PROPOSED RULEMAKING
PENNSYLVANIA GAMING CONTROL BOARD
[58 PA. CODE CHS. 421a, 423a, 425a, 427a, 431a, 436a, 438a, 439a AND 440a]
General Provisions; Applications; Licensed Entity Representatives; Manufacturer Licenses; Supplier Licenses; Horsemen's Organizations; Labor Organizations; Junket Enterprises; Management Companies
[37 Pa.B. 2197]
[Saturday, May 12, 2007]The Pennsylvania Gaming Control Board (Board), under the general authority in 4 Pa.C.S. § 1202(b)(30) (relating to general and specific powers) and the specific authority in 4 Pa.C.S. §§ 1202(b)(9), (13)--(20) and (23), 1202.1(b) and (e), 1317, 1317.1, 1321(a)(1) and (2), 1325, 1326, 1331 and 1406, proposes to adopt Chapters 421a, 423a, 425a, 427a, 431a, 436a, 438a, 439a and 440a to read as set forth in Annex A.
Purpose of the Proposed Rulemaking
Under 4 Pa.C.S. § 1203 (relating to temporary regulations), the Board initially adopted temporary regulations in Chapters 421, 423, 427 and 431 at 35 Pa.B. 4045 (July 16, 2005), Chapter 425 at 37 Pa.B. 21 (January 6, 2007), Chapter 436 at 36 Pa.B. 3409 (July 1, 2006), Chapter 438 at 36 Pa.B. 3951 (July 22, 2006), Chapter 439 at 35 Pa.B. 6619 (December 3, 2005) and Chapter 440 at 36 Pa.B. 679 (February 4, 2006). Under 4 Pa.C.S. Part II (relating to gaming), the temporary regulations expire on July 5, 2007.
The Board is proposing to replace the temporary regulations with the permanent regulations in this proposed rulemaking.
Explanation of Chapters in this Proposed Rulemaking
Chapter 421a (relating to general provisions) is an updated version of temporary Chapter 421. A number of revisions were made to improve clarity, increase parallel construction and remove redundant provisions.
Section 421a.1 (relating to general requirements) contains general requirements that apply to all applicants. It includes items such as a requirement that applicants consent to investigations, agree to abide by provisions of 4 Pa.C.S. Part II and the Board's regulations and waive liability as to the Board and other State agencies pertaining to disclosure of application information. It also requires applicants to report suspected violations of 4 Pa.C.S. Part II, to report changes in information provided in its application and to provide additional information requested by the Board. A provision that appears in § 435.1(l) (relating to general provisions) has been added to this section as subsection (j).
Temporary § 421.2 has been deleted. This section listed the types of licenses, permits certifications and registrations issued by the Board, but contained no regulatory requirements.
Section 421a.2 (relating to disqualification criteria) contains criteria the Board may use to deny an initial or renewal application or suspend or revoke a license, permit, certification or registration. Included in the list are failure to prove that the applicant is qualified; violations of 4 Pa.C.S. Part II or the Board's regulations; misrepresentations of facts in the application; or violations of state or Federal laws.
Section 421a.3 (relating to investigations; supplementary information) provides that the Board may make inquires or conduct investigations of applicants for or holders of a license, permit, certification or registration. It also requires applicants for or holders of a license, permit, certification or registration to cooperate in these investigations.
Section 421a.4 (relating to presuitability determination) outlines the procedures for conducting presuitability determinations of potential purchasers of an applicant for or holder of a license.
Section 421a.5 (relating to undue concentration of economic opportunities and control) restates the provision in 4 Pa.C.S. § 1102(5) (relating to legislative intent) to prevent undue concentration of economic opportunities and control in gaming. It specifies the opportunities for control the Board will evaluate and the criteria the Board will examine to determine the potential for undue concentration.
Chapter 423a (relating to applications) replaces temporary Chapter 423. It contains provisions that pertain to all applications filed with the Board.
Section 423a.1 (relating to general requirements) contains general provisions including: requirements that applications be on Board forms; that applicants file supplemental forms required and additional information requested by the Board; and that all information be true and complete. It also specifies that some documents shall be sworn to or notarized; English translations or summaries shall be provided for documents in a foreign language; applications will be denied if the applicant fails to cooperate in investigations; and application materials submitted to the Board become the property of the Board.
Section 423a.2 (relating to preliminary submission review) is a new section that outlines the process for preliminary review of applications, allows the applicant an opportunity to provide missing materials and requires the return of an incomplete application to the applicant.
Section 423a.3 (relating to application processing) outlines the general process that will apply to the review of applications after they have been accepted for filing. It also includes provisions requiring the Board to publish a list of applications and actions regarding the applications and that the information provided in applications will be part of the evidentiary record that the Board will use to render its decision.
Section 423a.4 (relating to deficient applications) outlines the process for notification of deficiencies, how an applicant can cure deficiencies and that the application may be immediately denied if the deficiencies are not corrected.
Section 423a.5 (relating to application withdrawal) requires an applicant to file a petition for withdrawal which specifies the reasons for the withdrawal. It also permits the Board to grant a petition for withdrawal with or without prejudice and bars reapplication by applicants whose withdrawal was granted with prejudice for 5 years. Additionally, this section allows the Board to convert an incomplete application to a petition for withdrawal and that fees and costs related to the application shall be paid before a petition for withdrawal will be approved.
Section 423a.6 (relating to license, permit, registration and certification issuance and Statement of Conditions) specifies that an application will not be issued until all fees have been paid and all conditions set by the Board have been fulfilled. It also provides that the Board may require that a Statement of Conditions be signed by an entity's executive officer and that violation of any of the conditions in the Statement of Conditions may result in the imposition of administrative sanctions by the Board.
Section 423a.7 (relating to restriction on application after denial or revocation) imposes a 5-year restriction on reapplication by an applicant whose application was denied or by holders of a license, permit, certification or registration if the license, permit, certification or registration was revoked. It establishes a process to petition for reapplication after 2 years and specifies what must be in the petition. If a petition for early reapplication is denied, the petitioner may not file another request for early reconsideration for at least 1 year.
Chapter 425a (relating to licensed entity representatives) replaces temporary Chapter 425. Like the temporary regulations, this chapter requires licensed entity representatives to file a Licensed Entity Registration Form and update their information on an on-going basis. It also requires the Board to maintain a list of licensed entity representatives that will be available at its offices and on the Board's website.
Chapter 427a (relating to manufacturers) replaces temporary Chapter 427. It has been reorganized to improve the chapter's clarity and to incorporate changes made in the act of November 1, 2006 (P. L. 1243, No. 135) (Act 135).
Section 427a.1 (relating to manufacturer general requirements) specifies who must obtain a manufacturer license; that an applicant for or holder of a manufacturer license cannot apply for or hold a slot machine or supplier license; that a licensed manufacturer or manufacturer designee may supply or repair the manufacturer's equipment; that a licensed manufacturer can contract with a licensed supplier to supply or repair the manufacturer's equipment; and that no limitation will be placed on the number of manufacturer licenses issued or when applications for a manufacturer license may be filed.
Section 427a.2 (relating to manufacturer license applications and standards) lists what is required from an applicant for a manufacturer's license. An applicant must submit: the Manufacturer Application and Disclosure Information Form; the application fee; a diversity plan; applications for key employees and principals; Securities and Exchange Commission (SEC) filings; an affirmation that the applicant and its affiliates, intermediaries, subsidiaries or holding companies does not hold an interest in a slot machine applicant or licensee; and an affirmation that the applicant has developed and implemented safeguards to prevent a violation of 4 Pa.C.S. § 1513 (relating to political influence). Manufacturer applicants are also required to provide additional information requested by the Board, comply with Chapters 421a and 423a, demonstrate the ability to produce, repair or modify slot machines or associated equipment and pay additional cost regarding background investigations of the applicant. Additionally, this chapter lists the criteria the Board will use to evaluate these applications.
Section 427a.3 (relating to manufacturer license term and renewal) is a new section that specifies that a manufacturer's license is good for 1 year, that renewal applications must be submitted 6 months prior to the expiration of the license and that a license for which a renewal application and fee has been received will remain in effect for up to an additional 6 months until the Board acts on the renewal application.
Section 427a.4 (relating to alternative manufacturer licensing standards) lays out the process for an alternative review of a manufacturer's license application based on the applicant's licensure in another jurisdiction. It requires submission of the application materials filed in the other jurisdiction, a copy of the other license or order approving the license and disclosure of any enforcement actions pending in the other jurisdiction.
Section 427a.5 (relating to responsibilities of a manufacturer) sets forth the responsibilities of licensed manufacturers including requirements to provide information requested by the Board; report changes in circumstances that could affect the licensee's eligibility for the license; and provide copies of SEC filings within 30 days of submission of the filings to the SEC. This section also specifies which employees must obtain occupational permits and clarifies what a slot machine license may do in terms of servicing or repairing the manufacturer's slot machines or associated equipment under a contract with the manufacturer. It also permits a slot machine licensee to perform routine maintenance without requiring an agreement between the slot machine licensee and the manufacturer.
Chapter 431a (relating to supplier licenses) replaces temporary Chapter 431. It has been reorganized to improve the clarity of the chapter and to incorporate changes made in Act 135.
Section 431a.1 (relating to supplier general requirements) specify: who must obtain a supplier license; that an applicant for or holder of a supplier license can't apply for or hold a slot machine or manufacturer license; and that no limitation will be placed on the number of supplier licenses issued or when applications for a supplier license may be filed.
Section 431a.2 (relating to supplier license applications and standards) lists what is required from an applicant for a supplier's license. An applicant must submit: the Supplier Application and Disclosure Information Form; the application fee; a diversity plan; applications for key employees and principals; SEC filings; an affirmation that the applicant and its affiliates, intermediaries, subsidiaries or holding companies does not hold an interest in a manufacturer or slot machine applicant or licensee; and an affirmation that the applicant has developed and implemented safeguards to prevent a violation of 4 Pa.C.S. § 1513. Supplier applicants are also required to provide additional information requested by the Board, comply with Chapters 421a and 423a, demonstrate that the applicant has or will establish a place of business in this Commonwealth; and pay additional cost related to background investigations of the applicant. Additionally, this chapter lists the criteria the Board will use to evaluate these applications.
Section 431a.3 (relating to supplier license term and renewal) is a new section that specifies that a supplier's license is good for 1 year, that renewal applications must be submitted 2 months prior to the expiration of the license and that a license for which a renewal application and fee has been received will remain in effect for up to an additional 6 months until the Board acts on the renewal application.
Section 431a.4 (relating to responsibilities of a supplier) contains supplier responsibilities. These include requirements to: establish a place of business in this Commonwealth within 1 year; secure assets or lines of credit to support the supplier's operations; and submit agreements between the supplier and any manufacturer or slot machine licensee and detailed business plans. This section also requires a supplier to: provide information requested by the Board; report changes in circumstances that could affect the licensee's eligibility for the license; and provide copies of SEC filings within 30 days of submission of the filings to the SEC. It also specifies which employees of the supplier are required to obtain an occupation permit and what activities are permissible for slot machine and manufacturer licensees to perform.
Section 431a.5 (relating to supplier log books) requires suppliers to maintain a log book to register individuals who enter the supplier's principal place of business and a facility where slot machines are stored. It specifies what information must be entered in the log book and that the log book must be readily accessible for inspection by the Board, the Department of Revenue or the Pennsylvania State Police.
Chapter 436a (relating to horsemen's organizations replaces temporary Chapter 436. The revisions in Chapter 436a were primarily editorial in nature.
Section 436a.1 (relating to definitions) contains definitions of terms that are only used in this chapter.
Section 436a.2 (relating to horsemen's organization registration) requires each horsemen's organization to file a Horsemen's Organization Registration Statement. This section also requires applicants to comply with Chapters 421a and 423a. It specifies that registrations will be valid for 4 years; that renewal applications must be filed at least 120 days prior to expiration; and that if a renewal application and fee has been received, the current registration shall remain in effect until the Board acts on the renewal application.
Section 436a.3 (relating to permitting of officers, directors, representatives and fiduciaries) requires each officer, director or representative to file a Horsemen's Permit Application Form. This section also requires applicants to comply with Chapters 421a and 423a. It specifies that permits will be valid for 1 year; that renewal applications must be filed at least 60 days prior to expiration; and that if a renewal application and fee has been received, the current permit shall remain in effect until the Board acts on the renewal application. It also precludes any officer, director or representative who has been denied a permit from participating in any activity involving gaming funds allocated to the horsemen's organization. Additionally, third party providers of heath and benefit plans and, under certain conditions, attorneys and accountants are not required to obtain a permit.
Section 436a.4 (relating to responsibilities of horsemen's organizations, officers, directors, representatives and fiduciaries) outlines the responsibilities of horsemen's organizations and officers, directors or representatives. These include ensuring that all funds are used for the benefit of all horsemen, that adequate records are maintained, that annual independent audits are conducted and that copies of the audits are submitted to the Board. These audits will be available for public inspection at the Board's Harrisburg office. A new provision was added to this section to clarify that these funds can not be used for the personal benefit of any officer, director or representative except to the extent that the benefit is available to all program participants.
Section 436a.5 (relating to fiduciaries) specifies fiduciaries' responsibilities which include: ensuring that funds are used for the benefit of the horsemen; managing health and benefit plans; acting in a prudent manner; complying with any limitations on investments; and funding benefits as required by law or plan rules. This section also requires the filing of quarterly reports with the Board and providing documents requested as part of an investigation.
Section 436a.6 (relating to health and pension benefit plans) requires that health and benefit plan contracts must be submitted to the Board at least 90 days prior to the effective dates and that they cannot go into effect until they have been approved by the Board. It also requires administrative costs to be reasonable and sets a 15% limitation on what the Board will consider to be reasonable.
Chapter 438a (relating to labor organizations) replaces temporary Chapter 438.
Section 438a.1 (relating to definitions) contains definitions of terms that are only used in this chapter.
Section 438a.2 (relating to labor organization notification) requires each labor organization to file a Labor Organization Form and file updates within 30 days of changes.
Section 438a.3 (relating to permitting of labor organization officers, agents and management employees) requires every labor organization officer, agent and management employee to file a Labor Organization Permit Application Form with the permit fee and comply with Chapters 421a and 423a. It also provides that these permits will be valid for 1 year; that renewal applications must be filed at least 60 days prior to expiration; and that if a renewal application and fee has been received, the current permit shall remain in effect until the Board acts on the renewal application.
Chapter 439a (relating to junket enterprises) replaces temporary Chapter 439.
Section 439a.1 (relating to definitions) contains definitions of terms that are only used in this chapter.
Section 439a.2 (relating to junket enterprise general requirements) specifies who can file a junket enterprise application and that services cannot be provided until a license has been obtained.
Section 439a.3 (relating to junket enterprise license applications) requires an applicant to submit: a Junket Enterprise License Form; the application fee; a Junket Enterprise License Form for each principal entity; and a Junket Enterprise Representative Registration for each principal who is an individual and each key employee. This section also requires applicants to provide additional information requested by the Board, comply with Chapters 421a and 423a and pay additional cost related to background investigations of the applicant.
Section 439a.4 (relating to junket enterprise license term and renewal) is a new section that specifies that a junket enterprise license is good for 1 year, that renewal applications must be submitted 60 days prior to the expiration of the license and that a license for which a renewal application and fee has been received will remain in effect until the Board acts on the renewal application.
Section 439a.5 (relating to junket representative general requirements) requires junket representatives to be registered and employed by a licensed junket enterprise before they can organize junkets and that a junket representative can only be employed by one junket enterprise at a time.
Section 439a.6 (relating to junket representative registration) requires a junket representative applicant to submit a Junket Representative Registration Form and application fee. The applicant is also required to provide additional information requested by the Board and comply with Chapters 421a and 423a. Additionally, it specifies the criteria the Board will use to determine whether or not to grant the application, allows junket enterprises to file an application on behalf of an individual and specifies that registrations do not need to be renewed and are nontransferable.
Section 439a.7 (relating to junket schedules) requires junket schedules and changes thereto to be submitted to the Bureau of Corporate Compliance and Internal Controls. It lists the information to be included in the schedule and the time frames for the submissions.
Section 439a.8 (relating to junket arrival reports) requires the preparation of junket arrival reports, specifies what should be in the reports and when they should be prepared and that the reports must be maintained on premises and made available for inspection.
Section 439a.9 (relating to junket final reports) requires preparation of junket final reports, specifies what should be in the reports and when they should be prepared and that the reports must be maintained on premises and made available for inspection.
Section 439a.10 (relating to monthly junket reports) requires the preparation of monthly junket reports, requires submission of the reports to the Bureau of Corporate Compliance and Internal and requires the reports to be maintained on premises and made available for inspection.
Section 439a.11 (relating to purchase of patron lists) requires the preparation of a report pertaining to the purchase of patron lists, specifies what must be in the report and requires submission of the report to the Bureau of Corporate Compliance and Internal Controls no later than 7 days after the list is received.
Section 439a.12 (relating to junket enterprise and representative prohibitions) contains a list of activities that junket enterprises and representatives may not participate in.
Chapter 440a (relating to management companies) replaces temporary Chapter 440.
Section 440a.1 (relating to general requirements) requires that a management company obtain a license before it provides services and that a management company its affiliates, intermediaries, subsidiaries or holding companies may not apply for or hold a manufacturer or supplier license.
Section 440a.2 (relating to applications) requires a management company to: file the applicable Category 1, 2 or 3 slot machine license application and the applicable fee; promptly provide information requested by the Board; and comply with Chapters 421a and 423a.
Section 440a.3 (relating to management company license and term and renewal) provides that management company licenses will be valid for 1 year; that renewal applications must be filed at least 60 days prior to expiration; and that if a renewal application and fee has been received, the current license shall remain in effect until the Board acts on the renewal application.
Section 440a.4 (relating to management company responsibilities) states that the management company will be deemed to be an agent for violations and that the management company will be jointly and severally liable for violations of the slot machine licensee.
Section 440a.5 (relating to management contracts) specifies that management contracts and amendments must be submitted to and approved by the Board before they can go into effect. This section also requires submission of a business plan, lists a number of provisions that must be in each contract and requires contracts to clearly enumerate specific responsibilities in various areas of operation.
Affected Parties
This proposed rulemaking imposes requirements on applicants for and holders of slot machine licenses, licensed entity representative registrations, manufacturer licenses, supplier licenses, horsemen permits and registrations, labor organization permits and management company licenses.
Fiscal Impact
Commonwealth. This proposed rulemaking will impose costs on the Board regarding processing initial applications and renewals, conducting investigations and issuing licenses, permits and registrations. When applicable, the Pennsylvania State Police will also experience costs associated with investigations of applicants.
Political subdivisions. This proposed rulemaking will have no significant fiscal impact on political subdivisions of the Commonwealth.
Private sector. Applicants for the various licenses, permits and registrations will incur costs to complete the applicable applications and pay the applicable application fees and additional costs associated with investigations.
General public. This proposed rulemaking will have no significant fiscal impact on the general public.
Paperwork Requirements
Applicants for and holders of licensed entity representative registrations, manufacturer licenses, supplier licenses, horsemen permits and registrations, labor organization permits and management company licenses will be required to complete the applicable initial application and renewal forms.
Effective Date
The proposed rulemaking will become effective upon final-form publication in the Pennsylvania Bulletin.
Public Comments
Interested persons are invited to submit written comments, suggestions or objections regarding the proposed rulemaking within 30 days after the date of publication in the Pennsylvania Bulletin to Paul Resch, Secretary, Pennsylvania Gaming Control Board, P. O. Box 69060, Harrisburg, PA 17106-9060, Attention: Public Comment on Regulation #125-61.
Contact Person
The contact person for questions about this proposed rulemaking is Richard Sandusky, Director of Regulatory Review, (717) 214-8111.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on April 26, 2007, the Board submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Gaming Oversight Committee and the Senate Community, Economic and Recreational Development Committee. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Board, the General Assembly and the Governor of comments, recommendations or objections raised.
THOMAS A. DECKER,
ChairpersonFiscal Note: 125-61. (1) State Gaming Fund; (2) Implementing Year 2006-07 is $10,826,000; (3) 1st Succeeding Year 2007-08 is $10,083,000; 2nd Succeeding Year 2008-09 is $10,486,000; 3rd Succeeding Year 2009-10 is $10,906,000; 4th Succeeding Year 2010-11 is $11,342,000; 5th Succeeding Year 2011-12 is $11,796,000; (4) 2005-06 Program--$26,400,000; 2004-05 Program--$13,200,000; 2003-04 Program--$2,900,000; (7) State Gaming Board; (8) recommends adoption.
Annex A
TITLE 58. RECREATION
PART VII. GAMING CONTROL BOARD
Subpart B. LICENSING, PERMITTING, CERTIFICATION AND REGISTRATION
CHAPTER 421a. GENERAL PROVISIONS Sec.
421a.1. General requirements. 421a.2. Disqualification criteria. 421a.3. Investigations; supplementary information. 421a.4. Presuitability determination. 421a.5. Undue concentration of economic opportunities and control. § 421a.1. General requirements.
(a) A license, permit, certification or registration issuance, renewal or other approval issued by the Board is a revocable privilege. No person holding a license, permit, certification or registration, renewal, or other approval is deemed to have any property rights.
(b) By filing an application with the Board, an applicant consents to an investigation of the applicant's general suitability, financial suitability, character, integrity and ability to engage in, or be associated with, gaming activity in this Commonwealth to the extent deemed appropriate by the Board. The investigation may include a background investigation of the applicant, employees of the applicant, all persons having a controlling interest in the applicant and other persons as determined by the Board.
(c) By filing an application for a license, permit, certification or registration issuance, renewal or other approval from the Board, an applicant agrees to:
(1) Abide by the provisions of the act and this part.
(2) Waive liability as to the Board, its members, its employees, the Pennsylvania State Police, the Commonwealth and its instrumentalities for damages resulting from disclosure or publication in any manner, other than a willfully unlawful disclosure or publication of material or information acquired during an investigation of the applicant.
(3) Consent to execute releases requested by the Board.
(d) An applicant for or holder of a license, permit, certification or registration may not give or offer to give, compensation or reward or a percentage or share of the money or property played or received through gaming to a public official or public employee in consideration for or in exchange for obtaining a license, permit, certification or registration issued under this part.
(e) An applicant for or holder of a license, permit, certification or registration shall have a duty to inform the Bureau of an action which the applicant for or holder of a license, permit, certification or registration believes would constitute a violation of the act. A person who so informs the Bureau may not be discriminated against by an applicant for or holder of a license, permit, certification or registration for supplying the information.
(f) An applicant for a license, permit, certification or registration shall have a continuing duty to inform the Board of changes in the information supplied to the Board in or in conjunction with the original or renewal application or a change in circumstances that may render the applicant for a license, permit, certification or registration ineligible, unqualified or unsuitable to hold a license, permit, certification or registration under the standards and requirements of the act and of this part.
(g) An applicant for a license, permit, certification or registration shall have a continuing duty to promptly provide information requested by the Board relating to its application or regulation and cooperate with the Board in investigations, hearings and enforcement and disciplinary actions.
(h) An application submitted to the Board constitutes the seeking of a privilege. An applicant shall at all times have the burden of proof. It shall be the applicant's affirmative responsibility to establish the facts supporting its suitability under the act and this part by clear and convincing evidence, including why a license, permit, certification or registration should be issued or renewed by the Board.
(i) A person holding a license, permit, certification or registration issued by the Board who violates a provision of the act or this part may be held jointly or severally liable for the violation.
(j) The Board will maintain lists of applicants for licenses, permits, certifications or registrations under this part as well as a record of the actions taken with respect to each applicant. The lists will be posted on the Board's website (www.pgcb.state.pa.us).
§ 421a.2. Disqualification criteria.
(a) An application for issuance or renewal of a license, permit, certification or registration may be denied, or a license, permit, certification or registration may be suspended or revoked if:
(1) The applicant has failed to prove to the satisfaction of the Board that the applicant or any of the persons required to be qualified, are in fact qualified in accordance with the act and with this part.
(2) The applicant for or holder of a license, permit, certification or registration has violated the act or this part.
(3) The applicant for or holder of a license, permit, certification or registration is disqualified under the criteria in the act.
(4) The applicant for or holder of a license, permit, certification or registration has materially departed from a representation made in the application for licensure or renewal.
(5) The applicant for or holder of a license, permit, certification or registration has failed to comply with applicable Federal or state laws or regulations.
(b) A denial of an application or nonrenewal, suspension or revocation of a license, permit, certification or registration may be made for a sufficient cause consistent with the act and the public interest.
§ 421a.3. Investigations; supplementary information.
(a) The Board may make an inquiry or investigation concerning an applicant for or holder of a license, permit, certification or registration or any affiliate, intermediary, subsidiary or holding company of the applicant for or holder of a license, permit, certification or registration as it may deem appropriate either at the time of the initial application or at any time thereafter.
(b) It shall be the continuing duty of applicants and a holder of a license, permit, certification or registration to provide full cooperation to the Board in the conduct of an inquiry or investigation and to provide supplementary information requested by the Board.
§ 421a.4. Presuitability determination.
(a) Upon request from an eligible applicant for or holder of a license and upon receipt of an application and appropriate fees, the Board will make an inquiry or investigation of a potential purchaser of an applicant for or holder of a license, certification or registration as if the purchaser were an eligible applicant. The eligible applicant for or holder of a license may petition the Board, on behalf of the purchaser, for a Statement of Investigation under § 493.4 (relating to petitions generally).
(b) The applicant for or holder of a license making the request shall reimburse the costs associated with the inquiry or investigation upon request of the Board.
(c) This inquiry or investigation does not replace the application process required under the act and this part which is a requirement for licensure, certification or registration.
§ 421a.5. Undue concentration 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 undue concentration of economic opportunities and control of the licensed gaming facilities in this Commonwealth by that person.
(b) For purposes this section, ''undue concentration 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 this 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 undue concentration of economic opportunities and control of the licensed gaming facilities in this 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) Gross terminal revenue.
(v) Net terminal revenue.
(vi) Total amount of money, vouchers and electronic money transfers through the use of a cashless wagering system made to slot machines.
(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 undue concentration of economic opportunities and control of the licensed gaming facilities.
(11) Other evidence deemed relevant by the Board.
CHAPTER 423a. APPLICATIONS Sec.
423a.1. General requirements. 423a.2. Preliminary submission review. 423a.3. Application processing. 423a.4. Deficient applications. 423a.5. Application withdrawal. 423a.6. License, permit, registration and certification issuance and Statement of Conditions. 423a.7. Restriction on application after denial or revocation. § 423a.1. General requirements.
(a) For the purposes of this section, a reference to an applicant includes the applicant's affiliates, intermediaries, subsidiaries and holding companies.
(b) An application shall be submitted on forms supplied or approved by the Board, shall contain the information and documents required by the Board and include the applicable fees.
(c) The applicant shall file with the application supplemental forms required by the Board. The forms require full disclosure of the details relative to the applicant's suitability to conduct business in this Commonwealth under the act.
(d) Upon request of the Board, the applicant shall further supplement information provided in the application. The applicant shall provide requested documents, records, supporting data and other information within the time period specified in the request, or if no time is specified, within 30 days of the date of the request. If the applicant fails to provide the requested information within the required time period as set forth in the request, the Board may deny the application.
(e) Information provided to the Board must be true and complete. If there is any change in the information provided to the Board, the applicant shall promptly file a written amendment in a form prescribed by the Board.
(f) The application and amendments thereto and other specific documents designated by the Board shall be sworn to or affirmed by the applicant before a notary public.
(g) The Board will deny the application of an applicant that refuses to submit to a background investigation or provide requested information as required under the act.
(h) An applicant that submits a document to the Board which is in a language other than English shall also submit an English translation of the non-English language document. The translation must include the signature, printed name, address and telephone number of the translator and a verification by the translator of the truth and accuracy of the translation. At its discretion, the Board may accept an English summary of a document in lieu of a complete translation of the document.
(i) An application that has been accepted for filing and related materials submitted to the Board shall become the property of the Board and will not be returned to the applicant.
§ 423a.2. Preliminary submission review.
(a) Upon receipt of an application submission, the Board will review the submission to insure that it contains:
(1) The applicable application fee.
(2) The applicable application forms and additional information and accompanying documentation required by the act or the Board's regulations governing the specific type of application.
(3) Completed authorization forms for release of information from Federal and state agencies required for the specific type of application.
(4) For slot machine license applications only, a bond or letter of credit as required by section 1313(c) of the act (relating to applicant's ability to pay license fee).
(b) If an application submission fails to include one or more of the items in subsection (a), the applicant will be notified that the application has not been accepted for filing and the applicant will be given an opportunity to cure the insufficiency.
(c) If the applicant fails or is unable to cure the insufficiency within the time period set by the Board, the submission and related materials will be returned to the applicant.
§ 423a.3. Application processing.
(a) Upon a determination that the prerequisites for filing have been met, the Board will:
(1) Accept the application for filing.
(2) Notify the applicant or the applicant's attorney, if any, in writing of the fact that the application has been accepted for filing and the date of the acceptance for filing. The Board will also notify the applicant that the acceptance for filing of the application will not constitute evidence that any requirement of the act has been satisfied.
(3) Obtain and evaluate information as may be necessary to determine the qualifications of the applicant and any matter relating to the application.
(4) Request the Bureau to promptly conduct an investigation and provide the information necessary to determine the qualifications of the applicant and any matter relating to the application.
(5) Request the Pennsylvania State Police to provide a criminal history background investigation report, determine employee eligibility consistent with § 435.1 (relating to general provisions), conduct fingerprinting, photograph applicants and perform duties as directed by the Board.
(6) Request the Department to promptly conduct a tax clearance review.
(7) Request the Department of Labor and Industry to perform an Unemployment Compensation Tax clearance review and a Workers Compensation Tax clearance review.
(8) Request any agencies, entities or persons to conduct investigations or evaluations or to provide information to the Board as deemed necessary by the Board.
(b) The Board will keep and maintain a list of all applicants under this part together with a record of all actions taken with respect to applicants.
(c) An application submitted under this part and information obtained by the Board relating to the application shall be part of the evidentiary record of the licensing proceeding. The Board's decision to issue or deny a license will be based solely on the evidentiary record before the Board.
§ 423a.4. Deficient applications.
(a) If an application is found to be deficient, the Board will notify the applicant of the deficiencies in the application and permit the applicant to cure the deficiencies within a time period prescribed by the Board.
(b) Refusal to provide information as required in subsection (a) may result in the immediate denial of the application.
§ 423a.5. Application withdrawal.
(a) A request for withdrawal of an application for a license, permit, certification or registration may be made by petition to the Board filed at any time prior to issuance by the Board of its determination with respect to the application.
(b) The petition must set forth the reasons for the withdrawal.
(c) An applicant may petition for the withdrawal of its application or an application submitted by one of its affiliates, intermediaries, subsidiaries or holding companies or persons or entities required to be qualified under section 1311 of the act (relating to slot machine license application business entity requirements), or both.
(d) When rendering a decision on a petition for withdrawal, the Board may set the conditions of withdrawal and may deny or grant the request with or without prejudice.
(1) If a petition for withdrawal is granted with prejudice, the person or entity whose application has been withdrawn will not be eligible to apply for a license, permit, certification or registration with the Board until after expiration of 5 years from the date of the withdrawal.
(2) If a petition for withdrawal is granted without prejudice the Board will determine when the person or entity whose application has been withdrawn may be eligible to apply for a license, permit, certification or registration.
(e) The Board may convert an incomplete application to a petition for withdrawal.
(f) Unless the Board otherwise directs, fees or other payments relating to the application will not be refundable by reason of the withdrawal. Additionally, fees and costs owed to the Board related to the application shall be paid prior to granting a petition to withdraw.
§ 423a.6. License, permit, registration and certification issuance and Statement of Conditions.
(a) Issuance criteria.
(1) In addition to the criteria contained in the act, the Board will not issue or renew a license, permit, certification or registration unless the Board finds that the following criteria have been established by the applicant:
(i) The applicant has paid the applicable fees.
(ii) The applicant has fulfilled each condition set by the Board or contained in the act, including the execution of a Statement of Conditions.
(iii) The applicant is found suitable, consistent with the laws of the Commonwealth and is otherwise qualified to be issued a license, certification, permit, registration or other authorization.
(b) Statement of Conditions.
(1) For the purposes of this subsection, the term ''executive officer'' means the individual holding the highest ranking management position within the entity and who is authorized to contract on behalf of the entity.
(2) If the Board approves an entity's application for a license, certification or registration, or for the renewal of a license, certification or registration, the Board may require the executive officer of the entity whose application has been approved, or other competent individual designated by the entity in accordance with paragraph (3), to execute a Statement of Conditions in the manner and form required by the Board. Execution of the Statement of Conditions shall constitute the acceptance of each provision contained in the Statement of Conditions by both the entity and the executive officer. The executive officer shall ensure that the entity fully complies with each provision contained in the Statement of Conditions.
(3) Prior to the issuance of a license, certification or registration to an entity, the entity shall determine whether the entity will designate its executive officer or another competent individual with a direct reporting relationship to its executive officer to execute the Statement of Conditions on behalf of both the entity and its executive officer. If the entity elects to designate another competent individual with a direct reporting relationship to its executive officer to execute the Statement of Conditions on behalf of the entity and its executive officer, the entity shall adopt a resolution identifying the individual so designated, authorizing that individual to execute the Statement of Conditions on behalf of both the entity and its executive officer, and evidencing the executive officer's concurrence in that individual's designation. A copy of the resolution, certified as true and correct, shall be provided to the Board and attached to the Statement of Conditions.
(4) If the Board approves an individual's application for a license, permit, certification or registration, or for the renewal of a license, permit, certification or registration, the Board may require the individual whose application has been approved to execute a Statement of Conditions in the manner and form required by the Board. The execution of the Statement of Conditions shall constitute the acceptance of each provision contained in the Statement of Conditions by the individual. The individual shall fully comply with each provision contained in the Statement of Conditions.
(5) Failure to fully comply with a provision contained in an executed Statement of Conditions shall constitute a violation of the Statement of Conditions and may result in the imposition of Board-imposed administrative sanctions, up to and including revocation, against the individual to whom the license, permit, certification or registration was issued, and, in the case of an entity, against the entity and its executive officer or other designee under paragraph (3).
§ 423a.7. Restriction on application after denial or revocation.
(a) A person whose application has been denied or whose license, permit, registration or certification has been revoked, may not apply for a license, permit, certification or registration for 5 years from the date that the application was denied or the license, permit, certification or registration was revoked.
(b) The 5-year restriction in subsection (a) will not apply:
(1) To applicants for a slot machine license if the denial was for reasons other than unsuitability.
(2) 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 the disqualifying offense.
(c) Two years from the date that the application was denied or the license, permit, certification or registration was revoked, a person may file a petition for permission to apply for a license, permit, certification or registration before the expiration of the 5-year period.
(d) A petition filed under subsection (c) shall be filed in accordance with § 493.4 (relating to petitions generally).
(e) Petitions filed under subsection (c) must 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, permit, certification or registration.
(3) If the denial or revocation was the result of a conviction, the petition must include 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.
(f) If a petition filed under subsection (c) is denied, a person may not file another petition under subsection (c) for 1 year from the date of the denial of the petition.
CHAPTER 425a. LICENSED ENTITY REPRESENTATIVES Sec.
425a.1. Registration. § 425a.1. Registration.
(a) A licensed entity representative shall file a completed Licensed Entity Registration Form with the Bureau of Licensing, which includes the individual's name, employer or firm, address, telephone number and the licensed entity being represented.
(b) A licensed entity representative shall update its registration information on an ongoing basis.
(c) The Board will maintain a list of licensed entity representatives. The registration list will be available for public inspection at the offices of the Board and on the Board's website (www.pgcb.state.pa.us).
CHAPTER 427a. MANUFACTURERS Sec.
427a.1. Manufacturer general requirements. 427a.2. Manufacturer license applications and standards. 427a.3. Manufacturer license term and renewal. 427a.4. Alternative manufacturer licensing standards. 427a.5. Responsibilities of a manufacturer. § 427a.1. Manufacturer general requirements.
(a) A manufacturer seeking to manufacture slot machines and associated equipment for use in this Commonwealth shall apply to the Board for a manufacturer license.
(b) In accordance with section 1317.1 of the act (relating to manufacturer licenses), an applicant for or the holder of a manufacturer license or any of the applicant's or holder's affiliates, intermediaries, subsidiaries or holding companies, may not apply for or hold a slot machine license or supplier license.
(c) A licensed manufacturer or a licensed manufacturer designee may supply or repair any slot machine or associated equipment manufactured by the licensee.
(d) A licensed manufacturer may contract with a slot machine licensee or a licensed supplier to supply or repair slot machines or associated equipment manufactured by the manufacturer licensee.
(e) Limitations will not be placed on the number of manufacturer licenses issued or when an application for a manufacturer license may be filed.
§ 427a.2. Manufacturer license applications and standards.
(a) An applicant for a manufacturer license shall submit:
(1) An original and three copies of the Manufacturer Application and Disclosure Information Form.
(2) A nonrefundable application fee.
(3) A diversity plan as set forth in section 1325(b) of the act (relating to license or permit issuance) and Chapter 481 (relating to diversity).
(4) An application from every key employee under § 435.3 (relating to key employee license) and principal under Chapter 433 (relating to principal license) as specified by the Manufacturer Application and Disclosure Information Form or as determined by the Board.
(5) If applicable, copies of all filings required by the SEC during the 2 immediately preceding fiscal years, including annual reports filed with the SEC, under sections 13 or 15D of the Securities Exchange Act of 1934 (15 U.S.C.A. §§ 78m and 78o-6), quarterly reports filed with the SEC, under sections 13 or 15D of the Securities Exchange Act of 1934, current reports filed with the SEC, under sections 13 or 15D of the Securities Exchange Act of 1934, and proxy statements issued by the applicant.
(6) An affirmation that neither the applicant nor any of its affiliates, intermediaries, subsidiaries or holding companies, holds any direct or indirect ownership interest in any applicant for or holder of a slot machine license or supplier license, or employs, directly or indirectly, any person who satisfies the definition of a principal or key employee of a slot machine applicant or licensee or supplier applicant or licensee. In applying this provision to an applicant for a manufacturer license, the Board will not include interests that are held by individuals in any of the following manners:
(i) In mutual funds when the value of the interest owned does not exceed 1% of the total fair market value of the applicant or licensee and provided that the mutual fund is not a nondiversified fund invested primarily in entities operating in, or connected with, the gaming industry.
(ii) Through defined benefit pension plans.
(iii) Through deferred compensation plans organized and operated under section 457 of the Internal Revenue Code of 1986 (26 U.S.C.A. § 457).
(iv) In blind trusts over which the holder does not exercise managerial control or receive income during the time period the holder is subject to these provisions.
(v) Through tuition account plans organized and operated under section 529 of the Internal Revenue Code of 1986 (26 U.S.C.A. § 529).
(vi) Through plans described in section 401(k) of the Internal Revenue Code of 1986 (26 U.S.C.A. § 401(k)).
(vii) An interest held by a spouse if an action seeking a divorce and dissolution of marital status has been initiated in any jurisdiction by either party to the marriage.
(7) A sworn or affirmed statement that the applicant has developed and implemented internal safeguards and policies to prevent a violation of section 1513 of the act (relating to political influence) and a copy the safeguards and policies.
(b) In addition to the materials required under subsection (a), an applicant for a manufacturer license shall:
(1) Promptly provide information requested by the Board relating to the manufacturer's application or regulation and cooperate with the Board in investigations, hearings and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(3) Demonstrate that the applicant has the ability to manufacture, build, rebuild, repair, fabricate, assemble, produce, program, design or otherwise make modifications to slot machines or associated equipment which meet one or more of the following criteria:
(i) Are specifically designed for use in the operation of a slot machine.
(ii) Are needed to conduct an authorized game.
(iii) Have the capacity to affect the outcome of the play of a game.
(iv) Have the capacity to affect the calculation, storage, collection or control of gross terminal revenue.
(c) An applicant for a manufacturer license will be required to reimburse the Board for additional costs, based on the actual expenses incurred by the Board, in conducting the background investigation.
(d) In determining whether an applicant is suitable to be licensed as a manufacturer under this section, the Board will consider the following:
(1) The financial fitness, good character, honesty, integrity and responsibility of the applicant.
(2) If all principals of the applicant individually qualify under the standards of section 1317.1 of the act (relating to manufacturer license).
(3) The integrity of all financial backers.
(4) The suitability of the applicant and the principals and key employees of the applicant based on the satisfactory results of:
(i) The background investigation of the principals and key employees.
(ii) A current tax clearance review performed by the Department.
(iii) A current Unemployment Compensation Tax clearance review and a Workers Compensation Tax clearance review performed by the Department of Labor and Industry.
§ 427a.3. Manufacturer license term and renewal.
(a) A manufacturer license or renewal will be valid for 1 year from the date on which the license or renewal is approved by the Board.
(b) A renewal application and renewal fee shall be filed at least 6 months prior to the expiration of the current license.
(c) A manufacturer license for which a completed renewal application and fee has been received by the Board will continue in effect for an additional 6-month period or until acted upon by the Board, whichever occurs first.
§ 427a.4. Alternative manufacturer licensing standards.
(a) If an applicant for a manufacturer license holds a similar license in another jurisdiction in the United States, the applicant may submit a written request with its application required under § 427a.2(a) (relating to manufacturer license applications and standards) for the Board to adopt an abbreviated licensing process under section 1319 of the act (relating to alternative manufacturer licensing standards) to review a manufacturer license application.
(b) The Board may use the abbreviated process if:
(1) The Board determines, after investigation, that the licensing standards in the jurisdiction in which the applicant is licensed are similarly comprehensive, thorough and provide equal, if not greater, safeguards as provided in the act and that granting the request is in the public interest.
(2) The applicant has provided a copy of its most recent application or renewal for the similar license in the other jurisdiction and a copy of the license or the order issued by the other jurisdiction granting the license.
(3) The applicant has no administrative or enforcement actions pending in another jurisdiction or the applicant has adequately disclosed and explained the action to the satisfaction of the Board.
(4) There are no pending or ongoing investigations of possible material violations by the applicant in another jurisdiction or the applicant has adequately disclosed and explained the investigation to the satisfaction of the Board.
(c) This section may not be construed to waive fees associated with obtaining a license through the application process in this Commonwealth.
§ 427a.5. Responsibilities of a manufacturer.
(a) A holder of a manufacturer license shall have a continuing duty to:
(1) Provide information requested by the Board relating to the manufacturer's licensing or regulation; cooperate with the Board in investigations, hearings and enforcement and disciplinary actions; and comply with conditions, restrictions, requirements, orders and rulings of the Board in accordance with the act.
(2) Report a change in circumstances that may render the holder of a manufacturer license ineligible, unqualified or unsuitable to hold a license under the standards and requirements of the act and of this part.
(3) Provide a copy of all SEC filings listed in § 427a.2(a)(5) (relating to manufacturer license applications and standards) that are filed after the date of issuance of its license. The copy shall be submitted within 30 days after the date of filing with the SEC.
(b) An employee of a licensed manufacturer whose duties of employment or incidental activities related to employment require the employee to be on the gaming floor or in a restricted area shall be required to obtain an occupational permit under § 435.4 (relating to occupational permit).
(c) A slot machine licensee may service or repair slot machines or associated equipment at its licensed facility pursuant to a written agreement between the slot machine licensee and the manufacturer licensee that provided the slot machines or associated equipment at the licensed facility.
(d) A slot machine licensee may perform routine maintenance directly related to the availability of slot machines for play, customer service or a clean and gracious playing environment. The routine maintenance includes installation or replacement of the following: batteries, hardware, including hinges, screws, bolts and custom handles, light bulbs, locks on slot machines and slot cash storage boxes, including the rekeying of the locks, printers, exclusive of printer software and paper stock. Routine maintenance also includes external cleaning and the clearing of paper, bill and coin jams which do not require removal or dismantling of the mechanisms.
[Continued on next Web Page]
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.
