reference Bureau as required by law.
THOMAS A. DECKER,
ChairpersonFiscal Note: 125-42. 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 § 405.7. Enforcement action.
(a) Upon a determination by the Office of Enforcement Counsel that sufficient facts exist to support enforcement action against a person holding a license, permit, certification or registration issued by the Board, the Office of Enforcement Counsel will serve the person with a notice of enforcement action in accordance with § 491.3 (relating to service by the Board), including a proposed order for enforcement action.
(b) The proposed order for enforcement action will include a statement of the facts supporting the proposed enforcement action, the statute, regulation or statement of conditions that the person is being charged with violating and the proposed penalty. The proposed order will be accompanied by a certificate of service demonstrating the date of service.
(c) Within 15 days from the date of service of the proposed order for enforcement action, the person may file a request for a hearing with the Clerk to the Board and serve a copy of the request on the Office of Enforcement Counsel. Failure to request a hearing within 15 days will be deemed:
(1) A waiver by the person of any right to an administrative hearing before the Board.
(2) An admission by the person of all matters and facts alleged in the proposed order for enforcement action.
(3) Consent by the person to the entry of a final order by the Board disposing of the enforcement matter.
(d) Upon the person's failure to request a hearing within the prescribed 15 days, the matters and facts deemed admitted by the person and the proposed enforcement order will be presented to the Board. The Board may, by resolution, adopt the proposed enforcement order.
(e) The Clerk to the Board will notify the person of the Board's final order by certified mail.
Subpart B. LICENSING, REGISTERING, CERTIFYING AND PERMITTING
CHAPTER 421. GENERAL PROVISIONS § 421.5. Monopolization of economic opportunities and control.
(a) In accordance with section 1102(5) of the act (relating to legislative intent), a slot machine license, management company license or other license may not be issued to or held by a person if the Board determines that the issuance or holding will result in the monopolization of economic opportunities and control of the licensed gaming facilities in this Commonwealth by that person.
(b) For purposes this section, monopolization of economic opportunities and control of the licensed gaming facilities means that a person:
(1) Would have actual or potential domination of the gaming market in the Commonwealth contrary to the legislative intent.
(2) Could substantially impede or suppress competition among licensees.
(3) Could adversely impact the economic stability of the gaming industry in this Commonwealth.
(c) In determining whether the issuance or holding of a license by a person will result in monopolization of economic opportunities and control of the licensed gaming facilities in the Commonwealth, the Board will consider the following criteria:
(1) The percentage share of the market presently controlled by the person in each of the following categories:
(i) Total number of slot machine licenses available under section 1307 of the act (relating to number of slot machine licenses).
(ii) Total gaming floor square footage.
(iii) Number of slot machines.
(iv) Net revenue.
(v) Slot machine win.
(vi) Slot machine drop.
(vii) Number of persons employed by the licensee.
(2) The estimated increase in the market share in the categories in paragraph (1) if the person is issued or permitted to hold the license.
(3) The relative position of other persons who hold licenses, as evidenced by the market share of each person in the categories in paragraph (1).
(4) The current and projected financial condition of the industry.
(5) Current market conditions, including level of competition, consumer demand, market concentration, any consolidation trends in the industry and other relevant characteristics of the market.
(6) Whether the gaming facilities held or to be held by the person have separate organizational structures or other independent obligations.
(7) The potential impact of licensure on the projected future growth and development of the gaming industry in this Commonwealth and the growth and development of the host communities.
(8) The barriers to entry into the gaming industry, including the licensure requirements of the act, and whether the issuance or holding of a license by the person will operate as a barrier to new companies and individuals desiring to enter the market.
(9) Whether the issuance or holding of the license by the person will adversely impact consumer interests, or whether the issuance or holding is likely to result in enhancing the quality and customer appeal of products and services offered by slot machine licensees to maintain or increase their respective market shares.
(10) Whether a restriction on the issuance or holding of an additional license by the person is necessary to encourage and preserve competition and to prevent monopolization of economic opportunities and control of the licensed gaming facilities.
(11) Other evidence deemed relevant by the Board.
CHAPTER 423. APPLICATIONS § 423.6. Restriction on application after denial or revocation.
(a) Any person whose application has been denied or whose license, certification, registration or permit has been revoked, may not apply for a license, certification, registration or permit for 5 years from the date that the application was denied or the license, certification, registration or permit was revoked.
(b) After 2 years from the date that the application was denied or the license, certification, registration or permit was revoked, a person may file a petition for permission to reapply for a license, certification, registration or permit before the expiration of the 5-year period.
(c) A petition filed under subsection (b) shall be filed in accordance with § 493.4 (relating to petitions generally).
(d) Petitions filed under subsection (b) may contain:
(1) An explanation of how the conditions that were the basis for denial or revocation have been corrected or no longer exist.
(2) Supporting materials that demonstrate that the person meets the requirements for a license, certification, registration or permit.
(3) If the denial or revocation was the result of a conviction, evidence of rehabilitation, such as:
(i) The nature and seriousness of the offense or conduct.
(ii) The circumstances under which the offense or conduct occurred.
(iii) The date of the offense or conduct.
(iv) The age of the applicant when the offense or conduct was committed.
(v) Whether the offense or conduct was an isolated or repeated incident.
(vi) Social conditions which may have contributed to the offense or conduct.
(vii) Evidence of rehabilitation, including good conduct in prison or in the community, counseling or psychiatric treatment received, acquisition of additional academic or vocational schooling, successful participation in correctional work-release programs, or the recommendation of persons who have or have had the applicant under their supervision.
(viii) Evidence that all obligations for restitution, fines and penalties have been met.
(e) If a petition filed under subsection (b) is denied, a person may not file another petition under subsection (b) for 1 year from the date of the denial of that petition.
(f) The 5-year restriction in subsection (a) will not apply if the denial or revocation was based on pending charges for a disqualifying offense under section 1213 or section 1518 of the act (relating to license or permit prohibition; and prohibited acts and penalties), 18 Pa.C.S. (relating to crimes and offenses) or the criminal laws of any other jurisdiction and the pending charges do not result in conviction of a disqualifying offense.
Subpart C. SLOT MACHINE LICENSING
CHAPTER 441. SLOT MACHINE LICENSES § 441.23. Slot machine license agreements.
(a) An agreement or noncontractual relationship between a person and a slot machine licensee which provides for a payment to the person or any arrangement under which a person receives payment, however defined, of any direct or indirect interest, percentage or share of earnings, profits or receipts from slot machines and associated equipment of a licensed facility, shall require Board approval, regardless of the amount or percentage.
(b) An agreement will not receive Board approval if it, or if it when viewed in the aggregate as related to any of the persons who receive payment as a result of the agreement, creates a monopolization of economic opportunities or control of the licensed gaming facilities in this Commonwealth under § 421.5 (relating to monopolization of economic opportunities and control).
(c) Notwithstanding the definition of a key employee qualifier, persons who receive payments pursuant to the agreements or arrangements shall be licensed by the Board prior to receiving the payments, unless the agreement or person is exempted under subsection (d).
(d) The following are exempt from the requirements of this section:
(1) Fixed sum and hourly payments.
(2) Junket agreements.
(3) Employee profit sharing agreements administered by class or category.
(4) Management agreements.
(5) Slot system agreements for wide area progressive slot systems.
(6) Horsemen's organizations.
(7) Labor organizations.
(8) Other agreements determined by the Board.
[Pa.B. Doc. No. 06-1313. Filed for public inspection July 21, 2006, 9:00 a.m.]
No part of the information on this site may be reproduced for profit or sold for profit.This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
