PROPOSED RULEMAKING

PENNSYLVANIA GAMING CONTROL BOARD

[ 58 PA. CODE CH. 401a, 461a,
465a, 467a, 521 AND 525 ]

Accounting and Internal Controls; Commencement of Slot and Table Game Operations

[41 Pa.B. 2581]
[Saturday, May 21, 2011]

 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 specific authority in 4 Pa.C.S. §§ 1207, 1322, 13A02(1)—(6) and 13A25, proposes to amend Chapters 401a, 461a, 465a and 467a and to rescind Chapter 521 and 525 (relating to general provisions; and table game internal controls) to read as set forth in Annex A.

Purpose of the Proposed Rulemaking

 With this proposed rulemaking, the Board is proposing to replace the following sections: rescind temporary § 521.3 (relating to table games surveillance requirements) by amending the existing permanent regulations in Chapter 465a (relating to accounting and internal controls); rescind temporary § 521.11 (relating to table games floor plan changes) by amending the permanent regulations in Chapter 467a (relating to commencement of slot and table game operations); and rescind Chapter 525 by amending Chapter 465a of the permanent regulations.

 This proposed rulemaking will amend the internal control provisions and the provisions on the commencement of gaming operations so the current requirements for slot operations will also be applicable to table game operations. This proposed rulemaking will also provide some clarity, delete some filings and update the regulations to reflect the Board's experience to date.

Explanation of Amendments to Chapters 401a, 461a, 465a and 467a

 Throughout this proposed rulemaking, the term ''table games'' has been added so that the operational requirements that were applicable to slot machines are now applicable to table game operations within the same licensed facility. The terms ''cashiers' cage'' and ''slot cage'' have been changed since there is not a separate slot cage or cashiers' cage but one cage or a main cage for facilities with satellite cages. Additionally, ''person'' has been changed to ''individual'' in many sections since ''person'' is a statutorily defined term that includes both individuals and entities.

 In § 401a.3 (relating to definitions), the definition of ''complimentary service'' has been amended to clarify that it does not include points awarded to patrons who are members of a slot machine licensee's player rewards program or credits for free slot play. In many gaming jurisdictions, complimentaries and credits for free slots play are treated the same when calculating taxes due to the gaming jurisdiction. In this Commonwealth, credits for free slot play (which may be given directly or received in exchange for points earned in a player rewards program) or promotional play may be deducted from the total of cash or cash equivalent wagers when calculating gross terminal revenue. The value of complimentaries including cash and noncash gifts or reimbursements may not be deducted from gross terminal or gross table game revenue. The amended definition reflects this distinction.

 The term ''certificate holder'' was added to § 401a.3 and is used throughout the regulations to refer to those slot machine licensees that have been awarded a certificate to operate table games at the licensed facility.

 The definition of ''gaming employee'' has been amended. Although the individuals listed in subparagraph (i)(P) of the definition are directors or department heads and were previously required to be licensed as key employees, the Board has determined that these individuals should be permitted as gaming employees. The directors of facilities and construction may access restricted areas in the licensed facility. Additionally, all three of these directors supervise employees who are required to be on the gaming floor. Employees who are on the gaming floor and contact electronic gaming tables, slot monitoring systems, casino management systems or player tracking systems are also required to be permitted as gaming employees, which was added in subparagraph (ii). These positions were therefore removed from the definition of ''key employee'' in subparagraph (ii).

 In § 461a.1 (relating to definitions), the definition of ''cash equivalents'' has been updated to reflect statutory amendments to 4 Pa.C.S. Part II (relating to Pennsylvania Race Horse Development and Gaming Act) (act).

 The term ''count team'' has been added to this section. The count team includes those individuals who count the contents of slot cash storage boxes and table game drop boxes while the drop team consists of those individuals who pick up the boxes from the gaming floor. Adding this definition does not imply that two separate teams are required since at most facilities the drop team and the count team are comprised of the same individuals.

 The term ''gaming day'' was amended by deleting the reference to the central control computer system (CCS) since the CCS does not calculate gross table game revenue.

 The definition of ''gaming voucher'' has been amended to allow noncashable credits to be used only on slot machines.

 In § 461a.12(g) (relating to progressive slot machines), RAM clear (zeroing out of any meter) was added to the list of process that require testing by the Gaming Lab. This was added because the calculation of gross terminal revenue is calculated using the metered win so altering the meters requires testing by the Gaming Lab. Additionally, examples of modifications that require lab testing were added to subsection (g). One of the references to the progressive jackpot was deleted as unnecessary language in subsection (i) and the cross-reference was changed from subsection (j) to the proper subsection (k).

 In § 465a.2 (relating to internal control systems and audit protocols), applicants were deleted as they do not submit internal controls. Internal controls are submitted only by licensees prior to the commencement of slot or table game operations. Subsection (a)(8) was amended for clarity. In subsection (b), ''competent person'' was changed to ''delegated individual'' because this responsibility should be performed by someone who is authorized to sign on behalf of the chief executive officer or chief financial officer. The remaining changes to this section were made for clarity.

 In § 465a.5 (relating to annual audit; other reports; suspicious activity and currency transaction reporting), the type of financial reports in subsections (c), (e) and (f) are no longer required to be filed as part of the slot machine licensee's audited financial statements. The reference to subsection (e) has therefore been deleted from proposed subsection (d), current subsection (g). The remaining subsections were renumbered.

 In proposed subsection (c), current subsection (d), the time period to file the audited financial statements was extended from 60 days to 90 days in conformity with statutory amendments to the act.

 In § 465a.6(c)(3) (relating to retention, storage and destruction of books, records and documents), the retention period for voided gaming vouchers was reduced from 6 months to 30 days. Voided gaming voucher information can be obtained through the facility's computer system so retention of claimed gaming vouchers for 6 months is unnecessary. In subsection (c)(4), fully automated electronic gaming tables were added since both slot and fully automated machines accept gaming vouchers.

 Section 465a.7(a) (relating to complimentary services or items) has been amended to require Board approval of the internal controls regarding authorization and issuance of complimentary services and items. Informal Board reviews of these internal controls developed by slot machine licensees to date have found that these internal controls, in some cases, are not adequate. Therefore, slot machine licensees will be required to submit their internal controls regarding complimentaries to the Board for review in the same manner as other internal controls.

 Additionally, the general language in subsection (a) concerning the specific employees to whom these internal controls will apply has been deleted and replaced with a new, more detailed provision in subsection (b)(3), which requires the slot machine licensee to develop a matrix which shows which employees (by job title) are authorized to issue complimentary services or items including cash and noncash reimbursements, which comps those employees are allowed to issue and at what value. Similarly, the general audit requirement in subsection (b)(4) has been revised to require the slot machine licensee's internal audit department to audit the issuance of complimentary services. These changes will make it clear which employees are authorized to issue complementaries and strengthen the effectiveness of oversight on the issuance of complementaries. Finally, subsection (e) has been amended so the report required under subsection (e) will be submitted to the Bureau of Casino Compliance rather than the Bureau of Investigations and Enforcement.

 Section 465a.8 (relating to licensed facility) has been amended so the Bureau of Casino Compliance, not the Bureau of Gaming Operations, is responsible for inspecting and approving various aspects of the licensed facility prior to the commencement of gaming operations including audible alarms, signage and the suitability of the casino compliance office.

 Section 465a.9(a) (relating to surveillance system; surveillance department control; surveillance department restrictions) requires the Bureau of Casino Compliance, instead of the Bureau of Investigations and Enforcement, to review surveillance coverage. Subsection (c) was amended for clarity and to add the requirements for table game surveillance coverage. On table games that are not fully automated, operators are required to have a specific number of cameras, as specified in subsection (c)(2), depending on the table game type. Fully automated electronic gaming tables are required to have the same camera coverage as slot machines. Adequate surveillance coverage is necessary to detect and record cheating and theft, to reconstruct patron play in the event of a dispute or irregularity and for the protection of assets during the drop and count process.

 In subsection (e), the slot machine licensee is now required to continuously record the distribution, inspection and retrieval of cards, dice and tiles to and from the gaming pits. This is to ensure the integrity of the equipment used for play. Additionally, requiring ATM machines to be equipped with a camera to record the face of each patron transacting business at the machine will be required since aerial shots do not adequately show the face of individuals transacting business at ATMs.

 Subsection (j) was updated to reflect the changes made in subsection (e). Operators will be required to retain for 30 days the surveillance recordings regarding the following: transactions conducted at the main cage or satellite cage; the count process; armored car collection and delivery; operations conducted at ATMs, coupon redemption units and jackpot payout machines; and entrances and exits. Only one retention period was extended from 7 days to 30 days and that was the counting of assets conducted in the count room. Based on the Board's experience to date, a 7-day retention period is not adequate to determine if theft or mishandling of funds in the count room was an isolated incident by one individual or a repeated course of conduct by many individuals. Subsection (m) was amended for clarity.

 Amendments to § 465a.11 (relating to slot machine licensee's organization; jobs compendium) add additional surveillance requirements regarding the operation of table games; require credit to come under the director of finance; require a certificate holder to have a table games department or a gaming department which includes both slot machine and table game operations; and update the assets that the finance department is now responsible for.

 Subsections (g)—(m) were added to require a licensee to submit a jobs compendium which includes organization charts of each department or division and detailed job descriptions for each position. This information will be reviewed by the Board to ensure that there is a proper segregation of duties to protect the integrity of gaming and to verify that the proper licensing, permitting or registration requirements will be met. This section also sets forth the process to be used to amend the jobs compendium and requires that an updated jobs compendium be filed annually. The jobs compendium submission requirement is consistent with 4 Pa.C.S. § 13A25(c) (relating to table game accounting controls and audit protocols).

 Section 465a.12 (relating to access badges and temporary access credentials) has been updated to require operators to provide an access matrix containing all restricted areas and the employees who have access to those areas. This is necessary to ensure that only those employees who are authorized to be in certain areas of the licensed facility, such as the cage or storage areas, have access to those areas.

 The cage characteristics in § 465a.15 (relating to cage characteristics) and the accounting controls for the cage in § 465a.16 (relating to accounting controls for the cage) have been updated to reflect the additional types of assets that the cage is responsible for with the addition of table games. In § 465a.15(b), the supervisor of the cage is no longer required to be licensed as a key employee but is permitted as a gaming employee. This is updated to reflect the statutory amendments to the act.

 Section 465a.17 (relating to bill validators, slot cash storage boxes and table game drop boxes) has been updated to include the key control and description of table game drop boxes. Since fully automated electronic gaming tables are equipped like a slot machine, the requirements for bill validators and key controls have been applied to fully automated electronic gaming tables in subsections (a)—(e). The requirements for table game drop boxes from a table game that is not a fully automated electronic gaming table have been added in subsections (f)—(j). These requirements are necessary to ensure the protection of the assets contained within those slot cash storage boxes and table game drop boxes.

 Section 465a.18 (relating to transportation of slot cash storage boxes and table game drop boxes to and from the gaming floor; storage) has been updated to add the requirements for the movement of table game drop boxes from the gaming floor. Table game drop boxes from fully automated electronic gaming tables may be collected at the same time as slot cash storage boxes. All table game drop boxes from fully automated and live play tables are required to be collected daily, regardless of whether the table was open for play. Requiring the drop of an empty drop box on a table that was not open for play is the easiest way to ensure that boxes have not gone missing and that all boxes containing funds were collected during a drop. Operators are required to file a schedule of which boxes are picked up daily, the route the drop team will take to and from the count room and which employees will have access to the keys to open the boxes. These are the requirements designed to protect the assets contained within the slot cash storage and table game drop boxes.

 Section 465a.19 (relating to acceptance of tips or gratuities from patrons) has been updated to reflect the statutory amendments to 4 Pa.C.S. § 13A02(6) (relating to regulatory authority). An operator is required to submit internal controls specifying its policy on tips and gratuities. The pooling of tips required under the act reduces the likelihood of diverting chips into an employee's tip box since all chips for banked dealers are required to be distributed pro rata among all dealers. The Department of Revenue also has an interest in adequate tip procedures to ensure the proper reporting of income from employees, particularly dealers who derive a substantial portion of their pay through tips.

 In § 465a.20(b) (relating to personal check cashing), the provision prohibiting a licensee from cashing a check or multiple checks totaling $2,500 or more per day will not apply to checks written in conjunction with a credit transaction authorized under the credit provisions in proposed Chapter 609a (relating to credit). See 41 Pa.B. 1769 (April 2, 2011).

 Section 465a.22 (relating to cash equivalents) has been updated. When the act was amended, ''cash equivalent'' was defined to include chips or tokens as well as travelers checks, certified checks, money orders and personal checks. This section is applicable to checks and other types of cash equivalents but is not applicable to chips or tokens used for play at a gaming table. Proposed subsection (a) was therefore added excluding gaming chips or plaques from the requirements on cash equivalents in this section.

 Section 465a.24 (relating to count room characteristics) was updated to reflect the additional types of drop boxes that the count room is responsible for with the addition of table games.

 In § 465a.25 (relating to counting and recording of slot cash storage boxes and table game drop boxes), the count process for the slot cash storage boxes and table game drop boxes has been updated. Although the amount of tax collected for the Commonwealth on slot revenue is based on the slot machine meters recorded by the CCS, the revenue for table game play is based on the unrecorded funds in the table game drop boxes that are then counted and recorded by the count team. Additional safeguards are therefore necessary to ensure the accurate counting and recording of table game drop boxes.

 For clarity and to provide a logical flow of the count room process, the existing provisions in § 465a.25 have been replaced. Operators are still required to submit internal controls, which were previously required in subsection (f), regarding the count process. Proposed subsection (a) consolidates what must be contained in the internal controls. The workflow diagram in subsection (a)(1) is a new requirement which provides an overview of where cash, cash equivalents and equipment should be during every step of the counting process. Having the diagram makes it easier for casino compliance representatives and the surveillance department, which is required to record the count to trace irregularities in the count process.

 The requirements in proposed subsection (a)(2) regarding a description of all equipment and files used to conduct the count was moved from current subsection (g). Internal controls on the procedures the facility must utilize to empty and count the contents of storage and drop boxes in subsection (a)(3) has been updated so the requirements for slot cash storage boxes are also applicable to table game drop boxes. Several of the provisions in subsection (a)(3) were moved from current subsections (b), (h) and (i).

 The required procedures in subsection (a)(4) and (5), regarding internal controls for scheduled breaks and the proper wearing of jumpsuits, are designed to protect the assets removed from slot cash storage boxes and table game drop boxes and to deter or minimize employee theft from the count room. Jumpsuits were previously required under current subsection (c).

 Proposed subsection (b) was taken from current subsection (a). Operators shall file a schedule setting forth the times that the contents of the slot cash storage boxes and table game drop boxes will be counted. The Bureau of Casino Compliance is now required because the onsite casino compliance representatives participate in the table game count which occurs immediately after the drop.

 Proposed subsection (c) was taken from current subsection (e).

 Subsection (d) permits only the individuals necessary to conduct the count in the count room. Additionally, individuals participating in the count may not access areas that are unnecessary to the count process. Subsection (e) requires the presence of a casino compliance representative in the count room prior to the commencement of the count of table game drop boxes from table games that are not fully automated electronic gaming tables. The casino compliance representative presence is not required for the counting of table game drop boxes from fully automated electronic gaming tables since those tables, like slot machines, are connected to the CCS, which determines the revenue not the count.

 Subsection (f) requires employees and the casino compliance representative observing the count to sign an attendance sheet. Subsection (g) describes the jumpsuit and which individuals shall wear the jumpsuit during the count process. This was an existing requirement moved from the current subsection (c).

 Subsection (h), regarding the carrying of bags into the count room and the proper procedure for clearing the hands of individuals involved in the count process, was moved from current subsection (d). Subsection (i) was added permitting the doors of the count room to be opened for very limited purposes since the count room should be secure while assets are being counted. Requiring employees to clear their hands and having at least three employees in the count room during a count, as required in subsections (j) and (k), is intended to reduce the likelihood of employee theft or collusion.

 Operators are currently not required to collect slot cash storage boxes from all slot machines on the gaming floor every day. However, table game drop boxes from all table games are required to be collected daily. Subsection (m) specifies that all table game drop boxes and the slot cash storage boxes that are collected from the gaming floor must be counted and recorded daily. The count for slot cash storage boxes, table game drop boxes from fully automated electronic gaming tables and table game drop boxes from table games that are not fully automated electronic gaming tables shall be counted and recorded separately. Subsection (n) does allow the main bank to buy the counted currency from slot cash storage boxes and table game drop boxes from fully automated electronic gaming tables together since, as previously mentioned, the CCS determines the revenue to tax.

 Additional requirements for the counting of table game drop boxes from tables that are not fully automated were added in subsection (o).

 Since the CCS is not involved in the count of slot cash storage boxes or table game drop boxes from fully automated electronic gaming tables, current subsection (j), which required the presence of a casino compliance representative if the CCS was not online, was therefore not moved into a new subsection. Instead, subsection (p) requires that if a problem occurs with the slot or table game count, the problem shall be brought to the attention of the casino compliance representative and a written report must be filed with the casino compliance representatives within 24 hours of the conclusion of the count.

 Operators may utilize, after submitting internal controls, an alternative procedure for the drop and count of Poker drop boxes. The count shall be conducted in the presence of the casino compliance representative by two employees of the finance department with no incompatible duties. This area is required to be under surveillance and in a segregated area of the poker cage.

 The procedures required in § 465a.25 are necessary for the safeguarding of assets and to deter or minimize employee theft from the count room. Having standardized count room procedures ensures the consistent and accurate accounting of assets and revenue and makes it easier for the facility's surveillance department and the casino compliance representatives to detect and track irregularities in the count process.

 Section 465a.26 (relating to jackpot and credit meter payouts) has been amended to include fully automated electronic gaming tables which, like slot machines, have credit meters and jackpot payouts. Subsection (b) was updated to account for the different Federal tax reporting requirements for slot machines versus table games. A player who wins $1,200 or more on a single win at a slot machine is required to complete a W-2G for the Federal tax reporting of gambling winnings. A slot machine is therefore programmed to lock out at $1,200. For table game play, a player must win $600 or more, not including the amount of the initial wager, and the odds have to be at least 300 to 1 before a W-2G is required to be completed. On the fully automated electronic gaming tables, only one optional side wager pays out at that amount and at those odds. The lock out amount on the fully automated electronic gaming tables has been set at $5,000.

 In § 465a.29(a) (relating to automated teller machines), language has been added which prohibits the placement of automated teller machines that offer credit card advances on the gaming floor. This amendment is consistent with changes made to 4 Pa.C.S. § 13A27(a) (relating to other financial transactions), which prohibits the placement of credit card advance machines on the gaming floor.

 In § 465a.31(b) (relating to gaming day), unnecessary language has been deleted. In subsection (c), an operator is required to get the approval of the Board's Executive Director prior to changing the facility's hours of operation. This should not be an issue since all slot machine licensees currently operate 24 hours a day.

 Section 465a.32(1) (relating to signature) was amended to specify Board-issued credential number since not all employees are licensed.

 In consultation with the Department of Revenue and the system operator, which is currently Gtech, § 465a.33 (relating to access to areas containing central control computer equipment) was amended. The provisions now require a licensee to make arrangements with the Department of Revenue and the system operator before accessing an area containing the CCS. The approval of the Board's casino compliance representatives is no longer required. The director of security was added in paragraph (3) because the director of security maintains the key to the area containing the CCS, which may be signed out to employees of the Department of Revenue or the system operator only if the employee is on the authorized access list, which the director of security was previously not authorized to obtain.

 In § 465a.34(b)(4) (relating to automated gaming voucher and coupon redemption machine accounting controls), an incorrect cross reference was amended.

 The remaining sections in Chapter 465a are new provisions applicable to table game internal controls which were taken from the temporary regulations in Chapter 525.

 Section 465a.35 (relating to personnel assigned to the operation and conduct of table games) sets forth minimum staffing requirements for the operation and supervision of table games. The staffing levels in this section are not applicable to fully automated electronic gaming tables, which do not have a live dealer.

 Subsection (b) requires one pit clerk for all table game operations. The pit clerk may be responsible for requesting a fill/credit and participating in the issuance of counter checks for credit to patrons. Two dealers are required for a Baccarat table which seats up to 14 players. Craps requires three dealers, one dealer to handle the dice (stickperson) and one dealer to handle patron's wagers at each end of the craps table.

 While surveillance is recording activity on the gaming floor, adequate supervisory staff, which is specified in subsections (c), (e), (f) and (g), can detect and deter cheating and theft on the gaming floor and can alert surveillance to direct camera coverage onto certain tables or individuals. On-the-floor staffing protects patrons and the integrity of gaming and the revenues generated from gaming. These requirements are similar to requirements used in other gaming jurisdictions.

 Although minimum staffing levels are specified, subsections (d) and (h) allow certificate holders additional operating flexibility. Subsection (d) permits the supervision of a greater number of table games per floorperson when electronic gaming tables that are not fully automated gaming tables are being used. Subsection (h) allows a certificate holder to file a written request with the Board's Executive Director to use a staffing plan that differs from what is required under this section. After reviewing the plan, the Executive Director will send a letter notifying the operator whether the plan has been approved, denied or conditioned.

 Section 465a.36 (relating to table inventories) contains security requirements associated with table inventories, articulates when gaming chips, coins and plaques may be added to or removed from a table inventory and specifies the information that must be included on Table Inventory Slips. Table Inventory Slips are necessary and important since the opening and closing inventory paperwork is used to calculate gross table game revenue. For audit purposes, a Table Inventory Slip is required to be completed once each gaming day, irrespective of whether the table was open for gaming, since all table game drop boxes, which contain a copy of the table inventory slip, are collected each gaming day. Subsection (d) is a segregation of duties requirement which ensures asset protection.

 Section 465a.37 (relating to procedures for opening table games) addresses the procedures that shall be followed when a table is being opened for gaming. The dealer or floorperson assigned to the table shall count the table inventory and compare their count to the totals on the Table Inventory Slip included in the table inventory. If the totals agree, the dealer or boxperson and supervising floorperson shall sign the Table Inventory Slip and place it in the drop box at the gaming table. If there is a discrepancy, notice shall be made to the appropriate parties and a written report shall be prepared explaining the cause of the discrepancy. Opening inventory is an essential component in calculating gross table game revenue.

 Section 465a.38 (relating to procedures for distributing value chips, coins and plaques to gaming tables) sets forth the procedures for adding value chips, coins or plaques to a gaming table to replenish the table inventory. A Fill Request Slip is made out specifying what value chips, coins or plaques are needed for the replenishment and that form is transported to the chip bank. The personnel in the chip bank will fill the request and complete a Fill Slip which is used to verify that the request has been fulfilled and that the requested amount of value chips, coins or plaques are delivered to the gaming table. This section specifies the information and signatures that must be on the Fill Request Slip and Fill Slip and how the copies of these forms are to be distributed. For audit purposes, the Fill Slip is required to be a three-part form so the chip bank that fills the request has a copy of what left the chip bank, the security employee who accepted the chips from the chip bank and transported them the to the floor has a copy and the table that added the chips to the inventory has a copy. All copies of Fill Request and Fill Slips are reconciled in accounting daily. Fills are also a component in calculating gross table game revenue.

 Section 465a.39 (relating to procedures for removing value chips, coins and plaques from gaming tables) establishes the procedures to be used when excess value chips or plaques in a table inventory need to be sent back to the chip bank. Like the process for requesting fills, a Credit Request Slip is made out specifying which value chips, coins or plaques are being returned. That form is transported to the chip bank along with the value chips or plaques. The personnel in the chip bank count the value chips, coins or plaques being returned and complete a three-part Credit Slip which is used to verify that the value chips or plaques being returned. The accounting and drop box copies of the Credit Slip will be returned to the gaming table to obtain the required signatures. After the appropriate signatures are obtained, the drop box copy of the Credit Slip shall be placed in the table game drop box and the accounting copy shall be returned by the security employee to the cage. The chip bank copy is maintained by the chip bank employee who accepted the chips back into the chip bank inventory. All copies of Credit Request and Credit Slips are reconciled in accounting daily. Credits are also a component in calculating gross table game revenue.

 Section 465a.40 (relating to procedures for accepting cash for gaming chips, plaques or electronic wagering credits at table games) outlines the procedures that a dealer or boxperson shall use when a patron asks to exchange cash for gaming chips or electronic credits. These procedures are designed to insure that the process is captured by the surveillance department and to avoid errors or disputes associated with the exchange. The cash accepted and deposited in the drop box is collected and recorded daily and is a component in calculating gross table game revenue.

 Section 465a.41 (relating to procedures for drops at open table games) establishes a procedure for recording the table inventory at a gaming table that is open when the drop occurs. The count of the table inventory just prior to the removal of the drop box is necessary so that the daily revenue for that gaming table can be calculated.

 Section 465a.42 (relating to procedures for closing table games) sets forth the procedures that shall be followed when a gaming table is being closed. The dealer or boxperson and the floorperson assigned to the gaming table shall be required to complete a Table Inventory Slip which will be used to calculate the gaming revenue from that table and is used to verify the contents of the table inventory when the table is reopened. Additionally, this section requires that table inventory be secured in a container that is attached to the table or that is returned to the cage.

 Section 465a.43 (relating to table inventories for Poker tables) gives certificate holders the option of using dealer impressed table inventories for Poker tables. Because the rake will be deposited in the drop box at Poker tables, rather than following the procedures in §§ 465a.36, 465a.37, 465a.41 and 465a.42, a certificate holder may want to have its Poker dealers use an impressed table inventory that only the dealer will be responsible for and that will have to be balanced at the end of the dealer's shift.

 Section 465a.44 (relating to table inventory counts on a per shift basis) gives certificate holders that use drop boxes that segregate the contents by shift the option of adopting procedures which would require the completion of a new Table Inventory Slip at the close of each shift in addition to the other times a Table Inventory Slip is required to be completed under this chapter.

 In § 467a.1 (relating to gaming floor plan), operators that have already submitted an initial gaming floor plan will no longer be required to submit paper copies of revised gaming floor plans. Electronic submissions will now be accepted provided that there is enough detail in the electronic submission to read the information when enlarged. Electronic submissions will now be accepted since floor plan changes to move slot machines or table games to other parts of the licensed facility do not typically necessitate fully renderings. The Board staff, however, reserve the authority to request paper submissions, which may be necessary in cases of a facility expansion or a relocation of large banks of machines or gaming pits. Since operators will no longer be required to regularly submit paper renderings of floor plans, the Board will need a yearly paper submission of the facility's gaming floor. Operators will file the yearly submission 12 months after the commencement of slot operations and every 12 months thereafter.

 In subsection (a)(3), language was changed which allowed underage individuals to traverse the gaming floor. These individuals may use areas adjacent to the gaming floor to access amenities, such as restaurants and shops, but may not be on or cross the gaming floor. Operators shall include these areas in the depictions of their floor plans as well as the areas they have designated as smoking and nonsmoking.

 The Board, at its July 29, 2010, meeting, delegated authority to the Executive Director to approve certain table game floor plan changes that involve less than 10% of the certificate holder's approved table games. Section 467a.1(c) codifies that delegation of authority.

 Subsection (d) was amended to provide clarity to operators as to what information shall be submitted to the Board or Executive Director before the makeup or configuration of the gaming floor plan may be changed. Operators are now required to include in a petition or request the following: the distribution and collection routes for table game drop boxes and slot cash storage boxes; the table game and pit number or slot machine area affected; the type, location or number of slots or table games affected; updates to staffing plans; and updates to surveillance.

 In accordance with administrative law, an operator may appeal a decision of Board staff to the Board. The Executive Director was therefore added in subsection (e).

Affected Parties

 Slot machine licensees that elected to become certificate holders shall submit updated internal controls to reflect the amendments in this proposed rulemaking. Additionally, slot machine licensees that have not yet been issued a license, as well as successful future applicants, shall comply with the provisions in this proposed rulemaking.

 The Board will experience increased regulatory demands to review the revised internal controls that are submitted by the current operators.

Fiscal Impact

 Commonwealth. The Board will experience increased regulatory demands to review the new and revised internal controls submitted by the operators. These reviews will be conducted by existing Bureau of Gaming Operations staff so the Board does not expect that it will incur cost increases as a result of this proposed rulemaking.

 Political subdivisions. This proposed rulemaking will not have direct fiscal impact on political subdivisions of this Commonwealth.

 Private sector. The surveillance requirements in § 465a.9 will not impose additional costs on the current certificate holders since surveillance systems have already been updated prior to the commencement of table game operations. The operators did experience significant costs for the following: the installation of new cameras and other surveillance equipment; the reconfiguration of the gaming floor and positioning and repositioning of new and existing cameras; and the addition of new employees for their surveillance departments. The Board projected the costs regarding surveillance requirements to be in the $150,000 to $300,000 range depending on the type of equipment purchased, the size of the gaming floor and the types of table games installed.

 This proposed rulemaking will combine into one chapter two separate internal controls sections on slot operations and table game operations. Before authorized to commence table game operations, the certificate holder was required to expand and revise the scope of its internal controls. The revised costs were estimated at between $20,000 and $50,000 depending on the scope of the revisions and if the revisions were prepared internally. Although operators will again have to submit updated internal controls, those internal controls combine the separate sections that, for the most part, should already be written.

 Certificate holders were also required to hire and train additional staff to operate table games. To satisfy the minimum staffing requirements in the temporary rulemaking, operators hired 12 key employees, 967 managers and supervisors, 3,264 dealers and 221 security guards. The cost for a gaming employee application is $350 while the cost for key employee licenses is $2,500. Although turnover in staff is expected, the Board does not have an estimate regarding the number of additional gaming and key employees an operator will be required to hire in the future to comply with the minimum staffing requirements in this proposed rulemaking.

 General public. This proposed rulemaking will not have fiscal impact on the general public.

Paperwork Requirements

 This proposed rulemaking requires certificate holders to draft and submit revised internal controls. Several reports were deleted and are no longer required to be filed as part of the operator's annual audit. Additionally, with this proposed rulemaking, operators will no longer be required to submit large scale gaming floor plans with every petition to modify the gaming floor but may now submit an electronic version.

Effective Date

 The proposed rulemaking will become effective upon final-form publication in the Pennsylvania Bulletin. However, operators will have 90 days from the date of publication of the final-form rulemaking to submit their updated internal controls.

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 Susan Yocum, Assistant Chief Counsel, Pennsylvania Gaming Control Board, P. O. Box 69060, Harrisburg, PA 17106-9060, Attention: Public Comment on Regulation #125-145.

Contact Person

 The contact person for questions about this proposed rulemaking is Susan Yocum, Assistant Chief Counsel, (717) 265-8356.

Regulatory Review

 Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on May 3, 2011, 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.

GREGORY C. FAJT, 
Chairperson

 Fiscal Note: 125-145. No fiscal impact; (8) recommends adoption.

 (Editor's Note: For a corrective amendment affecting § 465a.15, see 41 Pa.B. 2599 (May 21, 2011).)

 (Editor's Note: For a corrective amendment affecting § 465a.30, see 41 Pa.B. 2610 (May 21, 2011).)

Annex A

TITLE 58. RECREATION

PART VII. GAMING CONTROL BOARD

Subpart A. GENERAL PROVISIONS

CHAPTER 401a. PRELIMINARY PROVISIONS

§ 401a.3. Definitions.

 The following words and terms, when used in this part, have the following meanings, unless the context clearly indicates otherwise:

*  *  *  *  *

 Certificate holder—A slot machine licensee that was awarded a certificate to operate table games.

*  *  *  *  *

 Complimentary [service]—

 (i) Any lodging, service or item, including a cash and noncash gift or reimbursement, which is provided directly or indirectly to an individual at no cost or at a reduced cost which is not generally available to the public.

 (ii) The term includes [a] lodging provided to [a person] an individual at a reduced price due to the anticipated or actual gaming activities of that [person] individual. Group rates, including convention and government rates, shall be deemed generally available to the public.

 (iii) The term does not include points that are awarded to patrons of a licensed facility who are members of the licensed facility's player rewards program or credits for free slot play.

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 Gaming employee—

 (i) An employee of a slot machine licensee, including:

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 (P) Directors of the following departments:

 (I) Food and Beverage.

 (II) Facilities.

 (III) Construction.

 (ii) Employees of a licensed supplier, manufacturer [or], manufacturer designee, gaming service provider or gaming related gaming service provider whose duties [are]:

 (A) Are directly involved with the repair, service or distribution of slot machines [and], table game devices or associated equipment sold or provided to a licensed facility within this Commonwealth.

 (B) Affect or require contact with electronic gaming table or slot monitoring systems, casino management systems, player tracking systems and wide-area progressive systems for use or play in this Commonwealth, whether or not the individual is assigned to gaming operations in this Commonwealth.

 (iii) Employees of a registered or certified gaming service provider, licensed manufacturer or manufacturer designee whose duties require the employee's presence on the gaming floor or in a restricted area of a licensed facility.

 (iv) Gaming junket representatives.

 (v) Other employees or individuals who the Board determines, after a review of the work being performed, require permits for the protection of the integrity of gaming.

*  *  *  *  *

 Key employee—An individual who is:

*  *  *  *  *

 (ii) [Employed by a slot machine licensee, manufacturer licensee, or supplier licensee, whose duties affect or require contact with slot machines, slot monitoring systems, casino management systems, player tracking systems and wide-area progressive systems for use or play in this Commonwealth, whether or not the individual is assigned to gaming operations in this Commonwealth.

 (iii)] A sales representative seeking to sell slot machines, table game devices and associated equipment for use in this Commonwealth on behalf of a licensed manufacturer, manufacturer designee or supplier.

 [(iv)] (iii) Employed in other positions which the Board will determine based on detailed analyses of the employee's duties or the job descriptions.

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Subpart E. SLOT MACHINES AND ASSOCIATED EQUIPMENT

CHAPTER 461a. SLOT MACHINE TESTING AND CONTROL

§ 461a.1. Definitions.

 The following words and terms, when used in this subpart, have the following meanings, unless the context clearly indicates otherwise:

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 Cash equivalents—Instruments with a value equal to United States currency or coin including gaming chips and plaques, counter checks, certified checks, cashiers checks, travelers' checks, money orders, gaming vouchers or coupons.

*  *  *  *  *

 Count team—The group of employees of a slot machine licensee who are responsible for counting the contents of slot cash storage boxes and table game drop boxes.

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 Drop team—The group of employees of a slot machine licensee who [participate in the transportation of] are responsible for collecting and transporting slot cash storage boxes and table game drop boxes.

*  *  *  *  *

 Fill—The distribution of gaming chips, coins and plaques to a gaming table to replenish the table inventory.

 Finance department—The department that is responsible for the management of the financial and accounting activities relating to slot machines and table games being utilized [on an approved gaming floor] in a licensed facility.

 Gaming day—A period of time not to exceed 24 hours corresponding to the beginning and ending times of gaming activities for the purpose of accounting reports and determination [by the central control computer system] of gross terminal and gross table game revenue.

 Gaming voucher—An instrument that upon insertion into a [slot machine] bill validator entitles the patron inserting the gaming voucher to cashable or noncashable credits on a slot machine and cashable credits on an electronic gaming table corresponding to the value printed on the gaming voucher. A gaming voucher that contains noncashable credits may be used only for the purpose of slot machine gaming.

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§ 461a.12. Progressive slot machines.

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 (g) A slot machine that offers either a new progressive jackpot or undergoes a modification or RAM clear of an existing progressive jackpot may not be made available for play by the public until the slot machine has been tested and certified by the Bureau of Gaming Laboratory Operations. For purposes of this subsection, a modification includes any change in the software, hardware, including controllers, and any associated equipment that relates to progressive functionality.

*  *  *  *  *

 (i) Once an amount appears on a progressive meter, the probability of hitting the combination that will award the progressive jackpot may not be decreased unless the progressive jackpot has been won by a patron [or the progressive jackpot] has been transferred to another progressive slot machine or wide area progressive system or has been removed in accordance with subsection [(j)] (k).

*  *  *  *  *

CHAPTER 465a. ACCOUNTING AND INTERNAL CONTROLS

§ 465a.1. Accounting records.

*  *  *  *  *

 (c) The detailed, supporting and subsidiary records include:

*  *  *  *  *

 (3) Records [which] that identify the handle, payout, actual win amounts and percentages, theoretical win amounts and percentages, and differences between theoretical and actual win amounts and percentages, for each slot machine and table game on a week-to-date, month-to-date and year-to-date basis.

*  *  *  *  *

§ 465a.2. Internal control systems and audit protocols.

 (a) [An applicant for, or holder of, a] A slot machine [license] licensee shall submit to the Board and the Department a written description of its initial system of administrative and accounting procedures, including its internal control systems and audit protocols (collectively referred to as its ''internal controls'') at least 90 days before [gaming] slot or table game operations are to commence. A written system of internal controls must include:

 (1) Records of direct and indirect ownership in the [proposed] slot machine [license] licensee, its affiliates, intermediaries, subsidiaries or holding companies.

*  *  *  *  *

 (8) Procedures to ensure compliance with section 1513 of the act (relating to political influence) to:

 (i) Prevent political contributions.

 (ii) Provide an annual certification that the slot machine licensee has conducted a good faith investigation that has not revealed any violations [to the Board and to the Department of State's Bureau of Commissions, Elections and Legislation] of section 1513 of the act.

 (9) Procedures to ensure that the slot machine licensee's employees comply with Chapter 435a (relating to employees).

 (10) Other items the Board may request in writing to be included in the internal controls.

 (b) A submission must be accompanied by the following:

 (1) An attestation by the chief executive officer or other [competent person] delegated individual with a direct reporting relationship to the chief executive officer attesting that the officer believes, in good faith, that the submitted internal controls conform to the requirements of the act and this subpart.

 (2) An attestation by the chief financial officer or other [competent person] delegated individual with a direct reporting relationship to the chief financial officer attesting that the officer believes, in good faith, that the submitted internal controls are designed to provide reasonable assurance that the financial reporting conforms to generally accepted accounting principles in the United States and complies with applicable laws and regulations, including the act and this subpart.

 (c) The initial submission must also be accompanied by a report from an independent registered public accounting firm, licensed to practice in this Commonwealth. The report should express an opinion as to the effectiveness of the design of the submitted system of internal controls over financial reporting and should further express an opinion as to whether the submitted system of internal controls materially deviates from the requirements of applicable laws and regulations, including the act and this subpart.

 (d) A submission by a slot machine licensee [or applicant] must include, at a minimum, the following:

 (1) Administrative controls which include the procedures and records that relate to the decision making processes leading to management's authorization of transactions.

 (2) Accounting controls [which have as their primary objectives the safeguarding of] that safeguard assets and revenues and ensure the reliability of financial records. The accounting controls must be designed to provide reasonable assurance that:

 (i) Transactions or financial events which occur in the operation of a slot machine or table game are executed in accordance with management's general and specific authorization.

 (ii) Transactions or financial events which occur in the operation of a slot machine or table game are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States, the act and this subpart.

 (iii) Transactions or financial events which occur in the operation of a slot machine or table game are recorded in a manner which provides reliable records, accounts and reports, including the recording of cash and evidences of indebtedness, for use in the preparation of reports to the Board related to slot machines or table games.

 (iv) Transactions or financial events which occur in the operation of a slot machine or table game are recorded to ensure accountability for assets and to permit the proper and timely reporting[, and the calculation] of gross terminal and gross table game revenue, fees and taxes[, and to maintain accountability for assets].

 (v) Access to assets is permitted only in accordance with management's general and specific authorization.

 (vi) The recorded accountability for assets is compared with existing physical assets at reasonable intervals and that appropriate action is taken with respect to any discrepancies.

 (3) Procedures and controls for ensuring, in accordance with section 1323 of the act (relating to the central control computer system), that each slot machine and fully automated electronic gaming table directly provides and communicates all required activities and financial details to the central control computer system as set by the Board.

 (4) Procedures and controls for ensuring that all functions, duties and responsibilities are segregated and performed in accordance with sound financial practices by qualified personnel.

 (5) Procedures and controls for ensuring, through the use of surveillance and security departments, that the licensed facility is secure during normal operations and during any emergencies due to malfunctioning equipment, loss of power, natural disaster or any other cause.

 (e) The Board, in consultation with the Department, will review each initial submission made under subsection (a) and determine whether it conforms to the requirements of the act and this subpart and provides adequate and effective controls to insure the integrity of the operation of slot machines and table games at a licensed facility. If the Board determines that the submission is deficient in any area, the Board will provide [a] written notice of the deficiency to the slot machine [applicant or] licensee and allow the slot machine [applicant or] licensee to submit a revision to its submission. A slot machine licensee is prohibited from commencing [gaming] slot or table game operations until its system of internal controls is approved by the Board.

 (f) If a slot machine licensee intends to make a change or amendment to its system of internal controls, it shall submit the change or amendment electronically to the Bureau of Gaming Operations using the Amendment and Waiver Request Form posted on the Board's web site (www.pgcb.state.pa.us). A request for a change or amendment must include electronic copies of the attestations required under subsection (b)(1) and (2). The slot machine licensee shall also submit a written copy of the change or amendment and the required attestations to the Department. The slot machine licensee may implement the change or amendment on the 30th calendar day following the filing of a complete submission unless the slot machine licensee receives [a] written notice [under subsection (g)] tolling the change or amendment in accordance with subsection (g) rejecting the change or amendment.

 (g) If during the 30-day review period in subsection (f), the Bureau of Gaming Operations preliminarily determines that a procedure in a submission contains [a substantial and material] an insufficiency likely to [have a direct and materially adverse impact on] negatively affect the integrity of slot or table game operations or the control of gross terminal or gross table game revenue, the Bureau of Gaming Operations, by written notice to the slot machine licensee, will:

 (1) Specify the nature of the insufficiency and, when possible, an acceptable alternative procedure.

 (2) Direct that the 30 calendar day review period in subsection (f) be tolled and that any internal controls at issue not be implemented until approved under subsection (i).

 (h) Examples of submissions that may [be determined to] contain [a substantial and material] an insufficiency likely to [have a direct and materially adverse impact on] negatively affect the integrity of slot or table game operations or the control of gross terminal or gross table game revenue may include the following:

 (1) Submissions that fail to provide an audit trail sufficient to permit the review of gaming operations or the reconstruction of gross terminal or gross table game revenue transactions.

 (2) Submissions that fail to provide for the segregation of incompatible functions so that no employee is in a position [both] to both commit an error or [to] perpetrate a fraud and to conceal the error or fraud in the normal course of the employee's duties.

 (3) Submissions that do not include forms or other materials referenced in the submission or required by the act or this part [that are essential elements of the internal controls].

 (4) Submissions that would implement operations or accounting procedures not authorized by the act or this part.

 (5) Submissions that are dependent upon the use of equipment or related devices or software not approved by the Board, unless the submissions are required as part of an authorized test of the equipment or related device or software.

 (i) When a change or amendment has been tolled under subsection (g), the slot machine licensee may submit a revised change or amendment within 30 days of receipt of the written notice from the Bureau of Gaming Operations. The slot machine licensee may implement the revised change or amendment upon receipt of written notice of approval from the Board's Executive Director or on the 30th calendar day following the filing of the revision unless [it] the slot machine licensee receives written notice [under subsection (g)] tolling the change or amendment in accordance with subsection (g) or written notice [of disapproval] from the Board's Executive Director rejecting the change or amendment.

*  *  *  *  *

§ 465a.3. Forms, records and documents.

 (a) Information required by this part to be placed on any form, record or document and in stored data shall be recorded on the form, record or document and in stored data in ink or other permanent [form] manner.

 (b) Whenever duplicate or triplicate copies are required of a form, record or document, the original, duplicate and triplicate copies must have the name of the [recipient] department receiving the copy preprinted on the bottom of that copy so as to differentiate between the copies.

*  *  *  *  *

§ 465a.5. Annual audit; other reports; suspicious activity and currency transaction reporting.

 (a) A slot machine licensee shall, at its own expense, [cause] have its annual financial statements [to be] audited in accordance with generally accepted auditing standards (when applicable, the Standards of the Public Company Accounting Oversight Board (United States)) by an independent certified public accountant or, when appropriate, an independent registered public accounting firm, licensed to practice in this Commonwealth.

 (b) The annual financial statements shall be prepared on a comparative basis for the current and prior fiscal year and present the financial position and results of operations in conformity with generally accepted accounting principles in the United States.

 (c) [The financial statements required by this section must include a footnote reconciling and explaining any differences between the financial statements included in any annual report filed in conformity with § 465a.4 (relating to standard financial and statistical reports) and the audited financial statements. The footnote must, at a minimum, disclose the effect of adjustments on:

 (1) Revenue from the operation of slot machines.

 (2) Slot machine revenue net of expenses for complimentary services or items.

 (3) Total costs and expenses.

 (4) Income before extraordinary items.

 (5) Net income.

 (d)] One copy of the audited financial statements, together with any management letter or report prepared thereon by the slot machine licensee's independent certified public accountant or independent registered public accounting firm, shall be filed with the Bureau of Licensing not later than [60] 90 days after the end of the licensee's fiscal year.

 [(e) The slot machine licensee shall require the independent certified public accountant or independent registered public accounting firm auditing its financial statements to render the following additional reports:

 (1) A report on material weaknesses or significant deficiencies in the system of internal controls noted in the course of the examination of the financial statements.

 (2) A report expressing the opinion of the independent certified public accountant or independent registered public accounting firm as to the adequacy of the slot machine licensee's system of internal controls over financial reporting based upon the description of the system of internal controls approved for the slot machine licensee under § 465a.2 (relating to internal control systems and audit protocols). When appropriate, the report should make specific recommendations regarding improvements in the system of internal controls.

 (f) The slot machine licensee shall prepare a written response to the independent certified public accountant's or independent registered public accounting firm's reports required by subsection (e)(1) and (2). The response must indicate, in detail, corrective actions taken. The slot machine licensee shall submit a copy of the response to the Bureau of Licensing within 90 days of receipt of the reports.

 (g)] (d) The slot machine licensee shall file with the Bureau of Licensing one copy of [the reports required by subsection (e), and one copy of] any other reports on internal controls, administrative controls, or other matters relative to the slot machine licensee's accounting or operating procedures rendered by the licensee's independent certified public accountant or independent registered public accounting firm within 120 days following the end of the licensee's fiscal year or upon receipt, whichever is earlier.

 [(h)] (e) If the slot machine licensee, or a licensed holding company, licensed intermediary or licensed principal entity of the slot machine licensee, is publicly held, the slot machine licensee shall submit a notice to the Bureau of Licensing when it files any report, including forms S-1, 8-K, 10-Q, 10-K, proxy or information statements and registration statements, required to be filed by the slot machine licensee, licensed holding company, licensed intermediary or licensed principal entity of the slot machine licensee, with the SEC or other domestic or foreign securities regulatory agency. The notice must include a listing of the reports or forms filed and the date of the filing. The notice to the Bureau of Licensing shall be made within 10 business days of the time of filing with the applicable Commission or regulatory agency.

 [(i)] (f) If an independent certified public accountant or independent registered public accounting firm [who] that was previously engaged as the principal accountant to audit the slot machine licensee's financial statements resigns or is dismissed as the slot machine licensee's principal accountant, or another independent certified public accountant or independent registered public accounting firm is engaged as principal accountant, the slot machine licensee shall file a report with the Bureau of Licensing within 10 business days following the end of the month in which the event occurs, setting forth the following:

 (1) The date of the resignation, dismissal or engagement.

 (2) Whether in connection with the audits of the 2 most recent years preceding a resignation, dismissal or engagement there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, including a description of each disagreement. The disagreements to be reported include those resolved and those not resolved.

 (3) Whether the principal accountant's report on the financial statements for either of the past 2 years contained an adverse opinion or disclaimer of opinion or was qualified. The nature of the adverse opinion, disclaimer of opinion or qualification shall be described.

 [(j)] (g) The slot machine licensee shall request the former accountant to furnish to the slot machine licensee a letter addressed to the Bureau of Licensing stating whether he agrees with the statements made by the slot machine licensee in response to subsection [(i)(2)] (f)(2). The letter shall be filed with the Bureau of Licensing as an exhibit to the report required by subsection [(i)(2)] (f).

 [(k)] (h) The slot machine licensee shall file with BIE a copy of any Suspicious Activity Report-Casino (SARC) [it] that the slot machine licensee is required to file under 31 CFR 103.21 (relating to reports by casinos of suspicious transactions). Each SARC shall be filed with BIE concurrently with the Federal filing.

 [(l)] (i) A slot machine licensee, director, officer, employee or agent who reports a suspicious activity under subsection [(k)] (h) may not notify any person involved in the suspicious activity that the suspicious activity has been reported.

 [(m)] (j) The slot machine licensee shall file with BIE a copy of any Currency Transaction Report by Casino (CTRC) [it] that the slot machine licensee is required to file under 31 CFR 103.22 (relating to reports of transactions in currency). Each CTRC shall be filed with BIE concurrently with the Federal filing.

 [(n)] (k) Prior to commencing gaming operations, a slot machine licensee shall file with the Bureau of Gaming Operations, in a manner [to be] prescribed by the Bureau of Gaming Operations, a copy of [its] the slot machine licensee's compliance program required under 31 CFR 103.64 (relating to special rules for casinos). Thereafter, a slot machine licensee shall file with the Bureau of Gaming Operations any amendment or supplement to [its] the compliance program on or before the effective date of the amendment or supplement.

§ 465a.6. Retention, storage and destruction of books, records and documents.

*  *  *  *  *

 (b) Original books, records and documents pertaining to the operation of a licensed facility shall be:

*  *  *  *  *

 (3) [Kept immediately] Made available for inspection by agents of the Board, the Department and the Pennsylvania State Police during all hours of operation.

*  *  *  *  *

 (c) Original books, records and documents shall be retained by a slot machine licensee for a minimum of 5 years with the following exceptions:

 (1) Documentation with regard to gaming vouchers reported to the Board as possibly counterfeit, altered or tampered with, should be retained for a minimum of 2 years.

 (2) Coupons entitling patrons to cash or slot machine credits, whether unused, voided or redeemed shall be retained for a minimum of 6 months.

 (3) Voided gaming vouchers and gaming vouchers redeemed at a location other than a slot machine shall be retained for a minimum of [6 months] 30 days.

 (4) Gaming vouchers redeemed at a slot machine or fully automated electronic gaming table shall be retained for a minimum of 7 days.

 (d) A slot machine licensee may request, in writing, that the [Bureau of Gaming Operations] Board's Executive Director approve a location outside the licensed facility to store original books, records and documents. The request must include the following:

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§ 465a.7. Complimentary services or items.

 (a) A slot machine licensee shall develop, maintain and apply adequate internal controls over the authorization and issuance of complimentary services or items as defined in § 401a.3 (relating to definitions). The slot machine licensee shall [maintain a written record of the internal controls under this section and the specific employees to whom they apply. Slot machine licensees are not required to obtain Board approval of the internal controls under this section] submit internal controls for complimentary services and items to the Board for approval under § 465a.2 (relating to internal control systems and audit protocols).

 (b) The internal controls must include the following:

 (1) The procedures by which the slot machine licensee delegates to its employees the authority to approve the issuance of complimentary services or items.

 (2) The procedures by which the slot machine licensee establishes [or], modifies [any conditions] or limits[, to] delegated authority, including limits based on relationships between the authorizer and recipient.

 (3) [The provisions employed to insure the auditing of complimentary services or items.] A matrix of job titles authorized to issue complimentary services or items and what complimentary services and items or the maximum dollar value of complimentary services or items each job title is authorized to issue.

 (4) The procedures to be followed by the slot machine licensee's internal audit department to audit the issuance of complimentary services or items.

 (c) Complimentary services or items shall be recorded as follows:

 (1) A complimentary service or item provided directly to a patron in the normal course of a slot machine licensee's business shall be recorded at an amount based upon the full retail price normally charged for the service or item by the licensee.

 (2) A complimentary service or item not offered for sale to a patron in the normal course of a slot machine licensee's business but provided directly by the slot machine licensee shall be recorded at an amount based upon the actual cost to the slot machine licensee of providing the service or item.

 (3) A complimentary service or item provided directly or indirectly to a patron on behalf of a slot machine licensee by a third party not affiliated with the slot machine licensee shall be recorded at an amount based upon the actual cost to the slot machine licensee of having the third party provide the service or item.

 (4) A complimentary service or item provided directly or indirectly to a patron on behalf of a slot machine licensee by a third party who is affiliated with the slot machine licensee shall be recorded by the slot machine licensee in accordance with this section as if the affiliated third party were the licensee.

 (d) If a slot machine licensee provides complimentary cash and noncash gifts or reimbursements recorded at a value of $10,000 or more to a [person] patron and the [person's] patron's guests within a consecutive 5-day period, the slot machine licensee shall record the reason why the gifts were provided, and maintain the records and make them available for inspection by the Board and the Pennsylvania State Police. When the reason complimentary cash and noncash gifts were provided involves the [person's] patron's player rating, that rating must be based upon an evaluation of the amount and frequency of play by the [person] patron as recorded in the slot machine licensee's player rating system. For the purposes of this section, ''guest'' means any [person] patron who receives complimentary services or items as a result of his relationship with the [person] patron receiving the primary complimentary services or items.

 (e) A slot machine licensee shall submit to [BIE] the Bureau of Casino Compliance a report listing each [person] patron who, under subsection (d), received $10,000 or more in complimentary cash and noncash gifts or reimbursements within a consecutive 5-day period ending during the preceding month. The report shall be filed by the last day of the month following the month in which the complimentary cash and noncash gifts or reimbursements were issued and include the total amount of complimentary cash or noncash gifts or reimbursements provided to each [person] patron broken down into categories for food and beverage, hotel accommodations, travel, reimbursements and other services.

§ 465a.8. Licensed facility.

 (a) A licensed facility must be equipped with a surveillance system configured and approved in accordance with §§ 465a.9 and 465a.10 (relating to [the] surveillance system; surveillance department control; surveillance department [restriction] restrictions; and surveillance system recording formats). Except as otherwise provided in subsection (d)(1), the surveillance system shall be under the exclusive control of the surveillance department.

 (b) Restricted areas within the licensed facility shall be designated for the repair and storage of slot machines and table games. Areas approved and utilized within the licensed facility for slot machine and table game repair shall be covered by the approved surveillance system.

 (c) Emergency exits from the gaming floor and any other doors designated by the Bureau of [Gaming Operations] Casino Compliance must be equipped with an audible alarm system that produces a loud, distinguishable warning sound, discernable in the vicinity of the exit, whenever the emergency door is opened. The alarm system shall be designed to require deactivation and reset by means of a key. The key is to be maintained by the security department.

 (d) Slot machine licensees shall, in accordance with section 1207(13) of the act (relating to regulatory authority of board), provide for and maintain onsite facilities for use by the Board, the Department and the Pennsylvania State Police for the purpose of carrying out their respective responsibilities (collectively referred to as the ''onsite facilities''). The onsite facilities must be located in the same building as the gaming floor, in locations approved by the Bureau of [Gaming Operations] Casino Compliance and include suitable office space, equipment, partitions and supplies to meet the continuing needs of the Board, the Department and the Pennsylvania State Police at the facility including the following:

*  *  *  *  *

 (2) An area for the detention of individuals detained or taken into custody by the Pennsylvania State Police. The detention area must be located within the onsite facilities and consist of a bench or other apparatus which is permanently affixed to the wall or floor to which the [person] individual in custody can be handcuffed with as little discomfort to that [person] individual as is possible under the circumstances.

*  *  *  *  *

 (8) Signs indicating the location of the Board's office. The size, location and design of the signs must be approved by the Bureau of [Gaming Operations] Casino Compliance.

*  *  *  *  *

§ 465a.9. Surveillance system; surveillance department control; surveillance department restrictions.

 (a) The surveillance system of a licensed facility must comply with 18 Pa.C.S. Chapter 57 (relating to Wiretapping and Electronic Surveillance Control Act) and section 1522 of the act (relating to interception of oral communications) and shall be submitted to and approved by the Board under § 465a.2 (relating to internal control systems and audit protocols). The Bureau of Casino Compliance will review surveillance system specifications, inclusive of the camera configuration and any changes or modifications to the system specifications, to determine whether the system provides the adequate and effective surveillance of activities inside and outside the licensed facility mandated by section 1207(11) of the act (relating to regulatory authority of board). A slot machine licensee may not commence gaming operations until its surveillance system is approved by the Board.

 (b) A slot machine licensee shall at all times provide the Board and the Pennsylvania State Police with access to its surveillance system and its transmissions. Each member of its surveillance department shall comply with any request made by the Board or the Pennsylvania State Police to:

 (1) Use, as necessary, any surveillance monitoring room in the licensed facility.

 (2) Display on the monitors in the monitoring room any event capable of being monitored by the surveillance system.

 (3) Make a video and, if applicable, audio recording of, and take a still photograph of, any event capable of being monitored by the surveillance system.

 (i) The slot machine licensee shall preserve and store each recording or photograph in accordance with the directions of the Board or the Pennsylvania State Police.

 (ii) The Board and the Pennsylvania State Police shall have unfettered access to each recording or photograph [and, at]. At the request of the Board or Pennsylvania State Police, access to a recording or photograph may be denied to a particular employee or department of the slot machine licensee.

 (c) The surveillance system required in this section must include [the following]:

 (1) Light sensitive cameras with lenses of sufficient magnification and 360° pan, tilt and zoom capabilities, without camera stops, to allow the operator [to read information on a slot machine reel strip and credit meter and equipped with 360° pan, tilt and zoom capabilities, without camera stops,] to clandestinely monitor in detail and from various vantage points[, including] the following:

 (i) The gaming conducted at the slot machines and fully automated electronic gaming tables in the licensed facility with sufficient clarity to read information on a reel strip or electronic table layout and the credit meter.

 (ii) The gaming conducted at each table game that is not a fully automated electronic gaming table in the licensed facility with sufficient clarity to identify patrons and dealers and sufficient coverage to simultaneously view the table and determine the configuration of wagers, card, dice and tile values and game outcomes.

 (iii) The operations conducted at and in the [cashiers'] main cage and any satellite cage.

 [(iii)] (iv) The operations conducted at automated bill breaker machines, automated gaming voucher and coupon redemption machines, automated jackpot payout machines and automated teller machines.

 [(iv)] (v) The count processes conducted in the count room.

 [(v)] (vi) The movement of cash, gaming chips and plaques, tip boxes, table game drop boxes and slot cash storage boxes within the licensed facility.

 [(vi)] (vii) The entrances and exits to the licensed facility, the gaming floor and the count room.

 (viii) Any other activity or areas designated by the Bureau of Casino Compliance.

 (2) The following number of cameras dedicated to table games that are not fully automated electronic gaming tables:

 (i) At least one stationary camera for each table game offered by the licensed facility except Craps, Baccarat, Roulette and Big Six Wheel.

 (ii) At least two stationary cameras for each Craps table, with one camera covering each end of the table.

 (iii) At least two stationary cameras for each Baccarat table, with one camera covering each end of the table.

 (iv) At least two stationary cameras for each Roulette table, with one camera covering the Roulette wheel and one camera covering the Roulette table layout.

 (v) At least two stationary cameras for each Big Six Wheel, with one camera covering the Big Six Wheel and one camera covering the Big Six Wheel table layout.

 (3) Additional cameras as required by the Bureau of Casino Compliance. The additional cameras may include cameras with 360° pan, tilt and zoom capabilities.

 (4) Video recording equipment which, at a minimum, must:

 (i) Permit the preservation and viewing of a clear copy of the transmission produced by any camera connected to the surveillance system.

 (ii) Be capable of superimposing the time and date of the transmission on each recording made by the video recording equipment.

 (iii) Enable the operator to identify and locate, through the use of a meter, counter or other device or method, a particular event which was recorded.

 [(3)] (5) Recording media which shall be replaced immediately upon the manifestation of significant degradation in the quality of the images or sound, if applicable, recorded thereon. If videotape is utilized, it may be used for no more than 1 year.

 [(4)] (6) One or more monitoring rooms in the licensed facility which shall be staffed by employees of the slot machine licensee's surveillance department who shall at all times monitor the activities enumerated in [paragraph] paragraphs (1), (2) and (3). Each monitoring room shall be equipped with or serviced by:

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 [(5)] (7) An emergency power system, tested at intervals not to exceed 6 months, which can be used to operate the surveillance system in the event of a power failure.

 [(6)] (8) A preventive maintenance program, implemented by technicians assigned to the surveillance department, which insures that the entire surveillance system is maintained in proper working order and that the covers over the cameras are cleaned in accordance with a routine maintenance schedule.

 (d) Areas subject to camera coverage under this section must contain continuous lighting that is of sufficient quality to produce clear video recordings and still picture reproductions.

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