RULES AND REGULATIONS
Title 58—RECREATION
PENNSYLVANIA GAMING CONTROL BOARD
[ 58 PA. CODE CHS. 421a, 423a, 425a, 427a, 429a, 431a, 433a, 435a, 437a, 440a, 441a, 461a, 465a, 609a, 623a, 633a, 643a AND 645a ]
Licensing; Slot Software; Count Room Characteristics; Credit; Table Game Rules
[45 Pa.B. 2829]
[Saturday, June 13, 2015]In accordance with 4 Pa.C.S. Part II (relating to gaming), the Pennsylvania Gaming Control Board (Board), under the general authority in 4 Pa.C.S. § 1202(b)(9)—(23) (relating to general and specific powers) and the specific authority in 4 Pa.C.S. §§ 1205, 1206(f) and (g), 1207(1) and (2), 1208(1)(iii), 1209(b), 1212, 1213, 13A11, 13A12—13A14, 13A15 and 1802 and 4 Pa.C.S. Chapter 13 (relating to licensees) amends Chapters 421a, 423a, 425a, 427a, 429a, 431a, 433a, 435a, 437a, 440a, 441a, 461a, 465a, 609a, 623a, 633a, 643a and 645a to read as set forth in Annex A.
Purpose of the Final-Form Rulemaking
This final-form rulemaking is a comprehensive amendment package addressing 18 chapters in Subparts B, C, E and K. This final-form rulemaking should provide clarity, delete redundant provisions, decrease the number of copies of applications required, allow for an increase in ownership of licensees by institutional investors and ensure that a background investigation is completed on nongaming employees every 4 years.
Explanation
General revisions
The Board is referenced throughout Subparts B and C (relating to licensing, permitting, certification and registration; and slot machine licensing). However, many of the provisions currently listed as functions of the Board are functions associated with a specific bureau within the Board. To provide some clarity to the regulated community, ''Board'' has been replaced, when relevant, with a specific bureau.
Additionally, all references to the Board's web site address have been deleted as ''Board web site'' is defined in § 401a.3 (relating to definitions). This is done because the Board's web site has changed. Defining the web site address in § 401a.3 eliminates the need to revise references should the address change again in the future.
Chapter 421a. General provisions
In § 421a.1 (relating to general requirements), references to ''approval'' are replaced with ''authorization'' to reflect that gaming service providers (GSP) may receive an authorization to conduct business prior to being certified or registered with the Board, or may be authorized to conduct business and exempt from the GSP certification/registration requirements in § 437a.1 (relating to general gaming service provider requirements).
In subsection (b), the reference to the type of investigation conducted is deleted. Investigations are addressed in § 421a.3 (relating to investigations; supplementary information).
Language added to subsection (e)(2) requires applicants for and holders of licenses, permits, registrations, certifications or qualifications to report changes in circumstances that may render the applicant or holder unsuitable or ineligible to continue to apply for or hold a license, permit, certification, registration or qualification. This requirement is not new, simply moved, without amendment, from Chapter 435a (relating to key, gaming and nongaming employees; Board-issued credentials). It is necessary to move these provisions to this section because Chapter 435a is applicable to key, gaming and nongaming employees. This standard is applicable to anyone with a license, permit, registration, certification or authorization.
Language in subsection (f) was redundant with the language added to subsection (e)(2) and is deleted. Language in subsection (h) is also deleted as redundant with language in subsection (a).
In accordance with 4 Pa.C.S. Part II, applicants for and holders of a license, permit, registration or certification have an ongoing duty to report information to the Board that may impact the applicant or holder's suitability or eligibility to hold a license, permit, registration or certification. If applicants or holders do not maintain suitability or eligibility, the Board may revoke, suspend, or not issue or renew a license, permit, registration or certification. Language in subsection (i) is added to reiterate that any person regulated by the Board has an ongoing duty to maintain suitability and eligibility in accordance with 4 Pa.C.S. Part II and the Board's regulations.
Language is also deleted from subsection (i). The Board does not believe the language provided specificity as to which parties might be jointly and severely liable for conduct. The chapters on management companies, GSPs, manufacturer designees, and the like address joint and several liability with slot machine licensees.
Subsection (j) is deleted. This provision is a requirement of the Board not the regulated entities. It is a statutory requirement of 4 Pa.C.S. Part II and is therefore unnecessary to recite in the regulations.
Section 421a.2(a)(4) (relating to disqualification criteria) is amended. The Board believes the new language provides a clearer standard regarding the circumstances under which the Board may deny, suspend or revoke an applicant for or holder of a license, permit, registration or certification.
Subsection (a)(6) is existing language moved from former § 435a.1(o) (relating to general provisions). As previously stated, Chapter 435a relates to key, gaming and nongaming employees and this requirement is applicable to all individuals applying for a license (including principals), permit, registration or qualification. The new language in subsections (b)—(e) is existing language which is also moved from former § 435a.1(e)—(j).
Section 421a.3(c) is added to require applicants to reimburse the Board for actual expenses incurred in conducting background investigations. This is existing language moved from former §§ 427a.2(c), 429a.2(c), 431a.2(c) and 435a.2(d). Because applicants are required to reimburse the Board for actual expenses it made logical sense to include this provision in the general requirements applicable to all applicants.
The provisions on presuitability determinations in § 421a.4 (relating to presuitability determination) are amended to delete the requirement that a request for the presuitability determination be made by petition to the Board. Typically if a presuitability determination were conducted, the Bureau of Investigations and Enforcement (BIE) would already be investigating the applicant's eligibility and suitability in conjunction with an underlying application for a license or in conjunction with a petition for change of control or ownership. Requiring an additional petition for a presuitability determination would therefore be redundant and unnecessary. Instead, a request may now be made directly to the BIE.
The provisions regarding presuitability determinations in § 421a.4 are applicable to licensees but have not been applied to GSPs that are registered or certified. The reference to certification or registration in subsection (c) is therefore deleted.
Section 421a.5(a) (relating to undue concentration of economic opportunities and control) is amended to replace ''other'' license with ''principal'' license. Principals, specifically, are those individuals and entities that have ownership interest in or control over a licensee.
Language is added to subsection (c)(1)(iii)—(v) to reflect the legalization of table games. Former subsection (c)(1)(vi) is deleted as this provision would not be applicable in making a determination as to whether there was an undue concentration of economic control of a slot machine licensee. Gross terminal revenue, not ticket-in, ticket-out, is indicative of overall play.
Chapter 423a. Applications; statement of conditions; wagering restrictions
Language added to § 423a.1(b) (relating to general requirements) reflects that gaming and nongaming employees file applications electronically using the Board's SLOTS Link system.
Former subsection (c) is deleted as redundant. The requirements in this subsection are covered in final-form subsections (b) and (d).
In final-form subsection (c) (former subsection (d)), ''Board staff'' is added because the Bureau of Licensing (BOL) or the BIE may need additional information from an applicant to process an application or complete an investigation.
The language in final-form subsection (d) (former subsection (e)) is combined with the language in former subsection (f). The remaining subsections are renumbered.
Language is added to § 423a.2(a)(3) (relating to preliminary submission review). Applicants may be required to execute authorization forms for the release of information from other entities such as credit bureaus or banking institutions. Therefore, ''other entities'' is added.
Subsection (c) is deleted as inconsistent with current practice. The Board does not return applications but may deem the application abandoned or denied if an applicant does not cure deficiencies.
Former § 423a.3(a)(1) and (2) (relating to application processing) is deleted. An application is filed when submitted and an applicant will be given an opportunity to cure deficiencies if part of the application is missing or incomplete. Former subsection (a)(1) is deleted as unnecessary. Former subsection (a)(2) is deleted to reflect Board practice. In only a few circumstances, pertaining primarily to the filing of an application for a slot machine license or table game certificate, is the applicant or an attorney for the applicant notified, in writing, that the application has been officially accepted.
Final-form subsection (a)(1) (former subsection (a)(3)) is amended to reflect that the Board makes determinations regarding the information obtained by Board staff during an investigation. The remaining paragraphs are renumbered as former subsection (a)(1) and (2) is deleted.
Section 423a.5(a) (relating to application withdrawal and surrender) is amended to reflect that the Board no longer requires the filing of a petition for most individuals requesting to withdraw their applications. Only entities that have applied for a license, certification or registration and individuals who have applied for a principal license or GSP qualification are still required to petition the Board to withdraw. For other individuals (key, gaming and nongaming employees), a request form is submitted to the BOL. Former subsection (c) is therefore deleted as redundant with the language added to subsection (a).
Former subsection (d)(1) and (2) is deleted. Provisions regarding restrictions on subsequent application after a withdrawal with prejudice has been granted are already in § 423a.7 (relating to restriction on application after withdrawal with prejudice, denial or revocation).
Former subsection (e) is deleted to reflect Board practice. If an applicant fails to cure deficiencies with the application before it is officially accepted, the BOL may deem the application abandoned. Alternatively, if the applicant failed to cure deficiencies because the applicant failed to cooperate with an investigation, the Board may deny the application.
Section 423a.6(b) (relating to license, permit, registration and certification issuance and statement of conditions) is amended for clarity and to reflect Board practice. GSPs, unlike licensees, are now required to execute a statement of conditions at the time of application because a GSP or gaming-related GSP can be given interim authorization to conduct business prior to obtaining registration or certification from the Board.
New § 423a.6a (relating to restriction on wagering after issuance of a license, permit, registration or certification) is language moved from former § 435a.1(k)—(n). As previously stated, Chapter 435a is primarily applicable to key, gaming and nongaming employees. However, wagering restrictions are also applicable to principal licensees and qualifiers. For clarity to the regulated community, wagering restrictions are therefore adopted in this section.
Section 423a.7(f) is deleted as unnecessary. Typically when an individual's petition to reapply is denied, the Board will set a time period in which the person may reapply.
Chapter 427a. Manufacturers
Former § 427a.1(d) and (e) (relating to manufacturer general requirements) is deleted. Subsection (e) was applicable to the Board, not the regulated community. The provisions are in 4 Pa.C.S. Part II and are therefore unnecessary to recite in the regulations. Language similar to former subsection (e) was also deleted from former §§ 429a.1(d) and 431a.1(c) (relating to manufacturer designee general requirements; and supplier general requirements).
Section 427a.2(a) (relating to manufacturer license applications and standards) is amended to reflect that only one copy of an application is required instead of three. The number of required copies is also reduced in Chapters 429a, 431a, 433a, 437a and 441a.
Former subsection (a)(5) is deleted. Gaming employee applications are not required to be filed with the application for a manufacturer license. Typically the suitability of an employee of a licensee is considered separately from the suitability or eligibility of the licensee and its principals (owners, officers and directors). Similar language is deleted from former § 431a.2(a)(5) (relating to supplier license applications and standards).
Former subsection (a)(6) is also deleted. Copies of Securities and Exchange Commission (SEC) filings are no longer required to be submitted as part of the application packet. The BIE, when conducting its investigation, will review all SEC filings for any publicly traded applicant. All SEC filings are available online. If an applicant is publicly traded on a foreign exchange, the BIE may request specific information from the applicant during the investigation if the information is not publicly available through a foreign exchange regulator. Similar language is deleted from former § 429a.2(a)(5) (relating to manufacturer designee license applications and standards) and former § 431a.2(a)(6).
Language in final-form subsection (a)(5) (former sub- section (a)(7)) is deleted for consistency with 4 Pa.C.S. Part II. Similar language is deleted from final-form §§ 429a.2(a)(5) and 431a.2(a)(5).
Former subsection (b)(1) is deleted and also deleted in other sections in the chapters regarding licensing. This is a current requirement of all applicants, as specified in § 421a.1(g), and final-form subsection (b)(2) requires all applicants to comply with Chapter 421a (relating to general provisions). Former subsections (b)(1) and (c) are therefore deleted as redundant. Language from former subsection (c) is moved to § 421a.3(c).
Amendments are made to final-form subsection (c) (former subsection (d)) for clarity and to delete a reference to key employee suitability. As previously stated, the suitability of an employee of a licensee, in most instances, is not considered at the time the Board evaluates the suitability of an entity or its owners, officers or directors (principals) to hold a license. Similar language is deleted from final-form §§ 429a.2(c) and 431a.2(d).
Section 427a.5(a)(1) and (2) (relating to responsibilities of a manufacturer) is deleted and also deleted in other sections in the chapters regarding licensing as these provisions are in Chapter 421a. Former subsection (a)(3) is deleted and replaced with final-form subsection (a)(2). Similar language is added to final-form §§ 429a.5(a) and 431a.4(c)(2) (relating to responsibilities of a manufacturer designee; and responsibilities of a supplier).
Subsection (b) is amended for clarity. Similar amendment are made to final-form §§ 429a.5(b) and 431a.4(d).
Former subsections (c) and (d) are deleted because the provisions did not relate to the chapter or section heading. Similar language is also proposed to be deleted from former § 431a.4(f)—(h).
Section 427a.6 (relating to change of control of a manufacturer licensee) is a new requirement of manufacturer licensees. This provision provides guidance to unlicensed companies regarding the proper procedure for acquiring a manufacturer licensee. These requirements will also ensure that the acquiring company and its officers, owners and directors (principals) apply for licensure and are investigated before a manufacturer licensee is acquired. The approval requirement is also applicable to manufacturer designees in § 429a.8 (relating to change of control of a manufacturer designee licensee), supplier licensees in § 431a.6 (relating to change of control of a supplier licensee) and management company licensees in § 440a.6 (relating to change in ownership or control of a management company licensee).
Chapter 429a. Manufacturer designees
Amendments to § 429a.3 (relating to additional manufacturer designee licenses) specify that if a manufacturer designee has already been licensed, it does not need to receive a separate manufacturer designee license to supply or repair gaming equipment on behalf of a different manufacturer. Instead, manufacturer designees submit an abbreviated application (Additional Manufacturer Designee Application and Disclosure Information Form) to receive a subsequent designation.
Amendments to subsection (b) reflect amendments to final-form § 429a.2(b) and (c).
Former § 429a.5(b) is deleted. This is a statutory requirement applicable to suppliers but is not applicable to manufacturer designees.
Section 429a.7 (relating to manufacturer designee agreements) is amended for clarity and to reflect Board practice. When a manufacturer designee enters into an agreement with a manufacturer, the designee, as part of its application for a designee license, is required to submit all agreements for review. The agreements are reviewed as part of the background investigation. Any subsequent agreements, after licensure, are reviewed by Board staff. If there are issues or questions regarding the terms of the agreement, Board staff will notify the parties and request additional information or clarification.
Chapter 431a. Supplier licenses
Former § 431a.4(b) is deleted. This subsection related to financial suitability. The information would be included in the application for a supplier license and would be reviewed during the applicant's background investigation. If the applicant is not financially suitable, it would not be awarded a supplier license.
Section 431a.5(c) (relating to supplier log books) specifies that licensed, permitted or registered employees of a supplier are not required to register in the log book. Language is therefore added to subsection (b)(5) for clarity.
Chapter 433a. Principal licenses
Section 433a.1 (relating to definitions) is amended to delete ''principal slot operations officer of a slot machine licensee'' from the definition of ''officer.'' Facilities utilize a slot operations director; the individual is licensed as a key employee not as a principal.
Section 433a.3(a)(3) (relating to interests in licensees held by individuals) is amended for clarity and consistency. Similar amendments are made to §§ 433a.4(a)(3) and 433a.7(a)(3) (relating to interests in licensees held by entities; and trusts).
Sections 433a.3(d) and 433a.4(d) are amended and former §§ 433a.3(e) and 433a.4(e) are deleted to reflect the requirements adopted in §§ 427a.6, 429a.8 and 431a.6. The remaining subsections are renumbered.
Section 433a.5 (relating to institutional investors) is amended to allow institutional investors to acquire a greater ownership interest in a licensee without requiring a waiver from the Board.
Previously, institutional investors were capped at a 15% ownership interest in a principal affiliate of a manufacturer, manufacturer designee and supplier licensee and a 10% ownership interest in a principal affiliate of a slot machine licensee. This amendment will allow institutional investors to acquire less than a 20% interest in all licensees provided the institutional investor files the notice of ownership form and passive investor affirmation. Additionally, before acquiring an interest in a slot machine or management company licensee that is between 10% and 20%, the institutional investor shall provide the BIE with additional information regarding the institutional investor's operations and sources of funds.
Based on the nature of the funds associated with institutional investors, the reporting obligations to the SEC and the permissible ownership interests in other gaming jurisdictions, the Board has determined that increasing the allowable ownership interest to less than 20% would not adversely impact the integrity of gaming. Additionally, allowing institutional investors to acquire an ownership interest of less than 20% would not have other licensing implications related to changes of control or ownership.
Management companies are deleted from subsection (a)(1). Management companies act on behalf of a slot machine licensee, are subject to the same requirements as slot machine licensees and therefore the requirements in subsection (a)(2) are applicable.
Subsection (c) and additional language in final-form subsection (d) (former subsection (b)) are added to address institutional investor ownership in licensees whose securities are publicly traded on a foreign exchange.
In regard to § 433a.6 (relating to lenders and underwriters), as previously stated, management companies act on behalf of a slot machine licensee and are therefore subject to the same requirements as slot machine licensees. Therefore, management companies are added to several of the sections throughout this chapter.
In subsection (f), language at the end of the sentence is deleted as unnecessary.
Section 433a.7(b) formerly required trusts to notify the Board and submit a complete application prior to possessing any interest in paragraphs (1)—(5). The notification requirement is deleted as unnecessary. Submitting applications will serve as notice. Subsection (c) is amended for clarity.
Chapter 435a. Key, gaming and nongaming employees; Board-issued credentials
The requirements in former § 435a.1(c), (e)—(j) and (o) were applicable to all applicants and holders of a license, permit, registration or certification. However, this chapter is pertinent only to key, gaming and nongaming employees. The requirements in this section are therefore moved to §§ 421a.1 and 421a.2.
The wagering restrictions in former subsections (k)—(n) are also applicable to holders of a license, permit, registration, certification or qualification and are moved to § 423a.6a.
Section 435a.5 (relating to nongaming employee registration) addresses nongaming employee registrations. Registrations formerly did not have an expiration date. Nongaming employees do not submit a renewal application and therefore a subsequent background investigation is not conducted beyond initial registration. The Board believes that submission of a renewal application and subsequent background investigation is necessary to protect the integrity of gaming as it will ensure that every nongaming employee remains eligible and suitable to hold a registration.
Additionally, placing an expiration date on nongaming registrations will eliminate unnecessary administrative expenses associated with an ever growing number of individuals who no longer work in the gaming industry. There are currently over 5,000 nongaming employees who remain registered with and under the jurisdiction of the Board but have not worked in a position that requires registration for 2 years or more.
This section requires that nongaming employee registrations be renewed every 4 years. The application shall be submitted electronically through the Board's SlotsLink system. The renewal will cost around $40 which will cover the cost of fingerprinting with the Pennsylvania State Police and the criminal background check.
Regarding the renewal schedule, each Board credential currently issued to a nongaming employee has a date by which the credential shall be renewed with an updated employee photo. The BOL will use the expiration date on the credential as the renewal date which will ensure that renewals are staggered and will not all occur within the same month or year.
Section 435a.6 (relating to Board credentials) is amended for clarity. Specifically, subsection (c) is divided in two subsections, with subsection (c) addressing the wearing of Board-issued credentials by State employees and subsection (d) addressing the wearing of credentials by individuals who are not State employees.
Language in final-form subsection (e) (former subsection (d)) is deleted to reflect that all employees who are on the gaming floor are required to have a Board-issued credential. Former subsection (e) deleted as unnecessary.
The former heading of § 435a.8 (relating to temporary credentials) related to temporary credentials for principal and key employees and § 435a.9 related to temporary credentials for nongaming employees. Neither section addressed the issuance of temporary credentials for gaming employees. To reflect the Board practice of issuing temporary credentials to gaming as well as principals, keys and nongaming employees, language is added to § 435a.8. Language from § 435a.9, which is rescinded, is added to § 435a.8.
Section 435a.9a(a)(1) (relating to gaming service provider employee temporary access credentials) is amended for clarity. Subsection (a)(2) no longer requires an employee from the licensee's security department to escort a GSP employee provided that another employee of the licensee who is authorized to have access to the area escorts the GSP employee and both individuals sign in with the Board's casino compliance representatives. This will ensure that Board staff is aware of who is performing the work in the licensed facility and the individual responsible for supervising that employee.
Language is added to subsection (c) allowing additional flexibility, when circumstances warrant, to extend the time period to allow an employee to complete work beyond the 12 days in a 12-month period.
Former subsection (d) addressed a prohibition on the issuance of temporary access credentials to manufacturers, designees and suppliers. However, the section heading relates to GSP temporary access credentials. This subsection is deleted as misplaced and unnecessary.
Final-form subsection (d) specifies that if an operator is going to use an emergency GSP, any employee providing emergency services shall obtain a temporary access credential in accordance with this section prior to performing any emergency services at the licensed facility. This section corresponds with amendments to § 437a.10 (relating to emergency gaming service provider).
Section 435a.10 (relating to loss, theft or destruction of credentials) is amended to reflect that credentials are obtained from the Board's casino compliance representatives and are not distributed or controlled by a licensee's security department. Final-form subsection (b) (former subsection (c)) is amended to reflect that typically the employer, not the employee, will request replacement credentials from the Board.
Chapter 437a. Gaming service provider certification and registration
The amendments to § 437a.1 are made for clarity and to replace language with defined terms in § 401a.3.
Language added in § 437a.2 (relating to gaming service provider registration applications) should provide GSPs with some guidance as to when to file a sponsored versus unsponsored application. If a GSP already has a contract to provide goods or services to a slot machine licensee, the GSP completes a sponsored application. If the GSP does not have a contact with a specific licensee but anticipates that a licensee may utilize the GSP's services in the future, the GSP would complete the unsponsored application.
The language added in subsection (d) reflects the requirements in § 435a.3 (relating to occupation permit) and § 435a.5.
Former § 437a.3(d)—(f) (relating to gaming service provider certification applications) is deleted and added in § 437a.3a (relating to single transaction waiver). This is done because the section heading is not pertinent to waivers. Additionally, both registered and certified GSPs may request a single transaction waiver.
Section 437a.5 (relating to construction subcontractors) is amended to provide clarity to the regulated community. This section is applicable to subcontractors providing goods and services to other subcontractors while the licensed facility is under construction.
Subsection (c) is amended to reflect that prior to a casino opening, a licensed facility is, in essence, a construction site. Closer to opening, onsite Board staff will specify a date as to when an area of the licensed facility becomes a live gaming floor. Once designated, only those persons who hold a Board-issued credential are allowed onto the gaming floor.
In 2010, the Board amended the GSP regulations and exempted publicly traded GSPs from the requirements of certification or registration. To be eligible for the exemption, each publicly traded GSP was required to complete an authorization form to be placed on the authorized GSP list. At that time there was not an expiration placed on exemption. Although the Board believes that publicly traded GSPs should still be exempt from the certification and registration requirements, the Board has placed an expiration date on the exemption. Every 4 years, publicly traded GSPs that are exempt will have to submit the authorization form to verify that the GSP has continued to provide goods and services to licensed facilities and is still eligible for the exemption. Language relevant to the exemption expiration and renewal is therefore added in § 437a.6 (relating to registration and certification term and renewal).
Language is added in § 437a.7 (relating to registered, certified and authorized gaming service provider responsibilities) to reflect that the requirements applicable to a GSP that is registered or certified are also applicable to a GSP that is on the authorized list.
Subsections (b) and (c) are amended for clarity and to utilize terms that are already defined in § 401a.3. The requirement that offsite supervisors obtain a registration is also deleted. Language is deleted and a cross-reference is added in subsection (e) as these provisions are addressed in § 435a.9a.
Subsection (f) is added to address amendments adopted in final-form rulemaking 125-168 published at 44 Pa.B. 7057 (November 8, 2014), which rescinded § 501a.6 and moved those requirements to § 465a.20 (relating to personal check cashing). The personal check cashing provisions in § 501a.6 were applicable to licensees and GSPs, while the requirements in Chapter 465a (relating to accounting and internal controls) are applicable only to slot machine and management company licensees unless otherwise specified. Subsection (f) is necessary to ensure that requirements of personal check cashing are the same regardless of whether a licensee or a GSP acting on the licensee's behalf is performing those functions.
Section 437a.10 is amended to no longer require an emergency GSP that is not already registered or certified to file for registration or certification after providing emergency services. An employee of the emergency GSP will be required to obtain a temporary access credential before providing services. The BOL will review the explanation for use of the emergency GSP to ensure that this provision is not used to circumvent the registration and certification requirements.
Chapter 440a. Management companies
Section 440a.1 (relating to general requirements) is amended to reflect current practice. Many of the applicants for the available Category 2 slot machine license have contracted with a management company to manage the licensed facility should the slot machine applicant be awarded the license. The management company has filed an application with the Board and if the slot machine applicant were awarded the license, the management company would be licensed at that time as well.
Section 440a.2 (relating to applications) is amended to reflect that there is only one application for all categories of slot machine licenses. Additionally, if a management company is going to act on behalf of the slot machine applicant/licensee, the management company is required to complete the same application as the applicant for the slot machine license.
Section 440a.3 (relating to management company license term and renewal) is amended to reflect that a management company acts as the slot machine licensee and neither a slot machine license nor a management company license is transferrable.
A portion of § 440a.5(c) (relating to management contracts) is moved into subsection (d) and amended for clarity. The former language in subsection (d) is deleted as the business plan is essentially addressed in the requirements in subsection (f). Subsection (f) is amended to address the management of table game operations.
Chapter 441a. Slot machine licenses
Terms are added to § 441a.1 (relating to definitions). The use of these terms is explained in §§ 441a.11a and 441a.20a (relating to duty to maintain financial suitability; and changes to a slot machine licensee's initial or modified plan of development).
Former § 441a.2(a) (relating to slot machine application deadlines) is deleted for consistency with 4 Pa.C.S. Part II. Former subsection (c) is deleted as unnecessary. The handling of deficiencies in applications is addressed generally in § 423a.2 and § 441a.3 (relating to slot machine license application).
Section 441a.3 is amended to no longer require applications from key employees at the time the slot machine applicant submits an application for licensure. In most instances, key employees have not yet been identified at the time a slot machine applicant submits its application for licensure nor do most applicants hire employees unless and until the Board awards the applicant a slot machine license. The language regarding application requirements is deleted as unnecessary as application requirements for keys and principals are in Chapter 433a (relating to principal licenses) and Chapter 435a.
In subsection (a)(5), language is added to recognize that an authorized designee can sign on behalf of a chief executive officer to legally bind a slot machine applicant. Subsection (a)(6) is amended to reflect the new provisions for approval of a licensee's initial or modified plan of development in § 441a.20a.
As specified in § 423a.1(g), once submitted to the Board, applications and related materials will not be returned to the applicant. The inconsistent language in subsection (b) is therefore deleted.
Subsection (d) is amended to correct conflicting requirements. This subsection formerly required that the local impact report be submitted to the Board with the application and simultaneously to the municipality. Licensees were also required to submit proof that the municipality was served at the time the application was submitted to the Board. The language is amended and still requires licensees to submit the local impact report to the municipality and the Board (with the application) on the same day but provides that the applicant submit proof that the municipality was served within 5 days after the application is submitted to the Board. Subsection (e) is in § 421a.3 and is therefore deleted from this subsection.
Section 441a.5(e) (relating to license fee payment bond or letter of credit requirements) is amended to reflect that a slot machine license will not be issued until the license fee has been paid. The Board or Board staff, typically the BOL, will specify the date by which the fee shall be paid.
Most of the amendments to § 441a.7 (relating to licensing hearings for slot machine licenses) are made for clarity. Language in subsections (l) and (n) is amended to reflect that 4 Pa.C.S. § 1206(a) (relating to Board minutes and records) was deleted. Confidential information may be presented not in closed deliberations but during executive session in accordance with 65 Pa.C.S. § 708(a)(5) (relating to executive sessions).
Section 441a.11a is new and reflects requirements in 4 Pa.C.S. Part II.
Language in § 441a.15(b)(2) (relating to slot machine license issuance bond requirement) is deleted. Board staff reviews payment bonds submitted. If there are issues with the payment bond, the BOL notifies the applicant that was awarded the license if corrections are necessary or if additional information about the surety is required. The slot machine license will not be issued until all information is received and any necessary corrections are made.
Former § 441a.17(b)—(e) (relating to change in ownership or control of slot machine licensee and multiple slot machine license prohibition) is deleted. Final-form subsections (b)—(f) should provide clarity and specificity to the regulated community regarding the procedure to acquire an interest in a slot machine licensee which would trigger the change in control or ownership provisions of 4 Pa.C.S. Part II. The remaining subsections are renumbered.
Minor revisions are made to § 441a.18(b)(2) and (c) (relating to employee status report). Language in subsection (b)(2) is deleted because applicants for a slot machine license do not typically have employees and are therefore not required to submit an employee status report to the Board. Subsection (c) is amended to reflect that a signature on an electronically submitted employee status report is not required.
Section 441a.20a provides further detail on a requirement that is already in § 441a.3(a)(6). A licensee may change its approved plan of development with approval of the Board.
Subpart E. Slot machines and associated equipment; accounting and internal controls
Specificity is added in § 461a.7 (relating to slot machine minimum design standards) regarding how the Bureau of Gaming Laboratory Operations will calculate the theoretical payout percentage for slot machines.
A minor revision is made to § 465a.24(b)(1) (relating to count room characteristics) to clarify that the alarm device does not need to signal both security and surveillance. The licensee can designate which department will receive the audible alarm signal. Language at the end of the sentence is deleted as unnecessary. Every time the count room door is opened the audible alarm signal should be sent to security or surveillance. In subsection (b)(2), the language formerly requiring exits door to contain locks is deleted. Only entrances require dual key control. Subsection (b)(3) addresses exiting the count room and requires that licensees specify what type of door device will be used.
Subpart K. Table games
Language is added in § 609a.4 (relating to approval of credit limits) to reflect the statutory requirement that any increase in credit, whether temporary or permanent, requires reverification of a patron's credit information.
Section 609a.5 (relating to derogatory information; reduction or suspension of credit) is amended to clarify the following: if derogatory information is received, the licensee's credit department shall reverify the patron's casino credit information; if a patron's check is returned, the patrons credit privileges must be suspended; and if a patron's credit has been suspended, the licensee is required to reverify the patron's casino and consumer credit information before reinstating credit.
Amendments to §§ 623a.4 and 623a.5 (relating to making and removal of wagers; and payout odds) add clarity regarding the paying of wagers and the collection of vigorish.
The payout procedure in § 633a.7(i) (relating to procedure for dealing the cards; completion of each round of play) is amended to allow operators to either payout immediately when a player has a Blackjack or in accordance with the current regulation. Section 633a.9 (relating to surrender) is amended to allow operators to collect a surrendered hand immediately or in accordance with the current regulation.
In § 643a.12(b) (relating to payout odds; payout limitation), a new payout table is added for the Five Card Bonus Wager.
Former § 645a.5(i)(3) (relating to shuffle and cut of the cards; procedures for determining the starting position for dealing cards) is deleted as unnecessary.
Additional Revisions
Minor additional revisions were made throughout this final-form rulemaking for clarity and consistency among chapters and sections.
Language in § 421a.2(e) was deleted as redundant. When an employee is offered a position with a licensee, the licensee is required by Federal law to complete an I-9 form verifying the employee's identity and employee's legal authority to work in the United States. Additionally, as part of the background investigation, each employee must be fingerprinted. When fingerprinted, the law enforcement agency that performs the fingerprinting also verifies identity and legal authority to be in the United States. Because a prospective employee has already had his identity and legal status confirmed with the employer and law enforcement agency prior to being licensed, registered or permitted, the Board will no longer require the employee to also submit the authorization information to the Board.
Language in § 421a.4(a) was deleted unnecessary. The beginning of the subsection specifies that upon request the Bureau will make in inquiry of a potential purchaser of a licensee. It is unnecessary to include repetitive language at the end of the subsection.
In § 423a.2(b), language was added specifying that if an applicant fails to submit necessary information required under subsection (a)(1)—(3), the applicant would be given the opportunity to cure the deficiency. However, if an applicant fails to include the bond/letter of credit at the time of application, that applicant will not be given an opportunity to cure that deficiency. Applicants are required, by statute, to provide a letter of credit/bond at the time of application to demonstrate the financial ability to pay the license fee. See 4 Pa.C.S. § 1313(c) (relating to slot machine license application financial fitness requirements). The Board believes this to be a basic eligibility requirement, not curable after the application deadline.
Section 423a.3(a) addresses action Board staff will take after receiving an application. However, some of the language in final-form subsection (a)(2) (former subsection (a)(4)) was applicable to the applicant's duty to provide information to Board staff. This language was deleted as misplaced and unnecessary as the requirement of an applicant to provide information is addressed in § 421a.1(g).
In § 423a.5, language was added addressing the procedure for the surrender of a license, permit, certification or registration. The provisions added in subsection (d) reflect Board practice and are consistent with the procedural requirements in subsections (a)—(c) associated with requesting to withdraw an application.
Section 427a.1(c) was deleted as unnecessary. Manufacturers are permitted by statute to repair slot machines and associated equipment. See the definition of ''manufacturer'' in 4 Pa.C.S. § 1103 (relating to definitions) and the provisions associated with repairing machines in 4 Pa.C.S. § 1317.1(b)(6) (relating to manufacturer licenses). Additionally, the Board issues occupation permits to gaming employees who are employed by manufacturers to service and repair slot machines and associated equipment. It is unnecessary to include this provision in the regulation.
Final-form § 427a.6(b) was added so the BIE and the BOL are aware of a contemplated change of control or ownership prior to the licensee filing a petition. This is necessary because there are other licensing provisions triggered by a change of control or ownership, including the requirement that principals apply for a license, which should occur prior to petitioning the Board to change ownership or control of the licensee. This provision is also consistent with the requirement that licensed entities provide information, on an ongoing basis, relating to their financial suitability. Similar language was added in §§ 429a.8(b) and 431a.6(b) applicable to manufacturer designees and suppliers.
In § 433a.3(e), language was added for clarity to reflect that the provisions relate to indirect ownership interests not direct ownership interests. Similar language was also added in § 433a.4(e).
In § 433a.6, manufacturer designees were inadvertently excluded from the proposed rulemaking and were added in this final-form rulemaking to reflect that the requirements in this section are applicable to all entity licensees.
As it relates to § 433a.6(f), this provision formerly provided that if the Board had reason to believe the suitability of a person that holds a debt instrument of a licensee is at issue, the Board may require that person to apply for and obtain a license. The issue with the former provision is that persons that are not required to be licensed would not otherwise appear before the Board for the Board to make a determination as to suitability. This provision was changed in this final-form rulemaking to reflect that Board staff reviews debt instruments and if Board staff had reason to believe that the suitability of the person holding the debt instrument may be at issue, Board staff may require the person to apply and complete the full background investigation before the Board could make a determination as to suitability.
In § 440a.1(a), language was added to reflect that if a slot machine licensee is already operational, a new company contracted to manage the slot machine licensee would have to apply for and obtain a management company license prior to providing services to the slot machine licensee. This amendment was necessary to reflect that companies that manage operational slot machine licensees may change over time.
Section 440a.6 addressing the change in control or ownership of a management company licensee was added. These provisions were added in the proposed rulemaking to manufacturer, manufacturer designee and supplier licensees. Management company licensees were inadvertently not included in the proposed rulemaking. Management companies control and stand in the place of the slot machine licensee. Therefore, prior to changing ownership or those who control the management company licensee, the management company has to file a petition and receive Board approval to do so.
Section 461a.18(f) and (g) (relating to cashless funds transfer systems) is deleted as unnecessary. Cashless fund transfers, or the electronic transfer of credits to a patron at a slot machine, is primarily addressed in the provisions on complimentary services or items that are in § 465a.7 (relating to complimentary services or items). These types of transactions are already captured for audit, accounting and tracking purposes through the facility's slot accounting system and the Department of Revenue's Central Control Computer System.
The requirement in § 465a.2(f) (relating to internal control systems and audit protocols) that licensees provide attestations of changes to their internal controls was deleted as no longer necessary. Internal control changes are submitted electronically and each licensee is given a sign-in which is tied specifically to that licensee. For purposes of this section, the sign-in serves as the attestation.
Section 645a.2(c)(3) (relating to Pai Gow Poker table; Pai Gow Poker shaker; physical characteristics) was deleted as unnecessary. A button is used to mark which player is to receive the first stack of cards once a starting position has already been established, not as a mechanism by which to determine the starting position. Operators either use a shaker or a random number generator to determine starting position.
Language was added in § 645a.6(d) (relating to Pai Gow Poker rankings) clarifying that the royal flush plus royal match has a different definition depending on which Pai Gow Poker, Emperor's Challenge or Fortune, the operator is offering.
The paytable in § 645a.13(b) (relating to payout odds; Envy Bonus; rate of progression; payout limitation) was corrected and new paytables were added in subsection (d).
Comment and Response Summary
Notice of proposed rulemaking was published at 43 Pa.B. 6764 (November 16, 2013). Sands Bethworks Gaming, LLC (Sands) and Greenwood Gaming and Entertainment, Inc. (Parx) submitted comments on the proposed rulemaking. Additionally, on January 15, 2014, the Independent Regulatory Review Commission (IRRC) provided comments on the proposed rulemaking.
Regulated community
Parx raised issues with the proposed language in § 623a.4 specifying that Pass Bets in Craps could be wagered only before the come out roll. The language added in subsection (c) is not amending the provisions on when a Pass Bet may be wagered but is added merely for clarity. In accordance with the existing language in § 623a.3 (relating to wagers), a Pass Bet placed on the Pass Line of the layout can be made immediately prior to the come out roll, as defined in § 623a.1 (relating to definitions). In no other section of the regulations on authorized wagers has a certificate holder ever been authorized to accept a Pass Bet placed on the Pass Line of the layout after the come out point is established. Eliminating the possibility of winning on the come out roll (if the shooter throws a 7 or 11) by allowing the placement of the Pass Bet after the come out roll serves to increase the house edge. If a patron wants to participate in play after the point is already established, the patron can place a Buy or Place Bet. The provisions in this section are also consistent with the rules of play in a neighboring gaming jurisdiction.
Sands objected to three provisions in the proposed rulemaking: the requirement that facilities run credit checks each time a patron requests a credit limit increase; the requirement that operators reverify a patron's credit information prior to reinstating a patron's credit privileges; and the provisions on approval of material debt transactions and notification of refinancing transactions.
As it relates to credit limit increases in § 609a.4, Sands asserts that the statute does not require operators to reverify information prior to temporarily increasing a patron's credit information. The Board does not agree.
The Board has never recognized a this trip only (TTO) or temporary credit increase as the Board does not believe temporary credit increases, without reverification, to be permissible under 4 Pa.C.S. § 13A27(d) (relating to other financial transactions). Section 13A27 of 4 Pa.C.S. requires that if a facility is going to grant credit to a patron, the facility must complete credit application verification, establish a credit limit and two employees must approve the credit limit established.
Once a credit limit is established, the statute is clear on how that credit limit may be increased. Increases to an individual's credit limit may be approved by the licensee provided that two conditions are met: that the patron submits a written request to increase his credit limit; and that the facility reverifies the patron's credit information. The statute does not distinguish between different types of credit limit increases. The Board does not believe the statute to be ambiguous or the requirements discretionary.
Additionally, the issue of TTO or temporary credit limit increases was commented on and addressed when Chapter 609a (relating to credit) was adopted at 42 Pa.B. 2629 (May 12, 2012). The ''temporary and permanent'' language added in § 609a.4(a) and (c) is not altering what is already required and was added for clarity purposes only. The Board believes that, at a minimum, operators must reverify a patron's casino credit prior to granting any increase to the patron's credit limit.
Sands also objected to the requirement in § 609a.5(e) that operators reverify a patron's consumer and casino credit information if the patron's credit privileges were suspended for any reason. While the Board does not believe the language added expands the requirement instituted in 2012 when Chapter 609a was adopted, the Board acknowledges that there may be operational reasons unrelated to overall creditworthiness of a patron for an operator to temporarily suspend a patron's access to credit (such as updating an expired identification or verifying whether a patron walked with chips).
The Board therefore added language specifying that suspension requires reverification if the suspension was related to a patron's creditworthiness provided that the facility document the reasons why a patron's credit privileges were suspended and thereafter reinstated. Failure to document or to reverify a patron's consumer and casino credit information when the credit suspension was related to a patron's continued creditworthiness, such as a returned check, could result in an enforcement action filed with the Board against the licensee.
As it relates to the sections added at proposed on approval of material debt transactions and notification of refinancing transactions in proposed §§ 441a.25 and 441a.26, the Board withdrew these sections from the final-form rulemaking and will publish a proposed rulemaking at a later date to address financial transactions.
IRRC
Comment
IRRC commented on the deletion of the language in §§ 427a.5 and 431a.4 which allowed a licensed manufacturer or supplier to service and repair slot machines and associated equipment.
Response
As previously discussed, the language was deleted because manufacturers and suppliers are permitted by statute to repair slot machines and associated equipment. See the definition of ''manufacturer'' and ''supplier'' in 4 Pa.C.S. § 1103 and the provisions associated with repairing equipment in 4 Pa.C.S. § 1317(b)(4) (relating to supplier licenses) and 4 Pa.C.S. § 1317.1(b)(5). Additionally, the Board issues occupation permits to gaming employees who are employed by slot machine, manufacturer and supplier licensees to service and repair slot machines and associated equipment. See paragraph (6) and the additional language provided after paragraph (14) in the definition of ''gaming employee'' in 4 Pa.C.S. § 1103. It is therefore unnecessary to include this provision in the regulation as it is already permitted by statute.
Comment
As it relates to the renewal of nongaming employee registrations in § 435a.5, IRRC requested that the Board provide detail regarding how: the regulated community and nongaming employees would be notified of the renewal requirement; nongaming employees and publicly traded GSPs would transition into compliance with the new renewal requirements; the currently registered nongaming employees would obtain registrations with expiration dates; and the 2-year expiration provision would work.
Response—notification
Currently nongaming employees are credentialed with the Board once their initial application has been approved. The credential contains an expiration date. Credentials are valid for 4 years and must be updated with a new photograph upon the expiration of the credential. When the renewal provisions are adopted, the expiration of the nongaming registration will coincide with the expiration date on each nongaming employee's credential. At least 60 days prior to the expiration date on the credential, the nongaming employee would be required to complete the renewal application through the Board's web-based SLOTS Link system. The application is approximately five questions and asks that the employee update information such as address, phone number and criminal history. Typically, completion of the application is done in the licensee's human resources office just like gaming employee permit renewals.
Response—compliance
To transition licensees into compliance, the Board will utilize the date on each nongaming employee's credential as the renewal date and will provide the licensee with at least 90 days' notice of the employees that are up for renewal. For example, if this final-form rulemaking is published June 20th, at the beginning of July, Board staff will send to the licensees the names of those individuals whose renewal is due in October. In August those set to expire in November would be sent and in September, those set to expire in December would be sent. This will ensure that the applications are received at least 60 days prior to expiration, in conformance with the renewal provisions, and will give the employees at least 30 days to complete the renewal application. Each month Board staff sends out another list to the licensee/employer for those due to expire in the next 90 days. This is the exact process Board staff and the licensees already utilize for gaming employee permit renewals.
The same process would also be utilized for nongaming employees of manufacturers, suppliers and GSPs. The entity/employer would be notified of the renewal deadline at least 90 days prior to the expiration of their employee's registration.
For those nongaming employees who receive an updated photo credential just prior to the effective date of this final-form rulemaking, they would not go through the renewal process until their credential is set to expire. For example, if this final-form rulemaking is published June 20th and the nongaming employee had just received an updated photo credential on May 1, 2015, that credential would remain in effect, without going through the renewal process, until the credential expired on April 30, 2019.
This process should ensure that licensees are not inundated with nongaming renewals all at one time. The Board anticipates that there will be approximately 1,200 nongaming registrations to renew yearly, divided among the slot machine licensees, manufacturers, suppliers and GSPs. This should equate to, on average, less than ten registration renewals per slot machine licensee per month, with a much lower number of renewals for manufacturers, suppliers and GSPs.
Response—employee obtaining a registration with an expiration date
Credentials, which all employees are required to have and which are provided by the Board upon approval of an employee's license, permit or registration, are already imprinted with an expiration date. The Board will sync the credential date with the nongaming employee's renewal date. For key and gaming employees, their credential renewal date and their license/permit renewal date are already one in the same. Employees can look at their Board-issued credentials, which they are required to carry, and see when their licenses/permits are due for renewal.
Response—additional 2-year expiration provision in the proposed rulemaking
The proposed rulemaking provided that although the registrations would be renewed once every 4 years, if a registrant were not employed for 2 years in a position that requires registration that the registration would be deemed expired. After reconsidering the practicality of implementing this provision, the Board deleted the expiration provision from the final-form rulemaking. Registrations will be valid for 4 years. If the registrant does not file a renewal, the registration will expire at the end of the 4-year term.
Comment
IRRC asked that the Board explain how publicly traded GSPs would transition into compliance with the renewal provisions in § 437a.6.
Response
Publicly traded GSPs are not presently required to renew or reaffirm that they are a publicly traded entity and thus exempted from the certification and registration requirements in §§ 437a.2 and 437a.3. This final-form rulemaking requires that the publicly traded GSPs submit a form attesting that the entity is still conducting business with a licensee (and should therefore remain under the jurisdiction of the Board) and that the entity is still eligible for the exemption.
There are approximately 100 publicly traded GSPs that are authorized to conduct business with slot machine licensees that are not otherwise required to apply for certification or registration with the Board. For purposes of renewals, the Board staff will utilize the date on which the publicly traded GSP was placed on the list of GSPs authorized to conduct business. The renewal form is approximately four pages long and is available on the Board's web site.
For those publicly traded GSPs that were placed on the authorized list less than 4 years ago and are thus not yet expired, 120 days prior to expiration the Board staff will send notices that the GSPs must submit renewal forms at least 60 days prior to the expiration of the authorization.
For those publicly traded GSPs that were placed on the authorized list more than 4 years ago, upon publication of the final-form rulemaking, the Board staff will send notice that the GSPs must submit the renewal publicly traded form within 60 days. There are less than 40 GSPs that will fall under this category.
Those that do not file a publicly traded renewal form will be removed from the Board's authorized GSP list and will no longer be under the Board's jurisdiction. GSPs are notified, at the time renewal notifications are sent, that a failure to renew will result in removal of the GSP from the authorized list upon expiration of the GSP's certification, registration or authorization.
Comment
IRRC raised a clarity issue with provisions associated with material debt transactions in proposed §§ 441a.25 and 441a.26.
Response
As previously discussed, the Board withdrew these sections from the final-form rulemaking and will publish a proposed rulemaking at a later date to address financial transactions.
Comment
IRRC asked that the Board provide an explanation regarding why the Board will no longer require licensees to reverify a patron's consumer credit information prior to approving a credit limit increase as provided in § 609a.4.
Response
The Board deleted this provision for two reasons. First, consumer credit is dated information, typically at least 60 days old. However, casino credit (run through Central Credit, which is much like the three consumer credit reporting agencies) is updated more frequently. If a patron has markers with several facilities in this Commonwealth or with another facility that utilized Central Credit, the licensee would have access to that information.
Additionally, and perhaps most importantly, each time a facility runs a patron's consumer credit, the patron's overall credit rating can be negatively affected which can have lasting implications beyond access to casino credit. Casino credit, which is required to be run each time a patron requests a credit limit increase, can be run without repercussions as to the patron's consumer credit score.
Comment
IRRC requested that the Board explain why the requirement to reverify a patron's consumer credit each time an operator receives derogatory information regarding the patron was proposed to be deleted from § 609a.5.
Response
The provision requiring operators to reverify a patron's consumer credit when derogatory information is received was deleted because, in addition to the reasons previously provided, this provision, as formerly written, could, and has, had a compounding negative impact on a patron's consumer credit rating.
If, for example, a patron has lines of credit available with three facilities in this Commonwealth, and the patron has derogatory information reported from a casino in Nevada, all three facilities in this Commonwealth were required to separately reverify the patron's consumer credit information. This would show up as three separate inquiries into a person's consumer credit worthiness even if that patron has not played in facility in this Commonwealth for a period of time or is not currently utilizing credit with any licensed facility. The harm that this could cause to patrons outweighs the potential benefit particularly since derogatory information is typically reported to the licensees through Central Credit. Therefore, it is logical to require reverification of casino credit only.
Based on the Board's experience to date, the Board does not believe it necessary to continue to require licensees to run a patron's consumer credit each time a patron requests a credit limit increase or each time a facility receives derogatory information. However, if the licensee suspends a patron's credit privileges because of a bounced check or based on the nature of derogatory information received, the licensee must run both the patron's casino and consumer credit prior to reinstating the patron's credit privileges.
Affected Parties
Individuals and entities that apply for a license, permit, registration, certification or authorization will be affected by this final-form rulemaking. However, most of the amendments in this final-form rulemaking were done for clarity or to reduce or eliminate requirements with the exception of nongaming employees and authorized publicly traded GSPs. Those employees who are registered and the publicly traded GSPs that are authorized will now be required to renew their registration or authorization every 4 years. Lastly, slot machine licensees will have some additional payout options associated with table games.
Fiscal Impact
Commonwealth. The Board does not expect that this final-form rulemaking will have a substantial fiscal impact on the Board or other Commonwealth agencies. Although nongaming employees and publicly traded GSPs will be required to submit renewals, the renewals are conducted only once every 4 years and will not occur at the same time. Additionally, the Board may see some administrative cost savings associated with nongaming employees who no longer work in the gaming industry. Currently there are over 5,000 nongaming employees who are still under the Board's jurisdiction although they have not worked in a position that requires a registration in 2 years or more.
Political subdivisions. This final-form rulemaking will not have fiscal impact on political subdivisions of this Commonwealth.
Private sector. Individuals and entities that apply for a license, permit, registration, certification or authorization will be required to comply with the requirements in this final-form rulemaking. Most of the amendments in this final-form rulemaking will not have a fiscal impact on the regulated community with two exceptions (nongaming employees and GSPs).
Nongaming employees will be required to renew their registration once every 4 years. The renewal fee will be approximately $40 to cover the cost of fingerprinting and a criminal background check with the Pennsylvania State Police. There are approximately 4,000 individuals who hold a registration and continue to work with a licensee and would therefore be required to renew their registration.
Publicly traded GSPs will also be required to renew their authorization once every 4 years. The renewal fee is $250, a substantial cost savings over GSP certification or registration renewal. There are approximately 100 publicly traded GSPs that are authorized and not required to apply for certification or registration.
Additionally, GSPs that provide services to slot machine licensees on an emergency basis will no longer be required to complete an application for certification or registration, a cost savings of at least $2,500. It is unclear how many emergency GSPs will benefit from this amendment.
General public. This final-form rulemaking will not have fiscal impact on the general public.
Paperwork Requirements
This final-form rulemaking eliminates the requirement that applicants for and holders of a slot machine, management company, manufacturer, manufacturer designee or supplier license file copies of SEC filings with the Board. A one-page notification is required. Additionally, applicants will no longer be required to submit three copies of applications, only an original and one copy.
Although nongaming employees will be required to renew their registration, the application is submitted electronically through the Board's SLOTS Link system and a paper submission typically is not required.
For publicly traded GSPs that will be required to renew their authorization, the application is approximately four pages long and is available on the Board's web site.
Regarding institutional investors, the Institutional Investor Notice of Ownership Form and Passive Investor Affirmation, which is required under § 433a.5, is a single page, plus instructions and an affirmation page.
Effective Date
This final-form rulemaking will become effective upon publication in the Pennsylvania Bulletin. As it relates to nongaming employee renewals, notification will be sent at least 90 days prior to the expiration of the employee's registration to ensure compliance. Authorized publicly traded GSPs will have 60 days from the date the notification is sent to submit the authorization renewal form.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on November 4, 2013, the Board submitted a copy of the notice of proposed rulemaking, published at 43 Pa.B. 6764, to IRRC and 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, IRRC and the House and Senate Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Board has considered all comments from IRRC, the House and Senate Committees and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on April 15, 2015, 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 April 16, 2015, 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) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) The 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 Chapters 421a, 423a, 425a, 427a, 429a, 431a, 433a, 435a, 437a, 440a, 441a, 461a, 465a, 609a, 623a, 633a, 643a and 645a, are amended by adding §§ 423a.6a, 427a.6, 429a.8, 431a.6, 437a.3a, 440a.6, 441a.11a and 441a.20a, deleting § 435a.9 and amending §§ 421a.1—421a.5, 423a.1—423a.3, 423a.5, 423a.6, 423a.7, 425a.1, 427a.1, 427a.2, 427a.4, 427a.5, 429a.1—429a.7, 431a.1—431a.5, 433a.1, 433a.3—433a.8, 435a.1—435a.3, 435a.5, 435a.6, 435a.8, 435a.9a, 435a.10, 437a.1—437a.3, 437a.4—437a.8, 437a.10, 437a.11, 440a.1—440a.3, 440a.5, 441a.1—441a.7, 441a.9, 441a.10, 441a.15, 441a.17—441a.19, 441a.21, 461a.7, 461a.18, 465a.2, 465a.24, 609a.4, 609a.5, 623a.4, 623a.5, 633a.7, 633a.9, 643a.12, 645a.2, 645a.5, 645a.6 and 645a.13 to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(Editor's Note: The addition of § 440a.6 and the amendments to §§ 461a.18, 465a.2, 645a.2, 645a.6 and 645a.13 were not included in the proposed rulemaking published at 43 Pa.B. 6764. The proposed rescission of § 441a.11 and proposed §§ 441a.24—441a.26 have been withdrawn by the Board.)
(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.
WILLIAM H. RYAN, Jr.,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 45 Pa.B. 2218 (May 2, 2015).)
Fiscal Note: Fiscal Note 125-175 remains valid for the final adoption of the subject regulations.
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