[36 Pa.B. 4475]
[Saturday, August 12, 2006]
[Continued from previous Web Page]
GENERAL APPLICABILITY § 901.21. Applicability.
This part applies to manufacturers and distributors who sell or intend to sell games of chance in this Commonwealth and to eligible organizations located in municipalities within this Commonwealth which have adopted the act by an affirmative vote in a municipal referendum under the act.
§ 901.22. (Reserved).
§ 901.23. Restriction of sales.
(a) Manufacturers.
(1) Registration. A manufacturer shall register with the Department and obtain a manufacturer registration certificate to sell, offer for sale or furnish games of chance for use in this Commonwealth. This paragraph does not apply to manufacturers that only sell, offer for sale or furnish raffle, daily drawing or weekly drawing tickets for use in this Commonwealth.
(2) Sales. A registered manufacturer may only sell, offer for sale or furnish games of chance that have been approved by the Department for sale in this Commonwealth. A registered manufacturer may only sell, offer for sale or furnish approved games of chance for sale in this Commonwealth to a licensed distributor. This paragraph does not apply to the sale of raffle, daily drawing or weekly drawing tickets.
(b) Distributors.
(1) Licensure. A distributor shall apply for and obtain from the Department a distributor license to sell, offer for sale or furnish games of chance in this Commonwealth. This paragraph does not apply to distributors that only sell, offer for sale or furnish raffle, daily drawing or weekly drawing tickets.
(2) Sales. A licensed distributor may only sell, offer for sale or furnish approved games of chance for use within this Commonwealth to another licensed distributor or a licensed eligible organization. This paragraph does not apply to the sale of raffle, daily drawing or weekly drawing tickets.
(3) Purchase. A licensed distributor may only purchase approved games of chance for resale in this Commonwealth from a registered manufacturer or licensed distributor. This paragraph does not apply to the purchase of raffle, daily drawing or weekly drawing tickets.
(c) Eligible organizations.
(1) Licensure. An eligible organization shall apply for and obtain a games of chance license from the licensing authority in the county where it shall maintain its licensed premises before purchasing games of chance for use in this Commonwealth.
(2) Purchase. A licensed eligible organization may not purchase or lease games of chance for use in this Commonwealth except from a licensed distributor. This paragraph does not apply to the purchase of raffle, daily drawing or weekly drawing tickets.
§ 901.23a. Effect of denial, suspension, revocation, expiration of a certificate, license or game of chance.
A certificate, license or game of chance that has been denied, suspended or revoked or that has expired is not a valid certificate, license or game of chance. A person, applicant for or holder of a certificate or license or owner of a game of chance cannot avail himself of the privileges that the act and this part confers upon a holder of a valid certificate or license or an approved game of chance following a denial, suspension or revocation.
§ 901.24. (Reserved).
§ 901.25. Vested rights.
A certificate or license confers only a privilege on the holder. A certificate or license confers no vested right in the privilege so conferred.
§ 901.26. Background checks.
(a) As a condition precedent to the issuance of a license or certificate, the Department may require background checks on a person seeking a license or for whom a certificate is sought, or employees thereof, or of a person participating as an employee who will be involved in the operation of games of chance or a person with equity ownership of 10% or more.
(b) The applicant or the person for whom a license or certificate is requested shall cooperate with the Department and assist in its investigation.
§ 901.28. Inspection of premises.
(a) Licensed premises, or premises relating to or being used for activities conducted under the act and this part by a licensed eligible organization, registered manufacturer or licensed distributor shall be open to inspection by the Department or its authorized representatives with or without prior notice, but the inspection shall:
(1) Take place during the registrant's or licensee's normal business hours or normal operating hours.
(2) Take place only when a reasonable belief exists that a violation of the act or this part has occurred, is occurring or will occur.
(3) Be limited to the inspection of matters, areas and records associated with games of chance to insure compliance with the act and this part.
(b) The Department or its authorized representatives reserve the right to enter and make annual inspections.
§ 901.30. Prohibited practices, contracts, gifts and the like.
(a) A manufacturer or distributor or employee thereof may not directly or indirectly solicit, give or offer to give or receive from another licensee or registrant or an employee thereof gifts, loans of money, premiums, rebates, free merchandise or services of a substantial value. A licensee or registrant or employee thereof, may not directly or indirectly solicit, receive from, or give or offer to give a manufacturer or distributor or his employee gifts, loans of money, premiums, rebates, free merchandise or services of a substantial value.
(b) A manufacturer, distributor or representative thereof may not sell to or solicit from a person an order for a game of chance contingent upon that person or another purchasing or ordering some other game of chance.
(c) A manufacturer, distributor or licensed eligible organization may not fix by express or implied agreement with another manufacturer, distributor, eligible organization or any other person, the prices to be charged to other manufacturers, distributors or eligible organizations in the competitive market place for games of chance or goods, prizes or services sold or rendered in connection with games of chance. Nothing in this subsection is intended to prohibit individual manufacturers, distributors and eligible organizations from negotiating for the price to be paid for goods, prizes or services sold or rendered in connection with games of chance.
§ 901.31. Examination of records.
In addition to the examination of records authorized during an inspection of the premises, the Department is authorized to examine the reports, books, accounts and records, and the inventory related to games of chance of a licensed distributor, registered manufacturer, licensed eligible organization or their representatives. Every manufacturer, distributor or eligible organization is directed and required to give to the Department or its authorized representatives the means, facilities and opportunity for the examinations.
§ 901.32. Ownership of games of chance.
The physical possessor of a chance in a game is the owner of the chance until a name is imprinted or placed upon it. When a name is placed upon the chance, the person whose name appears on the chance is the owner and is entitled to a prize attributable to it.
§ 901.34. Disputes.
If a dispute occurs about whether a chance is a winning chance and the dispute cannot be resolved through normal verification procedures or other appropriate means the licensed eligible organization may retain the chance and replace it with an equivalent chance in a like game. This is the exclusive remedy of the owner of the chance. Detailed records regarding the dispute, the reasons for the dispute and the chance shall be maintained by the eligible organization for a minimum of 2 years from the date the dispute arose.
§ 901.35. Termination of games of chance.
A licensed eligible organization may announce a termination date at which point no further chances may be sold, and a date by which all claims or prizes shall be made. This date may not be less than 30 days after the last date for play of the game being terminated.
§ 901.36. Federal withholding and reporting requirements.
A licensed eligible organization is responsible for complying with Internal Revenue Service rules for reporting and withholding on gambling and lottery winnings.
§ 901.37. State withholding and reporting requirements.
A licensed eligible organization is responsible for complying with Commonwealth rules for reporting and withholding on gambling and lottery winnings.
§ 901.38. Commonwealth resident designee.
A person applying for a certificate or distributor's license under the act or this part is required to designate a person and location within this Commonwealth for purposes of service of process and the person shall agree to submit to the jurisdiction of the courts of the Commonwealth and law enforcement officials of the Commonwealth and its subdivisions.
§ 901.40. Operating days, nonoperating days and operating weeks.
(a) An operating day or a nonoperating day may not exceed 24 consecutive hours. An operating day or a nonoperating day may not overlap with any other operating day or nonoperating day.
(b) An operating day may extend from 1 calendar day to another so long as the eligible organization's normal activities or business hours extend from 1 calendar day to another. For example, an eligible organization's operating day may begin at 9 a.m. and end at 3 a.m. the following calendar day (that is, 18 consecutive hours over 2 calendar days).
(c) If an eligible organization operates on a 24 hour-a-day basis, the eligible organization's operating day shall be any consecutive 24-hour period as chosen by the organization. For example, an eligible organization could choose its operating day to be from 9:01 a.m. to 9 a.m. the following calendar day or from 12:01 a.m. to midnight on the same calendar day.
(d) An operating week shall consist of 7 consecutive, reoccurring operating or nonoperating days.
(e) An eligible organization shall choose its operating day and week and report them on its license application.
(f) A licensed eligible organization may change its operating day and week. The eligible organization shall amend its license before the new operating day or week becomes effective.
ADMINISTRATION § 901.51. Power and duties.
The Department has the power and authority granted to it by the Legislature under the act, including the power and authority to do the following:
(1) Review the tax status of an applicant for a certificate or distributor license.
(2) Prescribe the records and books which distributors and manufacturers are required to keep. See §§ 901.421--901.426 and 901.441--901.445 (relating to manufacturer records and reports; and distributor records and reports).
(3) Impose minimum standards and restrictions applicable to games of chance manufactured for sale in this Commonwealth. The standards and restrictions may include specifications for the maximum number of chances available to be sold for a single game or prize and other standards and restrictions the Department deems necessary for the purpose of the act.
(4) Establish procedures by which manufacturers may apply for a certificate and distributors may apply for licensure.
(5) Provide forms for registration of manufacturers and licensure of distributors.
(6) Prescribe procedures for the suspension or revocation of distributor licenses and certificates for violations of the act or this title.
(7) Prescribe the form to be used by the licensing authority to license eligible organizations.
(8) Conduct investigations prior to licensure and registration to ensure compliance with the requirements and prohibitions of the act and this part.
(9) Collect a fee for the issuance of a manufacturer registration certificate or distributor license.
(10) Initiate legal proceedings, in law or equity, before any court or tribunal, for purposes of administering or enforcing the provisions of the act or this part.
(11) Notify the Office of Attorney General of violations of the act and this part and request the Attorney General to initiate legal proceedings, criminal or civil, legal or equitable, to enforce the provisions of the act and this part.
(12) Do other matters necessary or desirable for the efficient operation and administration of games of chance and to carry out the act and this part.
§ 901.52. Administrative entity.
The Department will carry out its powers provided in the act or this part through the Bureau of Business Trust Fund Taxes--Miscellaneous Tax Division. The administrative entity may be changed by notice published in the Pennsylvania Bulletin.
Subchapter B. LICENSING AND REGISTRATION
MANUFACTURER REGISTRATION § 901.101. Manufacturer registration and game approval required.
(a) A person shall be registered with the Department and possess a manufacturer's registration certificate to sell or otherwise furnish games of chance to licensed distributors within this Commonwealth.
(b) A registered manufacturer may not sell a game of chance in this Commonwealth to a licensed distributor until the Department has approved it.
(c) If a registered manufacturer modifies an approved game of chance in any substantial way so that the nature or identity of the game is changed, the rules of the game change or the prizes or payouts change, the game of chance must be considered a new game of chance and submitted for approval.
§ 901.102. Registration and game approval forms.
(a) A person seeking a manufacturer registration certificate shall submit to the Department an application form as prescribed by the Department.
(b) A person seeking an approval of a game of chance shall submit the application for approval to the Department with its manufacturer's registration application or during the registration term on a form prescribed by the Department. The information to be provided on the form must include:
(1) The name of the game.
(2) The game form number.
(3) A description of the game and rules for play.
(4) A picture or illustration of the game and its component pieces.
(5) The game prize structure, prizes and their value.
(6) The number of chances and cost per chance.
(7) The percentage of prizes to be paid in relation to the gross sale proceeds for all chances.
(c) The application forms referenced in subsections (a) and (b) shall be completed in full and will not be considered to be received until completed in full.
§ 901.103. Manufacturer registration application form contents.
An application for registration as a manufacturer of games of chance shall contain at a minimum the following information:
(1) The name of the manufacturer, including a copy of the Fictitious Name Registration Form, Department of State Registry Statement or similar registration form.
(2) The manufacturer's business, mailing and legal address as well as the address of all locations where the applicant manufactures its games. It does not include the address of each person from whom the manufacturer purchases raw materials, components or subparts used to manufacture its games.
(3) The names, addresses, telephone numbers and Social Security numbers of officers, directors, owners and partners or other responsible persons. If incorporated, the application must contain the names, addresses, telephone numbers and Social Security numbers of officers and shareholders controlling 10% or more of outstanding stock. If organized as a partnership, the application must contain the names, addresses and telephone numbers of all partners.
(4) A copy of the constitution and bylaws or the corporate charter for new applications. This information must also accompany renewal application if requested or if amended.
(5) A complete list of all games of chance to be manufactured for sale in this Commonwealth during the registration term. The list must contain information as prescribed on the manufacturer registration application form.
(6) The signatures of responsible persons.
(7) A complete list of manufacturer representatives operating in this Commonwealth, their addresses and telephone numbers.
(8) Pennsylvania tax information, including:
(i) The Pennsylvania Sales Tax number.
(ii) The Pennsylvania corporate box number.
(iii) The Pennsylvania employer identification number.
(iv) The Pennsylvania Unemployment Compensation account number.
(9) A certified statement that:
(i) State tax reports and returns have been filed.
(ii) State taxes due and payable have been paid.
(iii) State taxes owing are subject to timely administrative or judicial appeal and the required bond or security has been filed.
(iv) Delinquent State taxes are subject to an approved deferred payment plan. A copy of the approved deferred payment plan shall be attached to the certified statement.
(10) A certified statement that no officer, director or other responsible person or employee eligible to make sales on behalf of the manufacturer has been convicted of one or more of the following:
(i) A felony in a state or Federal court within the past 5 years.
(ii) A violation of the act, the Bingo Law or a gambling related offense under 18 Pa.C.S. (relating to the Crimes Code) or other comparable state or Federal law within 10 years of the date of the application in a state or Federal court.
(11) The logos and trade names used by the manufacturer.
(12) Other documents as identified in the application materials.
§ 901.103a. Change of application information.
A manufacturer shall report any changes to the information supplied in its application to the Department within 15 days of the change.
§ 901.104. Waiver of confidentiality.
By filing an application for the grant of a manufacturer registration certificate, the applicant waives confidentiality with respect to Commonwealth tax information in the possession of the Department, the Office of Attorney General or the Department of Labor and Industry regarding the applicant, regardless of the source of that information, and consents to the provision of that information to the Department by the Office of Attorney General or the Department of Labor and Industry.
§ 901.106. Registration term.
A registration term begins on April 1 and ends on March 31 of the succeeding year. A certificate issued during a registration term is only valid from the date of issuance to the end of the registration term.
§ 901.107. Annual applications.
A registered manufacturer shall file an application for a certificate at least 60 days prior to the expiration date of its existing certificate to ensure that the Department will act on its application prior to the expiration of its current certificate.
§ 901.108. Registration number.
The Department will assign a registration number and issue a certificate to each manufacturer that it approves for registration. The registered manufacturer shall place the registration number on all documents used in any transactions under the act or this part.
§ 901.109. Certificate.
The certificate issued must be maintained on the manufacturer's premises and available for inspection upon request.
§ 901.110. Duplicate certificate.
If a certificate is defaced, destroyed or lost, the Department may issue a duplicate to the holder of the certificate upon submission of a duplicate application form. A $100 fee will be charged for the duplicate certificate.
§ 901.111. Transfer.
A manufacturer is prohibited from transferring or assigning its certificate.
§ 901.112. (Reserved).
§ 901.113. Representatives of manufacturer.
A representative of a manufacturer acts as an agent of the manufacturer in activities conducted under the manufacturer's registration certificate.
§ 901.114. Dissolutions, terminations, mergers and bankruptcies.
(a) A manufacturer shall notify the Department in writing within 10 days of one or more of the following actions on the part of the manufacturer:
(1) The filing with the Department of State of a certificate of election to dissolve, or the filing of a similar document in another jurisdiction.
(2) The filing of a petition in bankruptcy or receivership by the manufacturer.
(3) The merging or consolidating with another entity.
(4) The termination of its business activities by a process, legal or equitable, voluntary or involuntary, formal or informal, within or outside this Commonwealth.
(b) A notice of the decision to dissolve is required even if filing is not required.
§ 901.117. Denial notice of violation and revocation.
(a) Manufacturer registration certificate. The Department may deny an application for a certificate, issue a notice of violation or revoke a certificate if the manufacturer or a person required to be identified in the application form commits one or more of the following acts:
(1) Has included false information on the application.
(2) Has failed to comply with or engaged in an activity prohibited by the act or this part.
(3) Has changed its address without notification as required in this part.
(4) Has been convicted of, forfeited bond upon a charge of or pleaded guilty or nolo contendere to one of the following:
(i) Forgery.
(ii) Larceny.
(iii) Extortion.
(iv) Conspiracy to defraud.
(v) Willful failure to make required payment or reports to a governmental agency.
(vi) A crime, whether a felony or a misdemeanor, involving a gambling activity or a felony involving moral turpitude.
(vii) Other similar offenses.
(5) Has refused to permit an inspection of its records or premises under one of the following:
(i) Section 901.28 or § 901.31 (relating to inspection of premises; and examination of records).
(ii) A search warrant.
(iii) A court order.
(6) Has been convicted of a felony in a State, or Federal court within the past 5 years.
(7) Has been convicted in a municipal, state or Federal court of a violation of the act, the Bingo Law or of a gambling-related offense under 18 Pa.C.S. (relating to the Crimes Code) or another comparable state or Federal law within 10 years of the date of application.
(8) Has made a misrepresentation or fails to disclose a material fact.
(9) Sells or offers for sale in this Commonwealth a game of chance that has not been approved by the Department as provided for in this part.
(b) Game of chance approval. The Department may deny an application for a game of chance approval. The Department may issue a notice of violation for or revoke an approved game of chance if the game of chance fails to meet the requirements of the act or this part. The Department may revoke its approval of a game if the Department determines that the approval was issued in error.
(c) Notice of violation.
(1) A notice of violation is issued to notify a manufacturer of a violation of the act or this part and to provide the manufacturer with an opportunity to remedy the violation. A manufacturer retains the privileges conferred on it by its certificate or game approval during the notice period and may continue to sell games of chance in this Commonwealth.
(2) The time period that the Department may grant to a manufacturer to remedy a violation may not exceed 30 days, unless the manufacturer requests an extension, in writing, and the Department approves the extension. An extension may not exceed 30 additional days.
(3) The Department will provide the manufacturer a notice of compliance within 5 days after the manufacturer demonstrates to the satisfaction of the Department that the violation has been remedied.
(4) If the Department determines that the manufacturer has not remedied the violation identified in the notice by the end of the notice or extension period, the Department will revoke the certificate or game approval as applicable.
(5) There is no right to appeal a notice of violation or a denial of an extension.
(d) Notice.
(1) The Department will notify a manufacturer in writing of a denial, violation or revocation. The notice will provide:
(i) The issue date of the notice.
(ii) The action taken by the Department.
(iii) The reason for the action.
(iv) The manufacturer's appeal rights.
(2) The Department will serve the notice by certified or first-class mail.
(3) The Department will mail the notice to the manufacturer's Commonwealth resident designee and the manufacturer's primary business address listed on the manufacturer's application.
§ 901.117a. Registration following revocation.
Unless otherwise provided by the act or this part:
(1) A manufacturer whose certificate is revoked is ineligible to apply for and receive another certificate for the remaining registration term or 6 months, whichever is longer.
(2) For a second revocation, the manufacturer is ineligible to apply for and receive another certificate for the remaining registration term as well as the following registration term.
(3) For a third and subsequent revocation, the manufacturer is ineligible to apply for and receive another certificate for 30 months.
§ 901.119. Raffle, daily drawing and weekly drawing ticket manufacturers.
This section and §§ 901.101--901.118 do not apply to the manufacturers who only produce and sell raffle, daily drawing and weekly drawing tickets.
DISTRIBUTOR LICENSING § 901.131. Distributor license requirement.
A person shall be licensed by the Department and possess a license to sell, offer for sale or otherwise furnish games of chance to licensed eligible organizations in this Commonwealth.
§ 901.132. License application form.
For a distributor to obtain a license to sell games of chance in this Commonwealth, the distributor shall submit a license application to the Department in the form prescribed by the Department. The application form shall be completed in full and will not be considered to be received until it has been completed in full.
§ 901.133. Distributor license application form contents.
The application form must include the following:
(1) The name of the distributor, including a copy of the Fictitious Name Registration, Department of State Registry Statement or similar registry statement.
(2) The address of the distributor, including the business, mailing and legal address.
(3) The names, addresses, telephone numbers and Social Security numbers of officers, directors, owners and partners or other responsible persons. If incorporated, the application shall contain the names, addresses and telephone numbers of officers and shareholders controlling 10% or more of outstanding stock. If organized as a partnership, the application must contain the names, addresses and telephone numbers of all partners.
(4) A copy of the constitution and bylaws or corporate charter only for new applications. This information must also accompany renewals if requested or if changed or amended.
(5) A list of all types of games of chance to be distributed.
(6) A list of manufacturers with whom distributors anticipate doing business.
(7) The signature of responsible persons.
(8) A complete list of distributor representatives and their addresses and telephone numbers.
(9) Pennsylvania tax information, including:
(i) Pennsylvania Sales Tax number.
(ii) Pennsylvania Corporate box number.
(iii) Pennsylvania Employer identification number.
(iv) Pennsylvania Unemployment Compensation account number.
(v) Pennsylvania Liquor License Number, if applicable.
(10) A certified statement that:
(i) State tax reports and returns have been filed.
(ii) State taxes due and payable have been paid.
(iii) State taxes owing are subject to timely administrative or judicial appeal.
(iv) Delinquent State taxes are subject to an approved deferred payment plan. A copy of the approved deferred payment plan shall be attached to the certified statement.
(11) A certified statement that no officer, director or other responsible person or employee eligible to make sales on behalf of the distributor has been convicted of one or more of the following:
(i) A felony in a state or Federal court within the past 5 years.
(ii) A violation of the Bingo Law or of the act or a gambling related offense under 18 Pa.C.S. (relating to the Crimes Code) or other comparable state or Federal law within 10 years of the date of application in a state or Federal court.
(12) The logo used by the distributor.
(13) Other documents as identified in the application materials.
§ 901.133a. Change of application information.
A distributor shall report any changes to the information supplied in its application to the Department within 15 days of the change.
§ 901.136. License term.
A license term begins on June 1 and ends on May 31 of the succeeding year. A license issued during a license term is only valid from the date of issuance to the end of the license term.
§ 901.137. Annual application.
A licensed distributor shall file an application for a license at least 60 days prior to the expiration date of its existing license to ensure that the Department will act on its application prior to the expiration of its existing license.
§ 901.138. License number.
The Department will assign a license number and issue a license to each distributor it approves for licensure. A licensed distributor shall place its business name and license number on all documents used in any transaction under this part.
§ 901.139. License.
The license shall be conspicuously displayed at all times at the place of business of the person licensed.
§ 901.140. Duplicate license.
Whenever a license is defaced, destroyed or lost, the Department may issue a duplicate to the holder of the license upon submission of a duplicate License Application Form. A $100 fee will be charged for the duplicate license.
§ 901.141. Transfer.
A licensed distributor is prohibited from transferring or assigning its license.
§ 901.142. Distributor's representative.
A distributor's representative acts as an agent of the licensee in activities conducted under the distributor's license.
§ 901.143. Restrictions on distributorship interest.
(a) A licensed eligible organization may not be a distributor.
(b) A person who is an officer, director, proprietor, consultant, employee or owner of a distributorship may not have a pecuniary interest in the operation of games of chance.
(c) A distributor or person who has a financial interest in a distributorship may not be a lessor of premises, directly or indirectly, to a licensed eligible organization.
§ 901.144. Restrictions of distributor employees.
(a) An employee of a distributorship may not be an employee, consultant or volunteer of a licensed eligible organization unless the employee has first made a full written disclosure of the employee's distributorship employment to the eligible organization.
(b) An employee of a distributorship may not be a law enforcement official.
(c) An employee of a distributorship may not play games of chance at the site of a licensed eligible organization if that eligible organization is a customer of the distributorship.
(d) A Department employee assigned to the bureau responsible for administering the act or this part may not have an interest in a distributor licensed under the act or this part.
§ 901.146. Sales promotion.
A distributor may not use as a sales promotion a statement, demonstration or implication that a certain portion of a deal contains more winners than other portions of the deal or that a game of chance may be played by a licensed eligible organization in a particular manner that would give the organization an advantage in selling more chances before having to pay out winners.
§ 901.147. Fixed prices.
A distributor may not enter into an express or implied agreement with another distributor to fix the price at which games of chance may be sold, or for which services in connection therewith may be rendered. The price of these items in the competitive marketplace must be established by each distributor for the games of chance and services offered by each and may not be directly or indirectly established in concert with one another.
§ 901.148. Dissolutions, terminations, mergers and bankruptcies.
(a) A distributor shall notify the Department, in writing, within 10 days of one or more of the following actions on the part of the distributor:
(1) The filing with the Department of State of a certificate of election to dissolve, or the filing of a similar document in another jurisdiction.
(2) The filing of a petition in bankruptcy or receivership by the distributor.
(3) The merging or consolidating with another entity.
(4) The termination of its business activities by a process, legal or equitable, voluntary or involuntary, formal or informal, in or out of this Commonwealth.
(b) A notice of the decision to dissolve is required if filing is not required.
§ 901.149. Change of address.
A distributor shall notify the Department, in writing, 10 days prior to a change of address.
§ 901.150. Changes in ownership or personnel.
The distributor shall make a written report to the Department of changes of responsible persons engaged in the business of the distributor. This report must also include a change in the management, ownership, directorship or equity ownership of 10% or more, or a change in the manufacturer's representatives. The report must be filed within 15 days of the addition or deletion.
§ 901.151. Denial, notice of violation and revocation of licenses.
(a) Distributor license. The Department may deny a license application, issue a notice of violation or revoke a license if the distributor or a person required to be identified in the application form commits one of the following acts:
(1) Has included false information on the application.
(2) Has failed to comply with or engaged in an activity prohibited by the act or this part.
(3) Has changed its address without notification as required in this part.
(4) Has been convicted of, forfeited bond upon a charge of or plead guilty or nolo contendere to one of the following:
(i) Forgery.
(ii) Larceny.
(iii) Extortion.
(iv) Conspiracy to defraud.
(v) Willful failure to make required payments or reports to a governmental agency.
(vi) A crime, whether a felony or a misdemeanor, involving gambling activity or a felony involving moral turpitude.
(vii) Other similar offenses.
(5) Has refused to permit an inspection of its records or premises under one of the following:
(i) Section 901.28 or 901.31 (relating to inspection of premises; and examination of records).
(ii) A search warrant.
(iii) A court order.
(6) Has been convicted of a felony in a state or Federal court within the past 5 years.
(7) Has been convicted in a municipal, State or Federal court of a violation of the act, the Bingo Law, a gambling-related offense under 18 Pa.C.S. (relating to the Crimes Code) or another comparable state or Federal law within 10 years of the date of application.
(8) Has made a misrepresentation or failed to disclose a material fact.
(b) Notice of violation.
(1) A notice of violation is issued to notify a distributor of a violation of the act or this part and to provide the distributor with an opportunity to remedy the violation. A distributor retains the privileges conferred on it by its license during the notice period and may continue to sell games of chance in this Commonwealth.
(2) The time period that the Department may grant to a distributor to remedy a violation may not exceed 30 days, unless the distributor requests an extension, in writing, and the Department approves the extension. An extension may not exceed 30 additional days.
(3) The Department will provide the distributor a notice of compliance within 5 days after the distributor demonstrates to the satisfaction of the Department that the violation has been remedied.
(4) If the Department determines that the distributor has not remedied the violation identified in the notice by the end of the notice or extension period, the Department will revoke the license.
(5) There is no right to appeal a notice of violation or a denial of an extension.
(c) Notice.
(1) The Department will notify a manufacturer in writing of a denial, violation or revocation. The notice will provide:
(i) The issue date of the notice.
(ii) The action taken by the Department.
(iii) The reason for the action.
(iv) The distributor's appeal rights.
(2) The Department will serve the notice by certified or first-class mail.
(3) The Department will mail the notice to the distributor's Commonwealth resident designee and the distributor's primary business address listed on the distributor's application.
§ 901.151a. Licensing following revocation.
Unless otherwise provided by the act or this part:
(1) A distributor whose license is revoked is ineligible to apply for and receive another license for the remaining license term or 6 months, whichever is longer.
(2) For a second revocation, the distributor is ineligible to apply for and receive another license for the remaining license term as well as the following license term.
(3) For a third and subsequent revocation, the distributor is ineligible to apply for and receive another license for 30 months.
§ 901.153. Raffle, daily drawing and weekly drawing ticket distributors.
This section and §§ 901.131--901.152 do not apply to distributors who only sell raffle, daily drawing and weekly drawing tickets.
BOARD PROCEDURES § 901.161. Jurisdiction and purpose.
The Board will receive and review petitions challenging the Department's decisions to deny an application for a manufacturer registration certificate or game of chance approval or a distributor license. The Board will also receive and review petitions from manufacturers or distributors challenging the Department's revocation of a manufacturer registration certificate, game of chance approval or a distributor license. The Board will provide petitioners with the opportunity for a hearing and will make recommendations to the Secretary regarding petitions.
§ 901.165. Board practice and procedure.
(a) General. The provisions of 2 Pa.C.S. §§ 501--508 and 701--704 (relating to the administrative agency law) do not apply to practice and procedure before the Board to the extent that those provisions are inconsistent with §§ 901.161--901.164, this section and §§ 901.166--901.168 (relating to Board recommendation; decision and order; and stay of appeal).
(b) Representation.
(1) A petitioner is not required to be represented before the Board by an attorney. An individual or a partner in a partnership, corporation or association may be represented by a bona fide officer thereof or another person upon a showing of adequate authorization. A petitioner's representative shall be authorized in writing to represent the petitioner. A letter signed by the petitioner or a listing as a representative on the face of the petition signed by the petitioner will be accepted as authorization for representation. An authorization continues until the Board is notified in writing by the petitioner that the authorization is rescinded. A party may be represented by a member in good standing of the bar of this Commonwealth.
(2) Only an attorney-at-law representing a petitioner, or the petitioner acting without representation before the Board, is permitted to raise or argue a legal question at a hearing before the Board.
(3) Notices and other written communications to the petitioner will be given to the petitioner's authorized representative, and will have the same force and effect as if given to the petitioner directly. Action before the Board taken by the petitioner's authorized representative will have the same force and effect as if taken by the petitioner.
(c) Hearings.
(1) Waiver. The petitioner has the right to a hearing or to have the case decided upon the petition and record. A hearing shall be requested in writing. If a hearing is not requested, it is considered waived.
(2) Notices of hearing. When the petitioner requests a hearing in writing, reasonable notice will be given to the petitioner in writing specifying the date, time and place of the hearing.
(3) Continuances. The Board may grant a reasonable request for continuance of a scheduled hearing. The request shall be made or confirmed in writing, state the reasons for the continuance and be received at least 5 days prior to the scheduled hearing. The Board may grant a request that is not in conformity with this paragraph under extraordinary circumstances. The Board will notify the petitioner of its decision on the requested continuance.
(4) Presiding officer. The Deputy Secretary or a designee shall conduct the hearings.
(5) Transcripts. Written transcripts of hearings will not be prepared by the Board unless specifically requested in writing. The cost of the transcript is $1.50 per page. A recording of the hearing will be made.
(6) Contemptuous conduct. Contemptuous conduct is grounds for exclusion from the hearing.
(d) Authority of presiding officer. The presiding officer has authority to:
(1) Regulate the conduct of hearings, including scheduling, recessing, reconvening and adjourning, and to do acts and take measures necessary or proper for the efficient conduct of hearings.
(2) Administer oaths and affirmation.
(3) Receive evidence.
(4) Take or cause depositions to be taken.
(5) Hold appropriate conferences before or during hearings.
(6) Take other action necessary or appropriate to the discharge of the duties vested in the officer, consistent with statutory authority, regulations and Board policy.
(7) Participate in making decisions.
(8) Rule upon offers of proof and receive relevant evidence.
(9) Dispose of procedural requests or similar matters.
(e) Service. Notices and decisions issued under §§ 901.161--901.164, this section and §§ 901.166--901.168 will be sent by first class mail, postage prepaid.
(f) Consolidation. Two or more proceedings may be consolidated or severed by the Board at its discretion.
(g) Bond. A registrant or licensee whose license or registration has been revoked due to Commonwealth tax liabilities, and who has been notified of the revocation, shall file a bond in an amount of 120% of the tax and interest with the Department for an appeal of the revocation to stay the revocation.
(h) Evidence and subpoenas. The presentation of evidence and the issuance of subpoenas relating to hearings before the Board are governed by 1 Pa. Code Chapter 35 Subchapter C (relating to evidence and witnesses).
(i) Burden of proof. The petitioner has the burden of proof.
§ 901.168. Stay of appeal.
(a) Actions to revoke a registration, license or game approval will be stayed pending the decision of the Secretary when a petition has been filed with the Board.
(b) During the pendency of the appeal, the certificate, game approval or license will be suspended. (See § 901.23a (relating to effect of denial, suspension, revocation, expiration of a certificate, license or game of chance).)
ELIGIBLE ORGANIZATION LICENSING § 901.181. (Reserved).
§ 901.182. (Reserved).
§ 901.183. (Reserved).
§ 901.184. (Reserved).
§ 901.185. (Reserved).
§ 901.186. (Reserved).
§ 901.187. (Reserved).
§ 901.188. (Reserved).
§ 901.189. (Reserved).
§ 901.190. (Reserved).
§ 901.191. License application form.
(a) The Department will proscribe the license application form for eligible organizations. Licensing authorities may obtain the form from the Department.
(b) The form is available to eligible organizations through the licensing authorities.
(c) The license application form must contain, at a minimum, the following information:
(1) The name of the organization.
(2) The type of organization.
(3) The address of the organization.
(4) Incorporation information.
(5) The name of the municipality where the applicant will maintain its licensed premises.
(6) The eligible organization's licensed premises.
(7) The eligible organization's operating day and week.
(8) The names, addresses and telephone numbers of the officers of the organization.
(9) Partnership information.
(10) A list of shareholders owning 10% or more of outstanding stock.
(11) The names and addresses of persons who will be responsible for the operation of games of chance, including eligible organization employees, bar personnel, auxiliary group members and other persons who will obtain the games of chance and coordinate their use.
(12) A statement under oath in the form of an affidavit, affirmed by the executive officer or secretary of the eligible organization, stating the following:
(i) A person 17 years of age or younger will not be permitted by the eligible organization to operate or play games of chance.
(ii) The facility in which games of chance are to be played has adequate means of ingress and egress and adequate sanitary facilities available in the area and meets Department of Health and other local or Federal sanitary requirements.
(iii) The eligible organization is the owner of the premises upon which the games of chance are played or, if it is not, the eligible organization is not leasing the premises from the owner thereof under an oral agreement, nor is it leasing the premises from the owner thereof under a written agreement at a rental which is determined by the amount of receipts realized from the playing of games of chance or by the number of people attending, except that an eligible organization may lease a location or premises for a banquet where a per head charge is applied in connection with the serving of a meal.
(13) A copy of a corporate applicant articles of incorporation and bylaws; or, if not a corporation, a copy of bylaws and other documents which set out the organizational structure and purpose.
(14) A copy of a nonprofit charitable applicant's Internal Revenue Service tax exemption letter if one has been obtained and a copy of other documents indicating the eligible organization is a nonprofit charitable organization.
(15) The details and copies of the lease, rental or other arrangements between the applicant and the owner of premises upon which the games of chance will be conducted, if the premises are not owned by the eligible organization.
(16) The names, addresses, dates of birth and the Social Security numbers of each paid employee, auxiliary group member or agent who will be involved with the activities for which the license is sought.
(17) Other documents as identified in the application materials.
(18) The type of license applied for and a list of all types of games of chance to be operated by the eligible organization.
(19) A list of distributors of games of chance with whom the eligible organization does business.
(20) A list of the eligible organization's auxiliary groups that will operate games of chance under the eligible organization's license.
§ 901.192. (Reserved).
§ 901.193. (Reserved).
§ 901.194. (Reserved).
§ 901.195. Types of licenses.
Two types of licenses are available. An eligible organization may only hold one type of license at a time. The types of licenses are as follows:
(1) Games of chance license. A games of chance license authorizes the licensee to conduct games of chance as prescribed by the act and this part during the eligible organization's licensing term. A licensee is eligible to apply for special raffle permits.
(2) Limited occasion license. A limited occasion license authorizes the licensee to conduct games of chance on a limited basis as provided in § 901.196 (relating to limited occasion license requirements, limits and restrictions).
§ 901.196. Limited occasion license requirements, limits and restrictions.
(a) Only organizations that do not own or lease a premises or do not have a specific location at which they conduct their normal business are eligible for a limited occasion license.
(b) Limited occasion licensees are not eligible for the following:
(1) Special raffle permits.
(2) A games of chance license.
(c) Limited occasion licensees may conduct games of chance on no more than three occasions over a period of no more than 7 days during the license term.
(d) No more than two raffles may be conducted under a limited occasion license.
(e) The fee for a limited occasion license is $10.
(f) The licensee shall provide 10 days prior written notice of its intent to conduct games of chance under its license to the licensing authority that issued its license.
§ 901.197. Change of application information.
An eligible organization shall report any changes to the information supplied in its license application to the licensing authority within 15 days of the change.
§ 901.211. (Reserved).
§ 901.212. (Reserved).
§ 901.213. (Reserved).
§ 901.214. (Reserved).
§ 901.215. (Reserved).
§ 901.216. (Reserved).
§ 901.217. (Reserved).
§ 901.218. (Reserved).
§ 901.219. (Reserved).
Subchapter C. LOCAL OPTION
LOCAL OPTION REQUIREMENT AND LOCAL OPTION REPORTING § 901.307. Withdrawal of approval.
The referendum procedures contained in §§ 901.301--901.306, this section, §§ 901.308 and 901.309 shall also be available to withdraw the approval of the issuance of eligible organization licenses within the municipality which was granted through a prior referendum.
§ 901.308. Reporting.
A county board of elections shall certify to the Department the question and the results no later than 40 days following the primary election on which a referendum question relating to games of chance appears on the ballot.
§ 901.309. Public information.
Information supplied with regard to the approval or disapproval of games of chance by local referendum shall be available from the county board of elections and the licensing authority.
Subchapter D. RECORDKEEPING
COUNTY RECORDS AND REPORTS § 901.401. (Reserved).
§ 901.402. (Reserved).
§ 901.403. (Reserved).
§ 901.404. (Reserved).
§ 901.405. List of licensed eligible organizations.
The licensing authority will keep a list of licensees and send the list to the Department biannually on or before January 15 and July 15 of each year. Upon request, the licensing authority will provide the Department with a copy of an eligible organization's license. The list shall identify the eligible organization, its full address, its license number, type of license and any special raffle permit serial number.
§ 901.406. (Reserved).
§ 901.407. List of municipalities.
(a) The licensing authority will keep and maintain an up-to-date list of those municipalities within the licensing authority's county that permit games of chance.
(b) The licensing authority will give a copy of the list to every eligible organization at the time of licensure.
(c) The licensing authority will make the list available to licensed eligible organizations who provide notice to the licensing authority of raffle sales within the licensing authority's county.
(d) Any time the list is updated, the licensing authority will submit a copy of the list to the Department within 30 days of the update.
MANUFACTURING RECORDS AND REPORTS § 901.421. Distributor license copy.
A manufacturer shall maintain a record of the games of chance license number of each distributor to which it sells or otherwise furnishes games of chance.
§ 901.423. Annual records.
A registered manufacturer shall keep and maintain annual records of the activities related to games of chance for at least 5 years.
§ 901.425. Records.
A record must include the following:
(1) Sales invoices. A manufacturer shall record every sale, return or other type of transfer of games of chance by completing a sales invoice or credit memo. An invoice must be prenumbered at the time of purchase. The numbering must be consecutive, using at least four digits. Manufacturers may use a computer generated numbering system if the same system is used for all sales and specific numbers cannot be input by use of a manual terminal or other device. The invoice must contain the following information:
(i) The date of the sale.
(ii) The date of the delivery.
(iii) The customer's business address.
(iv) The description of each item sold, including serial numbers for pull-tabs and form number. Each game listed on the invoice that the Department has approved for sale in this Commonwealth must be clearly noted. The games may be listed in separate attachment identifying the form numbers and serial numbers.
(v) The quantity and sale price of each individual item, including individual items of merchandise to be used as prizes on punchboards and pull-tabs.
(vi) The gross amount of each sale to each customer, including discount terms and the total dollar amount of a discount.
(vii) The total amount of the invoice.
(viii) The distributor license number.
(2) Other records. Other records and reports as required by this part.
(3) Serial numbers not required. A manufacturer is not required to record the serial numbers of punchboards on the sales invoice.
DISTRIBUTOR RECORDS AND REPORTS § 901.441. License of purchaser.
A distributor shall keep a copy of the valid games of chance license of each eligible organization to which it sells or otherwise furnishes games of chance.
§ 901.443. Annual records.
A licensed distributor shall keep and maintain annual records of its activities related to games of chance for at least 5 years.
§ 901.445. Records.
A record must include the following:
(1) Sales invoices. A distributor shall record every sale, return or other type of transfer of games of chance by completing a standard sales invoice or credit memo. An invoice must be prenumbered at the time of purchase. The numbering must be consecutive using at least four digits. The invoice must contain the following information:
(i) The date of the sale.
(ii) The date of the delivery.
(iii) The name, address and license number of the licensed eligible organization.
(iv) A full description of each item sold, including serial numbers for punchboards and pull-tabs and form numbers. The games may be listed as a separate attachment identifying the form numbers and serial numbers.
(v) The quantity and sales price of each individual item, including individual items of merchandise to be used as prizes on punchboards and pull-tabs.
(vi) The gross amount of each sale to each licensed eligible organization, including all discount terms and the total dollar amount of any discount.
(vii) The total amount of the invoice.
(viii) The ideal prizes per game.
(2) Bank reconciliation. A bank reconciliation shall be performed on a monthly basis.
(3) List of games sold. A list of games sold by form number and serial number and the license number of the purchaser. These records must include enough detail to allow an audit of sold, unsold and damaged games.
(4) Other records. Other records and reports shall be maintained as required by this part.
LICENSED ELIGIBLE ORGANIZATION RECORDS § 901.461. Annual records.
An eligible organization licensed to conduct games of chance shall keep and maintain annual records of the activities related to games of chance with separate totals of activity under the license for each operating week. Annual records shall be maintained for 2 years.
§ 901.462. General records required.
A record must include the following:
(1) The gross receipts from the conduct of games of chance.
(2) The full details of the expenses related to the conduct of games of chance.
(3) The total cost of the prizes paid out for games of chance.
(4) The details as to how the proceeds from games of chance were used or disbursed by the eligible organization.
§ 901.464. Punchboard and pull-tab records.
Detailed annual records for the operation of punchboards and pull-tabs, must include the following:
(1) The name of the punchboard or pull-tab deal.
(2) The manufacturer's serial number on the punchboard or pull-tab deal.
(3) The date it was placed in play.
(4) The date it was removed from play.
(5) The total number of plays in each deal or punchboard.
(6) The cost per play.
(7) The cost to the eligible organization of the prizes paid, including cash and merchandise.
(8) The cash value of all prizes.
(9) A list of winners' names and addresses for prizes in excess of $100.
§ 901.464a. Daily and weekly drawing records.
A licensed eligible organization shall maintain the following records and information with regard to each daily or weekly drawing:
(1) The type of drawing (daily or weekly).
(2) The operating day or operating week as applicable during which chances were sold and the date of the drawing.
(3) The list of entrants in the drawing.
(4) Each entrant's assigned or chosen number.
(5) The cost per chance.
(6) The proceeds from the sale of chances and the prize payout percentage.
(7) The winner's name.
(8) The prize paid to the winner.
(9) The winner's name and address for a prize over $100.
(10) The winner's signed acknowledgment for receipt of the prize.
(11) A notation if the drawing is a carryover, and the amount of the jackpot being carried over to the next drawing.
§ 901.465. Cash over and short.
Cash over and short must be determined by:
(1) Subtracting actual cash from net receipts for games of chance paying cash prizes.
(2) Subtracting actual cash from gross receipts for games of chance which award merchandise prizes.
§ 901.466. Prize records.
A separate annual record shall be kept which may be easily cross-referenced to the other required records and which identifies the following:
(1) The number and amount of individual prizes awarded in excess of $100.
(2) The total amount of prizes awarded per operating week.
(3) The total amount of raffle prizes awarded each month.
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