[37 Pa.B. 2695]
[Saturday, June 16, 2007]
[Continued from previous Web Page]
CHAPTER 437a. VENDOR CERTIFICATION AND REGISTRATION Sec.
437a.1. General vendor requirements. 437a.2. Vendor registration applications. 437a.3. Vendor certification applications. 437a.4. Principal certification. 437a.5. Key employee certification. 437a.6. Registration and certification term and renewal. 437a.7. Registered and certified vendor responsibilities. 437a.8. Approved vendors list; prohibited vendors. 437a.9. Permission to conduct business prior to certification or registration. 437a.10. Emergency vendor. 437a.11. Slot machine applicants' and licensees' duty to investigate. § 437a.1. General vendor requirements.
(a) A vendor seeking to conduct business with a slot machine applicant or licensee, except as provided in § 437a.10 (relating to emergency vendor), shall apply to the Board for registration if:
(1) The total dollar amount of business will be or is anticipated to be greater than $15,000 but $200,000 or less with a single slot machine applicant or licensee within a consecutive 12-month period.
(2) The total dollar amount of business will be or is anticipated to be greater than $15,000 but $500,000 or less with multiple slot machine applicants or licensees within a consecutive 12-month period.
(b) A vendor seeking to conduct business with a slot machine applicant or licensee, except as provided in § 437a.10 shall apply to the Board for certification if:
(1) The total dollar amount of business will be or is anticipated to be greater than $200,000 with a single slot machine applicant or licensee within a consecutive 12-month period.
(2) The total dollar amount of business will be or is anticipated to be greater than $500,000 with multiple slot machine applicants or licensees within a consecutive 12-month period.
(3) The vendor's employees will have access to restricted areas or the gaming floor.
(4) The Board notifies the vendor that certification is required based upon the Board's analysis of the vendor's services.
(c) The following persons are exempt from the vendor registration and the vendor certification requirements of this chapter:
(1) Public utilities which provide only one or more of the following services to a slot machine applicant or licensee:
(i) Water.
(ii) Sewerage.
(iii) Electricity.
(iv) Natural gas.
(2) Regulated insurance companies providing insurance to a slot machine applicant or licensee and its employees.
(3) Employee benefit and retirement plans and related administrators including incorporated 401K plans and employee stock purchase programs.
(4) National or local professional associates that receive funds from the slot machine applicant or licensee for the cost of enrollment, activities and membership.
(5) State, Federal and municipal operated agencies.
(6) Manufacturers and suppliers of liquor, wine and beer regulated by the Pennsylvania Liquor Control Board.
(7) State and Federally regulated banks or savings and loan associations where funds are deposited by slot machine licensees, not withstanding those sources or transactions provided to a slot machine licensee which require Board approval.
(8) Providers of professional services including accountants, attorneys, engineers and architects.
(9) Telecommunication service providers.
(10) Shipping services.
(11) Persons that engage in efforts to influence legislative action or administrative action on behalf of a principal for economic consideration.
(12) Public institutions of higher education.
(13) Professional entertainers, sports figures and other celebrities engaged by a slot machine licensee to appear at a slot machine licensee-sponsored special entertainment or promotional event.
(14) Newspapers, television stations, radio stations and providers of simulcast services that contract with slot machine applicants or licensees.
(d) Subsection (c) does not relieve a slot machine applicant or licensee of reporting obligations required by § 441a.12 (relating to maintaining agreements; filing of agreements).
(e) A vendor who provides goods or services that are not listed in subsection (c) may seek a waiver of vendor certification or registration requirements by filing a completed Vendor Certification Waiver Application.
(f) The Board may, in response to misrepresentations or changes in circumstances, revoke an exemption or waiver granted under this section and require the recipient of the exemption or waiver to comply with the vendor registration and certification requirements of this chapter.
§ 437a.2. Vendor registration applications.
(a) A vender seeking registration shall complete and the slot machine applicant or licensee for whom the vendor will provide goods or services shall submit an original and four copies of a Vendor Registration Form unless otherwise directed by the Board.
(b) In addition to the materials required under subsection (a), an applicant for a vendor registration shall:
(1) Promptly provide information requested by the Board relating to its application or regulation and cooperate with the Board in investigations, hearings and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(c) An applicant for a vendor registration will be required to reimburse the Board for costs incurred by the Board in conducting the review of the application, up to a maximum amount of $2,000.
(d) A vendor registration will not be issued until all fees have been paid.
§ 437a.3. Vendor certification applications.
(a) A vender seeking certification shall complete and the slot machine applicant or licensee for whom the vendor will provide goods or services shall submit:
(1) An original and four copies of a Vendor Certification Form unless otherwise directed by the Board.
(2) A nonrefundable application fee.
(3) A Vendor Certification Form for each affiliate, intermediary, subsidiary and holding company of the applicant.
(4) Applications for each principal and key employee as required by §§ 437a.4 and 437a.5 (relating to principal certification; and key employee certification).
(b) In addition to the materials required under subsection (a), an applicant for a vendor certification shall:
(1) Promptly provide information requested by the Board relating to its application or regulation and cooperate with the Board in investigations, hearings and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(c) A vendor certification will not be issued until all fees have been paid.
§ 437a.4. Principal certification.
(a) Principals of certified vendors or applicants thereof, including natural persons and entities, shall obtain a principal certification from the Board.
(b) Certified principals and applicants for principal certification are subject to the requirements and waiver provisions of Chapter 433a (relating to principal licenses).
§ 437a.5. Key employee certification.
(a) Key employees of certified vendors or applicants thereof shall obtain a key employee certification from the Board.
(b) Key employee applicants for certification and certified key employees are subject to the requirements and waiver provisions of § 435a.2 (relating to key employee license).
§ 437a.6. Registration and certification term and renewal.
(a) Certifications, registrations and renewals issued under this chapter will be valid for 4 years from the date of Board approval.
(b) A renewal application and renewal fee shall be submitted to the Board at least 60 days prior to the expiration of a certification or registration.
(c) A certification or registration for which a completed renewal application and fee has been received by the Board will continue in effect until the Board sends written notification to the holder of the certification or registration that the Board has approved or denied the certification or registration.
§ 437a.7. Registered and certified vendor responsibilities.
(a) A holder of a vendor certification or registration shall have a continuing duty to:
(1) Provide information requested by the Board relating to licensing or regulation; cooperate with the Board in investigations, hearings and enforcement and disciplinary actions; and comply with conditions, restrictions, requirements, orders and rulings of the Board in accordance with the act.
(2) Report a change in circumstances that may render the holder of a vendor certification or registration ineligible, unqualified or unsuitable to hold a certification or registration under the standards and requirements of the act and of this part.
(b) An employee of a certified vendor shall be required to obtain an occupational permit under § 435a.3 (relating to occupational permit) if:
(1) The employee is the onsite supervisor of other employees of the vendor whose duties of employment or incidental activities related to employment require the employees to be on the gaming floor or in a restricted area.
(2) The employee's duties of employment or incidental activities related to employment require the employee to be on the gaming floor or in a restricted area and require the employee to touch or have contact with a slot machine or associated equipment.
(c) An employee of a certified vendor that is not required to obtain an occupational permit under subsection (b) shall be required to obtain a nongaming employee registration under § 435a.5 (relating to nongaming employee registration) if:
(1) The employee's duties of employment or incidental activities related to employment require the employee to be on the gaming floor but do not require the employee to touch or have contact with a slot machine or associated equipment other than exterior cleaning.
(2) The employee's duties of employment or incidental activities related to employment require the employee to be in a restricted area, do not require the employee to touch or have contact with a slot machine or associated equipment other than exterior cleaning and the employee is under the constant supervision of an employee of the slot machine licensee who is licensed or permitted and who has the appropriate access clearance to be in the restricted area.
(d) Employees of a certified vendor who are not required to obtain an occupation permit or a nongaming employee registration under subsection (b) or (c) may be required to obtain an occupation permit or nongaming employee registration if the Board determines, after a review of the work being performed, that obtaining a permit or registration is necessary for the protection of the integrity of gaming.
§ 437a.8. Approved vendors list; prohibited vendors.
(a) The Board will maintain a list of approved registered or certified vendors and a list of prohibited vendors.
(b) A slot machine licensee or applicant may not enter into an agreement or continue to do business with a vendor listed as a prohibited vendor.
(c) The Board will consider the following factors in determining whether a vendor will be listed as a prohibited vendor:
(1) The failure of a vendor to apply for certification or registration after notice from the Board that certification or registration is required.
(2) The failure of a vendor to cooperate with the Board in the Board's review of the application for certification or registration.
(3) The vendor's certification or registration is suspended, revoked or denied.
(4) The vendor is restricted from reapplication by action of the Board.
(5) The vendor is temporarily prohibited from doing business with slot machine license applicants or licensees by action of the Board.
(d) A person or entity seeking to be removed from the list of prohibited vendors shall file a petition for removal in accordance with § 493a.4 (relating to petitions generally). The petition must state the specific grounds believed by the petitioner to constitute good cause for removal from the prohibited vendors list and how the vendor has cured the deficiencies that led to the vendor being placed on the prohibited vendors list.
§ 437a.9. Permission to conduct business prior to certification or registration.
(a) Notwithstanding § 437a.1 (relating to general vendor requirements), the Board may allow an applicant for a vendor certification or registration to conduct business with a slot machine applicant or licensee prior to the certification or registration of the vendor applicant if the following criteria are met:
(1) A completed Vendor Registration Form or Vendor Certification Form has been filed by the slot machine applicant or licensee in accordance with § 437a.2 or § 437a.3 (relating to vendor registration applications; and vendor certification applications).
(2) The slot machine applicant or licensee certifies that it has performed due diligence on the vendor.
(3) The slot machine applicant or licensee shows good cause for granting the written request.
(b) Permission to conduct business under this section will be for a period of 6 months.
(c) The Board may extend the relief for additional 6-month periods upon a showing of good cause by the slot machine applicant or licensee.
§ 437a.10. Emergency vendor.
(a) A slot machine licensee may utilize a vendor that is not registered or certified when a threat to public health, welfare or safety exists or circumstances outside the control of the slot machine applicant or licensee creates an urgency of need which does not permit the delay involved in using the formal method of vendor certification or registration.
(b) When using a vendor that is not registered or certified to respond to an emergency, the slot machine applicant or licensee shall:
(1) File a Vendor Notification Form with the Board within 72 hours of the vendor's commencement of services.
(2) Provide a written explanation to the Board of the basis for the emergency vendor procurement and for the selection of the particular vendor.
(3) File a Vendor Registration Form or Vendor Certification Form on behalf of the vendor within 20 business days of the filing of the Vendor Notification Form.
§ 437a.11. Slot machine applicants' and licensees' duty to investigate.
(a) An applicant for or holder of a slot machine license shall investigate the background and qualifications of the applicants for vendor registration or certification with whom it intends to have a contractual relationship or enter into an agreement. Certification or registration by the Board may not be relied upon as the sole criterion for entering into an agreement with a certified or registered vendor.
(b) An applicant for or holder of a slot machine license shall have an affirmative duty to avoid agreements or relationships with applicants for vendor registration or certification whose background or association is injurious to the public health, safety, morals, good order and general welfare of the people of this Commonwealth, who threaten the integrity of gaming in this Commonwealth or who discredit or tend to discredit the gaming industry in this Commonwealth or the Commonwealth.
(c) An agreement or contract between an applicant for or holder of an slot machine license and an applicant for or holder of a vendor registration or certification shall contain a cancellation clause that allows termination of the agreement or contract in the event that the Board or the slot machine applicant or licensee finds that the agreement or contract fails to meet the requirements of subsection (b). This provision applies to written and oral agreements and contracts.
Subpart C. SLOT MACHINE LICENSING
CHAPTER 441a. SLOT MACHINE LICENSES Sec.
441a.1. Definitions. 441a.2. Slot machine application restrictions and deadlines. 441a.3. Slot machine license application. 441a.4. Alternative Category 1 licensing standards. 441a.5. License fee payment bond or letter of credit requirements. 441a.6. Public input. 441a.7. Licensing hearings for slot machine licenses. 441a.8. Divestiture. 441a.9. Approval of a slot machine license. 441a.10. Notification of anticipated or actual changes in principals or key employees. 441a.11. Notification of new financial sources. 441a.12. Maintaining agreements; filing of agreements. 441a.13. Board review of agreements and records of agreements. 441a.14. Master purchasing and disbursement report. 441a.15. Slot machine license issuance bond requirement. 441a.16. Slot machine license term and renewal. 441a.17. Change in ownership or control of slot machine licensee and multiple slot machine license prohibition. 441a.18. Employee status report. 441a.19. Notice of employee misconduct and offenses. 441a.20. Slot machine license agreements. 441a.21. Management contracts. 441a.22. Category 1 slot machine licensees. 441a.23. Category 3 slot machine licensees. § 441a.1. Definitions.
For purposes of this subpart, the following words and terms have the following meanings, unless the context clearly indicates otherwise:
Amenities--Ancillary activities, services or facilities in which a registered guest or the transient public, in return for non-de minimis consideration, may participate at a resort hotel, including, but not limited to:
(i) Sports and recreational activities and facilities such as a golf course or golf driving range, tennis courts or swimming pools.
(ii) Health spa.
(iii) Convention, meeting and banquet facilities.
(iv) Entertainment facilities.
(v) Restaurant facilities.
Applicant--A person who applies to the Board to receive a slot machine license as defined in this section.
Developer--A person engaged by a slot machine applicant or licensee to construct a proposed licensed facility or to otherwise make land or buildings suitable for use as a licensed facility.
Guest rooms under common ownership--A room or group of rooms, including timeshare units, that are owned by a well-established resort hotel and that are available for rental.
Licensing hearing--A hearing before the Board in which an applicant for a grant of a permanent slot machine license or a Conditional Category 1 slot machine license will have an opportunity to present to the Board:
(i) Evidence concerning its eligibility for a license.
(ii) Evidence concerning its suitability for a license.
(iii) Evidence of how its proposed facility and operation addresses the criteria identified in section 1325(c) of the act (relating to license or permit issuance).
(iv) For applicants seeking licensure under section 1304 of the act (relating to Category 2 slot machine license), evidence which sets forth a comparison between the applicant and other applicants within the same category of licensure on the standards and criteria in the act.
Non-de minimis consideration--A payment of fair market value of at least $10 per patron paid to the resort hotel for use of one or more amenities.
Organization--Legal business entities that are under common ownership or control, including, but not limited to, affiliates, subsidiaries, intermediaries and holding companies.
Patron of amenities--An individual who is a registered attendee of a convention, meeting or banquet event or a participant in a sport or recreational event or any other social, cultural or business event held at a resort hotel or who participates in one or more of the amenities provided to registered guests of the resort hotel.
Slot machine license--A Category 1 slot machine license under section 1302 of the act (relating to Category 1 slot machine license), a Conditional Category 1 slot machine license under section 1315 of the act (relating to Conditional Category 1 license), a Category 2 slot machine license under section 1304 of the act (relating to Category 2 slot machine license) and a Category 3 slot machine license under section 1305 of the act (relating to Category 3 slot machine license).
Well-established resort hotel--A resort hotel having at least 275 guest rooms under common ownership at the time of application for a Category 3 slot machine license and having substantial year-round recreational guest amenities.
§ 441a.2. Slot machine application restrictions and deadlines.
(a) Under section 1304 of the act (relating to category 2 slot machine license), an applicant for a Category 2 slot machine license under section 1301 of the act (relating to authorized slot machine licenses), its affiliate, intermediary, subsidiary or holding company, may not possess any ownership or financial interest in any person eligible to apply for a Category 1 slot machine license or its affiliates, intermediaries, subsidiaries or holding companies.
(b) The Board will initiate the formal procedure for the acceptance, consideration and final resolution of applications for slot machine licenses by setting a filing period for filing of Category 1, 2 or 3 slot machine license applications. The filing period set by the Board will be posted on the Board's website (www.pgcb.state.pa.us).
(c) After the expiration of the filing period established by the Board under subsection (b), the Board will set a completion date by which all filed applications are to be complete. An application that is not complete, as determined by the Board, by the completion date will not be considered. The completion date set by the Board under this subsection will be published in the Pennsylvania Bulletin at least 30 days prior to the completion date.
§ 441a.3. Slot machine license application.
(a) An applicant for a slot machine license shall submit an application which includes the following:
(1) An original and three copies of the Conditional/Category 1, Category 2 or Category 3 Application and Disclosure Information Form.
(2) A nonrefundable application fee.
(3) A license or waiver application for each principal and key employee under Chapters 433a and 435a (relating to principal licenses; and employees), including an original and three copies of the Multi-jurisdictional Personal History Disclosure Form, the Pennsylvania Supplement and a nonrefundable background investigation deposit to be set by the Board and provided in a fee schedule for each principal and each key employee.
(4) Fingerprints for the applicant and each principal and key employee.
(5) 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), which shall be signed by the chief executive officer of the applicant.
(6) If a temporary land-based facility is to be licensed, a plan for how the licensee will transition to a permanent facility, including a date for completion of the permanent facility. A permanent facility shall be the facility proposed by the applicant, which is designated, identified and made part of the evidentiary record by the applicant at the applicant's licensing hearing. Modifications to the proposed permanent facility following the applicant's licensing hearing shall be approved by the Board.
(7) A sworn or affirmed statement that the applicant has developed and implemented internal safeguards and policies to prevent a violation of section 1513 of the act (relating to political influence).
(8) A statement demonstrating compliance with the geographical requirements of section 1302 of the act (relating to Category 1 slot machine license), section 1304 of the act (relating to Category 2 slot machine license) or section 1305 of the act (relating to Category 3 slot machine license).
(b) Failure to provide the information required in subsection (a) may result in the application being returned to the applicant or result in an application being deemed incomplete.
(c) In addition to the materials required under subsection (a), an applicant for a slot machine license shall:
(1) Promptly provide information requested by the Board relating to its application, financial fitness, character, honesty and integrity, or regulation and cooperate with the Board in investigations, hearings and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(d) A copy of the local impact report required as part of the application shall be provided to the political subdivisions in which the licensed facility will be located at the same time as the filing of the application for a slot machine license. The applicant shall file a proof of service with the Board.
(e) An applicant for a slot machine license will be required to reimburse the Board for additional costs, based on the actual expenses incurred by the Board, in conducting the background investigation.
§ 441a.4. Alternative Category 1 licensing standards.
(a) If an applicant for a Category 1 license, or its affiliate, intermediary, subsidiary or holding company holds a similar license in another jurisdiction in the United States or Canada, the applicant may submit a written request with its application required under § 441a.3 (relating to slot machine license application) for the Board to adopt an abbreviated licensing process under section 1314(b) of the act (relating to alternative Category 1 licensing standards).
(b) The Board may use the abbreviated process if:
(1) The Board determines, after investigation, that the licensing standards in the other jurisdiction in which the applicant or its affiliate, intermediary, subsidiary or holding company is licensed is similarly comprehensive and thorough and provides safeguards that are equal to or greater than those provided in the act and granting the request would be in the public interest.
(2) A completed application for a Category 1 license has been filed with the Board which includes the name and address of the regulatory agency in the other jurisdiction.
(3) The Board has received a copy of the completed application, renewal applications and accompanying documents filed in the other jurisdiction.
(4) The applicant has provided current, updated information to the Board regarding the license in the other jurisdiction and information relating to its financial viability and suitability and good character.
(5) The applicant has no administrative or enforcement actions pending in other jurisdictions or the applicant has disclosed and explained these actions to the satisfaction of the Board.
(6) There are no pending or ongoing investigations of possible material violations by the applicant in other jurisdictions or the applicant has disclosed and explained these investigations to the satisfaction of the Board.
(c) The abbreviated process does not waive fees associated with obtaining a Category 1 license.
(d) The Board may determine to use an abbreviated process requiring only that information determined by the Board to be necessary to consider the issuance of the license, including the financial viability of the applicant.
(e) Following the issuance of a Category 1 license under this section, the Bureau will initiate a complete review of the information submitted under this subpart. If the applicant does not meet the requirements of the act or this part, the Board will revoke, suspend or condition the license until the applicant meets the requirements of the act.
§ 441a.5. License fee payment bond or letter of credit requirements.
(a) An application for a slot machine license shall at all times throughout the period in which the application is on file with the Board include original payment bonds or original irrevocable letters of credit, or some combination thereof, that include draw instructions guaranteeing the applicant's payment of the slot machine license fee required by section 1209(c) of the act (relating to slot machine license fee) if the license is approved and issued.
(1) Payment bonds or irrevocable letters of credit shall be submitted and approved by the Board before an application may be accepted for filing. The Board's review will include an assessment of both the proposed terms of the payment bond or irrevocable letter of credit and of the surety or financial institution that will issue the payment bond or irrevocable letter of credit. An application will be deemed incomplete if at any time during the period the application is on file with the Board payment bonds or letters of credit approved by the Board in the amounts required in paragraph (2) are not in full force and effect.
(2) Payment bonds or irrevocable letters of credit must aggregate to the following amounts:
(i) $50,000,000 for each application for a Category 1 or Category 2 license.
(ii) $5,000,000 for each application for a Category 3 license.
(b) Unless otherwise required by the Board, a payment bond provided under this section must be issued by a surety company that is both licensed by the Insurance Department and assigned a credit rating within the three highest categories, without regard to numerics or other modifiers, by Moody's or Standard & Poor's, or upon the discontinuance of Moody's or Standard & Poor's, by another Nationally recognized rating service. Proof that the surety is licensed by the Insurance Department and has been assigned the required credit rating must accompany any payment bond submitted under this section.
(c) Unless otherwise required by the Board, a letter of credit must be issued by a bank, trust company, National banking association or corporation which is both subject to regulation by the Federal Reserve System under the Bank Holding Company Act of 1956 and assigned a credit rating within the three highest rating categories, without regard to numerics or other modifiers, by Moody's or Standard & Poor's, or upon the discontinuance of Moody's or Standard & Poor's, by another Nationally recognized rating service. Proof that the bank, trust company, National banking association or corporation is subject to regulation by the Federal Reserve System under the Bank Holding Company Act of 1956 and that the issuer has been assigned the required credit rating must accompany any letter of credit submitted under this section.
(d) The payment bond or irrevocable letter of credit provided under this section must state that it is payable to ''The Commonwealth of Pennsylvania'' as the obligee.
(e) The payment bond or irrevocable letter of credit provided under this section must provide that if the slot machine license has been approved and issued by the Board and the license fee has not been paid in full within 5 business days following the issuance of the license, the Commonwealth will have the right to request immediate payment under the payment bond or irrevocable letter of credit for payment of the slot machine license fee.
(f) The payment bond or irrevocable letter of credit provided under this section must state that it will expire upon the earlier to occur of the following:
(1) A specified expiry date or any automatically extended expiry date.
(2) Receipt by the issuer of the Board's signed statement that:
(i) The application has been denied.
(ii) The slot machine license has been issued and 10 business days have elapsed following the issuance of the license.
(iii) The license fee has been paid.
(iv) The applicant has been permitted by the Board to withdraw its application under § 423a.5 (relating to application withdrawal).
(g) An expiry date applicable to a payment bond or letter of credit provided under this section must be at least 12 months from the date of issuance of the payment bond or letter or credit. A provision automatically renewing or extending a payment bond or letter of credit must do so at intervals of at least 3 months. Notice provisions to the Board in a payment bond or letter of credit applicable to an election by an issuer not to renew or extend a then current expiry date must provide that the Board will receive at least 60 days written notice, by registered mail or overnight courier service, of an election not to renew or extend.
(h) This section does not preclude a slot machine license applicant from substituting or replacing a payment bond or letter of credit during the period the application is on file with the Board provided the replacement payment bond or letter of credit is approved by the Board under this section.
§ 441a.6. Public input.
(a) Prior to granting a slot machine license, the Board will conduct at least one public input hearing.
(b) Public input hearings relating to an application for a slot machine license shall be held in the municipality where the licensed facility will be located. The public input hearings will be organized in cooperation with the municipality.
(c) The Board will develop and post the procedures that will be used to conduct public input hearings on the Board's website (www.pgcb.state.pa.us).
(d) The Board will make public a list of all witnesses scheduled to testify at a public input hearing at least 7 days prior to the hearing. The list of witnesses will be updated at least 3 days prior to the hearing. Additional witnesses will be posted on the Board's website (www. pgcb.state.pa.us) as they are added to the witness list.
§ 441a.7. Licensing hearings for slot machine licenses.
(a) A schedule of licensing hearings for all slot machine license applicants will be posted on the Board's website (www.pgcb.state.pa.us).
(b) The Board will allot each applicant a specified time for its presentation. The length of the presentations, which will be the same for each applicant within each category, will be established at the prehearing conferences.
(c) At a licensing hearing, an applicant shall appear before the Board and at all times have the burden to establish and demonstrate, by clear and convincing evidence, its eligibility and suitability for licensure and to address the criteria identified in section 1325(c) (relating to license or permit issuance) of the act.
(d) For the purposes of this section, an applicant's demonstration of eligibility must include a showing of:
(1) Compliance with section 1302, 1303, 1304 or 1305 (relating to Category 1 slot machine license; additional Category 1 slot machine license requirements; Category 2 slot machine license; and Category 3 slot machine license) of the act, as applicable.
(2) Compliance with the application requirements in § 441a.3 (relating to slot machine license application).
(3) Compliance with the license fee payment bond or letter of credit requirements in § 441a.5 (relating to license fee payment bond or letter of credit requirements).
(4) Compliance with the diversity requirements in Chapter 481a (relating to diversity) and section 1325(b) of the act.
(e) For the purposes of this section, an applicant's demonstration of suitability must include a showing of:
(1) Good character, honesty and integrity in compliance with section 1310 of the act (relating to slot machine license application character requirements).
(2) Financial fitness in compliance with section 1313 of the act (relating to slot machine license application financial fitness requirements).
(3) Operational viability, including:
(i) The quality of the proposed licensed facility, and temporary land-based facility, if applicable, including the number of slot machines proposed and the ability of the proposed licensed facility to comply with statutory, regulatory and technical standards applicable to the design of the proposed licensed facility and the conduct of slot machine operations therein.
(ii) The projected date of the start of operations of the proposed licensed facility and accessory uses such as hotel, convention, retail and restaurant space proposed in conjunction therewith. Applicants shall provide the Board with a time line on the deliverability of proposed temporary land-based or phased permanent licensed facilities and the accessory uses proposed in conjunction therewith.
(iii) The ability of the applicant's proposed licensed facility to generate and sustain an acceptable level of growth of revenue.
(f) For the purposes of this section, an applicant's demonstration of how it addresses the criteria identified in section 1325(c) of the act must include:
(1) The location and quality of the proposed facility, including, but not limited to, road and transit access, parking and the facility's centrality to its anticipated market service area.
(2) The potential for new job creation and economic development which are expected to result from granting a license to an applicant.
(3) The applicant's good faith plan to recruit, train and upgrade diversity in all employment classifications in the facility.
(4) The applicant's good faith plan for enhancing the representation of diverse groups in the operation of its facility through the ownership and operation of business enterprises associated with or utilized by its facility or through the provision of goods or services utilized by its facility and through the participation in the ownership of the applicant.
(5) The applicant's good faith effort to assure that all persons are accorded equality of opportunity in employment and contracting by it and any contractors, subcontractors, assignees, lessees, agents, vendors and suppliers it may employ directly or indirectly.
(6) The potential for enhancing tourism which is expected to result from granting a license to the applicant.
(7) The history and success of the applicant in developing tourism facilities ancillary to gaming development in other locations if applicable to the applicant.
(8) The degree to which the applicant presents a plan for the project which will likely lead to the creation of quality, living-wage jobs and full-time permanent jobs for residents of this Commonwealth generally and for residents of the host political subdivision in particular.
(9) The record of the applicant and its developer in meeting commitments to local agencies, community-based organizations and employees in other locations.
(10) The degree to which potential adverse effects which might result from the project, including costs of meeting the increased demand for public health care and treatment of problem gamblers and their families, child care, public transportation, affordable housing and social services, will be mitigated.
(11) The record of the applicant and its developer regarding compliance with:
(i) Federal, State and local discrimination, wage and hour, disability and occupational and environmental health and safety laws.
(ii) State and local labor relations and employment laws.
(12) The record of the applicant in dealing with its employees and their representatives at other locations.
(13) The applicant's business probity, experience and ability.
(14) Areas of deficiency in the applicant's application previously identified by the Bureau of Licensing or Chief Enforcement Counsel that have not been resolved.
(g) The applicant's demonstration of how it addresses section 1325(c) of the act and subsection (f) may include information relating to its affiliates, intermediaries, subsidiaries or holding companies.
(h) No later than 30 days before the first scheduled licensing hearing in the category of license for which the applicant has filed an application, the applicant shall file with the Board a memorandum identifying the evidence it intends to use in support of its presentation before the Board. At the same time, Category 1 and Category 3 applicants shall serve the memorandum on the other applicants in the same category. At the same time, Category 2 applicants shall serve the memorandum on other applicants whose proposed facility meets the same location criteria as the applicant's proposed facility as specified in subsection (m)(1)(i)--(iii). The memorandum must include the following:
(1) The name of the applicant and docket number of the applicant's application to which the evidence will relate.
(2) Identification of each standard and criterion in subsections (d)--(f) to which the evidence will relate.
(3) As to each criterion identified, whether the evidence will be presented through oral testimony or, the proffer of documents, or both. If any portion of the evidence will be presented through oral testimony, the notice must include the name, address and telephone number of each testifying witness, the identified criteria about which the witness will testify and a detailed summary of the witness' testimony. If any portion of the evidence will be presented through the proffer of documents, including reports and exhibits, the memorandum must include a copy of each document to be proffered and the name, address and telephone number of the persons who prepared the document.
(4) If any person identified in paragraph (3) will testify as an expert, the person's qualifications, including the person's education, experience and training, and a listing of the other jurisdictions where the person has been qualified as an expert witness, within the last 5 years, shall be attached to the notice. A copy of the results or reports of any tests, experiments, examinations, studies or documents prepared or conducted by the expert or about which the expert will testify or which will be relied upon by the expert to render an opinion shall be attached to the notice.
(i) The Board will serve on all applicants within that category any expert reports developed for and requested by the Board that pertains to the applicants.
(j) Applicants, at the time of filing, shall provide the Board with an electronic version, in a format prescribed by the Board, of the reports and exhibits provided in paper form.
(k) If an applicant designates any submitted report or exhibit as confidential under § 401a.3 (relating to definitions) or section 1206(f) of the act (relating to Board minutes and records), the applicant shall:
(1) Clearly and conspicuously indicate that the report or exhibit is confidential in both the paper and electronic format and provide these exhibits separately from the nonconfidential exhibits.
(2) Request that the confidential information be presented to the Board in closed deliberations, under section 1206(a) of the act and provide an explanation of the need for the designation of confidentiality and closed deliberations or authorize the release of the report or exhibit in compliance with section 1206(f) of the act.
(l) Applicants are prohibited from relying upon or introducing new evidence, including witnesses' testimony, reports or exhibits, not identified under subsections (h) or (m), except in the following circumstances:
(1) Applicants may update or supplement evidence, including witnesses' testimony, reports or exhibits to respond to requests from the Board.
(2) Applicants may update or supplement evidence, including witnesses' testimony, reports or exhibits to respond to issues raised subsequent to the filing of the memorandum required by subsection (h) at a prehearing conference if the issues could not have been reasonably anticipated by the applicant.
(m) For Category 2 and Category 3 applicants only, in addition to the applicant's presentation of evidence to the Board relative to its eligibility and suitability for a license, an applicant may, during its licensing hearing, present evidence which sets forth a comparison between the applicant and other applicants within the same category with respect to the standards and criteria in subsections (d)--(g).
(1) Comparisons must be limited to:
(i) For applicants seeking to locate a licensed facility in a city of the first class, other applicants for a licensed facility in a city of the first class.
(ii) For applicants seeking to locate a licensed facility in a city of the second class, other applicants for a licensed facility in a city of the second class.
(iii) For applicants seeking to locate a licensed facility in a revenue- or tourism-enhanced location, other applicants for a licensed facility in a revenue- or tourism-enhanced location.
(iv) For applicants seeking to locate a licensed facility in a well-established resort hotel, other applicants for a licensed facility in a well-established resort hotel.
(2) If an applicant desires to present comparative evidence under this subsection, the applicant shall, no later than 20 days prior to the commencement of the first scheduled licensing hearing in the category of license for which the applicant has filed an application, file a separate written notice evidencing the intent with the Board identifying each other applicant about whom the applicant desires to present evidence. A copy of the notice shall also be served on the applicants about whom the evidence will be presented and on the Chief Enforcement Counsel. The notice must include:
(i) The name of the applicant and docket number of the applicant's application to which the evidence will relate.
(ii) Identification of the standards and criteria in subsections (d)--(g) to which the evidence will relate.
(iii) As to each criterion identified, a copy of documents or evidence that will be used to support the comparison to be presented in compliance with subsection (h).
(3) An applicant served with notice under paragraph (2) may present, during its licensing hearing, comparative evidence concerning it and the applicant from who notice was received with respect to the standards and criteria in subsections (d)--(g). The applicant so served shall have 10 days following services to file a reply notice with the Board which contains the information required by paragraph (2). A complete copy of the reply notice shall be served on the applicant who initially served notice under paragraph (2) and on the Chief Enforcement Counsel.
(4) If the applicant plans to present evidence to the Board concerning another applicant in closed deliberations, the applicant shall provide notice to the other applicant and provide reports or exhibits relied upon to the other applicant. The other applicant may be represented in the closed deliberations.
(n) At the discretion of the Board, an applicant's presentation may include:
(1) Oral presentation.
(2) Documentary evidence submissions, including reports, photographs, audiovisual presentations, exhibits or testimony of witnesses.
(o) The Board, its designee and Chief Enforcement Counsel may:
(1) Examine or question the applicant and witnesses called by the applicant or the Board regarding their testimony and any aspect of the applicant's application and relevant background.
(2) Recall the applicant and other witnesses called by the applicant or the Board during the licensing hearing for further questioning.
(p) A person who testifies at the licensing hearing shall be sworn and testify under oath.
(q) At its discretion, the Board may terminate, recess, reconvene and continue the licensing hearing.
(r) Each Category 1 and Category 3 applicant may file a brief up to 25 pages in length within 10 days of the completion of the hearing with respect to all applications within its category. Each Category 2 applicant may file a brief up to 25 pages in length within 10 days of the completion of the hearing with respect to all applications that meet the same location criteria as the applicant as specified in subsection (m)(1)(i)--(iii). At the prehearing conferences, applicants in any category may waive the opportunity to file briefs.
(s) At the conclusion of the presentation of all testimony and evidence, the Board will cause the record to be transcribed. The transcript and evidence will become part of the evidentiary record for the Board's consideration. For good cause shown, the Board may seal portions of the record.
(t) Following submission of the applicants' briefs, all applicants will have an opportunity to make final remarks in the form of oral argument before the Board in a manner and time prescribed by the Board. At the prehearing conferences, applicants in any category may waive the opportunity for oral argument.
(u) Upon the conclusion of the licensing hearings and upon review of the evidentiary record in its entirety, the Board will consider, approve, condition or deny the slot machine license applications. A final order, accompanied by the Board's written decision, will be served on the applicants for slot machine licenses.
(v) An applicant may appeal the denial of a slot machine license to the Supreme Court as provided in the act.
(w) This subsection pertains exclusively to intervention in a licensing hearing for a slot machine license under this section and is not applicable to other hearings before the Board. The right to intervene in a hearing under this section is within the sole discretion of the Board.
(1) A person wishing to intervene in a licensing hearing for a slot machine license shall file a petition in accordance with this subsection.
(2) A person may file a petition to intervene under this subsection if the person has an interest in the proceeding which is substantial, direct and immediate and if the interest is not adequately represented in a licensing hearing.
(3) Petitions to intervene in a licensing hearing may be filed no later than 45 days prior to the commencement of the first scheduled licensing hearing, in the category of license for which the applicant, in whose hearing the petitioner seeks to intervene, has filed an application unless, in extraordinary circumstances for good cause shown, the Board authorizes a late filing. At the same time the petitioner files its petition with the Board, a complete copy of the petition to intervene shall be served on the Chief Enforcement Counsel and the applicant in whose licensing hearing the petitioner seeks to intervene.
(4) Petitions to intervene must set out clearly and concisely the facts demonstrating the nature of the alleged right or interest of the petitioner, the grounds of the proposed intervention, the position of the petitioner in the proceeding and a copy of the written statement to be offered under paragraph (6). The petitioner shall fully and completely advise the applicant and the Board of the specific issues of fact or law to be raised or controverted and cite provisions or other authority relied on.
(5) The applicant may file an answer to a petition to intervene, and in default thereof, will be deemed to have waived any objection to the granting of the petition. If made, answers shall be filed within 10 days after the date the petition is filed with the Board, unless for cause the Board prescribes a different time. A complete copy of the answer to the petition to intervene shall be served on the Chief Enforcement Counsel and the petitioner who seeks to intervene.
(6) Except when the Board determines that it is necessary to develop a comprehensive evidentiary record, the participation of a person granted the right to intervene in a licensing hearing will be limited to the presentation of evidence through the submission of written statements attested to under oath. The written statements will be part of the evidentiary record.
(x) This section supersedes any conflicting provisions of Subpart H (relating to practice and procedure) and 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure).
§ 441a.8. Divestiture.
(a) If the Board determines that a slot machine license application cannot be approved because the applicant, its principal or other person who holds a direct or indirect interest in the applicant or in an affiliate, intermediary, subsidiary or holding company of the applicant, does not meet a character or other eligibility criteria required by section 1310 of the act (relating to slot machine license application character requirements), or has an ownership or financial interest that is prohibited by section 1330 of the act (relating to multiple slot machine license prohibition), the Board may grant the person up to 120 days following the determination to completely divest his interest in the applicant or its affiliate, intermediary, subsidiary or holding company.
(b) The person shall notify the Board of his intention to divest within 30 days of notice from the Board of the opportunity to divest. The Board may extend this time period at its discretion.
(c) Failure to divest within 120 days, or within the time period prescribed by the Board, constitutes a per se disqualification of the applicant to receive a slot machine license.
(d) The terms of divestiture will be approved by the Board.
(e) The Board will not approve a divestiture if the compensation received for the divested interest exceeds the value of the interest.
(f) Following divestiture, the Board will reconsider the applicant's suitability for licensure in an expedited procedure.
§ 441a.9. Approval of a slot machine license.
(a) An applicant for a slot machine license shall prove by clear and convincing evidence:
(1) The financial stability and integrity of the applicant and its affiliates, intermediaries, subsidiaries and holding companies in accordance with section 1313 of the act (relating to slot machine license application financial fitness requirements).
(2) The good character, honesty and integrity of the applicant and its affiliates, intermediaries, subsidiaries, holding companies and principals in accordance with section 1310 of the act (relating to slot machine license application character requirements).
(b) For Category 1 slot machine applications, the State Horse Racing Commission or the State Harness Racing Commission may submit additional information to the Board if it believes the information will assist the Board in making a determination relating to the operational, financial or character fitness of the applicant.
(c) The Board may issue a slot machine license under this chapter if it determines that the applicant:
(1) Has demonstrated that the applicant will establish and is likely to maintain a financially successful, viable and efficient business operation and will likely be able to maintain a steady level of growth of revenue to the Commonwealth.
(2) Is of good character, honesty and integrity.
§ 441a.10. Notification of anticipated or actual changes in principals or key employees.
Each slot machine applicant or licensee shall notify the Board, in writing, as soon as it becomes aware, of the proposed appointment, appointment, proposed nomination, nomination, election, hiring, intended resignation, resignation, removal, firing, incapacitation or death of any person required to be licensed as a principal or key employee under Chapter 433a and § 435a.2 (relating to principal licenses; and key employee license). The notice must be addressed to the Bureau of Licensing.
§ 441a.11. Notification of new financial sources.
Each slot machine applicant or licensee shall notify the Board, in writing, as soon as it becomes aware that it intends to enter into a transaction which may result in any new financial backers. The notice must be sent to the Bureau of Licensing and the Bureau of Corporate Compliance and Internal Controls.
§ 441a.12. Maintaining agreements; filing of agreements.
(a) Maintaining agreements. Each slot machine applicant and licensee shall maintain the following:
(1) A fully signed copy of every written agreement.
(2) Records with respect to any oral agreement.
(b) Changes or amendments to agreements. Slot machine applicants and licensees shall maintain changes or amendments to the terms of the agreements subject to subsection (a).
(c) Filing agreements. Each slot machine licensee shall submit the following to the Board:
(1) A fully signed copy of written agreements with manufacturer applicants or licensees, manufacturer designee applicants or licensees, supplier applicants or licensees and with vendors subject to certification under § 437a.1(b) (relating to general vendor requirements).
(2) A precise written description of any oral agreement, in accordance with subsection (f), with manufacturer applicants or licensees, manufacturer designee applicants or licensees, supplier applicants or licensees and vendors subject to certification under § 437a.1(b).
(3) A fully signed copy of written agreements relating to land and real estate.
(d) Changes or amendments to filed agreements. Slot machine applicants and licensees shall file all changes or amendments to the terms of the agreements subject to subsection (c).
(e) Additional agreements. Notwithstanding the requirements of subsections (c) and (d), slot machine applicants or licensees may be required to submit a copy of any other written agreement, change or amendment or a precise written description of any other oral agreement, change or amendment as requested by the Board.
(f) Oral agreements. A written description submitted under this section must provide, at a minimum, the following:
(1) The nature of the goods or services to be provided to the slot machine licensee or applicant.
(2) The full name and business address of the non-slot machine licensee or applicant party to the agreement.
(3) The duration of the agreement, or if provided in the agreement, the specific date or dates of performance.
(4) The financial terms of the agreement.
(5) A description of the goods or services provided, including the expected duration and compensation.
§ 441a.13. Board review of agreements and records of agreements.
(a) The Board may review an agreement and record maintained or filed under § 441a.12 (relating to maintaining agreements; filing of agreements) to determine the following:
(1) The reasonableness of the terms of the agreement, including the terms of compensation.
(2) The qualifications of the persons involved in and associated with the agreement, after which the Board may make a finding as to the suitability of the persons to be involved or associated with the slot machine applicant or licensee.
(3) Whether any person involved therein or associated therewith is providing or likely to provide goods or services to, or conducting or likely to conduct business with, a slot machine applicant or licensee or its employees which requires a license, permit, certification, registration or notification under act or this part, in which case the Board will direct that the appropriate application be promptly filed by the person.
(4) Whether any action is desirable or necessary to regulate, control or prevent economic concentration in any vendor industry or to encourage or preserve competition in any vendor industry.
(b) If the Board finds that an agreement is not in the public interest or is inimical to the interest of gaming in this Commonwealth, the Board may, by order, require the termination of the agreement or association of any person associated therewith or pursue any remedy or combination of remedies provided for in the act or this part. If the agreement or association is not thereafter promptly terminated, the Board may pursue any remedy or combination of remedies provided for in the act or this part.
(c) Each agreement maintained or filed under § 441a.12 shall be deemed to include a provision for its termination without liability on the part of the slot machine applicant or licensee, or on the part of any qualified party to the agreement or any related agreement the performance of which is dependent upon the agreement, if the Board orders that the agreement be terminated in accordance with subsection (b).
§ 441a.14. Master purchasing and disbursement report.
(a) Each slot machine license applicant or licensee shall generate a monthly Master Purchasing and Disbursement Report for vendor transactions. The report shall be submitted to the Bureau of Licensing no later than the 22nd calendar day of following month. The report must include the following information:
(1) A payee register listing alphabetically by payee all nonpayroll transactions drawn by the slot machine applicant or licensee, including wire transfers and credits to vendors, and the following information next to the name of each payee:
(i) The vendor certification or registration number or exemption code.
(ii) The amount of the individual disbursement or credit.
(iii) The date of the individual disbursement or credit.
(iv) The subtotal of disbursements or credits by payee.
(v) The grand total of all disbursements made during the reporting period.
(vi) The total summarizing all previous payments in the last 12 months beginning from the first payment date.
(2) A payee register listing alphabetically by payee transactions drawn by an affiliate, intermediary, subsidiary, holding company or agent of the slot machine applicant or license for goods or services that benefit the slot machine applicant or license, including wire transfers and credits to vendors, and the following information next to the name of each payee:
(i) The vendor certification or registration number or exemption code.
(ii) The amount of the individual disbursement or credit.
(iii) The date of the individual disbursement or credit.
(iv) The subtotal of disbursements or credits by payee.
(v) The grand total of all disbursements made during the reporting periods.
(vi) The total summarizing all previous payments in the last 12 months beginning from the first payment date.
(3) A register listing alphabetically by vendor transactions, including wire transfers and credits, in which the slot machine applicant or licensee itself acted in the capacity of a vendor by providing goods or services. The register must include:
(i) The vendor certification or registration number or exemption code of the vendor to whom the goods or services were provided.
(ii) The date of each individual transaction.
(iii) The amount of each individual transaction.
(iv) A general description of the type of goods or services provided.
(v) By vendor, subtotals of payments or credits received by the slot machine licensee or applicant or disbursements or credits made by the slot machine licensee or applicant during the reporting period.
(vi) By vendor, totals of payments or credits received or disbursements or credits made by the slot machine licensee or applicant within the applicable 12-month period.
(b) The reports shall be signed by the slot machine applicant or licensee and transmitted to the Bureau of Licensing by means of electronic data transmission or in a form prescribed by the Board.
§ 441a.15. Slot machine license issuance bond requirement.
(a) Upon the issuance of a slot machine license, a slot machine licensee shall post an original payment bond in the amount of $1,000,000.
(b) Unless otherwise required by the Board, the payment bond must comply with the following:
(1) The payment bond must be issued by a surety company that is both licensed by the Insurance Department and assigned a credit rating within the three highest categories, without regard to numerics or other modifiers, by Moody's or Standard & Poor's, or upon the discontinuance of Moody's or Standard & Poor's, by another Nationally recognized rating service. Proof that the surety is licensed by the Insurance Department and has been assigned the required credit rating must accompany any payment bond submitted under this section.
(2) A slot machine licensee shall submit its proposed payment bond to the Board prior to the issuance of a slot machine license. The Board will investigate and approve both the proposed terms of the payment bond and the surety that will issue the payment bond.
(3) The payment bond must state that it is payable to ''The Commonwealth of Pennsylvania'' as the obligee for immediate payment of the slot machine licensee's financial obligations to the Commonwealth under the act and as security to guarantee that the slot machine licensee faithfully makes the payments, keeps its books and records, makes reports and conducts its operations in conformity with the act, this part and the rules and orders promulgated by the Board.
(4) A payment bond issued in accordance with this section will remain in full force and effect throughout the period of time that the slot machine license is in effect. If a bond is canceled and the slot machine licensee fails to file a new bond with the Board in the required amount on or before the effective date of the cancellation, the slot machine licensee's license will be revoked or suspended.
(5) Any notice provision to the Board in a payment bond applicable to an election by a surety to cancel a then current payment bond must provide that the Board will receive at least 30 days written notice, by registered mail or overnight courier service, of the surety's election to cancel.
(c) The Board may demand that the slot machine licensee post a new payment bond upon the occurrence of any of the following:
(1) Liability on the existing payment bond is discharged or reduced by judgment rendered, payment made or similar occurrence.
(2) The Board determines that the surety is no longer satisfactory.
(3) The slot machine licensee requests the right to post a new payment bond.
(4) The Board receives notice that the payment bond will be cancelled.
§ 441a.16. Slot machine license term and renewal.
(a) A slot machine license issued under this chapter will be valid for 1 year from the date of Board approval.
(b) A renewal application shall be submitted to the Board at least 60 days prior to the expiration of a slot machine license.
(c) A slot machine license for which a completed renewal application has been received by the Board will continue in effect until the Board sends written notification to the holder of the slot machine license that the Board has approved or denied the slot machine license renewal application.
§ 441a.17. Change in ownership or control of slot machine licensee and multiple slot machine license prohibition.
(a) A slot machine licensee shall notify the Board prior to or immediately upon becoming aware of any proposed or contemplated change in ownership of the slot machine licensee by a person or group of persons acting in concert which involves any of the following:
(1) More than 5% of a slot machine licensee's securities or other ownership interests.
(2) More than 5% 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 interest of the slot machine licensee.
(3) The sale, other than in the normal course of business, of a slot machine licensee's assets.
(4) Other transactions or occurrences deemed by the Board to be relevant to license qualification.
(b) Notice to the Board and Board approval shall be required prior to completion of any proposed change of ownership of a slot machine licensee that meets the criteria in subsection (a).
(c) A person or group of persons acting in concert desiring to acquire an interest in a slot machine licensee that meets the criteria in subsection (a) shall submit an application for approval of the transfer which includes the following:
(1) An application for transfer on a form prescribed by the Board.
(2) A copy of the documents, contracts and agreements related to the transfer.
(3) A principal license application for each person seeking to acquire an interest that does not currently hold a principal license.
(4) Application fees specified by the Board to cover the cost of investigations of the transfer application and persons seeking to acquire an interest. The applicant for the transfer shall be responsible for and remit to the Board any costs associated with the investigation of the transfer that exceed the amount covered by the fees.
(d) A person or group of persons acting in concert that acquires more than 20% of a slot machine licensee's securities or other ownership interests or purchases the assets, other than in the normal course of business, of any slot machine licensee shall independently qualify for a license in accordance with the act and this part and shall pay the licensing fee required by section 1209 of the act (relating to slot machine license fee), except as otherwise required by the Board.
(e) The requirements in subsections (a)--(d) do not apply to:
(1) An underwriter who will hold a security for less than 90 days.
(2) An institutional investor, if:
(i) The institutional investor holds less than 10% of the securities or other ownership interests referred to in subsection (a)(1) or (2).
(ii) The securities or interests are publicly traded securities.
(iii) The institutional investor's holdings if the securities were purchased for investment purposes only and the institutional investor files a certified statement with the Board stating that the institutional investor has no intention of influencing or affecting, directly or indirectly, the affairs of the slot machine licensee.
(f) In accordance with section 1330 of the act (relating to multiple slot machine license prohibition), a slot machine licensee, its affiliates, intermediaries, subsidiaries and holding companies, may not possess an ownership or financial interest in any other slot machine licensee or in any other person eligible to apply for a Category 1 slot machine license or its affiliates, intermediaries, subsidiaries or holding companies that exceeds 33.3%.
(g) Nothing in subsection (f) prevents a slot machine licensee from possessing ownership or financial interests of 33.3% or less, in multiple slot machine licensees or in persons eligible to apply for a Category 1 slot machine license or its affiliates, intermediaries, subsidiaries or holding companies.
(h) If a slot machine licensee, its affiliates, intermediaries, subsidiaries or holding companies has an ownership or financial interest in another slot machine licensee that is in violation of subsection (f), the slot machine licensee will be required to divest that interest which is in excess of 33.3% in compliance with section 1330 of the act.
(i) Nothing in this section concerning ownership or financial interests applies to contractual interests including those in the nature of management contracts, options to purchase exercisable after a license has been issued or leases.
§ 441a.18. Employee status report.
(a) A slot machine licensee shall maintain a complete, accurate and current record of each employee that includes the information in subsection (b)(1).
(b) Each month each slot machine licensee shall generate a monthly employee status report of the slot machine licensee's and management company's employees. The report shall be submitted to the Bureau of Licensing no later than the 15th calendar day of the following month. The report must include the following information:
(1) An alphabetical listing of the individuals currently employed by the slot machine licensee and the management company and the following information with respect to each employee listed:
(i) The name of the employee.
(ii) The address of record of the employee on file with the slot machine licensee.
(iii) The employee's license, permit or registration number.
(iv) The employee's title or position.
(v) Whether the employee is full-time or part-time.
(vi) The date of hire of the employee.
(vii) The access code, if any, assigned to the employee, which designates the restricted areas that the employee is permitted to enter and remain in for the purposes of performing his normal duties.
(2) The total number of persons employed by the slot machine applicant or licensee and management company during the preceding month.
(3) An alphabetical listing of employees who have discontinued or terminated employment with the slot machine licensee or management company during the preceding month and the following information with respect to each employee listed:
(i) The information listed in paragraph (1)(i)--(vii).
(ii) The date on which the employee discontinued or terminated employment with the slot machine licensee or management company.
(4) The total number of employees who have discontinued or terminated employment with the slot machine licensee and management company during the preceding month.
(5) The date on which the information provided in the report was compiled.
(c) The reports shall be signed by the slot machine licensee and transmitted to the Bureau of Licensing by means of electronic data transmission or in a form prescribed by the Board.
(d) The Board may, at its discretion, request interim employee status reports from a slot machine licensee or management company.
§ 441a.19. Notice of employee misconduct and offenses.
(a) A slot machine licensee or management company shall notify the Board within 5 days of the termination of an employee, of information surrounding the termination of the employee that could be cause for suspension or revocation of the employee's license, permit or registration or enforcement actions related thereto.
(b) The notice must include the following information:
(1) The employee's name.
(2) The address of record of the employee on file with the slot machine licensee.
(3) The employee's license, permit or registration number.
(4) The employee's title or position.
(5) A summary of the incident or misconduct by the employee, including violations of this part or the act.
(6) The date of termination of the employee.
(7) The access code, if any, assigned to the employee, which designates the restricted areas that the employee was permitted to enter and remain in for the purposes of performing his normal duties.
(c) Notwithstanding subsection (a), a slot machine licensee shall, within 24 hours, notify the Board upon learning of the arrest, charging, indictment or conviction of any of its affiliates, intermediaries, subsidiaries, holding companies, principals, key employees, permittees or registrants, for any of the following:
(1) An offense or violation under the act or this part.
(2) The willful and knowing violation or attempt to violate an order of the Board by an employee.
(3) An offense or violation of another applicable law which would otherwise disqualify the person from holding a license, permit or registration.
(4) An offense or violation of a criminal law or ordinance of the United States or the Commonwealth or a comparable offense or violation in other states or foreign jurisdictions.
§ 441a.20. Slot machine license agreements.
(a) An agreement or noncontractual relationship between a person and a slot machine licensee which provides for a payment to the person or an arrangement under which a person receives payment, however defined, of a direct or indirect interest, percentage or share of earnings, profits or receipts from slot machines and associated equipment of a licensed facility, requires Board approval, regardless of the amount or percentage.
(b) An agreement will not receive Board approval if it, or if it when viewed in the aggregate as related to any of the persons who receive payment as a result of the agreement, creates a monopolization of economic opportunities or control of the licensed gaming facilities in this Commonwealth under § 421a.5 (relating to monopolization of economic opportunities and control).
(c) Notwithstanding the definition of a principal, persons who receive payments under the agreements or arrangements shall be licensed by the Board prior to receiving the payments, unless the agreement or person is exempted under subsection (d).
(d) The following are exempt from the requirements of this section:
(1) Fixed sum and hourly payments.
(2) Junket agreements.
(3) Employee profit sharing agreements administered by class or category.
(4) Management contracts.
(5) Slot system agreements for wide area progressive slot systems.
(6) Horsemen's organizations.
(7) Labor organizations.
(8) Other agreements determined by the Board.
§ 441a.21. Management contracts.
Notwithstanding any provision to the contrary in the management contract, each slot machine licensee shall be jointly and severally liable for any act or omission by the management company in violation of the act or this part, regardless of actual knowledge by the slot machine licensee of the act or omission.
§ 441a.22. Category 1 slot machine licensees.
(a) A Category 1 license, including a Conditional Category 1 license, may be issued to any qualifying legal business entity within an organization, if a legal business entity within the organization has been approved or issued a license from either the State Horse Racing Commission or the State Harness Racing Commission to conduct thoroughbred or harness race meetings. If a Category 1 license is issued to a legal business entity within an organization, the requirements, duties and obligations imposed by this part or the act on the licensed racing entity or a licensed racetrack shall be deemed to be requirements imposed on any legal business entity within the organization that has been approved or issued a Category 1 license. If more than one licensed racing entity, on July 5, 2004, was conducting a racing meet at the same licensed racetrack where an organization has been issued a Category 1 slot machine license, section 1303 of the act (relating to additional category 1 slot machine license requirements) applies to each licensed racing entity at the licensed racetrack.
(b) If a Category 1 license is issued to a legal business entity in an organization, any legal business entity within the organization that has been approved or issued a Category 1 license shall be responsible for, in particular, but not limited to, complying with:
(1) Section 1404 of the act (relating to distributions from licensee's revenue receipts).
(2) Section 1405 of the act (relating to Pennsylvania Race Horse Development Fund).
(3) Distribution allocations received from the Pennsylvania Race Horse Development Fund under section 1406 of the act (relating to distributions from Pennsylvania Race Horse Development Fund).
(i) Funds designated for purses under section 1406(a)(1)(i) of the act shall be deposited into an account established by and for the benefit of the horsemen within 36 hours of receipt from the Commonwealth.
(ii) Funds designated for health and pension benefits under section 1406(a)(1)(iii) of the act shall be deposited into an account established under the rules and regulations of the horsemen's organization within 36 hours of receipt from the Commonwealth.
(c) A Category 1 slot machine licensee or management company shall file with the Board no later than the 20th day of the month following the end of each calendar quarter, the following reports:
(1) Quarterly Report of Funds Received from the Pennsylvania Racehorse Development Fund.
(2) Quarterly Report of Funds Distributed for Purses under 4 Pa.C.S. § 1406(a)(1)(i).
(3) Quarterly Report of Funds Distributed for Health and Pension Benefits under 4 Pa.C.S. § 1406(a)(1)(iii).
(4) Quarterly Report of Expenditures for Backside Improvements.
(d) The Board may request interim versions of the reports in subsection (c) from a Category 1 slot machine licensee or management company.
§ 441a.23. Category 3 slot machine licensees.
(a) To qualify as a well-established resort hotel with substantial year-round recreational guest amenities, the resort hotel must offer on its premises a complement of amenities characteristic of a well-established resort hotel, including, but not limited to, the following:
(1) Sports and recreational activities and facilities such as a golf course or golf driving range.
(2) Tennis courts.
(3) Swimming pools or a water park.
(4) A health spa.
(5) Meeting and banquet facilities.
(6) Entertainment facilities.
(7) Restaurant facilities.
(8) Downhill or cross-country skiing facilities.
(9) Bowling lanes.
(10) Movie theaters.
(b) A Category 3 slot machine applicant shall submit, as part of its application and its internal controls required under Chapter 465 (relating to accounting and internal controls), a plan detailing how the applicant will monitor the gaming area to ensure compliance with Chapters 503, 511 and 513 (relating to self-exclusion; persons required to be excluded; and underage gaming) and that only the following persons are permitted to enter the gaming area:
(1) Registered overnight guests.
(2) Patrons of one or more amenities.
(3) Authorized employees.
(4) Other persons authorized by the Board.
(c) Individuals holding a valid seasonal or year-round membership, which has been approved by the Board and entitles the individual to use one or more of the amenities at the well-established resort hotel holding the Category 3 slot machine license, may be allowed on the gaming floor at any time. The Board will base its approval of a membership on the duration of the membership, the amenity or amenities covered by the membership and whether the fee charged for the membership represents the fair market value for the use of the amenity or amenities.
(d) A patron of an amenity at a well-established resort hotel holding a Category 3 slot machine license may be permitted unlimited access to the gaming floor for one 24-hour period within 72 hours of the use of the amenity.
[Pa.B. Doc. No. 07-1044. Filed for public inspection June 15, 2007, 9:00 a.m.]
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