RULES AND REGULATIONS

Title 58—RECREATION

PENNSYLVANIA GAMING CONTROL BOARD

[ 58 PA. CODE CHS. 1401a—1411a ]

Sports Wagering

[51 Pa.B. 5973]
[Saturday, September 11, 2021]

 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. § 13C02 (relating to regulatory authority) adds Chapters 1401a—1411a regarding sports wagering to read as set forth in Annex A, and reserves Chapters 1401—1411.

Purpose of this Final-Form Rulemaking

 This final-form rulemaking establishes the regulatory oversight structure for the conduct of retail and interactive or mobile sports wagering in this Commonwealth.

Explanation

 Subpart Q (relating to sports wagering) establishes the regulations necessary for the Board to issue sports wagering certificates to slot machine licensees who wish to offer sports wagering, as well as the licensing of the principals and key employees of the certificate holders and other entities involved such as sports wagering operators, manufacturers, suppliers and gaming service providers. In addition, Subpart Q provides rules for player accounts, licensed operator duties and restrictions, and accounting and internal controls governing the conduct of sports wagering. Finally, Subpart Q addresses advertising, compulsive and problem gambling, and self-exclusion of players from sports wagering in this Commonwealth.

Chapter 1401a. General Sports Wagering Provisions

 Section 1401a.1 (relating to scope) provides the scope of the subpart and its applicability to retail and interactive or mobile sports wagering. This section clarifies that any sports wagering certificate holder that offers interactive or mobile sports wagering must also comply with the provisions contained in Subpart L (relating to interactive gaming), as interactive or mobile sports wagering operations are considered a form of interactive gaming.

 Section 1401a.2 (relating to definitions) provides the general definitions of terms used throughout Subpart Q for the conduct of retail and interactive or mobile sports wagering. Section 1401a.3 (relating to initial and renewal authorization and license fees) addresses the initial granting of sports wagering certificates to slot machine licensees in the Commonwealth, and section 1401a.4 (relating to sports wagering certificate petition and standards) outlines the information required in a petition from a slot machine licensee to be considered for a sports wagering certificate. This information is what will be reviewed by the Board to determine if a slot machine licensee has established the necessary organizational framework to operate a successful sports wagering operation.

 Section 1401a.5 (relating to conduct of sports wagering generally) outlines the general provisions relating to sports wagering operations. It addresses who may conduct sports wagering operations, where sports wagering may be offered, the offering of sports wagering through a sports wagering operator, prohibitions on minors and involuntary-excluded or self-excluded individuals from engaging in sports wagering, requirements to ensure sports wagering is only conducted by individuals within the boundaries of the Commonwealth and requirements to ensure the integrity of sports wagering operations before they can commence offerings ports wagering. Under the Pennsylvania Race Horse Development and Gaming Act (4 Pa.C.S. §§ 1101—1904) (act), Sports wagering may be conducted in a sports wagering area at the sports wagering certificate holder's licensed facility, a temporary facility adjacent to the licensed facility, or a nonprimary location of a Category 1 slot machine licensee. An amendment to the Fiscal Code in Act 23 of 2020 of May 29, 2020 (P.L. 158, No. 23) also permits a certificate holder to operate a sports wagering area in a Category 4 licensed facility owned by a Category 1, 2 or 3 slot machine licensee. Unlike interactive gaming, a sports wagering certificate holder may only partner with one sports wagering operator to offer sports wagering in this Commonwealth and thus may only have one sports wagering web site and mobile application. The web sites and mobile applications created by a sports wagering operator must clearly identify the sports wagering certificate holder with whom the operator has partnered with.

 Section 1401a.6 (relating to permitted sports wagering activities) describes the permitted sports wagering activities that may be offered within this Commonwealth. This includes the types of sporting events that may be wagered upon and the types of wagers that an individual can place. The Board permits sports wagers to be placed on professional sporting events, collegiate sporting events, and certain amateur events approved by the Board. Amateur events may be wagered upon when the participants involved are not minors and there is satisfactory oversight of the event to ensure the integrity of sports wagers placed on the event. This is consistent with industry standards. This section also addresses the concept of layoff wagers, which occur in one of two ways: (1) a sports wagering certificate holder or operator places a wager with another sports wagering certificate holder or operator directly, in order to mitigate potential large liability losses on an event; or (2) a sports wagering certificate holder or operator solicits a layoff wager from an authorized trader to place a large who then places a wager with the certificate holder or operator in an effort to mitigate potential large liability losses on an event.

 Section 1401a.7 (relating to prohibited and restricted sports wagering activities) outlines sports wagering activities that are prohibited in this Commonwealth. This includes wagering on unapproved amateur events, high school athletics, and proxy wagering. This section also places prohibitions on wagers that sports wagering certificate holders and operators may accept. For example, a sports wagering certificate holder or operator may not knowingly accept a sports wager from an athlete if the event the athlete is wagering on is in the same league or under the same governing body in which the athlete competes. For clarity, a sports wagering certificate holder or operator is prohibited from knowingly allowing a professional baseball player from wagering on baseball games in the same league. This is just one example of prohibited wagering activity; the section contains several others that are designed to protect the integrity of sports wagering operations.

 Section 1401a.8 (relating to persons prohibited from engaging in sports wagering activities) enumerates the individuals who are prohibited from engaging in sports wagering in the Commonwealth, or who are limited in the manner in which they may place sports wagers. This includes minors and athletes or other individuals who have exclusive information about the team. It also provides a procedure for teams or leagues to provide to the Board the biographical information of individuals who should be prohibited from certain wagering activities due to their role with a sports team or league. This list of individuals will be provided to sports wagering certificate holders and operators.

 Section 1401a.9 (relating to physical characteristics of sports wagering areas; security and surveillance of sports wagering area; other requirements) provides the requirements for the physical characteristics of the sports wagering areas, both in a licensed facility and any non-primary location where sports wagering has been authorized by the Board. These requirements are designed to ensure that sports wagering areas will contain adequate measures to ensure the security of the sports wagering operations, including proper surveillance coverage and physical security of ticket writing stations.

Chapter 1402a. Sports Wagering Operators
Chapter 1403a. Sports Wagering Manufacturer
Chapter 1404a. Sports Wagering Supplier
Chapter 1405a. Sports Wagering Gaming Service Pro-
      viders
Chapter 1406a. Sports Wagering Principals and Key,       Gaming and Nongaming Employees

 These chapters of this final-form rulemaking establish the categories of licensure required for certain entities to participate in various areas of the offering of sports wagering in the Commonwealth, based upon the statutory criteria in 4 Pa.C.S. Chapter 13C (relating to sports wagering).

 A sports wagering operator, as described in Chapter 1402a (relating to sports wagering operators), is an entity that is licensed by the Board to operate a sports wagering system or platform in order to provide sports wagering to individuals in the Commonwealth on behalf of a sports wagering certificate holder. This entity must apply for and be issued a sports wagering operator license and pay all applicable license fees. No sports wagering operator may offer sports wagering in this Commonwealth on its own independence from a sports wagering certificate holder; it must be done in partnership with or on behalf of a sports wagering certificate holder. Each sports wagering certificate holder may partner with one sports wagering operator to offer retail and interactive or mobile sports wagering, or may also choose to enlist the services of one operator to handle retail sports wagering and a different operator to handle interactive or mobile sports wagering. A sports wagering certificate holder is limited to only having one sports wagering web site and one mobile application.

 Sports wagering manufacturers, as described in Chapter 1403a (relating to sports wagering manufacturer), are entities who manufacture, build, rebuild, fabricate, assemble, produce, program, design, sell, lease, offer or otherwise make modifications to any authorized sports wagering device or associated equipment for use or operation in this Commonwealth for sports wagering purposes. The entity must apply for licensure as a sports wagering manufacturer and pay all applicable license fees, a process which may be abbreviated if the entity is currently licensed to manufacture devices or associated equipment for other forms of gaming in the Commonwealth.

 Sports wagering suppliers, as described in Chapter 1404a (relating to sports wagering supplier), are entities who sell, lease, offer or otherwise provide, distribute or service sports wagering devices or associated equipment to a sports wagering certificate holder or sports wagering operator. The entity must apply for licensure as a sports wagering supplier and pay all applicable license fees, a process which may be abbreviated if the entity is currently licensed to supply devices or associated equipment for other forms of gaming in the Commonwealth.

 Sports wagering gaming service providers, as described in Chapter 1405a (relating to sports wagering gaming service providers), are individuals or entities who provide certain services to sports wagering certificate holders or operators. Sports wagering gaming services providers must either be certified with the Board or registered with the Board, a determination made based upon the nature of the services being provided. Sports wagering gaming service providers shall apply for certification or registration and pay all applicable fees associated with the application. If the entity is already certified or registered with the Board and will be providing similar services to sports wagering certificate holders or operators, no additional applications or fees are required. Included in this Chapter are provisions related to how a sports wagering gaming service provider may be placed on the Prohibited Gaming Service Provider List maintained by the Board, and conversely, how an entity can apply for removal from the List.

 Chapter 1406a (relating to sports wagering principals and key, gaming and nongaming employees) details the licensure procedures for individuals who are deemed to be sports wagering principals, sports wagering key employees, sports wagering gaming employees, and sports wagering nongaming employees. Restrictions on the ability to place sports wagers are placed on licensed or registered employees of entities involved in sports wagering in the Commonwealth. For example, an individual who is employed by a sports wagering operator may not place a sports wager at a retail sportsbook where the operator offers sports wagering or on any interactive sports wagering web site or mobile application offered by the sports wagering operator. These provisions are designed to prevent an employee of an entity from taking gaining any unfair or inside advantage based upon his or her knowledge of the sports wagering system.

Chapter 1407a. Sports Wagering Testing and Controls

 This chapter establishes all procedures for the testing and control aspects of the sports wagering system or platform used by the sports wagering certificate holder or sports wagering operator acting on behalf of a certificate holder and all associated devices and equipment. This includes self-service sports wagering kiosks, which allow a patron to make a wager on a stand-alone wagering terminal, and redemption terminals which allow a patron to redeem winning sports wagers. Section 1407a.1 (relating to scope) contains the scope of the chapter and how the testing and controls supplement those contained in other Subparts. Section 1407a.2 (relating to definitions) contains the applicable definitions for the chapter. Section 1407a.3 (relating to testing and approval generally) contains the general provisions for testing and controls, such as the types of sports wagering devices that are required to be tested and approved, prior to implementation.

 Section 1407a.4 (relating to wagering device requirements generally) outlines the requirements for a sports wagering device. It sets forth all of the necessary functions that a wagering device must be able to perform, and all of the data that must be recorded for each transaction. Section 1407a.5 (relating to self-service kiosks and point of sale system requirements) contains the provisions for self-service kiosks and point of sale system requirements. A self-service kiosk allows a patron to place a sports wagering or redeem a winning sports wagering ticket without the assistance of a sports wagering employee. These kiosks allow a patron to insert funds, and the screen provides all of the available sports wagering available to the patron, including the odds for each wager. The point of sale systems are used by the ticket writers at the windows to process a sports wager for a patron. This section contains the procedures that a sports wagering certificate holder or sports wagering operator must follow when doing a ''drop,'' which is the removal of all accumulated funds in the self-service kiosks.

 Sections 1407a.6 and 1407a.7 (relating to ticket/voucher requirements; and ticket/voucher redemption requirements) set forth the requirements for a sports wagering ticket and sports wagering voucher and the requirements for redeeming the same. A sports wagering ticket is the physical slip of paper that evidences the wager placed by the patron, including the event wagered on, the amount wagered, the potential winnings, and information required to uniquely identify the ticket. A sports wagering voucher acts in the same manner as a slot machine or other gaming voucher; it is a cash equivalent that a patron may use to place a sports wager with a ticket writer or at a self-service sports wagering kiosk. In accordance with prior Board policy, a sports wagering voucher shall not expired. However, a sports wagering ticket may expire 1 year from the conclusion date of the event wagered on, or the last event to conclude in a multi-wager ticket such as a parlay.

 As it pertains to interactive or mobile sports wagering and the systems implemented to offer them in the Commonwealth, these systems must comply with the provisions in Subpart L, specifically Chapters 809a and 810a (relating to interactive gaming platform requirements; and interactive gaming testing and controls) published at 51 Pa.B. 5389 (August 28, 2021), and will be tested in accordance with those Chapters.

Chapter 1408a. Sports Wagering Accounting and Internal Controls

 This chapter establishes the requirements and procedures for the revenue accounting and reporting of sports wagering as well as other necessary reporting requirements. The internal controls are the systems and procedures that a sports wagering certificate holder or sports wagering operator will operate under when conducting sports wagering operations. The list of items that must be contained in a set of internal controls that is filed with the Board can be found in § 1408a.3 (relating internal controls). Section 1408a.4 (relating to terms and conditions) sets forth requirements for the adoption, approval, and posting of the terms and conditions a sports wagering certificate holder or sports wagering operator will implement at the retail sports book or in its interactive or mobile sports wagering. Section 1408a.5 (relating to information to be displayed/provided) provides all of the necessary information that must be on display in a retail sportsbook and on an interactive or mobile sportsbook. This includes the identity of the certificate holder or operator, the house rules for sports wagering, and all problem gambling information.

 Sections 1408a.6 and 1408a.7 (relating to segregation of bank accounts; and sports wagering certificate holder's or sports wagering operator's organization) set forth requirements when it comes to the bank accounts utilized for sports wagering funds and the organizational structure for certificate holder and operators. This includes the requirement of having employees who are dedicated for information technology security and protection of the integrity of interactive or mobile sports wagering.

 Sections 1408a.8 and 1408a.9 (relating to risk management; and integrity monitoring) address risk management and integrity monitoring. The concepts, while similar, vary in intent and necessity in sports wagering operations. Risk management is the system and procedures put in place by sports wagering operators to determine which sporting events they want to offer, monitoring of data including scores and player statistics, setting of appropriate odds and lines on sporting events, and setting of maximum wagering limits all of which are implemented to manage risk and maximize revenue. These procedures are designed to minimize risk, errors, or other omissions to ensure there is not an adverse effect on gaming.. Integrity monitoring is the process by which a certificate holder or operator observes the wagering going on, either at the retail sports book or on an interactive or mobile sportsbook, with the intent on preventing any unusual or suspicious wagering activity which could indicate that the integrity of the game or match has been compromised.

 Sections 1408a.10, 1408a.11 and 1408a.12 (relating to mandatory logging; records/data retention requirements; and required reports), detail the logging and reporting requirements for the sports wagering certificate holder or operator, and the sports wagering system used. The reports, while numerous, provide the Board with a complete and detailed picture of the entire sports wagering operation. These reports are often built into the sports wagering system, and the Board has access to all of them using a back-office tool.

 Section 1408a.13 (relating to accounting controls for the sports wagering area) sets forth the accounting controls for sports wagering areas of retail sportsbooks. Unlike interactive or mobile sports wagering, where everything is automated, from payments to the placement of a wager, retail sportsbooks still operate largely on a cash basis. This section details the requirements for ensuring all funds are accounted at each sports wagering ticket window. And lastly, Section 1408a.14 (relating to sports wagering accounts) cross-references to Subpart L, indicated that interactive or mobile sports wagering accounts must comply with the provisions contained therein.

Chapter 1409a. Sports Wagering Advertisements, Promotions and Tournaments

 This chapter establishes the standards for sports wagering advertising and promotions. Section 1409a.1 (relating to general requirements) states generally that advertising and promotions must comply with the provisions of Subparts C—E, I and L. This applies to all advertisements that are posted at or for the retail sportsbook or interactive and mobile sportsbook, and any and all promotions run by the certificate holder or operator. Section 1409a.2 (relating to sports wagering contests, tournaments, pools or other organized events) provides the details that a certificate holder or operator must submit in order to run a sports wagering contest, tournament, pool or other organized event. All sports wagering contests, tournaments, pools or other organized events that a certificate holder or operator offers, with individuals paying entry fees to join, must comply with the provisions and be approved by the Board prior to their offering.

Chapter 1410a. Sports Wagering Compulsive and       Problem Gambling Requirements
Chapter 1411a. Sports Wagering Self-Excluded Persons

 These chapters address compulsive and problem gambling requirements for sports wagering certificate holders and operators, and set forth the options available for players to set responsible gaming limits or to self-exclude from sports wagering.

 There were no specific provisions in the act for sports wagering compulsive and problem gambling requirements or self-exclusion. Given that sports wagering at retail sportsbooks takes place at licensed facilities or other Board-authorized locations (such as off-track betting locations owned and operated by slot machine licensees who hold a sports wagering certificate), the compulsive and problem gambling requirements and self-exclusion procedures shall be handled in accordance with the underlying provisions in Subpart I (relating to compulsive and problem gambling) of the Board's regulations. Under the act, interactive and mobile sports wagering is considered a form of interactive gaming. Therefore, the compulsive and problem gambling requirements and self-exclusion for this form of sports wagering shall be handled in accordance with the respective requirements in Subpart L of the Board's regulations.

Response to Comments

 The Board received comments from the Independent Regulatory Review Commission (IRRC) and the responses to those comments are as follows:

1. Protection of the public health, safety and welfare; Implementation procedures.

 The Board acted with due diligence in getting the final-form regulations promulgated to regulate the sports wagering and interactive gaming industry, which includes interactive or mobile sports wagering. After the passage of Act 42 of 2017 of October 30, 2017 (P.L. 419, No. 42), the Board was tasked with promulgating regulations for five separate forms of expanded gaming in rapid succession. In December 2020, Governor Tom Wolf signed Act 114 of 2020 of November 23, 2020 (P.L. 1140, No. 114) making amendments to the Fiscal Code of the Commonwealth. Act 114 of 2020 included a provision that extended the expiration date of temporary regulations of the Board from two years after publication to three years after publication. Therefore, the temporary regulations for interactive gaming, originally adopted in five different packages, expired or do not expire until varying dates between January 6, 2021, and March 9, 2022. As noted in the comment, the sports wagering temporary regulations do not expire until June 23, 2021, July 28, 2021, or September 15, 2021. To date, the Board has not had any issues involved in the regulatory oversight of either sports wagering or interactive gaming, which includes interactive or mobile sports wagering.

2. Compliance with the Regulatory Review Act and regulations of IRRC.

 All matters addressed in this comment have been remedied in the final-form Regulatory Analysis Form.

3. § 1401a.1. Scope—Protection of the public health, safety and welfare; and reasonableness of requirements.

 The language is amended to reflect the recommended changes in § 1401a.1. As the changes pertain to § 1407a.1 and § 1408a.1 (relating to scope), those provisions state that the regulatory provisions contained therein supplement the applicable regulations in the other referenced subparts or chapters. As indicated by the language contained therein, those other subparts or chapters must also be complied with only if a sports wagering certificate holder or sports wagering operator holds those other respective licenses, issued under those subparts or chapters. As such, §§ 1407a.1 and 1408a.1 are not designed to create a new obligation, but rather are meant to provide clarity to a sports wagering certificate holder or sports wagering operator regarding the continued obligation to comply with the regulatory provisions if the entity is also licensed under those other subparts and chapters.

4. § 1401a.2. Definitions—Clarity.

 This section is amended to reflect the recommended changes.

5. § 1401a.5. Conduct of sports wagering generally—Clarity.

 These subsections are amended to reflect the recommended changes.

6. § 1401a.6. Permitted sports wagering activities—Statutory authority; and Clarity.

 The Board possesses authority under 4 Pa.C.S. § 13C02 to establish the standards and procedures for sports wagering and the standards and procedures to govern the conduct of sports wagering and system of wagering. The inclusion of international team and individual events is consistent with industry standards. These events are popular with individuals who participate in sports wagering, and also the governing bodies that oversee the events maintain a high level of integrity monitoring, which ensures the protection of players. Additionally, many of these events feature athletes who are professional or collegiate athletes, but who at the time are participating in an event representing their home country.

 The language in § 1401a.6(c) was amended to reflect the recommended changes. As the terms in this subsection are not used significantly throughout the entire subpart, moving them to the definitions section is unnecessary. Additionally, language was struck from subsection (c)(3) relating to parlay wagers, as it was redundant.

 An authorized trader need not seek licensure from the Board to enter into a layoff wagering agreement with a sports wagering certificate holder or sports wagering operator. Subsection (f)(2) requires that the entity be licensed by a regulatory oversight body in the area of banking, security, or insurance, and therefore, additional licensure by the Board is unnecessary.

7. § 1401a.7. Prohibited and restricted sports wagering activities—Statutory authority; and Clarity.

 The ''amateur sporting events'' in § 1401a.7(b) refer primarily to the previously referenced international team and individual sporting events, which are typically considered amateur events. It also includes events that involve individuals 18 years of age or older that are not necessarily professional or collegiate, such as club soccer or rugby (U19, U20 or U21 leagues). The Board possesses authority under 4 Pa.C.S. § 13C02 to establish the standards and procedures for sports wagering and the standards and procedures to govern the conduct of sports wagering and system of wagering. The inclusion of international team and individual events is consistent with industry standards. These events are popular with individuals who participate in sports wagering and also the governing bodies that oversee the events maintain a high level of integrity monitoring, which ensures the protection of players. Additionally, many of these events feature athletes who are professional or collegiate athletes, but who at the time are participating in an event representing their home country.

 Subsection (c) is amended to provide better clarity on the issue of ownership interests in sports wagering certificate holders or sports wagering operators by individuals or entities who are connected to athletic teams or governing bodies. This amendment removes the blanket prohibition language, which would have prevented persons who are athletes or individuals in a position of authority on a sports team or governing body from owning 10% or more of a certificate holder or operator. The updated language now prohibits any sports wagering certificate holder or sports wagering operator who has a 10% or greater owner who is one of the listed individuals from accepting wagers on that specific team or on events run by that governing body. This amended language still provides the necessary integrity protection of sports wagering operations, while not stifling the industry from growing.

8. § 1401a.9. Physical characteristics of sports wagering areas; security and surveillance of sports wagering area; other requirements—Clarity and lack of ambiguity.

 Responses to the comments provided by the commentators are provided as follows.

9. § 1402a.2. Sports wagering operator application and standards—Clarity and lack of ambiguity.

 This language is consistent with the Board's existing body of licensing regulations, in addition to the other final-form rulemakings that pertain to expanded gaming. There may be instances where an entity has filed an application for licensure for a different license or for a different form of gaming, and the Board may determine that the filing of another application is not necessary, if the information contain therein would be duplicative.

10. § 1402a.3. Sports wagering operator license term and renewal—Clarity.

 This language is consistent with the Board's existing body of licensing regulations, in addition to the other final-form rulemakings that pertain to expanded gaming. The provisions in all applicable sections noted refer to all renewal applications that are filed prior to the expiration of the license in question. If the application is not filed until after the license expires, it is treated as an application for a new license, as no license is currently valid that can be extended during the pendency of the application.

11. § 1402a.2. Sports wagering operator change of control—Clarity.

 The definition of ''bureau'' has been added to the definitions in § 1401a.2.

12. § 1403a.2. Sports wagering manufacturer license application and standards—Clarity.

 Principal affiliates is a term already defined in the Board's licensing regulations in Chapter 433a (relating to principal licenses), and therefore, inclusion of the definition in this subpart of regulations would be duplicative. Additionally, only requiring principal affiliates to also file the necessary applications for licensure is consistent with the Board's existing body of regulations.

13. § 1405a.6. Authorized sports wagering gaming service providers list; prohibited sports wagering gaming service providers—Clarity.

 The subsections are amended to reflect the recommended changes.

14. § 1405a.7. Permission to conduct business prior to certification or registration—Clarity; and implementation.

 This section is updated to reflect that the notice would be sent by registered mail, to be able to confirm receipt of the notice.

15. § 1405a.9. Duty to investigate—Clarity; and Implementation procedures.

 The investigations required in §§ 1405a.2 and 1405a.3 (relating to sports wagering gaming service provider certification applications; and sports wagering gaming service provider registration applications) are investigations done by the Board after the application for registration or certification have been filed. The duty to investigate in this section requires a sports wagering certificate holder or sports wagering operator to do its own investigation of the entity before entering into a contractor relationship with the provider. The goal is to prevent applications for certification or registration being filed with the Board by persons or providers who would not qualify to be certified or registered, something which a certificate holder or operator would be able to discern if a reasonable investigation was performed.

16. § 1406a.1. General provisions—Clarity.

 These subsections do apply to nongaming employees who have a registration issued by the Board.

17. § 1406a.5. Sports wagering nongaming employees—Clarity.

 This subsection is amended to reflect the recommended changes.

18. § 1407a.2. Definitions—Clarity.

 Currently, sports wagering accounts are not used to place wagers on self-service kiosks, and may only be used for interactive or mobile sports wagering.

19. § 1407a.3. Testing and approval generally—Clarity.

 A definition of ''interactive or mobile sportsbook'' is added to § 1401a.2.

 The language in subsection (d) is amended for consistency purposes as recommended.

20. § 1407a.4. Wagering device requirements generally—Clarity.

 Responses to the comments provided by the commentators are provided as follows as it pertains to subsections (g)—(i).

 By way of further explanation as to subsection (i), if a person who has a pending sports wager that was placed at a retail sportsbook and then self-excludes, he or she likely would not be identified as a self-excluded person until he or she attempted to redeem the winning sports wagering ticket. If the person enters the licensed facility while on the casino self-exclusion list, he or she would be in violation of the self-exclusion. If the person was redeeming a ticket above the Federal threshold for reporting, the individual would likely be identified as self-excluded and the winnings (actual amount won, not including the original bet placed) would be subject to confiscation and remittance to the Board, under the Board's self-exclusion procedures. If he or she mailed in the ticket to be redeemed, the individual's name would show up on the casino self-exclusion list during the redemption process, and once again, the winnings would be confiscated and remitted to the Board.

 It would be inappropriate to require that an individual who has pending sports wagers forfeit the funds used to place those wagers after placing himself or herself on the self-exclusion list. The individual in that instance has decided to avail himself or herself of a voluntary program to curb problem gambling; it would be punitive to also then impose what amounts to a financial penalty on the individual who self-excludes by requiring forfeiture of the funds. The most equitable approach is to cancel the pending wager and return the funds used to place the wager to the patron.

 Also, as it pertains to pending sports wagers placed on an interactive or mobile sportsbook, the cancelling of pending wagers and return of funds is not unduly burdensome. Certificate holders or operators that offer interactive or mobile sports wagering are required to regularly update their player database with information on individuals who self-exclude from the Board's Office of Compulsive and Problem Gambling, and suspend or close the accounts of individuals who self-exclude. If an individual has a pending wager at that time, the wager may easily be cancelled and those funds returned to the player with the rest of the funds on deposit with the certificate holder or operator.

21. § 1407a.6. Ticket/voucher requirements—Clarity.

 This paragraph is amended to reflect the recommended changes.

22. § 1407a.8. Sports wagering interactive system requirements—Clarity.

 This subsection is amended to reflect the recommended changes.

23. § 1408a.3. Internal controls—Clarity.

 The language in paragraph (21) is amended to reflect the recommended changes. Paragraph (21)(iii) is amended to provide clarity as to the meaning of the section.

 Responses to the comments provided by the commentators are provided as follows as it pertains to subsections (j) and (o).

24. § 1408a.8. Risk management—Protection of the public interest, safety and welfare; and Implementation.

 This section is amended to reflect the recommended changes to be consistent with § 1401a.5(h).

 In determining whether a sports wagering certificate holder or sports wagering operator's in-house risk management unit will be satisfactory, Board staff will review the submitted information required under § 1408a.8(b). If Board staff finds that the information provide will ensure the proper level of risk management required for sports wagering operations to occur, the in-house unit will be deemed satisfactory for use.

 Responses to the comments provided by the commentators are provided as follows as it pertains to subsection (b)(10) and cancelation of wagers placed due to error.

25. § 1408a.9. Integrity monitoring—Clarity; Protection of the public interest, safety and welfare; and implementation.

 This subsection is amended to reflect the recommended changes to be consistent with § 1401a.5(g).

 The Board's proposed integrity monitoring procedures are consistent with the industry standards imposed in other jurisdictions. The Board will evaluate the sports wagering certificate holder or sports wagering operators internal controls to ensure proper safeguards are in place for the in-house unit.

 The reporting of integrity issues is done through an online portal, set up to provide sports wagering certificate holders or sports wagering operators ease of access in reporting unusual or suspicious betting activity, similar to the submission of internal controls.

 The phrase ''in a timely manner'' is deleted because under § 1408a.9(f)(1), the requirement is that the information be provided in a report within 5 calendar days.

26. § 1409a.2. Sports wagering contests, tournaments, pools or other organized events—Clarity and lack of ambiguity.

 Subsection (a)(5) prevents the collecting of or paying out real money during a contest, tournament or pool. Once initial entry fees are paid under subsection (b) and the contest, tournament or pool starts, any wagers to be placed or picks to be made during that event must use tournament credits or points. Therefore, the sections are not in conflict.

 The language regarding discontinuation of sports wagering contests, pools or tournaments is updated to reflect that it must occur immediately upon notification. Many of these contests or pools run for a short period of time, sometimes only hours long, so it is imperative that contests that could adversely impact the integrity of gaming be shut down promptly.

27. Miscellaneous—Clarity.

 Issues of clarity identified are updated, as necessary.

 The Board received public comment from Greenwood Gaming and Entertainment, Inc., d/b/a Parx Casino, and the responses to those comments are as follows:

I. The Board should clarify § 1407a.4(e)(12).

 As subsection (e) states, the information contained in the numbered paragraphs only needs to be recorded by the sports wagering device, that is, the platform used by the sports wagering certificate holder or sports wagering operator. The information need not be provided to the patron on the sports wagering ticket, but must be accurately recorded by the system, and nothing in the subsection requires it be provided to the patron.

II. The Board should provide clarification of § 1407a.4(g).

 This subsection is updated to reflect the recommended changes.

III. The Board should recognize that wagering devices cannot automatically prevent the posting, voiding, and cancellation of wagers without human interaction.

 The Board understands that sports wagering devices are not infallible, and there are many instances where human intervention to prevent improper wagering from occurring or to remedy improperly placed wagers will be necessary. The ultimate goal, however, should still be that these devices prevent past posting of wagers as best as possible.

IV. The Board should eliminate the requirement in § 1407a.4(i), as the implementation of this requirement is not feasible at retail locations, would be unduly burdensome, and creates the risk for potential abuse.

 As stated previously in response to the comments from IRRC, it would be inappropriate to assess what essentially becomes a financial penalty on an individual who chooses to self-exclude while an outstanding sports wager is pending. The potential forfeiture of the wager may discourage a problem gambler, someone who truly needs to avail himself of the self-exclusion program, from seeking the help he or she needs. The risk of abuse of this regulatory requirement is drastically outweighed by the benefits provided by the voluntary self-exclusion program.

 The Board understands that there may be minor feasibility issues related to the pending sports wagers placed by individuals who subsequently self-exclude. But as indicated previously, those individuals could be readily identified if and when an individual sought to redeem a winning sports wager, placed at a retail sports book prior to placement on the self-exclusion list, assuming the sports wagering certificate holder or sports wagering operator act in accordance with the Board's self-exclusion requirements. The same applies to pending sports wagers placed on a sports wagering certificate holder's or sports wagering operator's interactive or mobile sports wagering platform. If a sports wager is pending at the time an individual self-excludes, and the certificate holder or operator is updating their system with information from the Board's self-exclusion database as required, the wager needs to be cancelled and the funds returned to the patron's account. Then, under the Board's interactive gaming self-exclusion procedures, contained in Subpart L, the interactive gaming or sports wager account should be suspended or closed. The Board does not believe these requirements to be overly burdensome.

V. The Board should clarify the term ''ticket overrides'' in § 1407a.6(g)(2).

 The term ''ticket overrides'' is deleted, as it is encompassed in the other terms contained in subsection (g)(2).

VI. The Board should provide clarification of § 1408a.3(j).

 The Catalog of Events must be submitted to the Board 72 hours before implementation of the proposed change is planned to occur. The Board will notify the sports wagering certificate holder or sports wagering operator within those 72 hours if the revisions are approved. If approved, implementation may occur as scheduled; if denied, the sports wagering certificate holder or sports wagering operator will need to revise the submission and re-submit to the Board for approval. If full review of the revisions by Board staff is not able to be completed within 72 hours, the certificate holder or operator will be notified that the approval has been tolled under the internal controls procedures, and they must wait for approval before the revisions can be implemented.

VII. The Board should enable sports wagering certificate holders to cancel wagers at their discretion if the Board approves certain cancellation criteria.

 While the Board understands that flexibility in offering sports wagering is important to sports wagering certificate holders and sports wagering operators, it is the Board's responsibility to ensure that there is a fair and secure environment for individuals who engage in sports wagering. Allowing for the unilateral cancelling of wagers by a sports wagering certificate holder or sports wagering operator at their discretion due to an error of their own making creates the risk of inconsistency in application across the industry. Board approval of cancellation of wagers is a paramount step in achieving the Board's goal of fair sports wagering operations across the board. This is an industry standard across the country.

 These provisions do not apply to all instances in which a void is needed, such as the cancellation of a sporting event all together or other instances not related to palpable errors. This is outlined with the House Rules put in place by each operator, which include specific guidelines for the voiding of transactions.

VIII. The Board should modify the language in § 1408a.3(o).

 This section is updated to reflect the recommended changes.

IX. The Board should provide leniency in waiving regulations, upon request, as applied to nonprimary locations.

 Nonprimary locations are not solely under the jurisdiction of the Board, but also must be run in accordance with the regulatory requirements set forth by the State Horse Racing Commission. The Board and its staff are always available to discuss regulatory concerns of sports wagering certificate holder and sports wagering operators, and would continue to work in consultation with the Horse Racing Commission to make nonprimary locations as successful and patron friendly as possible. If a certificate holder or operator identifies issues related to nonprimary locations, such as or similar to those cited in the comment, it is possible those issues could be resolved through a formal request to the Board or Board staff.

 The Board received public comment from Downs Racing, L.P., d/b/a Mohegan Sun Pocono, and the responses to those comments are as follows:

I. The Board should clarify conflicting language on satellite sports wagering areas.

 Section 1401a.9(b) is amended to reflect the recommended changes.

II. The Board should clarify the proposed physical characteristics for sports wagering areas to ensure seamless integration of sports wagering and horse racing at nonprimary locations.

 As stated previously in response to Greenwood Gaming and Entertainment, Inc.'s similar comment, the Board will permit as much flexibility as possible with the regulatory requirements for sports wagering at nonprimary locations, to encourage the integration of the two activities. This will take coordination with the Horse Racing Commission, but the Board is committed to making sports wagering at nonprimary locations a successful part of the sports wagering industry in the Commonwealth.

III. The restrictions on ownership of sports wagering certificate holders and sports wagering operators should be clarified.

 As indicated previously in response to IRRC's comment, the language in § 1401a.7(c) was clarified. The blanket prohibition on ownership of more than 10% was modified, so that now a person or entity that is an athlete or connected to an athletic team or governing body may own 10% or more of a sports wagering certificate holder or sports wagering operator. However, that certificate holder or operator is not permitted to accept wagers on sporting events in which that athlete or team participates.

 Affiliates of sports wagering certificate holders or sports wagering operators are not exempted from this provision.

IV. The Board should exercise its discretion to permit wagering on eSports.

 The Board believes that unless and until the legislature expands the definition of sports wagering or sporting event to explicitly include eSports, it would exceed the Board's statutory authority to permit these wagering activities.

V. Sports wagering certificate holders and sports wagering operators should not be required to share information regarding unusual or suspicious wagering activity with sports governing bodies/leagues.

 The Board acknowledges Mohegan Sun Pocono's support for the deletion of this requirement from the temporary regulations.

Fiscal Impact

 Commonwealth. The Board expects that this final-form rulemaking will have a relatively small fiscal impact on the Board and other Commonwealth agencies, which primarily is the result of the need for some additional personnel to process and review applications, as well as to monitor and regulate the conduct of sports wagering. Most of the additional duties will be absorbed by existing Board staff. The costs of the final-form regulations will be paid for by an assessment against the licensed sports wagering certificate holder's sports wagering revenue as determined by the Department of Revenue.

 Political subdivisions. This final-form rulemaking will not have fiscal impact on political subdivisions of this Commonwealth.

 Private sector. This final-form rulemaking will not have a fiscal impact on the private sector other than for those who elect to participate in sports wagering. If pursued by an entity, there will be licensing costs as set forth by 4 Pa.C.S. Chapter 13C to offer sports wagering as a certificate holder or operator, or to be licensed as a manufacturer, supplier or gaming service provider.

 General public. This final-form rulemaking will not have fiscal impact on the general public.

Paperwork Requirements

 A slot machine licensee who wishes to offer sports wagering must file a Petition for Issuance of a Sports Wagering Certificate, as well as any necessary licensure applications for principals, key employees, gaming and nongaming employees.

 A sports wagering operator, sports wagering manufacturer, sports wagering supplier, sports wagering service provider, and principals, key employees, and gaming and nongaming employees thereof involved in the provision of sports wagering in this Commonwealth will be required to file applications with the Board providing information regarding the person's proposed activity, as well as accounting and internal control protocols and background information of each individual sufficient to permit the Board to determine the individual's suitability for licensure. All applications are available on the Board's web site at https://gamingcontrolboard.pa.gov/.

 If an individual wishes to join the casino self-exclusion list (to exclude from retail sports wagering) or the interactive gaming self-exclusion list (to exclude from interactive and mobile sports wagering), the person may do so online on the Board's web site by filling out a web-based form. The Board's web site address for self-exclusion is https://responsibleplay.pa.gov/self-exclusion/.

Effective Date

 This final-form rulemaking will become effective upon publication in the Pennsylvania Bulletin.

Regulatory Review

 Under section 5(a) of the Regulatory Review Act (71 P.S. § 745.5(a)), on November 12, 2020, the Board submitted a copy of the proposed rulemaking, published at 50 Pa.B. 7277 (December 26, 2020) IRRC and to the Chairpersons of the House Gaming Oversight Committee and the Senate Community, Economic and Recreational Development Committee for review and comment.

 Under section 5(c) of the Regulatory Review Act, the Board is required to submit to IRRC and the House and Senate Committees copies of comments received during the public comment period, as well as other documents when requested. With regard to this rulemaking, no comments were received from the Committees.

 Under section 5a(j.2) of the Regulatory Review Act (71 P.S. § 745.5a(j.2)), on July 14, 2021, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on July 15, 2021, and approved the final-form rulemaking.

Findings

 The Board finds that:

 (1) Public notice of intention to adopt these amendments was given under sections 201 and 202 of the act of July 31, 1968 (P.L. 769, No. 240) (45 P.S. §§ 1201 and 1202), known as the Commonwealth Documents Law, and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2. (relating to notice of proposed rulemaking required; and adoption of regulations).

 (2) This final-form rulemaking is necessary and appropriate for the administration and enforcement of 4 Pa.C.S. Part II (relating to gaming).

Order

 The Board, acting under 4 Pa.C.S. Part II, orders that:

 (1) The regulations of the Board, 58 Pa. Code, are amended by deleting §§ 1401.1—1401.8, 1402.1—1402.3, 1403.1—1403.7, 1404.1—1404.7, 1405.1—1405.9, 1406.1—1406.8, 1407.1—1407.9, 1408.1—1408.13, 1409.1, 1410.1 and 1411.1 and adding 1401a.1—1401a.9, 1402a.1—1402a.4, 1403a.1—1403a.6, 1404a.1—1404a.6, 1405a.1—1405a.9, 1406a.1—1406a.8, 1407a.1—1407a.9, 1408a.1—1408a.14, 1409a.1, 1409a.2, 1410a.1 and 1411a.1 to read as set forth in Annex A.

 (2) The Chairperson of the Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.

 (3) This order shall take effect upon publication in the Pennsylvania Bulletin.

DAVID M. BARASCH, 
Chairperson

 (Editor's Note: For IRRC's approval order, see 51 Pa.B. 4174 (July 31, 2021).)

 Fiscal Note: Fiscal Note 125-234 remains valid for the final adoption of the subject regulations.

Annex A

TITLE 58. RECREATION

PART VII. GAMING CONTROL BOARD

Subpart Q. SPORTS WAGERING

CHAPTER 1401. (Reserved)

Sec. 1401.1—1401.8. (Reserved).

CHAPTER 1401a. GENERAL SPORTS WAGERING PROVISIONS

Sec.

1401a.1.	Scope.
1401a.2.	Definitions.
1401a.3.	Initial and renewal authorization and license fees.
1401a.4.	Sports wagering certificate petition and standards.
1401a.5.	Conduct of sports wagering generally.
1401a.6.	Permitted sports wagering activities.
1401a.7.	Prohibited and restricted sports wagering activities.
1401a.8.	Persons prohibited from engaging in sports wagering activities.
1401a.9.	Physical characteristics of sports wagering areas; security and surveillance of sports wagering area; other requirements.

§ 1401a.1. Scope.

 (a) The purpose of this subpart is to govern the operation of sports wagering in this Commonwealth. The purpose of this chapter is to establish definitions for this subpart and create the process by which a slot machine licensee can seek approval to conduct sports wagering. The act and the Board's regulations promulgated thereunder shall otherwise apply when not in conflict with this subpart.

 (b) Any sports wagering certificate holder or sports wagering operator who offers interactive or mobile sports wagering as a form of interactive gaming shall also comply with all applicable provisions in Subpart L (relating to interactive gaming) as it pertains to the development, implementation, and use of interactive or mobile sports wagering system operations, specifically Chapters 809a—815a.

§ 1401a.2. Definitions.

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

 Associated equipment—Any equipment or mechanical, electromechanical or electronic contrivance, component or machine used in connection with sports wagering, including equipment which affects the proper reporting and counting of gross sports wagering revenue and computerized systems for controlling and monitoring sports wagering.

 Authorized trader—An entity who has been authorized by a sports wagering certificate holder or sports wagering operator to place a layoff wager pursuant to a layoff wager agreement.

 Bureau—The Bureau of Investigations and Enforcement.

 Cash equivalent—An asset that is readily convertible to cash, including any of the following:

 (i) Chips or tokens.

 (ii) Travelers checks.

 (iii) Foreign currency and coin.

 (iv) Certified checks, cashier's checks and money orders.

 (v) Personal checks or drafts.

 (vi) A negotiable instrument applied against credit extended by a certificate holder, an interactive gaming operator, sports wagering operator or a financial institution.

 (vii) A prepaid access instrument.

 (viii) Any other instrument or representation of value that the Board deems a cash equivalent.

 Gaming day—The period of time from 6 a.m. to 5:59:59 a.m. the following calendar day, corresponding to the beginning and ending times of sports wagering activities for the purpose of accounting reports and determination of gross sports wagering revenue.

 Gaming employee—An employee of any of the following who the Board determines, after a review of the work to be performed, requires a gaming employee permit for the protection of the integrity of sports wagering within this Commonwealth:

 (i) A sports wagering certificate holder, interactive gaming operator or sports wagering operator.

 (ii) A sports wagering manufacturer.

 (iii) A sports wagering supplier.

 (iv) A sports wagering gaming service provider.

 (v) Any other person as determined by the Board.

 Gross sports wagering revenue—

 (i) The total of cash or cash equivalents received from sports wagering minus the total of:

 (A) Cash or cash equivalents paid to players as a result of sports wagering.

 (B) Cash or cash equivalents paid to purchase annuities to fund prizes payable to players over a period of time as a result of sports wagering.

 (C) The actual cost paid by the sports wagering certificate holder for any personal property distributed to a player as a result of sports wagering. This clause does not include travel expenses, food, refreshments, lodging or services.

 (ii) The term does not include any of the following:

 (A) Counterfeit cash or chips.

 (B) Coins or currency of other countries received as a result of sports wagering, except to the extent that the coins or currency are readily convertible to cash.

 (C) Cash taken in a fraudulent act perpetrated against a sports wagering certificate holder for which the sports wagering certificate holder is not reimbursed.

 Interactive or Mobile Sportsbook—An authorized sports wagering web site or mobile application offered to registered players in this Commonwealth by a sports wagering certificate holder or sports wagering operator.

 Interactive or mobile sports wagering—Sports wagering offered to registered players in this Commonwealth by a sports wagering certificate holder or sports wagering operator by means of an authorized sports wagering web site or mobile application.

 Key employee—All of the following:

 (i) An individual who is employed in a director or department head capacity and who is empowered to make discretionary decisions that regulate sports wagering operations or systems, including the director of sports wagering or other similar job classifications associated with sports wagering.

 (ii) An employee who is not otherwise designated as a gaming employee and who supervises the operations or systems of the sports wagering department or to whom the sports wagering department directors or sports wagering department heads report.

 (iii) Other positions not otherwise designated or defined under this subpart which the Board determines based on detailed analyses of job descriptions as provided in the internal controls of the sports wagering certificate holder or sports wagering operator as approved by the Board.

 Layoff wager—

 (i) A wager placed by a sports wagering certificate holder or sports wagering operator with another sports wagering certificate holder or sports wagering operator located in this Commonwealth for the purposes of offsetting patron wagers.

 (ii) A wager sought and accepted by a sports wagering certificate holder or sports wagering operator placed by an authorized trader for the purposes of offsetting patron wagers.

 Layoff wager agreement—An agreement entered into between a sports wagering certificate holder or sports wagering operator and an authorized trader which governs the terms and conditions for the placement of layoff wagers.

 Player—An individual wagering cash, a cash equivalent or other thing of value on a sporting event, combination of sporting events or the individual performance statistics of an athlete in a sporting event, including during a contest or tournament, the act of which may deliver or entitle the individual to receive cash, a cash equivalent or other thing of value from another player or sports wagering certificate holder, interactive gaming operator or sports wagering operator.

 Registered player—An individual who has entered into a sports wagering account agreement with a sports wagering certificate holder or sports wagering operator offering interactive or mobile sports wagering.

 Retail sportsbook—Sports wagering activities conducted by means of self-service kiosks or point of sale system in the sports wagering areas of a sports wagering certificate holder's approved locations.

 Sporting event—A professional or collegiate sports or athletic event or a motor race event, including international team and international individual athletic events.

 Sports wagering—

 (i) The business of accepting wagers on sporting events or on the individual performance statistics of athletes in a sporting event or combination of sporting events by any system or method of wagering, including at a retail sportsbook or over the Internet through web sites and mobile applications when authorized by the Board. The term includes exchange wagering, parlays, over-under, moneyline, pools and straight bets. The term does not include the other forms of gaming or wagering listed in section 13C01 of the act (relating to definitions).

 Sports wagering area—

 (i) The physical land-based location at which a certificate holder is authorized, under Chapter 13C of the act (relating to sports wagering), to conduct retail sports wagering. The area must be:

 (A) A designated area within the certificate holder's slot machine licensed facility, as approved by the Board.

 (B) A Board-approved temporary facility that is physically connected to, attached to or adjacent to the certificate holder's slot machine licensed facility for a period not to exceed 18 months.

 (C) A nonprimary location of a Category 1 slot machine licensee under 3 Pa.C.S. Chapter 93 (relating to race horse industry reform) upon Board approval in consultation with the State Horse Racing Commission.

 (D) At a Category 4 licensed facility, if the holder of the Category 4 slot machine license also holds a Category 1, 2 or 3 slot machine licensed and has acquired a sports wagering certificate under that Category 1, 2 or 3 license.

 (ii) The term does not include a redundancy facility or an interactive gaming or interactive or mobile sports wagering restricted area which is not located on the premises of a licensed facility as approved by the Board and which is maintained and operated by a certificate holder, interactive gaming operator or sports wagering operator in connection with sports wagering.

 Sports wagering certificate—A certificate awarded by the Board under this subpart that authorizes a slot machine licensee to conduct sports wagering in accordance with this subpart.

 Sports wagering certificate holder—A slot machine licensee to whom the Board has awarded a sports wagering certificate.

 Sports wagering device—Any mechanical, electrical or computerized contrivance, terminal, machine or other device, apparatus, equipment or supplies approved by the Board and used to conduct sports wagering.

 Sports wagering gaming service provider—A person that is not required to be licensed as a sports wagering operator, interactive gaming operator, sports wagering manufacturer, sports wagering supplier, interactive gaming manufacturer or interactive gaming supplier and:

 (i) Provides goods or services to a sports wagering certificate holder, interactive gaming operator or sports wagering operator for the operation of sports wagering.

 (ii) Is determined to be a sports wagering gaming service provider by the Board.

 Sports wagering interactive system—All hardware, software and communications that comprise a type of server-based sports wagering system for the purpose of offering authorized interactive or mobile sports wagering in this Commonwealth when authorized by the Board.

 Sports wagering manufacturer—A person who manufactures, builds, rebuilds, fabricates, assembles, produces, programs, designs, sells, leases, offers or otherwise makes modifications to any authorized sports wagering device or associated equipment for use or operation in this Commonwealth for sports wagering purposes.

 Sports wagering manufacturer license—A license issued by the Board authorizing a sports wagering manufacturer to manufacture, build, rebuild, fabricate, assemble, produce, program, design, sell, lease, offer or otherwise make modifications to any authorized sports wagering device or associated equipment for use or operation in this Commonwealth for sports wagering purposes.

 Sports wagering operator—A person licensed by the Board to offer sports wagering at a retail sportsbook or offer interactive or mobile sports wagering through the provision of a sports wagering platform on behalf of a sports wagering certificate holder. The term includes an interactive gaming operator applicant or licensee that seeks to operate retail sports wagering or interactive or mobile sports wagering system on behalf of sports wagering certificate holder.

 Sports wagering platform—The combination of hardware and software or other technology designed and used to manage, conduct and record retail and interactive or mobile sports wagering activity as approved by the Board. The term includes any emerging or new technology deployed to advance the conduct and operation of retail and interactive or mobile sports wagering activity as approved through regulation by the Board.

 Sports wagering restricted area—Any room or area, as approved by the Board, used by a sports wagering certificate holder, interactive gaming operator or sports wagering operator to manage, control and operate sports wagering, including, when approved by the Board, redundancy facilities and remote gaming server locations.

 Sports wagering supplier—A person who provides, distributes or services any authorized sports wagering device or associated equipment for use or operation in this Commonwealth for sports wagering purposes that is not otherwise required to be licensed as a sports wagering manufacturer or sports wagering gaming service provider.

 Sports wagering supplier license—A license issued by the Board authorizing a sports wagering supplier to provide products or services related to any authorized sports wagering device or associated equipment to a sports wagering certificate petitioner or holder or sports wagering operator for use or operation in this Commonwealth for sports wagering purposes.

§ 1401a.3. Initial and renewal authorization and license fees.

 (a) Prior to the Board issuing a sports wagering certificate, sports wagering operator license or renewal thereof, the sports wagering certificate holder or sports wagering operator shall pay the authorization or license fee.

 (b) If an interactive gaming operator licensee, licensed in accordance with the provisions of Subpart L (relating to interactive gaming), has already remitted the required licensing fee, the Board will not assess an additional fee for the interactive gaming operator licensee to acquire a sports wagering operator license.

§ 1401a.4. Sports wagering certificate petition and standards.

 (a) A slot machine licensee seeking to offer sports wagering in this Commonwealth may petition the Board for a sports wagering certificate.

 (b) A petitioner for a sports wagering certificate shall submit all of the following to the Board:

 (1) The name, business address and contact information of the slot machine licensee petitioning for a sports wagering certificate.

 (2) The name, business address and contact information of any affiliate, sports wagering operator or other person that will be a party to an agreement with the sports wagering certificate petitioner related to the operation of sports wagering on behalf of the sports wagering certificate petitioner and a description of the services to be provided.

 (3) The name and business address, job title and a photograph of each principal and key employee of the sports wagering petitioner who will be involved in the conduct of sports wagering and whether or not the principal or key employee is currently licensed by the Board.

 (4) A statement identifying what types of sports wagering, including the sporting events, the sports wagering certificate petitioner intends to offer.

 (5) A statement identifying whether the sports wagering petitioner intends to offer retail sports wagering, interactive or mobile sports wagering, or a combination thereof.

 (6) A statement identifying whether the sports wagering petitioner intends to utilize a temporary facility for its retail sports wagering operations or system.

 (7) If the petitioner is a Category 1 slot machine licensee, a statement identifying whether the sports wagering petitioner intends to offer retail sports wagering in any nonprimary locations.

 (8) The estimated number of full-time and part-time employment positions that will be created as a result of sports wagering if a sports wagering certificate is issued.

 (9) An updated hiring plan under section 1510(a) of the act (relating to labor hiring preferences) which outlines the sports wagering certificate petitioner's plan to promote the representation of diverse groups and Commonwealth residents in the employment positions.

 (10) A brief description of the economic benefits expected to be realized by the Commonwealth if a sports wagering certificate is issued.

 (11) The details of any financing obtained or that will be obtained to fund an expansion or modification of the sports wagering certificate petitioner's licensed facility to accommodate sports wagering and to otherwise fund the cost of commencing sports wagering.

 (12) Information and documentation concerning financial background and resources to establish the financial stability, integrity and responsibility of the sports wagering certificate petitioner.

 (13) Information and documentation concerning the terms of any agreement with a sports wagering operator.

 (14) Information and documentation to establish that the sports wagering certificate petitioner has sufficient business ability and experience to conduct a successful sports wagering operation, including the sports wagering certificate petitioner's history in slot machine and table game operations, employment data and capital investment in casino operations.

 (15) Information and documentation that the sports wagering certificate petitioner has or will have the financial ability to pay the sports wagering authorization fee.

 (16) Detailed site plans identifying the proposed sports wagering area and sports wagering restricted area, including security and surveillance plans and plans relative to compliance with the Clean Indoor Air Act (35 P.S. §§ 637.1—637.11).

 (17) An overview of all of the following:

 (i) The sports wagering certificate petitioner's initial system of internal and accounting controls applicable to sports wagering including the areas described in paragraph (16).

 (ii) The sports wagering certificate petitioner's proposed standards to protect, with a reasonable degree of certainty, the privacy and security of its registered players.

 (iii) The sports wagering devices and associated equipment and interactive or mobile sports wagering system, or both, that the sports wagering certificate petitioner plans to or will utilize to manage, administer or control its sports wagering operations or systems as well as the identity of any third parties providing these devices and associated equipment.

 (18) A description of accounting systems, including accounting systems for all of the following:

 (i) Sports wagering accounts.

 (ii) Per wager charges, if applicable.

 (iii) Transparency and reporting to the Board and the Department.

 (iv) Ongoing auditing and internal control compliance reviews.

 (19) A description outlining the impact that sports wagering petitioner's plans will have on the number of slot machines and table games in operation at its licensed facility.

 (20) An overview of any necessary additions to the petitioner's Compulsive and Problem Gambling Plan necessitated by sports wagering.

 (c) The Board will approve a sports wagering petition if the petitioner establishes all of the following by clear and convincing evidence:

 (1) The petitioner's slot machine license and table game operation certificate are in good standing with the Board.

 (2) The conduct of sports wagering at the petitioner's licensed facility will increase revenues and employment opportunities.

 (3) The petitioner possesses adequate funds or has secured adequate financing to:

 (i) Fund any necessary expansion or modification of the petitioner's licensed facility to accommodate the conduct of sports wagering.

 (ii) Pay the authorization fee in accordance with section 13C61 of the act (relating to sports wagering authorization fee).

 (iii) Commence sports wagering operations or system at its licensed facility.

 (4) The petitioner has the financial stability, integrity and responsibility to conduct sports wagering.

 (5) The petitioner has sufficient business ability and experience to create and maintain a successful sports wagering operation.

 (6) The petitioner's proposed internal and external security and proposed surveillance measures within the area of the licensed facility where the petitioner seeks to conduct sports wagering are adequate.

 (7) The petitioner has satisfied the petition requirements.

§ 1401a.5. Conduct of sports wagering generally.

 (a) Sports wagering may only be conducted in this Commonwealth by a sports wagering certificate holder or a sports wagering operator on behalf of a sports wagering certificate holder. A sports wagering operator may be a licensed interactive gaming operator and provide interactive gaming and sports wagering services.

 (b) Sports wagering conducted in this Commonwealth by a sports wagering certificate holder or a sports wagering operator may only be offered to players as follows:

 (1) At a designated, clearly identified sports wagering area, at the sports wagering certificate holder's licensed facility.

 (2) At a temporary facility that is physically connected to, attached to or adjacent to the sports wagering certificate holder's slot machine licensed facility for a period not to exceed 18 months.

 (3) At a nonprimary location of a Category 1 slot machine licensee under 3 Pa.C.S. Chapter 93 (relating to race horse industry reform).

 (4) At a Category 4 licensed facility, if the holder of the Category 4 slot machine license also holds a Category 1, 2 or 3 slot machine license and has acquired a sports wagering certificate under that Category 1, 2 or 3 license.

 (5) Through a single interactive sports wagering web site or mobile application that clearly and prominently displays the name of the sports wagering certificate holder.

 (c) Sports wagering certificate holders may employ the services of a sports wagering operator to assist its sports wagering operations through any or all of the means identified in subsection (b).

 (i) A sports wagering certificate holder may employ the services of two sports wagering operators only if one sports wagering operator provides services related to retail sports wagering and the other provides services related to interactive or mobile sports wagering.

 (ii) A sports wagering certificate holder may only offer one sports wagering web site and one sports wagering mobile application.

 (d) A sports wagering certificate holder or a sports wagering operator may not permit the following individuals to engage in sports wagering activities:

 (1) Individuals under 21 years of age.

 (2) Individuals on the Board's sports wagering exclusion list.

 (3) Individuals on the Board's casino self-exclusion list for retail sports wagering or the interactive gaming self-exclusion list for interactive or mobile sports wagering.

 (4) Individuals located outside of Pennsylvania.

 (e) A sports wagering certificate holder or a sports wagering operator seeking to offer interactive or mobile sports wagering shall have a server or other equipment located in this Commonwealth that is capable of receiving sports wagering bets and that conforms with the requirements set forth by the Board in Subpart L (relating to interactive gaming).

 (f) A sports wagering certificate holder or a sports wagering operator seeking to offer interactive or mobile sports wagering shall utilize geolocation tools to ensure players placing sports wagering bets are located in this Commonwealth.

 (g) As set forth in § 1408a.9 (relating to integrity monitoring), a sports wagering certificate holder or a sports wagering operator shall employ the services of a third-party integrity monitor that is certified by the Board as required under § 1405a.1(a)(4) (relating to general sports wagering gaming service provider requirements) to assist the sports wagering certificate holder or a sports wagering operator in protecting against and identifying suspicious or illegal sports wagering activities, or otherwise demonstrate to the Board's satisfaction that it has established an in-house unit capable of performing this function with appropriate segregation of functions and reporting duties.

 (h) As set forth in § 1408a.8 (relating to risk management), a sports wagering certificate holder or sports wagering operators shall employ the services of a third-party risk manager that is certified by the Board as required under § 1405a.1(a)(4) to assist the certificate holder or a sports wagering operator to manage the risk and liabilities associated with operating a sportsbook, or otherwise demonstrate to the Board's satisfaction that it has established an in-house unit capable of performing this function with appropriate segregation of functions and reporting duties.

 (i) A sports wagering certificate holder or a sports wagering operator may not commence sports wagering operations through any of the means identified in subsection (b) to players in this Commonwealth until the Board approves all necessary associated applications, including applications of key employees, gaming employees, manufacturers, suppliers and gaming service providers.

 (j) A sports wagering certificate holder or a sports wagering operator shall comply with all applicable Federal laws governing the conduct of sports wagering and interstate commerce.

§ 1401a.6. Permitted sports wagering activities.

 (a) A sports wagering certificate holder or sports wagering operator shall submit to the Board for approval the events and types of wagers it proposes offering to players prior to accepting any sports wagering bets.

 (b) The Board may permit a sports wagering certificate holder or sports wagering operator to offer wagering on any of the following sporting events:

 (1) Professional athletic events.

 (2) Collegiate athletic events.

 (3) Professional motor race events.

 (4) International team and international individual athletic events.

 (5) Any other sporting events as approved by the Board.

 (c) The Board may permit a sports wagering certificate holder or sports wagering operator to offer any of the following types of wagers on the sporting events or on the individual performance statistics of athletes in a sporting event enumerated in subsection (b):

 (1) Exchange wagering—A marketplace which permits patrons to bet with or against each other through a gaming platform operated and managed by a sports wagering certificate holder or sports wagering operator.

 (2) In-game wagers—Wagers placed on the outcome of a sporting event or proposition wagers made after the athletic event has started and can continue during the course of live play of the athletic event.

 (3) Parlay wagers—A wager on two or more outcomes in which all outcome wagers must win or cover for the patron to win or, a series of three or more teams in 2-team parlays.

 (4) Proposition wagering—Wagers placed on the occurrence or nonoccurrence of a specific outcome of events within a game not directly involving the game's final outcome.

 (5) Straight wagers—A pre-game or pre-match wager on a single game or single event that will be determined by a point spread, money line or total score.

 (6) Other types of wagers as approved by the Board.

 (d) A sports wagering certificate holder or a sports wagering operator shall make available to patrons a clear explanation of all types of wagers permitted by the Board and events on which those wagers are permitted.

 (e) A sports wagering certificate holder or sports wagering operator may place a layoff wager with another sports wagering certificate holder or sports wagering operator located in this Commonwealth for the purpose of offsetting patron wagers made under this subpart provided that the following occurs:

 (1) The sports wagering certificate holder or sports wagering operator placing the layoff wager discloses its identity to the sports wagering certificate holder or sports wagering operator receiving the layoff wager.

 (2) The receiving sports wagering certificate holder or sports wagering operator agrees to accept the layoff wager after receiving notification of the identity of the sports wagering certificate holder or sports wagering operator placing the layoff wager.

 (f) A sports wagering certificate holder or sports wagering operator acting may seek and accept layoff wagers from an authorized trader under a layoff wager agreement submitted under subsection (f)(1)(B)(i) for the purposes of offsetting patron wagers.

 (1) The sports wagering certificate holder or sports wagering operator seeking and accepting the layoff wagers has set forth in its internal controls under Chapter 1408a (relating to sports wagering accounting and internal controls) all of the following:

 (A) Procedures for initiating a request for a layoff wager from an authorized trader.

 (B) Procedures for entering a layoff wager agreement with an authorized trader.

 (i) All layoff wager agreements entered into between a sports wagering certificate holder or sports wagering operator and an authorized trader must be provided to the Board with the internal controls submission.

 (C) Procedures for recording a layoff wager.

 (D) Procedures for auditing layoff wagers.

 (2) An entity acting as an authorized trader under a layoff wager agreement must be licensed or certified by a regulatory oversight body in the area of banking, securities or insurance, and documentation of the licensure or certification shall be provided to the Board with the layoff wager agreement submitted under subsection (f)(1)(B)(i).

 (3) A layoff wager placed by an authorized trader may be done in person at a sports wagering certificate holder or sports wagering operator's retail sportsbook or by way of an interactive or mobile sports wagering system.

 (4) All layoff wagers placed by an authorized trader using a sports wagering certificate holder's or sports wagering operator's interactive or mobile sports wagering platform must be executed by means of the authorized trader's sports wagering account, and the individual placing the wager must be physically present in this Commonwealth.

§ 1401a.7. Prohibited and restricted sports wagering activities.

 (a) The following sports wagering activity is prohibited:

 (1) Wagering on high school sporting events governed by the Pennsylvania Interscholastic Athletic Association or a similar governing body.

 (2) Wagering on amateur sporting events that have not otherwise been specifically approved by the Board.

 (3) Wagering on the account of or on behalf of any other person, or any other form of proxy wagering.

 (4) Any other sports wagering activity as prohibited by the Board.

 (b) A sports wagering certificate holder or sports wagering operator is prohibited from:

 (1) Knowingly accepting wagers from athletes on sporting events of the type in which the athlete participates as well as sporting events governed by the same governing body under which the athlete competes.

 (2) Knowingly accepting wagers from a person who holds a position of authority or influence sufficient to exert influence over the participants in a sporting event, or a person professionally connected to a sporting event or governing body including referees, officials, coaches, managers, handlers, athletic trainers or a person with access to certain types of exclusive information on any sporting event overseen by the governing body.

 (3) Knowingly accepting wagers from a person the certificate holder or operator has reason to believe or suspect is placing the wager on behalf of or for the benefit of another individual that is prohibited from participating in sports wagering under these regulations or other applicable State or Federal law.

 (4) Knowingly accepting wagers from a person the sports wagering certificate holder or sports wagering operator has reason to believe or suspect is attempting to place multiple wagers or structure wagers in any manner that is an attempt to evade or circumvent these regulations or other applicable State or Federal law.

 (5) Knowingly accepting or holding cash or cash equivalents with the understanding that the money will be used to place a wager upon the occurrence of a specified future contingency unless a sports wagering ticket/voucher detailing the wager is immediately issued upon the sports wagering certificate holder's and sports wagering operator's acceptance of the money.

 (6) Knowingly accepting any wagers other than those permitted by the Board.

 (7) Knowingly accepting wagers on events and odds other than those posted or otherwise available to the public by the sports wagering certificate holder or sports wagering operator.

 (8) Knowingly accepting a wager from or making payment to a person acting behalf of any other person, or any other form of proxy wagering.

 (9) Knowingly allowing a person to make a wager utilizing the account of another person.

 (c) If an athlete or person who holds a position of authority or influence sufficient to exert influence over the participants in a sporting event, or a person professionally connected to a sporting event or governing body including coaches, managers, handlers, athletic trainers, team physicians or other physicians providing medical consultation or treatment of an athletic participant or a person with access to certain types of exclusive information on any sporting event overseen by the governing body owns a 10% or more direct or indirect ownership interest in or control of a sports wagering certificate holder or a sports wagering operator, the certificate holder or operator shall not accept wagers on any sporting events in which the athlete, person, or team or governing body the individual is professionally connected to participates.

 (d) If a sports wagering certificate holder or sports wagering operator owns a 10% or more direct or indirect ownership interest in or control of an athletic team, organization or governing body of athletic teams or organizations, the certificate holder or operator shall not accept wagers on any sporting events in which that team or organization participates, or on any sporting event overseen by that governing body of athletic teams or organizations.

§ 1401a.8. Persons prohibited from engaging in sports wagering activities.

 (a) No person under 21 years of age of may engage in sports wagering with a sports wagering certificate holder or sports wagering operator.

 (b) No collegiate, amateur or professional athlete, referee, official, coach, manager, handler or athletic trainer or employee or contractor of a team or athletic organization who has access to nonpublic or exclusive information concerning an athlete or team may engage in sports wagering on a sporting event or the performance of an individual in a sporting event in which the person or team is participating.

 (c) No collegiate, amateur or professional athlete, referee, official, coach, manager, handler, athletic trainer or employee of a team or athletic organization who has access to nonpublic or exclusive information concerning an athlete or team may engage in sports wagering on a sporting event or the performance of an individual in sporting events in the sport or league in which the person is involved.

 (d) No person identified in subsections (a)—(c) may collect any winnings or recoup any losses from a sports wagering certificate holder or sports wagering operator as a result of engaging in sports wagering in violation of this section.

 (e) Winnings of a person prohibited from engaging in sports wagering under this section shall be confiscated and retained by the sports wagering certificate holder or sports wagering operator and shall properly be accounted for in all necessary reports.

 (f) An athletic team or the governing body or league of an athletic team may provide to the Board a list of all persons within the team's organization as well as all league officials or referees prohibited from engaging in sports wagering under this section, along with the specific type of sporting events from which the person is prohibited from participating in sports wagering activities. The Board shall provide that list of persons identified by the athletic team or governing body or league to sports wagering certificate holders and sports wagering operators to facilitate these prohibitions on sports wagering activities.

§ 1401a.9. Physical characteristics of sports wagering areas; security and surveillance of sports wagering area; other requirements.

 (a) A sports wagering certificate holder or sports wagering operator shall establish a physical, land-based retail sportsbook in one of the locations set forth in § 1401a.5(b)(1)—(4) (relating to conduct of sports wagering generally).

 (b) A sports wagering area shall be a single area of dedicated public space with clearly established walls or defined borders. Satellite sports wagering areas located within a permitted location under § 1401a.5(b)(1)—(4) shall also be permitted upon approval by the Board.

 (c) A sports wagering area shall include a restricted sports wagering area for conducting sports wagering transactions that:

 (1) Shall be designed and constructed to provide maximum security for the materials stored and the activities performed therein, with the design and construction approved by the Board.

 (2) Includes one or more ticket writer windows, each of which shall contain:

 (i) A writer's drawer and terminal through which financial transactions related to sports wagering will be conducted. Writers shall not commingle funds with other sources and shall not transfer funds directly with another writer.

 (ii) A permanently affixed number, which shall be visible to surveillance.

 (iii) Windows, as approved by the Board, which shall be fully enclosed and designed to prevent direct access to the materials stored and activities performed therein.

 (iv) Manually triggered silent alarms, which shall be connected directly to surveillance and security.

 (v) Surveillance coverage capable of accurate visual monitoring and recording of any activities, including the capturing of a patron's facial image when conducting transactions at the counter.

 (vi) An alarm for each exit door that is not a mantrap.

 (vii) A secure location, such as a vault, for the purpose of storing funds issued by the cage to be used in the operation of sports wagering. The secure location shall:

 (A) Be located in an area not open to the public.

 (B) Have surveillance cameras capable of accurate visual monitoring and recording of any activities in the area.

 (c) A sports wagering area shall have an operating balance of no more than $1 million.

 (1) Whenever a retail sportsbook accumulates funds in excess of $1 million, the excess funds shall be transferred to the cage no later than at the end of each shift.

 (2) The funds shall be transferred with appropriate licensed employee and container shall be accompanied by a security officer.

 (3) Prior to transporting the funds, security shall notify the surveillance department that the transfer will take place.

 (d) A sports wagering area may have slot machines or other authorized games with the approval of the Board, unless the sports wagering area is in a nonprimary location of a Category 1 slot machine licensee.

 (e) A sports wagering certificate holder or sports wagering operator shall include signage in the sports wagering area that displays ''If you or someone you know has a gambling problem, call 1-800-GAMBLER,'' or comparable language approved by the Board, including in print advertisements or other media advertising the sports wagering operations of the sports wagering certificate holder or sports wagering operator.

CHAPTER 1402. (Reserved)

Sec.

1402.1—1402.3. (Reserved).

CHAPTER 1402a. SPORTS WAGERING OPERATORS

Sec.

1402a.1.	Sports wagering operator requirements.
1402a.2.	Sports wagering operator application and standards.
1402a.3.	Sports wagering operator license term and renewal.
1402a.4.	Sports wagering operator change of control.

§ 1402a.1. Sports wagering operator requirements.

 A person seeking to operate sports wagering on behalf of a sports wagering certificate holder in this Commonwealth may apply with the Board for a sports wagering operator license.

§ 1402a.2. Sports wagering operator application and standards.

 (a) An applicant for a sports wagering operator license shall submit all of the following:

 (1) An Entity Enterprise Application and Disclosure Information Form unless otherwise directed by the Board.

 (2) The nonrefundable application fee posted on the Board's web site.

 (3) A diversity plan as set forth in section 1325(b) of the act (relating to license or permit issuance) and Chapter 481a (relating to diversity).

 (4) An application from every principal under Chapter 433a (relating to principal licenses) and § 1406a.2 (relating to sports wagering principals) and key employee under Chapter 435a (relating to key, gaming and nongaming employees; Board-issued credentials) and § 1406a.3 (relating to sports wagering key employees) as specified by the Enterprise Application and Disclosure Information Form.

 (b) In determining whether an applicant is suitable to be licensed as a sports wagering operator under this section, the Board will consider all of the following:

 (1) The financial fitness, good character, honesty, integrity and responsibility of the sports wagering operator license applicant.

 (2) If all principals of the sports wagering operator license applicant are eligible and suitable under the standards of section 1311.1 of the act (relating to licensing of principals).

 (3) The integrity of all financial backers.

 (4) The suitability of the sports wagering operator license applicant and the principals of the sports wagering operator license applicant based on the satisfactory results of all of the following:

 (i) The background investigation of the principals.

 (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.

§ 1402a.3. Sports wagering operator license term and renewal.

 (a) A sports wagering operator license and the renewal thereof is valid for 5 years from the date of approval of the application by the Board.

 (b) A renewal application for a sports wagering operator license shall be filed at least 6 months prior to the expiration of the current license.

 (c) A sports wagering operator license for which a completed renewal application and fee has been received by the Board will continue in effect until acted upon by the Board.

§ 1402a.4. Sports wagering operator change of control.

 (a) For purposes of this section, a change of control of a sports wagering operator will be deemed to have occurred when a person or group of persons acquires:

 (1) More than 20% of a sports wagering operator's securities, assets or other ownership interests.

 (2) More than 20% of the securities or other ownership interests of a corporation or other form of business entity that owns directly or indirectly at least 20% of the voting or other securities or other ownership interests of the sports wagering operator.

 (3) Any other interest in a sports wagering operator which allows the acquirer to control the sports wagering operator.

 (b) A sports wagering operator shall notify the Bureau and the Bureau of Licensing in a form or manner prescribed by the Bureau of Licensing immediately upon becoming aware of any proposed or contemplated change of control of the sports wagering operator.

 (c) Prior to acquiring a controlling interest in a sports wagering operator, the acquirer shall file a petition in accordance with § 493a.4 (relating to petitions generally) requesting Board approval of the acquisition. The petition must include all of the following:

 (1) A copy of all documents governing the acquisition.

 (2) Completed applications for the acquiring company, as required under § 1402a.2 (relating to sports wagering operator application and standards) and an application from every principal under Chapter 433a (relating to principal licenses) and § 1406a.2 (relating to sports wagering principals) and any identified key employee under Chapter 435a (relating to key, gaming and nongaming employees; Board-issued credentials) and § 1406a.3 (relating to sports wagering key employees) as specified by the Enterprise Entity Application and Disclosure Information Form and other persons as determined by the Board.

 (d) A person or group of persons seeking to acquire a controlling interest in a sports wagering operator shall promptly provide any additional information requested by the Board and Board staff and cooperate with the Bureau in any investigations related to the petition filed under subsection (c).

 (e) A person or group of persons may not acquire a controlling interest in a sports wagering operator until the petition required under subsection (c) has been approved. A person or group of persons seeking to acquire a controlling interest in a sports wagering operator and the sports wagering operator may enter into an agreement of sale that is contingent on Board approval of the petition.

 (f) The requirements in this section do not apply to the acquisition of a controlling interest in a sports wagering operator when all of the following conditions are met:

 (1) The acquirer is an existing licensed slot machine licensee, table game certificate holder, interactive gaming operator or sports wagering operator.

 (2) The existing licensed slot machine licensee, table game certificate holder, interactive gaming operator or sports wagering operator has provided the Bureau and the Bureau of Licensing notification and a copy of all documents governing the acquisition at least 60 days prior to the acquisition.

 (3) After reviewing the documentation, the Bureau and the Bureau of Licensing determine that the filing of a petition is not required.

CHAPTER 1403. (Reserved)

Sec.

1403.1—1403.7. (Reserved).

CHAPTER 1403a. SPORTS WAGERING MANUFACTURER

Sec.

1403a.1.	Sports wagering manufacturer license requirements.
1403a.2.	Sports wagering manufacturer license application and standards.
1403a.3.	Sports wagering manufacturer license term and renewal.
1403a.4.	Sports wagering manufacturer abbreviated license process.
1403a.5.	Sports wagering manufacturer licensee responsibilities.
1403a.6.	Sports wagering manufacturer licensee change of control.

§ 1403a.1. Sports wagering manufacturer license requirements.

 (a) A person seeking to manufacture, build, rebuild, fabricate, assemble, produce, program, design, sell, lease, offer or otherwise make modifications to any authorized sports wagering device or associated equipment for use or operation in this Commonwealth for sports wagering purposes shall apply to the Board for a sports wagering manufacturer license.

 (b) In accordance with section 1317.1(e)(3) of the act (relating to manufacturer licenses), an applicant for or the holder of a sports wagering 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 sports wagering supplier license.

§ 1403a.2. Sports wagering manufacturer license application and standards.

 (a) An applicant for a sports wagering manufacturer license shall submit all of the following:

 (1) An Enterprise Entity Application and Disclosure Information Form for the applicant and each of the applicant's principal affiliates unless otherwise directed by the Board.

 (2) The nonrefundable application fee posted on the Board's web site.

 (3) A diversity plan as set forth in section 1325(b) of the act (relating to license or permit issuance) and Chapter 481a (relating to diversity).

 (4) An application from every principal under Chapter 433a (relating to principal licenses) and § 1406a.2 (relating to sports wagering principals) and key employee under Chapter 435a (relating to key, gaming and nongaming employees; Board-issued credentials) and § 1406a.3 (relating to sports wagering key employees) as specified by the Enterprise Entity Application and Disclosure Information Form and other persons as determined by the Board.

 (5) An affirmation that neither the sports wagering manufacturer license applicant nor any of its affiliates, intermediaries, subsidiaries or holding companies is an applicant for or holder of a slot machine license and that the sports wagering manufacturer license applicant has neither applied for nor holds a sports wagering supplier license.

 (b) In addition to the materials required under subsection (a), an applicant for a sports wagering manufacturer license shall do all of the following:

 (1) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications; statement of conditions; wagering restrictions).

 (2) Demonstrate that the sports wagering manufacturer license applicant has the ability to manufacture, build, rebuild, repair, fabricate, assemble, produce, program, design or otherwise make modifications to authorized sports wagering devices or associated equipment which meet one or more of the following criteria:

 (i) Are specifically designed for use in the operation of sports wagering or a sports wagering device or associated equipment.

 (ii) Are needed to conduct authorized sports wagering.

 (iii) Have the capacity to determine the outcome of the sports wagering activity.

 (iv) Have the capacity to affect the calculation, storage, collection or control of gross sports wagering gaming revenue.

 (c) In determining whether an applicant is suitable to be licensed as a sports wagering manufacturer under this section, the Board will consider all of the following:

 (1) The financial fitness, good character, honesty, integrity and responsibility of the sports wagering manufacturer license applicant.

 (2) If all principals of the sports wagering manufacturer license applicant are eligible and suitable under the standards of section 1311.1 of the act (relating to licensing of principals).

 (3) The integrity of all financial backers.

 (4) The suitability of the sports wagering manufacturer license applicant and the principals of the sports wagering manufacturer license applicant based on the satisfactory results of all of the following:

 (i) The background investigation of the principals.

 (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.

§ 1403a.3. Sports wagering manufacturer license term and renewal.

 (a) A sports wagering manufacturer license and the renewal thereof is valid for 5 years from the date of approval of the application by the Board.

 (b) A renewal application for a sports wagering manufacturer license shall be filed at least 6 months prior to the expiration of the current license.

 (c) A sports wagering manufacturer license for which a completed renewal application and fee has been received by the Board will continue in effect until acted upon by the Board.

§ 1403a.4. Sports wagering manufacturer abbreviated license process.

 (a) The Board may use an abbreviated licensing process if the sports wagering manufacturer license applicant holds a license issued by the Board to manufacture slot machines, table games, table game devices, interactive games, video gaming terminals or associated equipment and all of the following shall apply:

 (1) The license was issued by the Board and is currently in good standing.

 (2) The entity to whom the manufacturer license was issued affirms there has been no material change in circumstances relating to the licensee.

 (3) The Board determines, in its sole discretion, that there has been no material change in circumstances relating to the licensee that necessitates that the abbreviated process not be used.

 (b) This section may not be construed to waive any fees associated with obtaining a sports wagering manufacturer license through the application process in this Commonwealth.

§ 1403a.5. Sports wagering manufacturer licensee responsibilities.

 (a) A holder of a sports wagering manufacturer license has a continuing duty to do all of the following:

 (1) Comply with the general requirements in Chapters 421a and 423a (relating to general provisions; and applications; statement of conditions; wagering restrictions).

 (2) For publicly traded sports wagering manufacturer licensees, provide notification of all SEC filings or, if the sports wagering manufacturer licensee is publicly traded on a foreign exchange, a copy of all filings submitted to the securities regulator that has jurisdiction over the foreign publicly traded corporation. The notification or copies of the filings shall be submitted to the Bureau of Licensing within 30 days after the date of filing with the SEC or securities regulator that has jurisdiction over the foreign publicly traded corporation.

 (b) An employee of a licensed sports wagering manufacturer who is a gaming or nongaming employee as defined in §§ 401a.3 and 1401a.2 (relating to definitions) shall obtain a permit under §§ 435a.3 and 1406a.4 (relating to occupation permit; and sports wagering gaming employees) or registration under §§ 435a.5 and 1406a.5 (relating to nongaming employee registration; and sports wagering nongaming employees).

§ 1403a.6. Sports wagering manufacturer licensee change of control.

 (a) For purposes of this section, a change of control of a sports wagering manufacturer licensee will be deemed to have occurred when a person or group of persons acquires:

 (1) More than 20% of a sports wagering manufacturer licensee's securities, assets or other ownership interests.

 (2) More than 20% of the securities or other ownership interests of a corporation or other form of business entity that owns directly or indirectly at least 20% of the voting or other securities or other ownership interests of the sports wagering manufacturer licensee.

 (3) Any other interest in a sports wagering manufacturer licensee which allows the acquirer to control the sports wagering manufacturer licensee.

 (b) A sports wagering manufacturer licensee shall notify the Bureau and the Bureau of Licensing in a form or manner prescribed by the Bureau of Licensing immediately upon becoming aware of any proposed or contemplated change of control of the sports wagering manufacturer licensee.

 (c) Prior to acquiring a controlling interest in a sports wagering manufacturer licensee, the acquirer shall file a petition in accordance with § 493a.4 (relating to petitions generally) requesting Board approval of the acquisition. The petition must include all of the following:

 (1) A copy of all documents governing the acquisition.

 (2) Completed applications for the acquiring company, as required under this chapter and an application from every principal under Chapter 433a (relating to principal licenses) and § 1406a.2 (relating to sports wagering principals) and any identified key employee under Chapter 435a (relating to key, gaming and nongaming employees; Board-issued credentials) and § 1406a.3 (relating to sports wagering key employees) as specified by the Enterprise Entity Application and Disclosure Information Form and other persons as determined by the Board.

 (3) An affirmation that neither the acquirer nor any of its affiliates, intermediaries, subsidiaries or holding companies is a slot machine licensee or sports wagering certificate holder and that the acquirer has neither applied for nor holds a sports wagering supplier license.

 (d) A person or group of persons seeking to acquire a controlling interest in a sports wagering manufacturer licensee shall promptly provide any additional information requested by the Board and Board staff and cooperate with the Bureau in any investigations related to the petition filed under subsection (c).

 (e) A person or group of persons may not acquire a controlling interest in a sports wagering manufacturer licensee until the petition required under subsection (c) has been approved. A person or group of persons seeking to acquire a controlling interest in a sports wagering manufacturer licensee and the sports wagering manufacturer licensee may enter into an agreement of sale that is contingent on Board approval of the petition.

 (f) The requirements of this section do not apply to the acquisition of a controlling interest in a sports wagering manufacturer licensee when all of the following conditions are met:

 (1) The acquirer is an existing licensed slot machine, table game, interactive gaming, sports wagering or video gaming terminal manufacturer.

 (2) The existing licensed sports wagering manufacturer has provided the Bureau and the Bureau of Licensing notification and a copy of all documents governing the acquisition at least 60 days prior to the acquisition.

 (3) After reviewing the documentation, the Bureau and the Bureau of Licensing determine that the filing of a petition is not required.

CHAPTER 1404. (Reserved)

Sec.

1404.1—1404.7. (Reserved).

CHAPTER 1404a. SPORTS WAGERING SUPPLIER

Sec.

1404a.1.	Sports wagering supplier license requirements.
1404a.2.	Sports wagering supplier application and standards.
1404a.3.	Sports wagering supplier license term and renewal.
1404a.4.	Sports wagering supplier abbreviated license process.
1404a.5.	Sports wagering supplier licensee responsibilities.
1404a.6.	Sports wagering supplier change of control.

§ 1404a.1. Sports wagering supplier license requirements.

 (a) A person seeking to sell, lease, offer or otherwise provide, distribute or service sports wagering devices or associated equipment to a sports wagering certificate holder or sports wagering operator in this Commonwealth shall apply to the Board for a sports wagering supplier license.

 (b) In accordance with sections 1317 and 1317.1 of the act (relating to supplier licenses; and manufacturer licenses), an applicant for or the holder of a sports wagering supplier license or any of the sports wagering supplier applicant's or licensee's affiliates, intermediaries, subsidiaries or holding companies may not apply for or hold a slot machine license or a sports wagering manufacturer license.

§ 1404a.2. Sports wagering supplier application and standards.

 (a) An applicant for a sports wagering supplier license shall submit all of the following:

 (1) An Enterprise Entity Application and Disclosure Information Form for the sports wagering supplier applicant and each of the sports wagering supplier applicant's principal affiliates unless otherwise directed by the Board.

 (2) The nonrefundable application fee posted on the Board's web site.

 (3) A diversity plan as set forth in section 1325(b) of the act (relating to license or permit issuance) and Chapter 481a (relating to diversity).

 (4) An application from every principal under Chapter 433a (relating to principal licenses) and § 1406a.2 (relating to sports wagering principals) and key employee under Chapter 435a (relating to key, gaming and nongaming employees; Board-issued credentials) and § 1406a.3 (relating to sports wagering key employees) as specified by the Enterprise Entity Application and Disclosure Information Form and other persons as determined by the Board.

 (5) An affirmation that neither the sports wagering supplier license applicant nor any of its affiliates, intermediaries, subsidiaries or holding companies is an applicant for or holder of a slot machine license and that the sports wagering supplier license applicant has neither applied for nor holds a sports wagering manufacturer license.

 (b) In addition to the materials required under subsection (a), an applicant for a sports wagering supplier license shall comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications; statement of conditions; wagering restrictions).

 (c) In determining whether a sports wagering supplier license applicant is suitable to be licensed as a sports wagering supplier under this section, the Board will consider all of the following:

 (1) The financial fitness, good character, honesty, integrity and responsibility of the sports wagering supplier license applicant.

 (2) If all principals of the sport wagering supplier license applicant are eligible and suitable under the standards of section 1311.1 of the act (relating to licensing of principals).

 (3) The integrity of all financial backers.

 (4) The suitability of the sport wagering supplier license applicant and the principals of the applicant based on the satisfactory results of all of the following:

 (i) The background investigation of the principals.

 (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.

§ 1404a.3. Sports wagering supplier license term and renewal.

 (a) A sports wagering supplier license and the renewal thereof is valid for 5 years from the date of approval of the application by the Board.

 (b) A renewal application for a sports wagering supplier license shall be filed at least 6 months prior to the expiration of the current license.

 (c) A sports wagering supplier license for which a completed renewal application and fee has been received by the Board will continue in effect until acted upon by the Board.

§ 1404a.4. Sports wagering supplier abbreviated license process.

 (a) The Board may use an abbreviated licensing process if the sports wagering supplier license applicant holds a license issued by the Board to supply slot machines, table games, table game devices, interactive gaming devices, video gaming terminal or associated equipment and all of the following apply:

 (1) The license was issued by the Board and is currently in good standing.

 (2) The entity to whom the supplier license was issued affirms there has been no material change in circumstances relating to the license.

 (3) The Board determines, in its sole discretion, that there has been no material change in circumstances relating to the licensee applying for the sports wagering supplier license that necessitates that the abbreviated process not be used.

 (b) This section may not be construed to waive any fees associated with obtaining a sports wagering supplier license through the application process in this Commonwealth.

§ 1404a.5. Sports wagering supplier licensee responsibilities.

 (a) A holder of a sports wagering supplier license has a continuing duty to do all of the following:

 (1) Comply with the general requirements in Chapters 421a and 423a (relating to general provisions; and applications; statement of conditions; wagering restrictions).

 (2) For publicly traded sports wagering supplier licensees, provide notification of all SEC filings or, if the sports wagering supplier licensee is publicly traded on a foreign exchange, a copy of all filings submitted to the securities regulator that has jurisdiction over the foreign publicly traded corporation. The notification or copies of the filings shall be submitted to the Bureau of Licensing within 30 days after the date of filing with the SEC or securities regulator that has jurisdiction over the foreign publicly traded corporation.

 (b) An employee of a licensed sports wagering supplier who is a gaming or nongaming employee as defined in §§ 401a.3 and 1401a.2 (relating to definitions) shall obtain a permit under §§ 435a.3 and 1406a.4 (relating to occupation permit; and sports wagering gaming employees) or registration under §§ 435a.5 and 1406a.5 (relating to nongaming employee registration; and sports wagering nongaming employees).

§ 1404a.6. Sports wagering supplier change of control.

 (a) For purposes of this section, a change of control of a sports wagering supplier licensee will be deemed to have occurred when a person or group of persons acquires:

 (1) More than 20% of a sports wagering supplier licensee's securities, assets or other ownership interests.

 (2) More than 20% of the securities or other ownership interests of a corporation or other form of business entity that owns directly or indirectly at least 20% of the voting or other securities or other ownership interests of the sports wagering supplier licensee.

 (3) Any other interest in a sports wagering supplier licensee which allows the acquirer to control a sports wagering supplier licensee.

 (b) A sports wagering supplier licensee shall notify the Bureau and the Bureau of Licensing in a form or manner prescribed by the Bureau of Licensing immediately upon becoming aware of any proposed or contemplated change of control of the sports wagering supplier licensee.

 (c) Prior to acquiring a controlling interest in a sports wagering supplier licensee, the acquirer shall file a petition in accordance with § 493a.4 (relating to petitions generally) requesting Board approval of the acquisition. The petition must include all of the following:

 (1) A copy of all documents governing the acquisition.

 (2) Completed applications for the acquiring company, as required under this chapter and an application from every principal under Chapter 433a (relating to principal licenses) and § 1406a.2 (relating to sports wagering principals) and any identified key employee under Chapter 435a (relating to key, gaming and nongaming employees; Board-issued credentials) and § 1406a.3 (relating to sports wagering key employees) as specified by the Enterprise Entity Application and Disclosure Information Form and other persons as determined by the Board.

 (3) An affirmation that neither the acquirer nor any of its affiliates, intermediaries, subsidiaries or holding companies is a slot machine licensee or sports wagering certificate petitioner or holder and that the acquirer has neither applied for nor holds a sports wagering manufacturer license.

 (d) A person or group of persons seeking to acquire a controlling interest in a sports wagering supplier licensee shall promptly provide any additional information requested by the Board and Board staff and cooperate with the Bureau in any investigations related to the petition filed under subsection (c).

 (e) A person or group of persons may not acquire a controlling interest in a sports wagering supplier licensee until the petition, required under subsection (c), has been approved. A person or group of persons seeking to acquire a controlling interest in a sports wagering supplier licensee and the sports wagering supplier licensee may enter into a sales agreement that is contingent on Board approval of the petition.

 (f) The requirements of this section do not apply to the acquisition of a controlling interest in a sports wagering supplier licensee when all of the following conditions are met:

 (1) The acquirer is an existing licensed slot machine, table game, interactive gaming, sports wagering or video gaming terminal supplier.

 (2) The existing licensed sports wagering supplier has provided the Bureau and the Bureau of Licensing notification and a copy of all documents governing the acquisition at least 60 days prior to the acquisition.

 (3) After reviewing the documentation, the Bureau and the Bureau of Licensing determine that the filing of a petition is not required.

CHAPTER 1405. (Reserved)

Sec.

1405.1—1405.9. (Reserved). [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. Top Bottom