SENATE BILL 711

OMNIBUS AMENDMENT

SENATE BILL 711 amends Title 4 (Amusement), which consolidated Act 71 of 2004 (The

Pennsylvania Race Horse Development & Gaming Act), to authorize the conduct of table

games at licensed slot machine facilities and amend numerous provisions of current law to

modify current practices related to the regulation of slot machine gaming.

LEGISLATIVE INTENT

• Reiterates the General Assembly’s intent to ban political campaign contributions

from persons subject to jurisdiction of the Pennsylvania Gaming Control Board

(PGCB).

• Incorporates the authorization of slot machines and table games under a single slot

machine license issued to licensed gaming entities (casinos) under Act 71 of 2004 (4

Pa.C.S.).

• Expresses the General Assembly’s intent to develop an approach to compulsive and

problem gambling of sufficient scope to ensure the availability of adequate

resources to identify, assess, and treat compulsive and problem gambling and drug

and alcohol addiction.

REFORM PROVISIONS

PGCB MEMBERS, EMPLOYEES, INDEPENDENT CONTRACTORS/PROHIBITIONS & RESTRICTIONS

• Outside employment for which a PGCB member would receive a salary,

compensation or fee in excess of 15% of the member’s gross annual salary would be

prohibited.

• The prohibition on outside income would not include the receipt of passive or

unearned income; the monetary value of healthcare benefits, retirement, pension or

annuity payments; amounts received from a family-controlled trade or business; and

fees and expenses attributable to membership on a corporate or nonprofit board.

• Clarifies that a former member of the PGCB cannot appear in any hearing or

proceeding or participate in any other activity on behalf of an applicant, licensed

entity or an affiliate, intermediary, subsidiary or holding company thereof, or any

other licensee or permittee for 2 years following the termination of a member’s

term of office.

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• Employees of the PGCB whose duties involve licensing or enforcement, the

development of laws or the development of regulation or policy related to gaming,

or who have discretionary authority that could affect the outcome of an action,

proceeding or decision of the PGCB would be prohibited from accepting

employment from or being retained by an applicant or licensed entity (including a

slot machine licensee, manufacturer licensee or supplier licensee) or appearing

before the PGCB on behalf of a licensed entity, licensee or permittee for 2 years

following termination of employment with the PGCB.

• As a condition of employment, employees of the PGCB whose duties involve

licensing or enforcement, the development of laws or the development of regulation

or policy related to gaming, or who have discretionary authority that could affect the

outcome of an action, proceeding or decision of the PGCB would be required to sign

an affidavit stating that the employee would not accept employment with or be

retained by an applicant or licensed entity for a period of 2 years after termination

of employment with the PGCB.

• Prohibits independent contractors of the PGCB whose duties involve consultation

relating to licensing, enforcement or other activities related to gaming from

accepting employment from or being retained by an applicant or licensed entity for

1 year following termination of the contract with the PGCB. Independent contractors

would also be prohibited from appearing before the PGCB on behalf of an applicant,

licensed entity or licensee for 2 years following termination of the contract. As a

condition of receiving a contract with the PGCB, independent contractors and their

employees would be required to sign an affidavit agreeing not to accept

employment with an applicant or licensed entity for a 1-year period following

termination of the contract or termination of employment with the independent

contractor of the PGCB.

• A provision would extend the post-employment restrictions and prohibitions, and

the waiver requirements to various employees substantially involved in processes

involving licensing, enforcement, and the development of regulations following

termination of their employment, i.e., employees of the Department of Revenue and

the Office of Attorney General, and the Pennsylvania State Police (PSP).

• The State Ethics Commission would be required to publish in the PA Bulletin a list of

all employment positions within the PGCB and those of independent contractors,

which would subject employees to the post-employment restrictions and

prohibitions. A similar list would have to be published to cover employment

positions within the Department of Revenue, the Office of Attorney General, and the

Pennsylvania State Police.

• A member of the PGCB found in violation of the outside employment ban or the

post-employment prohibitions could be removed by his or her appointing authority

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and, if so removed, would be prohibited from: future appointment to the PGCB;

applying for a license, permit or other authorization; serving as an independent

contractor; and registering as a licensed entity representative for a 5-year period

following the date of removal from the PGCB.

• An employee of the PGCB and an independent contractor or an employee of an

independent contractor found in violation of the post-employment prohibitions or

any other employment restriction would be prohibited from: applying for a license,

permit or other authorization; serving as an independent contractor; and registering

as a licensed entity representative for a period of 5 years from the date of

termination of employment or contract with the PGCB.

• Members and employees of the PSP, employees of the Department of Revenue, and

employees of the Office of the Attorney General whose duties involve licensing,

enforcement, or activities related to gaming would be prohibited from accepting

employment from a licensed entity or appearing before the PGCB on behalf of a

licensed entity for 2 years following termination of employment with the relevant

agency.

• In the event of a budgetary impasse or other fiscal crisis, members and employees of

the PGCB, employees of the Department of Revenue, and the PSP whose duties

involve the regulation and oversight of gaming would not be subject to any furlough

ordered by the Governor.

PGCB POWERS & DUTIES

BACKGROUND INVESTIGATIONS

• The PGCB would be prohibited from hiring an individual to serve as executive

director, chief counsel, director of the Bureau of Investigations and Enforcement

(BIE), or director of the Office of Enforcement Counsel before receiving and

reviewing the results of the candidate’s background investigation conducted by the

PSP.

REQUIRED INTERNET POSTINGS

• The PGCB would be required to post the following information on its Internet

website:

o The names of all persons with a controlling interest or ownership interest in an

applicant for a slot machine license or a licensed gaming entity or any affiliate,

intermediary, subsidiary, or holding company thereof.

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o The slot machine licensees that filed a petition for authorization to conduct table

games and the status of each petition or table game operation certificate. This

information would be published in January of each year on the PGCB website

and in the PA Bulletin.

o A log detailing the time, date, and subject of any meeting or discussion a

member of the PGCB has on the business premises of the PGCB with an

applicant, licensed entity, permittee, registrant, licensed entity representative,

or a person who provides goods, property, or services to a slot machine licensee

or any other person under the jurisdiction of the PGCB.

• The PGCB would be required to adopt regulations to govern post-employment

limitations and restrictions of its employees. In developing such regulations, the

PGCB could consult with the State Ethics Commission, other governmental agencies,

and the Disciplinary Board of the Supreme Court to develop regulations to govern

post-employment restrictions and limitations applicable to members and employees

of the PGCB who are also members of the PA Bar.

CODE OF CONDUCT

• The “code of conduct” provisions would be modified to:

� Clarify the registration requirements for “licensed entity

representatives”;

� Further prohibit PGCB members from accepting any discount, gift,

gratuity, or complimentary service from an applicant, licensed entity or

any affiliate, subsidiary or intermediary of an applicant, or a licensed

entity;

� Further prohibit members of the PGCB from soliciting charitable

contributions from individuals and persons involved in gaming and

licensed, permitted, registered, or otherwise authorized by the PGCB to

engage in activities under Title 4;

� Prohibit members of the PGCB from engaging in discussions with any

applicant, licensed entity, permittee, registrant, licensed entity

representative, person who provides goods, property, or services to a slot

machine licensee, or any other person or entity under the jurisdiction of

the PGCB unless the meeting or discussion occurs at the office of the

PGCB and is recorded in a log.

REGULATORY AGENCIES

• Provisions would be added to require the PSP, the Office of the Attorney General,

and the Department of Revenue to adopt a similar code of conduct to provide

guidance to various employees and independent contractors of the agencies whose

duties substantially involve licensing or enforcement, the development of laws, or

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the development or adoption of regulations or policy related to gaming, or who has

other discretionary authority which may affect the outcome of an action, decision,

or proceeding concerning gaming.

EX PARTE COMMUNICATIONS

• The ex parte communications provisions would be clarified and expanded to provide

a process to govern the disclosure of ex parte communications between PGCB

members and certain employees. Specifically:

o A PGCB member or hearing officer would be prohibited from engaging in an ex

parte communication with any person.

o An attorney of the Office of Chief Counsel who advises the board on a particular

licensing issue or proceeding would be prohibited from engaging in an ex parte

communication with any person.

o An attorney representing the BIE, the Office of Enforcement Counsel, or an

applicant, licensee, or permittee in any proceeding would be prohibited from

engaging in an ex parte communications with a PGCB member, an attorney of

the Office of Chief Counsel who is advising the PGCB on a proceeding, or a

hearing officer of the PGCB.

o An employee of the BIE or the Office of Chief Counsel would be prohibited from

engaging in an ex parte communication with a PGCB member, an attorney of the

Office of Chief Counsel who is advising the board on a proceeding, or a hearing

officer of the PGCB.

• Any ex parte communication received or engaged in by a PGCB member or a hearing

officer would have to be recorded in a log to disclose the name of the individual

documenting the ex parte communication, the date and time of the communication,

the names of all individuals involved, and the subject discussed. The PGCB would be

required to notify all parties affected by the ex parte communication in order to

provide them with an opportunity to respond.

• If there would be substantial reasonable doubt that a PGCB member or hearing

officer that made or received an ex parte communication could act objectively,

independently, or impartially, the individual would be required to recuse himself

from any hearing or proceeding related to the ex parte communication.

• If a legislative appointee would recuse himself from a hearing or proceeding because

of an ex parte communication, any qualified majority would consist of the remaining

legislative appointees and at least two gubernatorial appointees.

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• The failure of a hearing officer to recuse himself from a hearing or proceeding

because of an ex parte communication would be grounds for appeal to the PGCB.

The failure of a PGCB member to recuse himself would be grounds for appeal to a

court of competent jurisdiction.

• A PGCB member would not be prohibited from consulting with another member if

such consultation would comply with the Open Meeting provisions of Title 65 (Public

Officers).

• The definition of “ex parte communication” would be expanded to exclude

communications between the PGCB, a member of the PGCB, and the Office of Chief

Counsel.

EXPENSES OF REGULATORY AGENCIES

• Members and employees of the PGCB and employees of the Department of

Revenue, the Office of Attorney General, and the PSP could seek reimbursement for

actual and reasonable expenses incurred during the performance of their duties

related to the regulation and enforcement of gaming.

• A receipt would be required if the member or employee would seek reimbursement

for an expense paid or which would be paid by an applicant or a slot machine

licensee or from regulatory assessments.

• Receipts and requests for reimbursements by employees of regulatory agencies

would be financial records for purposes of, and subject to redaction under, the

Right-to-Know Law.

PUBLIC INPUT HEARINGS

• The PGCB would be required to hold at least one public input hearing before

approving or renewing a slot machine license and before approving the structural

redesign of a licensed facility located in Philadelphia.

• All public input hearings must be convened in the municipality where the licensed

facility will be or is located.

• At each public input hearing, the PGCB would be required to provide a reasonable

public comment period during which members of the public could provide

comments regarding the application for a slot machine license, the license, or the

proposed structural redesign of the licensed facility.

CONFIDENTIALITY OF INFORMATION

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• The following information submitted by an applicant for licensure or obtained

through background investigations could be withheld from public disclosure:

o Information related to the character, honesty, and integrity of an applicant or

licensee, including family information, habits, reputation, and history of criminal

activity, business activity, financial affairs, and professional and personal

associations;

o Nonpublic personal information such as contact information, Social Security

numbers, educational records, medical records, bank records, financial

condition, and credit worthiness;

o Documents containing proprietary information, trade secrets, patents,

engineering designs, and marketing materials, which may include customer-

identifying information;

o Security information such as risk prevention plans, location of count rooms,

emergency management plans, security and surveillance plans, and protocol

information;

o Information, the release of which would constitute an unwarranted invasion of

personal privacy;

o Records that are not required to be filed with the Securities & Exchange

Commission, and records and information which are considered nonpublic by

the Securities & Exchange Commission;

o Financial information deemed confidential by the PGCB.

• A claim of confidentially could not be made for information that is available to the

public, including information from a criminal history record check and information

possessed by the PGCB.

• For public input hearing purposes, the PGCB could release architectural renderings

of models depicting the proposed structural design or redesign of a licensed facility

that is the subject of the hearing.

PROHIBITION ON DISCLOSURE

• Current or former PGCB members, employees, independent contractors, and agents

of independent contractors, and members and employees of the PSP, the

Department of Revenue, and the Office of Attorney General, or any other executive-

branch office that has obtained confidential information would be prohibited from

intentionally and publicly disclosing such confidential information to any person,

unless the person is authorized by law to receive the information.

• The unlawful disclosure of confidential information would constitute a misdemeanor

of the third degree. Any employee, agent or, independent contractor who

committed a violation would be disciplined administratively by discharge,

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suspension, termination of contract, or other formal disciplinary action as deemed

appropriate.

• If a current PGCB member would unlawfully disclose confidential information, the

remaining members would be required to refer the matter to that member’s

appointing authority.

PROVISIONS AFFECTING SLOT MACHINE LICENSEES

LICENSING STANDARDS

• Clarifies that an applicant for a slot machine license must demonstrate by clear and

convincing evidence that he or she is a person of good character, honesty, and

integrity.

• Extends the license renewal period for a slot machine license from the current 1-

year period to 3 years. Each such slot machine licensee would be required to notify

the PGCB of any change in the status of its license or any other information

contained in its application materials that are on file with the PGCB.

• An applicant for a slot machine license could include the information necessary to

obtain a table game operation certificate in its initial application for a slot machine

license. The PGCB could allow an applicant with a pending slot machine application

to supplement its application with the information necessary to obtain a table game

operation certificate.

RETURN OF $50M LICENSING FEE

• Establishes the end date for the return of the full $50 million slot machine license

fee to be within 5 years of the date established by the PGCB as the deadline for the

initial submission of applications for a slot machine license.

• Clarifies that increasing the number of Category I and Category II licensed facilities

could trigger the return of the $50 million slot machine license fee.

• Each Category I and Category II slot machine licensee that would petition the PGCB

for a table game operation certificate would have to include in the petition a waiver

of the right to seek a return of the slot machine license fee. The PGCB would be

required to impose a condition on a table game operation certificate that the slot

machine licensee could not seek return of the $50 million license fee.

• Clarifies that if the $50 million license fee would be returned to any slot machine

licensee it must be returned to all licensees.

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• If the slot machine license fee would be returned because of an amendment to the

slot machine law, the PGCB would be required, within 10 days of such return, to

impose an additional licensing fee on all Category I and Category II slot machine

licensees in an amount equal to the amount of the license fee required to be

returned.

• Each Category I and Category slot machine licensee would be required to pay the

additional fee within two business days following the return of the initial fee.

NUMBER OF SLOT MACHINES

• Extends the time period by which each Category I and Category II slot machine

licensee must have 1,500 slot machines available for play to the later of 36 months

or December 31, 2012.

• After the expiration of the 36-month extension period or December 31, 2012, each

Category I and Category II slot machine licensee would be required to make 1,500

slot machines available for play.

• Deletes the provision that prohibits licensed gaming entities from acquiring more

than 50% of the slot machines made available for play at its licensed facility from the

same manufacturer.

CATEGORY II LICENSED FACILITIES

• A city of the first class would be prohibited from exempting a Category II licensed

facility from real property taxation or providing any real property tax abatement to

such a facility unless the slot machine licensee would enter into or has entered into

a tax-settlement agreement or payment-in-lieu-of-taxes agreement with the city.

CATEGORY III LICENSED FACILITIES

• Category III facilities would be required to limit the individuals who could enter the

gaming area of a resort hotel to registered overnight guests, patrons of the

amenities, and individuals who are members of the resort hotel and up to 4 guests

of such member.

• The PGCB would be given the authority to license two additional Category III

licensed facilities. A Category III facility licensed by the PGCB after November 30,

2009, could not be located within 30 linear miles of another licensed facility.

• The PGCB would be required to establish a 90-day application period for the

acceptance of applications for all Category III licenses that have not been awarded.

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SUPPLIER AND MANUFACTURER LICENSES

• The license renewal period for a supplier license and a manufacturer license would

be extended from the current 1-year period to 3 years. Each licensed supplier and

licensed manufacturer would be required to notify the PGCB of any changes in the

status of its license or any other information contained in the application materials

filed with the PGCB.

• The annual renewal fee for a slot machine supplier license would be increased to

$15,000 (currently $10,000).

• The annual renewal fee for a slot machine manufacturer license would be increased

to $30,000 (currently $25,000).

GAMING SERVICE PROVIDERS

• Provisions would be added to provide statutory authority for the PGCB to develop a

classification system to govern the certification, registration, and regulation of

gaming service providers (currently regulated as vendors) and individuals and

entities associated with them.

DIVERSITY PROVISIONS

• Expands the diversity provisions to require the PGCB to ensure that contracts and

subcontracts awarded for the construction, renovation, or reconstruction of a

licensed facility and that professional services rendered to licensed entities contain

provisions that promote the participation of diverse groups and afford equal access

to employment opportunities and professional service contractual opportunities.

• Each slot machine licensee would be required to submit a quarterly report to the

PGCB describing activities undertaken at its licensed facility related to the

development and implementation of its diversity plan during the previous quarter.

• The quarterly reports would have to contain a summary of:

o Employee recruitment and retention efforts to ensure the participation of

diverse groups in employment with the licensee;

o The total number of hires and employment offers made, including demographic-

specific data for individuals hired or offered employment;

o Contracting and subcontracting data involving minority-owned and women-

owned business enterprises.

• The PGCB would be required to conduct annual reviews of each slot machine

licensee’s activities related to the implementation of diversity plans to ascertain

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whether effective and meaningful action has been taken to implement diversity and

whether the licensee’s diversity plan and any other actions taken by the licensee

have achieved or will achieve diversity. Each review, at a minimum, would have to

contain a descriptive summary of each slot machine licensee’s:

o Employee recruitment and retention programs designed to ensure diversity;

o The total number of individuals hired and offers of employment made, including

demographic-specific data on such hires and offers made;

o Data related to minority-owned and women-owned business enterprises,

contracting, and subcontracting activities.

LICENSING STANDARDS

LICENSES RENEWALS

• Except as provided, all licenses and permits issued by the PGCB would be subject to

renewal every 3 years rather than annually.

• The amount of any license or permit renewal fee would be calculated by the PGCB to

reflect the longer renewal period.

FELONY BAN

• The PGCB would be prohibited from granting a principal license or a key employee

license to an individual who has been convicted of a felony offense in any

jurisdiction (lifetime ban).

• A principal license or key employee license could not be issued to an applicant who

has been convicted in any jurisdiction of a misdemeanor gambling offense within 15

years.

• The PGCB would be prohibited from issuing a gaming employee permit or a license

other than a principal or key employee license to an individual who has been

convicted in any jurisdiction of a felony offense or of a misdemeanor gambling

offense.

• A felony offense would be defined as an offense punishable by imprisonment for

more than 5 years.

DISCLOSURE REQUIREMENTS

• Applicants for a license or permit would be required to disclose all arrests and

citations issued for summary gambling offenses, including the circumstances

surrounding the arrest, the specific offense charged, and the disposition of the

charge.

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• Applicants for a license or permit would not be required to provide documentation

relating to any summary offense. The failure of the BIE to secure records of a

summary offense could not be used as grounds for denying a license or permit.

• In its review of an applicant’s suitability for a license or permit, the PGCB would be

required to consider a conviction for a felony offense or a misdemeanor gambling

offense that has been expunged, overturned, pardoned, or is subject to ARD.

• Applicants for a slot machine license, principal license, or key employee license

would be required to apply to an appropriate agency of the federal government to

secure federal records pertaining to the applicant under the Freedom of Information

Act and provide the PGCB with any record so received.

AUTHORITY TO SUSPEND LICENSE

• Any slot machine licensee that is required to make periodic payments to a

municipality, municipal authority, or other entity for an economic development

project as a condition of licensure would be required to enter into a written

agreement with the municipality, municipal authority, or other entity establishing

the terms of the required payments, including the amounts of each payment.

• The PGCB would be given the authority to suspend the slot machine license of any

slot machine licensee who would fail to enter into the required written agreement

and appoint a trustee to oversee the operations of the slot machine licensee. The

suspension would remain in effect until the slot machine licensee entered into the

written agreement with the municipality, municipal authority, or other entity.

• If a slot machine licensee would fail to comply with the terms of the written

agreement or make the required payments, the PGCB would be authorized to take

any action it would deem necessary to ensure compliance.

PORTABILITY OF SLOT MACHINE LICENSE

• An applicant for a slot machine license or a slot machine licensee could petition the

PGCB for the authority to relocate its licensed facility.

• The PGCB could approve the request to relocate the licensed facility if the relocated

facility would remain in the same county, would facilitate the timely

commencement of gaming operations, would comply with siting and statutory

location requirements, and would be in the best interest of the Commonwealth.

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APPOINTMENT OF TRUSTEE

• Provisions would be added to govern the appointment of individuals or persons by

the PGCB to serve as a trustee to operate a licensed facility that is subject to a

suspended, revoked, or non-renewed slot machine license or principal license.

• A trustee would have to be a resident of the Commonwealth and would be required

to qualify for and obtain a principal license.

REGULATORY ASSESSMENTS

• The amounts slot machine licensees are required to deposit in the section 1401

accounts to cover regulatory cost associated with slot machine gaming would be

reduced to $1.5 million for Category I and Category II slot machine licensees, and to

$1 million for Category III slot machine licenses. (Currently, all slot machine licensees

are required to maintain $5 million in their individual 1401 accounts.)

ITEMIZED BUDGET REPORTING

• The Department of Revenue, the Office of Attorney General, and the PSP would be

required to submit copies of their itemized budgets to the PGCB at the same time

they are submitted to the Appropriations Committees of the House and Senate.

• The PGCB would be required to prepare and submit an analysis, with

recommendations, of each budget to the Appropriations Committees.

TRANSFERS & DISTRIBUTIONS OF GROSS TERMINAL REVENUE

• The transfers and distributions of local share assessments from slot machine

revenue would be modified in the following manner:

o If the licensed facility is a Category I licensed facility located in a 3rd Class County

(Luzerne County) where harness racing is conducted, 2% of the gross terminal

revenue from the licensed facility would be deposited into a restricted receipts

account in the Commonwealth Financing Authority to fund grants for projects in

the public interest. Priority would be given to multi-year projects previously

approved or awarded by the Department of Community & Economic

Development (DCED).

o For a Category I licensed facility located in a 4th Class County (Washington

County) where harness racing is conducted, 2% of the gross terminal revenue

from slot machine gaming would be distributed as follows:

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� The DCED would make distributions directly to each municipality within

the County, except the host municipality, based on a formula equal to

$25,000 plus $10 per resident of the municipality. The amount

distributed to a municipality could not exceed 50% of its total budget for

the 2009 fiscal year.

� Each municipality in the 4th Class County that receives a local share

distribution could use the funds for any lawful purpose but would be

required to submit a report to the DCED detailing the amount and

purpose of each expenditure during the previous fiscal year.

o If the licensed facility is a Category II licensed facility located in a 5th Class County

(Monroe County), the County would receive 2% of the gross terminal revenue

from slot machine gaming with 1% distributed as follows:

� Beginning in 2010 and for a period of 20 years, $2.4 million would be

distributed to the County to fund debt service related to the construction

of a community college campus located within the county.

� Any remaining funds would be deposited into a restricted receipts

account in the DCED to, among other things, fund the cost of road

projects located within a 20-mile radius of the licensed facility and

located within the County.

� A provision would be added to prohibit the receipt of grant funds by a

contiguous county (Luzerne County) that hosts a Category I licensed

facility.

• If the licensed facility would be a Category III licensed facility located in a 2nd Class-A

county (Montgomery County), 2% of the gross terminal revenue from slot machine

gaming would be deposited into a restricted receipts account established in the

Commonwealth Financing Authority to be used for grants or guarantees for projects

in the County.

• $160,000 of the local share funds received by East Hanover Township, Dauphin

County, would be distributed to the 2nd Class Township in Lebanon County that is

adjacent to the licensed facility.

• If the licensed facility is a Category III licensed facility located in a Borough

(Wyomissing) in a 3rd Class County (Berks County) that is contiguous to a 3rd Class

City (Reading), 50% of 1% of the gross terminal revenue from slot machine gaming

would be distributed to the Borough and 50% of 1% would be distributed to the 3rd

Class City. The revenue distributed to the borough and 3rd Class City could not

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exceed 50% of their total municipal budget for the 2009 fiscal year. Any remaining

moneys would be distributed to the host county.

REPORTS

• The DCED would be required to prepare and submit an annual report to the

Appropriations Committee and committees of relevant jurisdiction in both chambers

of the General Assembly detailing all distributions of local share assessments. The

initial report would be due by August 31, 2010, and by each August 31 thereafter.

• All counties and municipalities that receive distributions of slot machine revenue

through local share assessments would be required to submit information to the

DCED on the total amount and use of local share funds received in the prior calendar

year.

PROHIBITED ACTIVITIES

• A person, an affiliated entity of a person, or a political subdivision would be

prohibited from engaging a person to lobby for compensation that would be

contingent, in whole or in part, upon the approval, award, receipt, or denial of local

share funds.

• A person or an affiliated entity of a person would be prohibited from engaging in or

agreeing to engage in lobbying for compensation contingent, in whole or in part,

upon the approval, award, receipt, or denial of local share funds.

• The prohibition against the payment of contingency fees to secure local share funds

would not apply to a county or municipality that pays a person to prepare grant

applications for local share funds if the person: would not be identified in the

application; had no direct contact with the agency, county, or municipality providing

the funds; and would be paid a fixed fee or percentage amount up to 0.5% of any

money received.

PA RACE HORSE DEVELOPMENT FUND

• Beginning on January 1, 2010, and for the remainder of the 2009-2010 fiscal year,

34% of the money in the PA Race Horse Development Fund would be transferred to

the General Fund and 66% would be distributed to each active and operating

Category I slot machine licensee conducting live racing. Of the moneys distributed to

Category I licensed facilities:

o 4% of the amount, or $275,000, would be used to fund health and pension

benefits for members of the horsemen’s organizations representing the owners

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and trainers at the racetrack for the benefit of the horsemen’s membership,

their families, employees, and others as determined by the appropriate racing

commission.

o A minimum of $250,000 would have to be paid annually by the horsemen’s

organization to the thoroughbred jockeys or standardbred driver’s organizations

at the racetrack for health insurance, life insurance, or other benefits to active

and disabled jockeys and drivers. The total distributions for health and pension

benefits for the 2009-2010 fiscal year shall not exceed $11.4 million.

o Of the remaining funds, 83⅓ % would be deposited into interest-bearing purse

accounts for the benefit of the horsemen; for thoroughbred tracks, 16⅔ % of the

money distributed would be deposited on a weekly basis into the PA Breeding

Fund as follows: for standardbred tracks, 8⅓ % would be deposited on a weekly

basis into the Sire Stakes Fund and 8⅓ % would be deposited on a weekly basis

into the Standardbred Breeders Development Fund in the State Racing Fund.

• For fiscal years 2010-2011 through 2012-2013, 17% of the funds in the PA Race

Horse Development Fund would be transferred to the General Fund on a weekly

basis and 83% would be distributed to each active and operating Category I licensed

facility conducting live racing as follows:

o 4% of the amount, or $220,000, would be used to fund health and pension

benefits for members of the horsemen’s organizations representing the owners

and trainers at the racetrack for the benefit of the horsemen’s membership,

their families, employees, and others as determined by the appropriate Racing

Commission.

o A minimum of $250,000 would have to be paid annually by the horsemen’s

organization to the thoroughbred jockeys or standardbred driver’s organizations

at the racetrack for health insurance, life insurance, or other benefits to active

and disabled jockeys and drivers. The total distributions for health and pension

benefits in any fiscal year could not exceed $11.4 million.

o Of the remaining funds, 83⅓ % would be deposited into interest bearing purse

accounts for the benefit of the horsemen; for thoroughbred tracks, 16⅔ % of the

money distributed would be deposited on a weekly basis into the PA Breeding

Fund; for standardbred tracks, 8⅓ % would be deposited on a weekly basis into

the Sire Stakes Fund and 8⅓ % would be deposited on a weekly basis into the

Standardbred Breeders Development Fund in the State Racing Fund.

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GAMING ECONOMIC DEVELOPMENT & TOURISM FUND

• Moneys in the PA Gaming Economic Development & Tourism Fund that were

directed to retire indebtedness and for financing a hotel or convention center in

Pittsburgh under the slot machine law would be redirected to a restricted account in

the DCED. The moneys would be used exclusively to fund economic development,

infrastructure development, job training, infrastructure development, community

development, public safety, and other projects in the public interest in Allegheny

County. Eligible applications seeking project funds would be submitted to the

Commonwealth Financing Authority by Allegheny County’s redevelopment

Authority.

REPORTS

• The Office of the Budget would be required to cooperate with the

Department of Community & Economic Development to prepare and submit

an annual report detailing all transfers made from the PA Gaming Economic

Development & Tourism Fund, and all distributions, reimbursements, and

payments made under the PA Gaming Economic Development & Tourism

Fund Capital Budget Itemization Act. The report would be submitted to the

Appropriations Committees and committees of relevant jurisdiction in both

chambers of the General Assembly by August 31, 2010, and by August 31 of

each year thereafter.

• Philadelphia, Pittsburgh, Allegheny County, and all entities that receive

money from the PA Gaming Economic Development & Tourism Fund

pursuant to an Economic Development Capital Budget would be required to

submit an annual report to the Office of the Budget. The report would

provide information on all funds received, including records of expenditures,

payments, and other distributions made from moneys received from the PA

Gaming Economic Development & Tourism Fund by the political subdivisions

and entities. The report would be due by August 31, 2010, and by August 31

of each year thereafter.

DISTRIBUTION TO INTERNATIONAL AIRPORT

• Upon the distribution of $42.5 million to Allegheny County for debt service

and economic development projects for an international airport, all

remaining money for that purpose would be distributed directly to the

airport authority operating the international airport in Allegheny County.

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TRANSFERS FROM THE STATE GAMING FUND

• The moneys transferred from the State Gaming Fund to the Compulsive & Problem

Gambling Treatment Fund would be increased to $2 million or an amount equal to

0.02% of the total gross terminal revenue of all active and operating licensed gaming

entities.

• Beginning in January 2010, $3 million would be transferred to the Department of

Health for drug and alcohol addiction treatment services, including treatment for

drug and alcohol addiction related to compulsive and problem gambling.

• Transfers from the State Gaming Fund for local law enforcement grants would be

decreased to $2 million annually. A local law enforcement agency would be

expanded to include the PSP when it provides enforcement and prevention services

in a municipality that does not have a municipal police department and in which the

PSP provides primary police coverage.

COMPULSIVE & PROBLEM GAMBLING PROGRAM

• The Department of Health’s Bureau of Drug and Alcohol Programs and the PGCB’s

Office of Compulsive and Problem Gambling would be required to jointly collaborate

with other offices and agencies of state or local government, including single county

authorities, and providers with expertise in compulsive and problem gambling

treatment to, among other things, implement a strategic plan for the prevention and

treatment of compulsive and problem gambling, and to adopt treatment standards

that could be integrated with the Bureau of Drug and Alcohol Program’s uniform

statewide guidelines that govern the provision of addiction treatment services.

• The compulsive and problem gambling program would be expanded to provide

funds to single county authorities to be used solely for drug and alcohol addiction

assessments, including drug and alcohol addiction assessments associated with or

related to compulsive and problem gambling, and related addiction treatment in

non-hospital residential detoxification facilities, non-hospital residential

rehabilitation facilities, and halfway houses licensed by the Department of Health.

STATE ETHICS COMMISSION

• The State Ethics Commission would be required to issue a written determination to

ascertain whether a person would be subject to the financial interest, employment,

and complimentary services prohibitions.

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• A person who relied in good faith on a determination made by the Ethics

Commission would not be subject to any penalty for an action taken, provided all

material facts depicted in the request are accurate.

• A person who relied in good faith on the list published by the Ethics Commission that

defines “public official” and “executive-level public employee” would also not be

subject to any penalty for a violation of the financial interest, employment, and

complimentary services prohibitions.

PENALTIES

• A licensed gaming entity or any person with a controlling interest in a licensed

gaming entity or a subsidiary of a licensed gaming entity or any officer, director, or

management level employee of a licensed gaming entity who would make a

prohibited political contribution for a second time within a 5-year period would be

required to pay a fine equal to an amount not less than two times the average single

day’s gross terminal and gross table game revenue.

PROSECUTORIAL AND ADJUDICATORY FUNCTIONS

• The PGCB would be required to adopt regulations that would ensure that the BIE is a

distinct entity, and that would prevent commingling of the investigatory and

prosecutorial functions of the BIE and the adjudicatory functions of the PGCB. The

regulations would have to contain provisions that would guarantee that neither the

executive director nor the chief counsel of the PGCB could direct or limit the scope

of a background investigation or a code of conduct.

BUREAU OF INVESTIGATIONS & ENFORCEMENT (BIE)

• The BIE would be prohibited from disclosing any portion of a background

investigation report to a member of the PGCB before submission of the final

background investigation report of an applicant’s suitability to the PGCB.

• The Office of Enforcement Counsel, on behalf of the BIE, would be required to

prepare the final background investigation report for inclusion in a final report of an

applicant’s suitability for licensure.

• •The Office of Enforcement Counsel would be given the authority to petition the

PGCB for the appointment of a trustee to oversee the operations of a licensed

facility upon the suspension or revocation of a slot machine license.

• The director of the Office of Enforcement Counsel would be authorized to petition a

court of record with jurisdiction over information possessed by an agency for

authorization to review that information if the information is material to a pending

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investigation or inquiry being conducted by the BIE. If there would be no court of

jurisdiction over the information possessed by an agency in this Commonwealth, the

director could petition the Commonwealth Court for authorization to review the

information held by an agency.

PENNSYLVANIA STATE POLICE (PSP)

• The PSP would be required to conduct a background investigation of an individual

selected by the board to serve as executive director, director of the BIE, chief

counsel of the PGCB, or director of the Office of Enforcement Counsel promptly

upon request.

• By March 1 of each year, the commissioner of the PSP would be required to submit a

report summarizing all PSP law enforcement activities at each licensed facility during

the previous year. The report would be submitted to the Appropriations Committees

and committees of relevant jurisdiction in both chambers of the General Assembly

and would have to contain arrest information, specific offenses charged, criminal

prosecutions instituted, the number of troopers assigned to each licensed facility,

and the number and subject matter of complaints made in licensed facilities.

LIQUOR CODE

• A person that holds a slot machine license and a license issued by the PA Liquor

Control Board would not be subject to the “Three Strikes” provisions of the Liquor

Code.

• The amount of a fine for a violation of the Liquor Code shall not be less than $250 or

more than $25,000. The prior citation history of the slot machine licensee would be

used to determine the amount of any fine.

ELECTRONIC FUNDS

• A slot machine licensee would be prohibited from installing, owning, operating, or

allowing another person to install, own, or operate, on the premises of its licensed

facility, a slot machine or table game that is played with a device that allows a player

to operate the slot machine or table game by transferring funds electronically from a

debit or credit card or through an electronic funds transfer.

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TABLE GAMES

AUTHORIZATION TO CONDUCT

• The PGCB could authorize a slot machine licensee to conduct table games, contests,

and tournaments and to operate a system of wagering associated with the conduct

of table games.

• Each slot machine licensee would be required to petition the PGCB for authorization

to conduct table games at a licensed facility.

• For a petition to be awarded, a slot machine licensee must provide the information

and documentation necessary to demonstrate by clear and convincing evidence that

it has sufficient finances to pay the authorization fee and the business ability and

experience to create and maintain a successful table game operation.

• In the case of a Category I or Category II slot machine licensee, the petition must

include a statement waiving the right to receive the return of or to sue for the return

of the slot machine license fee, or any portion of that fee paid by the slot machine

licensee because of any amendment to Title 4. The waiver of such rights must also

be included in each Category I and Category II slot machine licensee’s statement of

conditions that govern slot machine gaming.

• The petitioner must also agree not to permanently reduce the number of slot

machines that were in operation at its licensed facility as of October 1, 2009, in

order to install gaming tables.

• The PGCB would be required to approve or deny a petition to conduct table games

at a licensed facility within 60 days of receipt.

• Upon the approval of a petition, the PGCB would award the slot machine licensee a

table game operation certificate.

• The table game operation certificate would include an itemized list of table games

by type and number of gaming tables approved by the PGCB and permitted in the

certificate holder’s licensed facility.

• Both banking and non-banking table games, including poker, blackjack, roulette, and

other games and variations of games that may be approved by the PGCB, could be

played in a licensed facility. Non-banking games would be defined as those in which

players compete against one another rather than against the house.

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NUMBER OF GAMING TABLES

• Each Category I and Category II slot machine licensee would be authorized to

operate up to 250 gaming tables at any one time at their licensed facilities. Of the

250 gaming tables, no more than 75 could be used to operate non-banking games at

any one time.

• Each Category III slot machine licensee could operate 50 gaming tables at any one

time, no more than 15 of which could be used to play non-banking games.

• The PGCB or the executive director (if authorized by the PGCB) could increase the

number of gaming tables for the conduct of temporary table game contests and

tournaments by slot machine licensees.

TABLE GAME TAX

• Until June 1, 2011, the initial table game tax would be 14% of daily gross table game

revenue. After that date, the tax rate would be 12% of daily gross table game

revenue.

• Each table game operation certificate holder would be required to pay from its gross

table game revenue a daily tax of 34% from each table game played on a fully

automated electronic gaming table.

TABLE GAME AUTHORIZATION FEE

• A Category I or Category II slot machine licensee who submits a petition for a table

game operation certificate on or before June 1, 2010, would be required to pay a

one-time nonrefundable authorization fee of $16.5M. A licensee that submits a

petition after June 1, 2010, would pay an authorization fee of $24,750,000.

• A Category III slot machine licensee that submits a petition for a table game

operation certificate by June 1, 2010, would pay an authorization fee of $7.5M. A

Category III licensee that submits a petition after that date would be required to pay

an $11,250,000 authorization fee.

• If a Category I or Category III slot machine license would be issued after June 1,

2010, the holder of the Category I slot machine license would be required to pay an

authorization fee of $16.5M; the holder of a Category III slot machine license issued

after June 1, 2010, would pay a $7.5M authorization fee.

• Slot machine licensees that submit a petition for a table game operation certificate

before June 1, 2010, would be required to pay the fee on or before that date. The

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PGCB could allow a licensee to enter into a written agreement to pay the

authorization fee in installments.

• If a petition would fail to pay the authorization fee in full by June 1, 2010, the PGCB

could impose a penalty and allow the slot machine licensee up to 6 months to pay

the authorization fee in weekly payments until it is paid.

• The PGCB could suspend the table game operation certificate if the slot machine

licensee would fail to pay the authorization fee and penalty prior to the expiration of

the 6-month extension period. The suspension would remain in effect until the fee

would be paid in full.

• A Category III slot machine licensee that holds a table game operation certificate

would be entitled to operate no more than 600 slot machines at its licensed facility

(currently authorized for 500 slots).

DEPOSIT OF FEES

• All table game authorization fees and all penalties and other fees received in

connection with the conduct of table games, including fees received from table

game manufacturers, table game suppliers, and moneys derived from the daily table

game taxes would be deposited in the General Fund.

PROPERTY TAX RELIEF

• If the balance in the Rainy Day Fund would exceed $750M on the last day of a fiscal

year, the deposits of moneys received from the table game tax into the General

Fund would cease and, thereafter, be deposited into the Property Tax Relief Fund.

DUTIES OF THE PGCB

TEMPORARY REGULATIONS

• The PGCB would be given the authority to adopt temporary regulations to facilitate

the prompt implementation of table game operation.

• The temporary regulations would not be subject to the applicable provisions of the

Commonwealth Documents Law or the Regulatory Review Act or the

Commonwealth Attorneys Act and would expire two years after the effective date of

the enabling legislation.

• The PGCB would be required to begin publishing its temporary regulation to govern

table game rules, licensing of manufacturers, suppliers, and surveillance standards in

the PA Bulletin no later than February 1, 2010.

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PGCB REGULATIONS

• The regulations promulgated by the PGCB would have to establish standards to

govern the following:

o Table games and table game devices or associated equipment, including

standards that distinguish electronic gaming tables, fully automated gaming

tables, and traditional gaming tables;

o The conduct of table games and the system of wagering associated with table

games, including table games conducted on electronic gaming tables and fully

automated electronic gaming tables;

o The methods for calculating gross table game revenue and for the daily counting

of cash and cash equivalents received in the conduct of table games;

o Notice requirements concerning minimum and maximum wagers on table

games;

o The size and uniform color by domination of all chips used in the conduct of

table games, including those used in contests and tournaments;

o Procedures to determine the amount of rake in non-banking table games – rake

could be determined by use of a flat fee or a percentage;

o The acceptance of tips or gratuities by dealers and croupiers, including dealers

and croupiers in non-banking table games;

o The conduct of temporary contests and tournaments.

• The PGCB would have the authority to approve the operation of table games and

table game contests and tournaments in a hotel or specific areas of a hotel.

COMMONWEALTH RESIDENT EMPLOYMENT GOALS

• The PGCB would be required to work with each slot machine license to ensure that a

significant number of Commonwealth residents are employed in table game

operations.

• The stipulated Commonwealth-resident employment goal would be that at least

85% of table-game-related employees be Commonwealth residents by the end of

the third year following the commencement of table game operations at each

licensed facility.

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• The PGCB would be required to conduct annual reviews to ascertain each slot

machine licensee’s progress in achieving the employment goals and whether they

have instituted effective and meaningful action to employ Commonwealth residents

in their table game operations. The first review would be due one year following the

award of the first table game operation certificate.

TRAINING

• The executive director of the PGCB would have the authority to permit slot machine

licensees to conduct table game training and instruction for their employees or

potential employees.

• A slot machine licensee seeking to conduct employee training would be required to

submit a detailed summary of its training program to the PGCB.

• The training program would have to be conducted in specific areas of the gaming

floor clearly identified as for training purposes only and not accessible by the public.

• A slot machine licensee would be prohibited from charging a fee to participate in

table game training.

• The PGCB would be prohibited from imposing a fee as a condition for a slot machine

licensee to receive authorization to conduct table game training.

• For a one-year period following the effective date, slot machine licensees would be

given the authority to lease, purchase, or otherwise obtain table game devices and

associated equipment that will be used solely for training and instructional purposes

from manufacturers and suppliers, regardless of licensure, to facilitate the prompt

implementation of the conduct of table games.

LOCAL SHARE ASSESSMENT

• In addition to the state table game tax, each table game operation certificate holder

would be required to pay a local share assessment on a weekly basis.

• The local share assessment would be assessed at 1% for counties that host a

licensed facility and 1% for host municipalities.

MANUFACTURERS AND SUPPLIERS

• The initial license fee for a person who applies for a table game supplier license

would be $25,000. Each licensed table game supplier would be required to pay a

renewal fee of $15,000 for the annual renewal of a supplier license

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• The initial fee for a table game manufacturer license would be $50,000, and $30,000

for the annual renewal of the manufacturer license.

CREDIT

• The holder of a table game operation certificate would be allowed to extend credit

to eligible patrons and accept checks and credit card withdrawals.

• A holder of a table game operation certificate would be required to verify a patron’s

credit worthiness prior to approving a credit application. If approved, the credit limit

of an applicant would have to be approved by two or more management-level

employees of the certificate holder’s credit department. A certificate holder would

have the authority to reduce or suspend a patron’s credit privileges within the

licensed facility.

• Each certificate holder would be required to maintain a credit file on each patron

who applies for credit.

• The PGCB would be required to maintain a “voluntary credit suspension list” of

patrons who request their credit privileges be suspended.

• The credit extended by a table game certificate holder could not be claimed as a

deduction, credit, or offset for tax purposes.

• A slot machine licensee that does not hold a table game operation certificate would

be prohibited from accepting credit cards, charge cards, or debit cards from a player.

CLEAN INDOOR AIR

• The applicable provisions of the Clean Indoor Air Act would apply to areas of a

licensed facility where table games would be conducted except for areas off the

gaming floor where contests or tournaments are conducted.

LIQUOR CODE

• The provision of the Liquor Code that allows a slot machine licensee to provide free

drinks to individuals playing slot machines would also apply to individuals playing

table games.

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JUNKETS

• The PGCB would be given the authority to authorize the organization and conduct of

gaming junkets and to license gaming junket enterprises and issue occupation

permits to persons acting as gaming junket representatives.

• The PGCB would be required to establish a reasonable application and authorization

fee for gaming junket enterprises and gaming junket representatives.

GAMING SCHOOLS

• The Department of Labor and Industry, in consultation with the Department of

Education, would be directed to develop curriculum guidelines to govern gaming

school instruction.

• The guidelines would establish a course of instruction of sufficient scope to provide

students with adequate job training to obtain employment with a licensed gaming

entity.

• All gaming equipment utilized by a gaming school could only be used for

instructional and practice purposes and would have to have a permanently affixed

serial number filed with the PGCB.

• Each gaming school would have to provide adequate security for all gaming

equipment on its premises and would be prohibited from selling or transferring any

gaming equipment without written notice to the PGCB and the BIE.

APPROPRIATION

• The sum of $2.1M would be appropriated to the PGCB to facilitate the

implementation of the conduct and operation of table games at licensed facilities.