1981 General provisions; applications; licensed entity representatives; manufacturer licenses; supplier licenses; horsemen's organizations; labor organizations; junket enterprises; management companies
PENNSYLVANIA GAMING CONTROL BOARD [ 58 PA. CODE CHS. 421, 421a, 423, 423a, 425,
425a, 427, 427a, 431, 431a, 436, 436a, 438,
438a, 439, 439a, 440 AND 440a ]General Provisions; Applications; Licensed Entity Representatives; Manufacturer Licenses; Supplier Licenses; Horsemen's Organizations; Labor Organizations; Junket Enterprises; Management Companies [37 Pa.B. 5752]
[Saturday, October 27, 2007]The Pennsylvania Gaming Control Board (Board), under its general authority in 4 Pa.C.S. § 1202(b)(30) (relating to general and specific powers) and the specific authority in 4 Pa.C.S. §§ 1202(b)(9), (13)--(20) and (23), 1202.1(b) and (e), 1205, 1311.1, 1311.2, 1317, 1317.1, 1319, 1321(a)(1) and (2), 1325, 1326, 1331 and 1406, rescinds Chapters 421, 423, 425, 427, 431, 436, 438, 439 and 440 and adds Chapters 421a, 423a, 425a, 427a, 431a, 436a, 438a, 439a and 440a to read as set forth in Annex A.
Purpose of the Final-Form Rulemaking
Under 4 Pa.C.S. § 1203 (relating to temporary regulations), the Board initially adopted temporary regulations in Chapters 421, 423, 427 and 431 at 35 Pa.B. 4045 (July 16, 2005), Chapter 425 at 37 Pa.B. 21 (January 5, 2007), Chapter 436 at 36 Pa.B. 3409 (July 1, 2006), Chapter 438 at 36 Pa.B. 3951 (July 22, 2006), Chapter 439 at 35 Pa.B. 6619 (December 3, 2005) and Chapter 440 at 36 Pa.B. 679 (February 4, 2006). Under 4 Pa.C.S. § 1203(b), the temporary regulations expired on July 5, 2007.
The Board is adopting Chapters 421a, 423a, 425a, 427a, 431a, 436a, 438a, 439a and 440a to replace the Board's temporary regulations with the permanent regulations.
Explanation of Chapters 421a, 423a, 425a, 427a, 431a, 436a, 438a, 439a and 440a.
Chapter 421a (relating to general provisions) contains general requirements that apply to all applicants. It also contains criteria the Board may use to deny an initial or renewal application or suspend or revoke a license, permit, certification or registration; provides that the Board may make inquires or conduct investigations of applicants for or holders of a license, permit, certification or registration; outlines the procedures for conducting presuitability determinations of potential purchasers of an applicant for or holder of a license; and articulates how the Board will implement 4 Pa.C.S. § 1102(5) (relating to legislative intent) to prevent undue concentration of economic opportunities and control in gaming.
Chapter 423a (relating to applications) contains general provisions that apply to applications generally; outlines the process for preliminary review of applications and the general process that will apply to the review of applications after they have been accepted for filing. It also addresses how deficient applications will be handled; specifies how withdrawals of applications will be processed; provides that the Board may require a Statement of Conditions; imposes restrictions on reapplications by an applicant whose application was denied or by the holder of a license, permit, certification or registration if their license, permit, certification or registration was revoked.
Chapter 425a (relating to licensed entity representatives) requires licensed entity representatives to file a Licensed Entity Representative Registration Form and update their information on an ongoing basis. It also provides that the Board will maintain a list of licensed entity representatives which will be available at its offices and on the Board's website.
Chapter 427a (relating to manufacturers) provides general requirements pertaining to manufacturers; specifies what is required from an applicant for a manufacturer's license; specifies the term of a manufacturer's license and the renewal process; lays out the process for an alternative review of a manufacturer's license application based on the applicant's licensure in another jurisdiction; and sets forth the responsibilities of licensed manufacturers.
Chapter 431a (relating to supplier licenses) provides general requirements pertaining to suppliers; lists what is required from an applicant for a supplier's license; specifies the term of a supplier's license and the renewal process; contains supplier responsibilities; and requires suppliers to maintain a log book to register all individuals who enter the supplier's principal place of business and any facility where slot machines are stored.
Chapter 436a (relating to horsemen's organizations) contains definitions of terms that are only used in this chapter; requires each horsemen's organization to file a Horsemen's Organization Registration Statement; requires each officer, director or representative to file a Horsemen's Permit Application Form; outlines the responsibilities of horsemen's organizations and officers, directors or representatives; specifies fiduciaries' responsibilities; and requires that all health and benefit plan contracts must be submitted to and approved by the Board.
Chapter 438a (relating to labor organizations) contains definitions of terms that are only used in this chapter; requires each labor organization to file a Labor Organization Form; and requires every labor organization officer, agent, and management employee to file a Labor Organization Permit Application Form.
Chapter 439a (relating to junket enterprises) contains definitions of terms that are only used in this chapter; contains general provisions applicable to junket enterprises and application requirements; specifies the term of a junket enterprise license and the renewal process; requires junket representatives to be registered and delineates application requirements; requires junket schedules and changes thereto to be submitted to the Bureau of Corporate Compliance and Internal Controls; requires the preparation of junket arrival reports; requires preparation of junket final reports; requires the preparation of monthly junket reports; requires the preparation of a report pertaining to the purchase of patron lists; and lists activities that junket enterprises and representatives may not participate in.
Chapter 440a (relating to management companies) contains general requirements pertaining to management companies; lists what is required from an applicant for a management company license; specifies the term of a management company license and the renewal process; states that a management company will be deemed to be an agent of the slot machine licensee for any violations and that the management company will be jointly and severally liable for violations of the slot machine licensee; and specifies that all management contracts and amendments must be submitted to and approved by the Board before they can go into effect.
Comment and Response Summary
Notice of proposed rulemaking was published at 37 Pa.B. 2197 (May 12, 2007).
The Board received comments from Downs Racing, LP (Downs), Greenwood Gaming and Entertainment, Inc. (Greenwood) and Keystone Gaming Technologies, Inc. (KGT) during the public comment period. On July 11, 2007, comments on the proposed rulemaking were received from the Independent Regulatory Review Commission (IRRC). On July 12, 2007, comments on the proposed rulemaking were received from Representative Paul Clymer, Republican Chairperson of the House Gaming Oversight Committee. These comments were reviewed by the Board and are discussed in detail as follows.
Both Greenwood and Downs filed general comments pertaining to the renewal process. Both slot machine licensees strongly recommend that they only be required to file material updates of information contained in their initial application. They argue that this would be consistent with the language of 4 Pa.C.S. § 1326 (relating to license renewals) which states ''The application renewal shall include an update of the information contained in the initial and any prior renewal applications . . .''. They also suggest that the Board define the term ''material'' as ''updates which could have an effect on a continuing finding of suitability.''
The renewal of slot machine licenses is addressed in Chapter 441a (relating to slot machine licenses) published at 37 Pa.B. 2695 (June 16, 2007). However, the concerns raised are valid for all renewals. It is the Board's intent for all licensees and permittees to use renewal application forms which are essentially the same as the initial application forms. But the Board agrees there is no need to resubmit information that has not changed. Licensees and permittees will only be required to provide information that has changed; everything else can be marked ''No Update.'' This will substantially reduce the amount of time required to complete the renewal forms.
The Board is also considering requiring a full submission periodically, perhaps every 5 years. This would be done to insure that no significant information has inadvertently not been provided to the Board. Comments from licensees and permittees on this type of requirement and an appropriate frequency for these complete submissions are invited.
The Board has not added a definition of ''material'' because the Board wants all of the information that has changed. It is the responsibility of the Board to review anything that has changed and determine whether or not it could have an effect on a continuing finding of suitability.
Greenwood and Downs both suggest that Chapters 421a and 423a should contain more specific details on renewals and that renewals should only be required for licenses and permits.
The Board does not concur with either of these suggestions. Chapters 421a and 423a are general requirements that apply to all applicants for and holders of licenses, permits, certifications and registrations. They are not intended to provide the specific requirements for a particular entity. Specific requirements are addressed in the specific chapters for each type of applicant for and holder of a license, permit, certification and registration.
Greenwood and Downs are correct that 4 Pa.C.S. § 1326 only applies to licensees and permittees, but 4 Pa.C.S. § 1326 is silent on and therefore does not apply to other entities regulated by the Board. It is under its general authority and 4 Pa.C.S. § 1321 (relating to additional licenses and permits and approval of agreements) that the Board has adopted regulations to regulate other entities. For example, the Board established certification and registration requirements for vendors. These certifications and registrations are good for 4 years before they must be renewed. The argument that 4 Pa.C.S. § 1326 somehow bars the Board from establishing renewal requirements for other entities that the Board regulates is not persuasive.
Greenwood and Downs final two general comments suggested that the Board send a notice to all licensees 120 days prior to the expiration of their license and that renewal applications be deemed approved unless expressly denied by the Board.
The Board has not adopted either of these suggestions. Sending a notice to all licensees would create a significant administrative burden on the Board which licensees would end up having to pay for. However, because the date a license is approved and the date it is issued can differ, the Board understands and agrees that there can be some uncertainty concerning when a license is due to expire. To remove this uncertainty, the Board will be adding the license expiration date to the listing of licensees which is available on the Board's website. This will allow licensees to easily verify the expiration date of their license so they will know when their renewal applications are due.
The Board is not adopting the suggestion that applications be deemed approved because it conflicts with the statute and is unnecessary. Section 1326 of 4 Pa.C.S. states ''A permit or license for which a completed renewal application and fee, if required, has been received by the board will continue in effect unless and until the board sends written notification to the holder of the permit or license that the board has denied the renewal of such permit or license.'' This is the language that the Board has carried over into the renewal requirements for various entities in this regulation. The interests of licensees or permittees are protected because filing the required renewal materials ''extends'' the term of their current license or permit, so there is no need for a deemed approval provision.
IRRC offered two general comments. First, IRRC suggested that the Board add a reference to the Board's website wherever the regulations require payment of a fee.
The Board has adopted this suggestion and has added a reference to the Board's website where payment of a fee is required in Chapters 427a, 431a, 436a, 438a, 439a and 440a.
Second, IRRC noted that the term ''entity'' is used throughout the regulations but is not defined in the act or regulations.
The term ''entity'' refers to anything other than a natural person. This is consistent with its common usage and its usage has not been a source of confusion. Therefore, the Board has not added a definition for this term.
In § 421a.1 (relating to general requirements), IRRC had two comments. In subsection (a), IRRC stated that the last sentence, which reads ''No person holding a license, permit, certification or registration, renewal or other approval is deemed to have any property rights.'' is overly broad.
The Board intended that this provision only apply to the ''license, permit, certification or registration, renewal or other approval.'' Language has been added to this subsection to clarify its scope.
In subsection (c), IRRC asked the Board to explain the statutory authority for and need for applicants to agree to the extensive waiver.
The authority for this provision is contained in the Board's general rulemaking authority in 4 Pa.C.S. § 1202(30) and 4 Pa.C.S. § 1308 (relating to applications for a license or permit) and is consistent with the doctrine of sovereign immunity. These provisions were added to eliminate frivolous lawsuits from applicants relating to the disclosure of information obtained during investigations that is not willfully unlawful.
In § 421a.1(c)(2), Representative Clymer asked if this provision was in conflict with 4 Pa.C.S. § 1206(f) (relating to Board minutes and records).
The Board does not believe that there is a conflict. Section 1206(f) of 4 Pa.C.S. bars the Board from requiring an applicant to waive confidentiality related to personal information supplied to determine the applicant's character. Subsection (c)(2) addresses the liability of the Board, the Pennsylvania State Police and other Commonwealth agencies if any of that information is disclosed. Therefore, these provisions deal with different aspects of the confidentiality of this information.
In § 421a.1(f), Representative Clymer suggested that applicants should be required to notify the Board of any changes in information.
The obligation imposed in this provision has two components. The first requires notification of any changes in information supplied and the second requires notice of changes in circumstances which would not have been included in information previously supplied. To clarify these duties, this sentence has been split into two sentences.
In § 421a.1(i), Representative Clymer asked if this subsection referred to monetary or administrative liability and how fines would be assessed and collected.
It could be either or both. Whether a violation would result in a fine or a suspension or revocation will depend on the nature of the violation. How fines might be assessed will also depend on the facts surrounding the violation.
In § 421a.2 (relating to disqualification criteria), IRRC suggested that in subsection (a)(5) the Board replace the phrase ''applicable Federal and state laws or regulations'' with references to the specific applicable laws and regulations or delete this provision.
This reference was intended to be broad, not limited to specific statutes or regulations. To clarify the Board's intent the word ''applicable'' has been deleted.
In § 421a.3 (relating to investigations; supplementary information), IRRC asked if the ''phrase'' or at anytime ''thereafter'' meant that the Board would conduct investigations after an application has been approved. If so, IRRC suggested that this language should be placed in another section of the Board's regulations.
This provision does apply after an application has been approved. The Board has a continuing obligation to insure the integrity of gaming and may conduct investigations that could result in fines, suspension or revocation of a successful applicant's license, permit, certification or registration. Investigations are addressed in Chapter 405a (relating to Bureau of Investigations and Enforcement), but having this provision in this chapter as well makes it clear to applicants that they will have a continuing obligation, both as applicants for and holders of a license, permit, certification or registration, to cooperate in investigations.
In § 421a.4(b) (relating to presuitability detemination), Representative Clymer noted that the phrase ''upon request of the Board'' could imply that reimbursement for the cost of an investigation is discretionary and suggested that this phrase be deleted.
The Board agrees with this suggestion and has deleted ''upon request of the Board.''
In § 421a.5(c)(11) (relating to undue concentration of economic opportunities and control), IRRC noted that the phrase ''Other evidence deemed relevant by the Board'' is vague and suggested that the Board amend this provision to indicate what the evidence should pertain to.
The Board agrees with this suggestion and has revised the language to be more specific.
In § 423a.1 (relating to general requirements), IRRC suggested that the phrase ''in a form prescribed by the Board'' in subsection (e) should be replaced with the name of the form and information on how to obtain the form should be added.
Because of the variation that exists in applications, the Board does not believe it is reasonable to try to use one form to submit changes in information. Accordingly, the Board has deleted this phrase to allow applicants to supply the information in the form that is the most convenient for them.
In § 423a.1(h), Representative Clymer opined that a summary would be unacceptable because it may not contain all of the pertinent information.
The Board disagrees. For some documents a summary may be all that is needed. Since the Board has the discretion to require a full translation or a summary, no revisions were made to the substance of this subsection. However, the second sentence was moved to the end of the section to clarify that the translator's verification of accuracy applies to both full translations and summaries.
In §§ 423a.2 and 423a.3 (relating to preliminary submission review; and application processing), IRRC recommended that specific time frames be added for the preliminary submission review and the review of applications.
The Board has not adopted this recommendation because this chapter covers applications for licenses that can be hundreds of pages as well as one page registrations. For example, a simple registration may take only a day to process while an application for a slot machine license will take several months. For this reason, establishing fixed time frames for these reviews is not feasible.
In § 423a.2(a)(2), IRRC asked what ''additional information and accompanying documentation required by the act or the Board's regulations . . .'' is to be included with an application.
The additional information will vary depending on what type of license, permit, certification or registration is being sought. For example, the act and the Board's regulations require much more information from an applicant for a slot machine license than is required from an applicant for a gaming permit. Specific information relating to what is required is contained in the instructions for each application.
In § 423a.2(c), IRRC asked how would the Board set ''the time period set by the Board'' and how an applicant would be notified of the time period.
The time period will vary depending on what the deficiency is. When a deficiency is noted, the Board will send a letter to the applicant that will give the applicant a reasonable period of time to cure the deficiency. For something like a missing signature it could be a few days; if a major item is missing, the time period to supply the item could be weeks.
In § 423a.4 (relating to deficient applications), Representative Clymer suggested that there should be an upper limit on the time allowed to cure deficiencies under subsection (a) to avoid indefinite suspension of the process. Also on this section, IRRC had two concerns. In subsection (a), IRRC asked how the Board would set ''the time period set by the Board'' and how the applicant would be notified of the time period.
The Board has not set a time period or established a maximum time limit because the time allowed to cure a deficiency will vary depending on what the deficiency is. When a deficiency is noted, the Board will send a letter to the applicant that will give the applicant a reasonable period of time to cure the deficiency. For something like a missing signature it could be a few days; if a major item is missing, the time period allotted to supply the item could be weeks.
In subsection (b), IRRC suggested that if the Board intended a failure to cure deficiencies to result in a denial of the application, the language in this subsection should be similar to the language used in subsection (a).
The Board agrees with this suggestion and amended the language in subsection (b) to be similar to what appears in subsection (a).
On § 423a.5 (relating to application withdrawal), IRRC raised four questions. First IRRC asked why a petition is necessary as opposed to allowing the applicant to just withdraw the application by sending the Board a letter.
There are several reasons why the Board has elected to use the more formal petition process as opposed to allowing the applicant to just send a letter. First, the review of an application is a time intensive activity that should not be taken lightly by an applicant. Second, applicants have an obligation to pay investigative costs. These costs must be paid before a withdrawal will be considered. Additionally, a withdrawal may be with or without prejudice which can affect when the applicant may file another application.
Next, IRRC asked when, under subsection (d), would a request for withdrawal be denied.
There may be instances when an applicant, based on what the Board has uncovered in its investigation, anticipates that the Board will deny its application. In this case, an applicant may attempt to withdraw the application to avoid the 5-year restriction on reapplication. Depending on the specific fact situation, the Board may want to deny the application as opposed to approving the withdrawal with prejudice.
IRRC also asked what criteria the Board will use to determine whether or not to impose restrictions on an applicant whose petition for withdrawal has been granted without prejudice.
The decision as to whether or not to impose restrictions will be based upon the results of the review of the application and the results of any investigations that have been completed at the time of the petition for withdrawal. If there are problems, the Board may impose a restriction on reapplication that would be sufficient to allow the applicant to rectify the problem.
Finally, IRRC asked why the Board had not established a time frame for the review of withdrawal petitions.
Again, because this chapter covers applications that can vary substantially both in length and complexity, establishing a fixed time frame for the review of petitions for withdrawal is not feasible
In § 423a.5(e), Representative Clymer suggested that the Board add ''at the request of the applicant.''
This provision was not intended to be triggered by a request from an applicant. An applicant may file a petition for withdrawal for any reason under subsection (a). The intent of this provision is to allow the Board to treat a deficient application as an application that has been withdrawn rather than disapproving the application. This would allow an applicant to avoid being subject to the 5-year bar on reapplication that comes with a disapproval. The language has been revised to clarify this intent.
In § 423a.7 (relating to restriction on application after denial or revocation), IRRC asked what the bases are for the 5 and 2-year provisions. Additionally, IRRC asked if two different time periods and the petition process are necessary. If they aren't, IRRC suggested that the Board just use 2 years.
The application process can be extremely time intensive and costly for both the Board and applicants. The 5-year ban is designed to provide a strong incentive for unqualified applicants to not apply and for successful applicants to comply with the Board's regulations to avoid a revocation. In many cases the reason for a denial or revocation would be serious enough that it is unlikely that a 2-year restriction would provide enough time for the applicant to satisfactorily address the reason for the denial or revocation. Additionally, a 5-year ban is also what is commonly used in other gaming jurisdictions.
Allowing an applicant to file a petition after 2 years provides an opportunity for a person whose application was denied or license, permit, certification or registration was revoked, to seek permission to reapply before 5 years expire if they can demonstrate that they have addressed the reason for the denial or revocation. This gives the Board some latitude to tailor the length of the reapplication bar to the seriousness of the circumstances that caused the denial or revocation and the subsequent corrective actions of the applicant. This provision is also used in some other gaming jurisdictions.
In § 423a.7, Representative Clymer asked why subsection (c) doesn't also apply to applicants' whose applications were withdrawn with prejudice.
An application may be denied for a variety of reasons, some much more serious than others. By contrast, a withdrawal with prejudice is rarely used and is only used when the problems with an application are extremely serious. In these cases, the Board believes that the full 5-year restriction on filing a new application should apply.
In § 427a.2 (relating to manufacturer license applications and standards), Representative Clymer noted that it was unclear as to whether the phrase ''as determined by the Board'' in subsection (a)(4) referred to who must submit an application or to what information must be supplied.
This phrase is intended to mean other persons the Board determines should be licensed as key employees or principals. To clarify this point, the phrase ''and other persons'' has been inserted before ''as determined by the Board.''
Also in § 427a.2, Representative Clymer asked what would happen under subsection (a)(7)(vii) if the divorce action is withdrawn or if the applicant receives a prohibited interest as part of the property settlement.
In either case, the applicant would have to notify the Board of this change under § 421a.1(f) and the individual would no longer be eligible to apply for a manufacturer license.
In § 427a.2, KGT recommended deletion of subsection (b)(3) which requires an applicant to demonstrate it ''has the ability to manufacture, build, rebuild, repair, . . . or otherwise make modifications'' to slot machines or associated equipment. IRRC also questioned the need for this provision.
This provision paraphrases the statutory definition of a ''manufacturer'' which is a person who ''manufactures, builds, rebuilds, fabricates, assembles, produces, programs, designs or otherwise makes modifications . . .'' Additionally, 4 Pa.C.S. § 1317.1(b)(5) (relating to manufacturer licenses) requires that applications include the ''types of slot machines or associated equipment to be manufactured or repaired.'' Therefore this provision is consistent with the mandates of the act.
The Board does not agree that this requirement poses an undue burden on new companies that want to become manufacturers. The act makes it clear that there can be no limitation on the number of manufacturer licenses issued by the Board. Furthermore, the Board has approved every application for a manufacturer license that it has received from applicants that meet the standards set forth in the act. For these reasons, subsection (b)(3) remains in the final-form regulation.
In § 427a.5(a)(2), Representative Clymer suggested that a manufacturer licensee should be required to report any changes in circumstances and allow the Board to determine how each change might affect the license.
The Board disagrees with this suggestion. This would impose an excessive reporting requirement on licensees that is not needed given the other reporting requirements and the fact that detailed renewal applications must be filed annually.
In § 427a.5(c), Greenwood suggested that the Board delete the requirement that a slot machine licensee must have a written agreement with a manufacturer before the slot machine licensee can service or repair slot machines or associated equipment purchased from that manufacturer. IRRC also questioned the need for this provision.
Given the amendments to the act contained in Act 135 of 2006, the Board agrees that there is no need for this requirement and has deleted the language requiring a written agreement in this subsection and in § 431a.4(f). The phrase ''a slot machine licensee or'' in § 427a.1(d) has also been deleted to conform to this change.
In § 427a.5(d), IRRC asked what the need was for this provision and why it is in this section.
This provision was put in this chapter to make it clear to manufacturers (as well as slot machine licensees) that manufacturers do not have the sole authority to perform these functions.
Also in § 427a.5(d), Representative Clymer suggested adding semicolons to provide greater clarity in the list.
The Board agrees with this suggestion and has inserted semicolons where appropriate.
In § 431a.2 (relating to supplier license applications and standards), Representative Clymer noted that it was unclear as to whether the phrase ''as determined by the Board'' in subsection (a)(4) referred to who must submit an application or to what information must be supplied.
This phrase is intended to mean other persons the Board determines should be licensed as key employees or principals. To clarify this point, the phrase ''and other persons'' has been inserted before ''as determined by the Board.''
Also in § 431a.2, Representative Clymer asked what would happen under subsection (a)(7)(vii) if the divorce action is withdrawn or if the applicant receives a prohibited interest as part of the property settlement.
In either case, the applicant would have to notify the Board of this change under § 421a.1(f) and the individual would no longer be eligible to apply for a supplier license.
In § 431.4(d)(2) (relating to supplier license term and renewal), Representative Clymer suggested that a supplier licensee should be required to report any changes in circumstances and allow the Board to determine how each change might affect the license.
The Board disagrees with this suggestion. This would impose an excessive reporting requirement on licensees that is not needed given the other reporting requirements and the fact that detailed renewal applications must be filed annually.
In § 431a.4 (relating to responsibilities of a supplier), IRRC questioned the need for subsections (g) and (h) and why are they in this section.
These subsections are in this section to make it clear to suppliers (as well as to slot machine and manufacturer licensees) that suppliers do not have the sole authority to perform these functions.
Also in § 431a.4(g), Representative Clymer suggested adding semicolons to provide greater clarity in the list.
The Board agrees with this suggestion and has inserted semicolons where appropriate.
In § 431a.5 (relating to supplier log books), IRRC had two questions. The first question was why log books are needed and why the log books must be made available to the Department of Revenue and the Pennsylvania State Police.
Generally, no one without a gaming permit is allowed to have any contact with slot machines. Because suppliers would have slot machines on their premises there is a need to control access to make sure no one without a license or permit has access to the slot machines. The log book provides a method for monitoring compliance.
Because of the Department of Revenue's responsibilities for the central computer system and the possibility of criminal behavior that would be investigated by the Pennsylvania State Police, the Board believes both of these agencies should have access to the log books.
In Chapter 436a (relating to horsemen's organizations), IRRC questioned the need for horsemen's organizations to register and for officers, directors and representatives to obtain permits. IRRC also asked what the statutory authority was for these requirements.
The Board's authority for these regulations is derived from the Board's general authority under 4 Pa.C.S. § 1202(30) and from 4 Pa.C.S. § 1406. Section 1406(a)(1)(iii) of 4 Pa.C.S. requires that 4% of the distributions from the Pennsylvania Race Horse Development Fund be used for benefits for members of horsemen's organizations. The registration requirement is needed to identify the horsemen's organizations at each of the Category 1 licensed facilities that will be administering these funds. Requiring permits for the individuals who will be responsible for the disbursement of these funds allows the Board to review the backgrounds of these individuals to minimize the potential for misuse of these funds and to insure compliance with 4 Pa.C.S. § 1406.
In § 436a.1 (relating to definitions), IRRC asked why the definition of ''horsemen'' in this chapter is different from the definition of ''Horsemen of this Commonwealth'' in the act.
The term ''Horsemen of this Commonwealth'' in the act is a general term which includes horsemen and trainers and employees of trainers. The definition of ''horsemen'' in this chapter is intended to be more narrow, including just the horsemen and trainers. This also reflects how the term is commonly used in the industry.
In Chapter 438a (relating to labor organizations), IRRC questioned the need for labor organizations to file a Labor Organization Notification Form and for officers, agents and management employees to obtain permits. IRRC also asked what the statutory authority was for these requirements.
The Board's authority for these regulations is derived from the Board's general authority under 4 Pa.C.S. § 1202(30). Labor organizations can have a substantial impact on the operations of a licensed facility. For this reason, the Board needs to know what labor organizations represent employees at each of the licensed facilities and which groups of employees they represent. The Labor Organization Notification Form provides this information. The requirement for permits applies to those individuals in the labor organization who are directly involved with the licensed facilities. Because of this direct relationship and the potential impact it can have on the operations of a licensed facility, background checks on these individuals are need to insure the integrity of gaming operations.
In § 439a.1 (relating to definitions), IRRC noted that there were substantive provisions in the definition of ''junket'' related to the selection or approval of a person to participate in a junket. IRRC recommended that these provisions be deleted from the definition and moved to another section in this chapter.
The Board agrees with this suggestion and has moved the substantive provisions from the definition of ''junket'' to § 439a.2 (relating to junket enterprise general requirements).
In § 440a.4(b) (relating to management company responsibilities), Downs suggested that the Board limit the scope of the joint and several liability to acts that are within the purview of the contract or direct operation of the casino. IRRC also questioned the reasonableness of this requirement and the legal basis for it.
The Board agrees that it would be unreasonable to impose an absolute liability standard on a management company for acts over which it clearly has no ability to control. However, the relationship between a management company and a slot machine licensee is one where each entity must be vigilant concerning the actions of the other party to the contract. Accordingly, the Board has replaced the word ''shall'' with ''may.'' This will allow the Board to determine, based on the specific facts of a given situation, if the management company should be liable for actions of the slot machine licensee. The legal basis for this provision is the Board's general authority in 4 Pa.C.S. §§ 1202(30), 1321 and 1325.
Additional Revisions
In addition to the revisions discussed previously, the Board has made several additional revisions.
In § 423a.5(a), the Board replaced the phrase ''at any time prior to issuance by the Board of its determination with respect to the application'' with ''at any time prior to the Board taking action on the application'' to clarify when a request to withdraw an application may be filed.
In § 423a.5(d)(2), the Board clarified the language indicating that it may impose restrictions on new applications from an applicant whose petition to withdraw has been granted without prejudice.
In § 427a.2(a), the Board added a new paragraph (5) requiring the filing of a Gaming Employee Application and Disclosure Information Form for each of the manufacturer's known gaming employees to mirror the current requirement in the Manufacturer Application and Disclosure Information Form.
Section 427a.2(a)(7) has been revised to better conform with the requirements in the act.
To improve clarity in § 427a.3(b) (relating to manufacturer license term and renewal), the Board has inserted the name of the renewal form manufacturers are required to use which is the Manufacturer License Renewal Application Form.
In § 427a.4(a) (relating to alternative manufacturer licensing standards), the Board replaced the phrase ''written request'' with the name of the form to be used by a manufacturer seeking to use alternate licensing standards which is the Manufacturer Application and Disclosure Information Form Addendum 1.
To improve clarity in § 431a.2(a), the Board added a new paragraph (5) requiring the filing of a Gaming Employee Application and Disclosure Information Form for each of the supplier's known gaming employees to mirror the current requirement in the Supplier Application and Disclosure Information Form.
In § 431a.3(b) (relating to supplier license term and renewal), the Board has inserted the name of the renewal form suppliers are required to use which is the Supplier License Renewal Application Form.
In § 431a.4, the Board replaced an incorrect citation to § 427a.2(a)(5).
The material in §§ 436a.2(d) and 436a.3(d) (relating to horsemen's organization registration; and permitting of officers, directors, representatives and fiduciaries) relating to terms and renewals of registrations and permits have both been split into three separate subsections to improve clarity.
In § 438a.1 (relating to definitions), the definition of ''labor organization'' has been amended by inserting ''who are required to obtain a license, permit or registration from the Board'' after ''employees'' to clarify which labor organizations must comply with this chapter. Additionally, the definition of ''labor organization officer'' has been revised to clarify who must obtain a permit under § 438a.3.
In § 438a.2 (relating to labor organization officers, agents and management employees), clarifying language has been added requiring the initial and any revisions to the Labor Organization Notification Form to be filed with the Bureau of Licensing.
In § 438a.3(d), the material relating to terms and renewals of permits has been split into three separate subsections to improve clarity.
Additionally, minor wording changes have been made throughout the chapter to improve clarity.
Finally, the Board is renumbering the statement of policy at Chapter 436a (relating to use of funds allocated to horsemen's organizations--statement of policy). The current numbering will be changed to Chapter 436b (relating to use of funds allocated to horsemen's organizations).
Affected Parties
This final-form rulemaking imposes requirements on applicants for and holders of slot machine licenses, licensed entity representative registrations, manufacturer licenses, supplier licenses, horsemen permits and registrations, labor organization permits, and junket enterprise licenses, junket representative registrations and management company licenses.
Fiscal Impact
Commonwealth
This final-form rulemaking will impose costs on the Board related to processing initial applications and renewals, conducting investigations and issuing licenses, permits and registrations. When applicable, the Pennsylvania State Police will also experience costs associated with investigations of applicants.
Political Subdivisions
This final-form rulemaking will have no fiscal impact on political subdivisions of the Commonwealth.
Private Sector
Applicants for the various licenses, permits and registrations will incur costs to complete the applicable applications and pay the applicable application fees and additional costs associated with investigations.
General Public
This final-form rulemaking will have no significant fiscal impact on the general public.
Paperwork requirements
Applicants for and holders of licensed entity representative registrations, manufacturer licenses, supplier licenses, horsemen permits and registrations, labor organization permits, junket enterprise licenses, junket representative registrations and management company licenses will be required to complete the applicable initial application and renewal forms.
Effective Date
The final-form rulemaking will become effective upon publication in the Pennsylvania Bulletin.
Contact Person
The contact person for questions about this final-form rulemaking is Richard Sandusky, Director of Regulatory Review, (717) 214-8111.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a), on April 26, 2007, the Board submitted a copy of the proposed rulemaking, published at 37 Pa.B. 2197 (May 12, 2007), and a copy of the Regulatory Analysis Form to IRRC and the Chairpersons of the House Gaming Oversight Committee and the Senate Committee on Community, Economic and Recreational Development.
Under section 5(c) of the Regulatory Review Act (71 P. S. § 745.5(c)), IRRC and the 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 received 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 September 19, 2007, the final-form rulemaking was deemed approved by the House Gaming Oversight Committee and the Senate Committee on Community, Economic and Recreational Development. Under section 5.1(e) of the Regulatory Review Act (71 P. S. § 745.5a(e)), IRRC met on September 20, 2007, and approved the final-form rulemaking.
Findings
The Board finds that:
(1) Public notice of intention to adopt these chapters 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 the Pennsylvania Race Horse Development and Gaming Act.
Order
The Board, acting under the 4 Pa.C.S. §§ 1101--1904, orders that:
(a) The regulations of the Board, 58 Pa. Code Part VII, are amended by deleting §§ 421.1--421.5, 423.1--423.8, 425.1, 427.1--427.5, 431.1--431.5, 436.1--436.7, 438.1--438.4, 439.1--439.11 and 440.1--440.4 and by adding final regulations in §§ 421a.1--421a.5, 423a.1--423a.7, 425a.1, 427a.1--427a.5, 431a.1--431a.5, 436a.1--436a.6, 438a.1--438a.3, 439a.1--439a.12 and 440a.1--440a.5 to read as set forth in Annex A.
(b) The statement of policy in §§ 436a.1--436a.6 is renumbered as §§ 436b.1--436b.6.
(c) The Chairperson of the Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) This order shall take effect upon publication in the Pennsylvania Bulletin.
MARY DIGIACOMO COLINS,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 37 Pa.B. 5447 (October 6, 2007).)
Fiscal Note: Fiscal Note 125-61 remains valid for the final adoption of the subject regulations.
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[Continued from previous Web Page] Annex A TITLE. 58. RECREATION PART VII. GAMING CONTROL BOARD Subpart B. LICENSING, PERMITTING, CERTIFICATION AND REGISTRATION CHAPTER 421. (Reserved) §§ 421.1--421.5. (Reserved).
CHAPTER 421a. GENERAL PROVISIONS Sec.
421a.1. General requirements. 421a.2. Disqualification criteria. 421a.3. Investigations; supplementary information. 421a.4. Presuitability determination. 421a.5. Undue concentration of economic opportunities and control. § 421a.1. General requirements.
(a) A license, permit, certification or registration issuance, renewal or other approval issued by the Board is a revocable privilege. No person holding a license, permit, certification or registration, renewal, or other approval is deemed to have any property rights related to the license, permit, certification or registration.
(b) By filing an application with the Board, an applicant consents to an investigation of the applicant's general suitability, financial suitability, character, integrity and ability to engage in, or be associated with, gaming activity in this Commonwealth to the extent deemed appropriate by the Board. The investigation may include a background investigation of the applicant, employees of the applicant, all persons having a controlling interest in the applicant and other persons as determined by the Board.
(c) By filing an application for a license, permit, certification or registration issuance, renewal or other approval from the Board, an applicant agrees to:
(1) Abide by the provisions of the act and this part.
(2) Waive liability as to the Board, its members, its employees, the Pennsylvania State Police, the Commonwealth and its instrumentalities for damages resulting from disclosure or publication in any manner, other than a willfully unlawful disclosure or publication of material or information acquired during an investigation of the applicant.
(3) Execute all releases requested by the Board.
(d) An applicant for or holder of a license, permit, certification or registration may not give or offer to give, compensation or reward or a percentage or share of the money or property played or received through gaming to a public official or public employee in consideration for or in exchange for obtaining a license, permit, certification or registration issued pursuant to this part.
(e) An applicant for or holder of a license, permit, certification or registration shall have a duty to inform the Bureau of an action which the applicant for or holder of a license, permit, certification or registration believes would constitute a violation of the act. A person who so informs the Bureau may not be discriminated against by an applicant for or holder of a license, permit, certification or registration for supplying the information.
(f) An applicant for a license, permit, certification or registration shall have a continuing duty to inform the Board of changes in the information supplied to the Board in or in conjunction with the original or renewal application. An applicant for or holder of a license, permit, certification or registration shall have a continuing duty to inform the Board of a change in circumstances that may render the applicant for or holder of a license, permit, certification or registration ineligible, unqualified or unsuitable to hold a license, permit, certification or registration under the standards and requirements of the act and of this part.
(g) An applicant for a license, permit, certification or registration shall have a continuing duty to promptly provide information requested by the Board relating to its application or regulation and cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions.
(h) An application submitted to the Board constitutes the seeking of a privilege. An applicant shall at all times have the burden of proof. It shall be the applicant's affirmative responsibility to establish the facts supporting its suitability under the act and this part by clear and convincing evidence, including why a license, permit, certification or registration should be issued or renewed by the Board.
(i) A person holding a license, permit, certification or registration issued by the Board who violates a provision of the act or this part may be held jointly or severally liable for the violation.
(j) The Board will maintain lists of applicants for licenses, permits, certifications or registrations under this part as well as a record of the actions taken with respect to each applicant. The lists will be posted on the Board's website (www.pgcb.state.pa.us).
§ 421a.2. Disqualification criteria.
(a) An application for issuance or renewal of a license, permit, certification or registration may be denied, or a license, permit, certification or registration may be suspended or revoked if:
(1) The applicant has failed to prove to the satisfaction of the Board that the applicant or any of the persons required to be qualified, are in fact qualified in accordance with the act and with this part.
(2) The applicant for or holder of a license, permit, certification or registration has violated the act or this part.
(3) The applicant for or holder of a license, permit, certification or registration is disqualified under the criteria in the act.
(4) The applicant for or holder of a license, permit, certification or registration has materially departed from a representation made in the application for licensure or renewal.
(5) The applicant for or holder of a license, permit, certification or registration has failed to comply with Federal or state laws or regulations.
(b) A denial of an application or nonrenewal, suspension or revocation of a license, permit, certification or registration may be made for a sufficient cause consistent with the act and the public interest.
§ 421a.3. Investigations; supplementary information.
(a) The Board may make an inquiry or investigation concerning an applicant for or holder of a license, permit, certification or registration or any affiliate, intermediary, subsidiary or holding company of the applicant for or holder of a license, permit, certification or registration as it may deem appropriate either at the time of the initial application or at any time thereafter.
(b) It shall be the continuing duty of applicants and a holder of a license, permit, certification or registration to provide full cooperation to the Board in the conduct of an inquiry or investigation and to provide supplementary information requested by the Board.
§ 421a.4. Presuitability determination.
(a) Upon request from an eligible applicant for or holder of a license and upon receipt of an application and appropriate fees, the Board will make an inquiry or investigation of a potential purchaser of an applicant for or holder of a license, certification or registration as if the purchaser were an eligible applicant. The eligible applicant for or holder of a license may petition the Board, on behalf of the purchaser, for a Statement of Investigation under § 493a.4 (relating to petitions generally).
(b) The eligible applicant for or holder of a license making the request shall reimburse the costs associated with the inquiry or investigation.
(c) This inquiry or investigation does not replace the application process required under the act and this part which is a requirement for licensure, certification or registration.
§ 421a.5. Undue concentration of economic opportunities and control.
(a) In accordance with section 1102(5) of the act (relating to legislative intent), a slot machine license, management company license or other license may not be issued to or held by a person if the Board determines that the issuance or holding will result in the undue concentration of economic opportunities and control of the licensed gaming facilities in this Commonwealth by that person.
(b) For purposes of this section, ''undue concentration of economic opportunities and control of the licensed gaming facilities'' means that a person:
(1) Would have actual or potential domination of the gaming market in this Commonwealth contrary to the legislative intent.
(2) Could substantially impede or suppress competition among licensees.
(3) Could adversely impact the economic stability of the gaming industry in this Commonwealth.
(c) In determining whether the issuance or holding of a license by a person will result in undue concentration of economic opportunities and control of the licensed gaming facilities in this Commonwealth, the Board will consider the following criteria:
(1) The percentage share of the market presently controlled by the person in each of the following categories:
(i) Total number of slot machine licenses available under section 1307 of the act (relating to number of slot machine licenses).
(ii) Total gaming floor square footage.
(iii) Number of slot machines.
(iv) Gross terminal revenue.
(v) Net terminal revenue.
(vi) Total amount of money, vouchers and electronic money transfers through the use of a cashless wagering system made to slot machines.
(vii) Number of persons employed by the licensee.
(2) The estimated increase in the market share in the categories in paragraph (1) if the person is issued or permitted to hold the license.
(3) The relative position of other persons who hold licenses, as evidenced by the market share of each person in the categories in paragraph (1).
(4) The current and projected financial condition of the industry.
(5) Current market conditions, including level of competition, consumer demand, market concentration, any consolidation trends in the industry and other relevant characteristics of the market.
(6) Whether the gaming facilities held or to be held by the person have separate organizational structures or other independent obligations.
(7) The potential impact of licensure on the projected future growth and development of the gaming industry in this Commonwealth and the growth and development of the host communities.
(8) The barriers to entry into the gaming industry, including the licensure requirements of the act, and whether the issuance or holding of a license by the person will operate as a barrier to new companies and individuals desiring to enter the market.
(9) Whether the issuance or holding of the license by the person will adversely impact consumer interests, or whether the issuance or holding is likely to result in enhancing the quality and customer appeal of products and services offered by slot machine licensees to maintain or increase their respective market shares.
(10) Whether a restriction on the issuance or holding of an additional license by the person is necessary to encourage and preserve competition and to prevent undue concentration of economic opportunities and control of the licensed gaming facilities.
(11) Other evidence related to concentration of economic opportunities and control of the licensed gaming facilities in this Commonwealth.
CHAPTER 423. (Reserved) §§ 423.1--423.8. (Reserved).
CHAPTER 423a. APPLICATIONS Sec.
423a.1. General requirements. 423a.2. Preliminary submission review. 423a.3. Application processing. 423a.4. Deficient applications. 423a.5. Application withdrawal. 423a.6. License, permit, registration and certification issuance and statement of conditions. 423a.7. Restriction on application after denial or revocation. § 423a.1. General requirements.
(a) For the purposes of this section, a reference to an applicant includes the applicant's affiliates, intermediaries, subsidiaries and holding companies.
(b) An application shall be submitted on forms supplied or approved by the Board, contain the information and documents required by the Board and include the applicable fees.
(c) The applicant shall file with the application all supplemental forms required by the Board. The forms require full disclosure of all details relative to the applicant's suitability to conduct business in this Commonwealth under the act.
(d) Upon request of the Board, the applicant shall further supplement information provided in the application. The applicant shall provide requested documents, records, supporting data and other information within the time period specified in the request, or if no time is specified, within 30 days of the date of the request. If the applicant fails to provide the requested information within the required time period as set forth in the request, the Board may deny the application.
(e) Information provided to the Board must be true and complete. If there is any change in the information provided to the Board, the applicant shall promptly file a written amendment.
(f) The application and amendments thereto and other specific documents designated by the Board shall be sworn to or affirmed by the applicant before a notary public.
(g) The Board will deny the application of an applicant that refuses to submit to a background investigation or provide requested information as required under the act.
(h) An applicant that submits a document to the Board which is in a language other than English shall also submit an English translation of the non-English language document. At its discretion, the Board may accept an English summary of a document in lieu of a complete translation of the document. The summary or translation must include the signature, printed name, address and telephone number of the translator and a verification by the translator of the truth and accuracy of the summary or translation.
(i) An application that has been accepted for filing and related materials submitted to the Board will become the property of the Board and will not be returned to the applicant.
§ 423a.2. Preliminary submission review.
(a) Upon receipt of an application submission, the Board will review the submission to insure that it contains:
(1) The applicable application fee.
(2) The applicable application forms and additional information and accompanying documentation required by the act or the Board's regulations governing the specific type of application.
(3) Completed authorization forms for release of information from Federal and state agencies required for the specific type of application.
(4) For slot machine license applications only, a bond or letter of credit as required by section 1313(c) of the act (relating to slot machine license application financial fitness requirements).
(b) If an application submission fails to include one or more of the items in subsection (a), the applicant will be notified that the application has not been accepted for filing and the applicant will be given an opportunity to cure the insufficiency.
(c) If the applicant fails or is unable to cure the insufficiency within the time period set by the Board, the submission and related materials will be returned to the applicant.
§ 423a.3. Application processing.
(a) Upon a determination that prerequisites for filing have been met, the Board will:
(1) Accept the application for filing.
(2) Notify the applicant or the applicant's attorney, if any, in writing of the fact that the application has been accepted for filing and the date of the acceptance for filing. The Board will also notify the applicant that the acceptance for filing of the application will not constitute evidence that any requirement of the act has been satisfied.
(3) Obtain and evaluate information as may be necessary to determine the qualifications of the applicant and any matter relating to the application.
(4) Request the Bureau to promptly conduct an investigation and provide the information necessary to determine the qualifications of the applicant and any matter relating to the application.
(5) Request the Pennsylvania State Police to provide a criminal history background investigation report, determine employee eligibility consistent with § 435.1 (relating to general provisions), conduct fingerprinting, photograph applicants and perform other related duties in accordance with the act.
(6) Request the Department to promptly conduct a tax clearance review.
(7) Request the Department of Labor and Industry to perform an Unemployment Compensation Tax clearance review and a Workers Compensation Tax clearance review.
(8) Request any agencies, entities or persons to conduct investigations or evaluations or to provide information to the Board as deemed necessary by the Board.
(b) The Board will keep and maintain a list of all applicants under this part together with a record of all actions taken with respect to applicants.
(c) An application submitted under this part and information obtained by the Board relating to the application shall be part of the evidentiary record of the licensing proceeding. The Board's decision to issue or deny a license will be based solely on the evidentiary record before the Board.
§ 423a.4. Deficient applications.
(a) If an application is found to be deficient, the Board will notify the applicant of the deficiencies in the application and permit the applicant to cure the deficiencies within a time period prescribed by the Board.
(b) Refusal to provide the information necessary to cure the deficiencies required under subsection (a) may result in the immediate denial of the application.
§ 423a.5. Application withdrawal.
(a) A request for withdrawal of an application for a license, permit, certification or registration may be made by petition to the Board filed at any time prior to the Board taking action on the application.
(b) The petition must set forth the reasons for the withdrawal.
(c) An applicant may petition for the withdrawal of its application or an application submitted by one of its affiliates, intermediaries, subsidiaries or holding companies or persons or entities required to be qualified under section 1311 of the act (relating to additional slot machine license requirements ), or both.
(d) When rendering a decision on a petition for withdrawal, the Board may set the conditions of withdrawal and may deny or grant the request with or without prejudice.
(1) If a petition for withdrawal is granted with prejudice, the person or entity whose application has been withdrawn will not be eligible to apply for a license, permit, certification or registration with the Board until after expiration of 5 years from the date of the withdrawal.
(2) If a petition for withdrawal is granted without prejudice the Board may, in the order granting the petition, impose restrictions on when the person or entity whose application has been withdrawn will be eligible to apply for a license, permit, certification or registration.
(e) The Board may convert an application with deficiencies that an applicant fails to cure under § 423a.4(a) (relating to deficient applications) to a petition for withdrawal.
(f) Unless the Board otherwise directs, fees or other payments relating to the application will not be refundable by reason of the withdrawal. Additionally, fees and costs owed to the Board related to the application shall be paid prior to granting a petition to withdraw.
§ 423a.6. License, permit, registration and certification issuance and statement of conditions.
(a) Issuance criteria.
(1) In addition to the criteria contained in the act, the Board will not issue or renew a license, permit, certification or registration unless the Board finds that the following criteria have been established by the applicant:
(i) The applicant has paid all applicable fees.
(ii) The applicant has fulfilled each condition set by the Board or contained in the act, including the execution of a statement of conditions.
(iii) The applicant is found suitable consistent with the laws of the Commonwealth and is otherwise qualified to be issued a license, permit, certification, registration or other authorization.
(b) Statement of conditions.
(1) For the purposes of this subsection, the term ''executive officer'' means the individual holding the highest ranking management position within the entity and who is authorized to contract on behalf of the entity.
(2) If the Board approves an entity's application for a license, certification or registration, or for the renewal of a license, certification or registration, the Board may require the executive officer of the entity whose application has been approved, or other competent individual designated by the entity in accordance with paragraph (3), to execute a Statement of Conditions in the manner and form required by the Board. Execution of the Statement of Conditions constitutes the acceptance of each provision contained in the Statement of Conditions by both the entity and the executive officer. The executive officer shall ensure that the entity fully complies with each provision contained in the statement of conditions.
(3) Prior to the issuance of a license, certification or registration to an entity, the entity shall determine whether the entity will designate its executive officer or another competent individual with a direct reporting relationship to its executive officer to execute the statement of conditions on behalf of both the entity and its executive officer. If the entity elects to designate another competent individual with a direct reporting relationship to its executive officer to execute the statement of conditions on behalf of the entity and its executive officer, the entity shall adopt a resolution identifying the individual so designated, authorizing that individual to execute the statement of conditions on behalf of both the entity and its executive officer, and evidencing the executive officer's concurrence in that individual's designation. A copy of the resolution, certified as true and correct, shall be provided to the Board and attached to the statement of conditions.
(4) If the Board approves an individual's application for a license, permit, certification or registration, or for the renewal of a license, permit, certification or registration, the Board may require the individual whose application has been approved to execute a statement of conditions in the manner and form required by the Board. The execution of the Statement of Conditions constitutes the acceptance of each provision contained in the statement of conditions by the individual. The individual shall fully comply with each provision contained in the Statement of Conditions.
(5) Failure to fully comply with any provision contained in an executed Statement of Conditions constitutes a violation of the Statement of Conditions and may result in the imposition of Board-imposed administrative sanctions, up to and including revocation, against the individual to whom the license, permit, certification or registration was issued, and, in the case of an entity, against the entity and its executive officer or other designee under paragraph (3).
§ 423a.7. Restriction on application after denial or revocation.
(a) A person whose application has been denied or whose license, permit, registration or certification has been revoked, may not apply for a license, permit, certification or registration for 5 years from the date that the application was denied or the license, permit, certification or registration was revoked.
(b) The 5-year restriction in subsection (a) will not apply:
(1) To applicants for a slot machine license if the denial was for reasons other than unsuitability.
(2) If the denial or revocation was based on pending charges for a disqualifying offense under section 1213 or section 1518 of the act (relating to license or permit prohibition; and prohibited acts; penalties), 18 Pa.C.S. (relating to crimes and offenses) or the criminal laws of any other jurisdiction and the pending charges do not result in conviction of the disqualifying offense.
(c) Two years from the date that the application was denied or the license, permit, certification or registration was revoked, a person may file a petition for permission to apply for a license, permit, certification or registration before the expiration of the 5-year period.
(d) A petition filed under subsection (c) shall be filed in accordance with § 493a.4 (relating to petitions generally).
(e) Petitions filed under subsection (c) must contain:
(1) An explanation of how the conditions that were the basis for denial or revocation have been corrected or no longer exist.
(2) Supporting materials that demonstrate that the person meets the requirements for a license, permit, certification or registration.
(3) If the denial or revocation was the result of a conviction, the petition must include evidence of rehabilitation, such as:
(i) The nature and seriousness of the offense or conduct.
(ii) The circumstances under which the offense or conduct occurred.
(iii) The date of the offense or conduct.
(iv) The age of the applicant when the offense or conduct was committed.
(v) Whether the offense or conduct was an isolated or repeated incident.
(vi) Social conditions which may have contributed to the offense or conduct.
(vii) Evidence of rehabilitation, including good conduct in prison or in the community, counseling or psychiatric treatment received, acquisition of additional academic or vocational schooling, successful participation in correctional work-release programs, or the recommendation of persons who have or have had the applicant under their supervision.
(viii) Evidence that all obligations for restitution, fines and penalties have been met.
(f) If a petition filed under subsection (c) is denied, a person may not file another petition under subsection (c) for 1 year from the date of the denial of the petition.
CHAPTER 425. (Reserved) § 425.1. (Reserved).
CHAPTER 425a. LICENSED ENTITY REPRESENTATIVES Sec.
425a.1. Registration § 425a.1. Registration.
(a) A licensed entity representative shall file a completed Licensed Entity Representation Registration Form with the Bureau of Licensing, which includes the individual's name, employer or firm, address, telephone number and the licensed entity being represented.
(b) A licensed entity representative shall update its registration information on an ongoing basis.
(c) The Board will maintain a list of licensed entity representatives. The registration list will be available for public inspection at the offices of the Board and on the Board's website (www.pgcb.state.pa.us).
CHAPTER 427. (Reserved) §§ 427.1--427.5. (Reserved).
CHAPTER 427a. MANUFACTURERS Sec.
427a.1. Manufacturer general requirements. 427a.2. Manufacturer license applications and standards. 427a.3. Manufacturer license term and renewal. 427a.4. Alternative manufacturer licensing standards. 427a.5. Responsibilities of a manufacturer. § 427a.1. Manufacturer general requirements.
(a) A manufacturer seeking to manufacture slot machines and associated equipment for use in this Commonwealth shall apply to the Board for a manufacturer license.
(b) In accordance with section 1317.1 of the act (relating to manufacturer licenses), an applicant for or the holder of a manufacturer license or any of the applicant's or holder's affiliates, intermediaries, subsidiaries or holding companies, may not apply for or hold a slot machine license or supplier license.
(c) A licensed manufacturer or a licensed manufacturer designee may supply or repair any slot machine or associated equipment manufactured by the licensee.
(d) A licensed manufacturer may contract with a licensed supplier to supply or repair slot machines or associated equipment manufactured by the manufacturer licensee.
(e) Limitations will not be placed on the number of manufacturer licenses issued or when an application for a manufacturer license may be filed.
§ 427a.2. Manufacturer license applications and standards.
(a) An applicant for a manufacturer license shall submit:
(1) An original and three copies of the Manufacturer Application and Disclosure Information Form.
(2) The nonrefundable application fee posted on the Board's website (pgcb.state.pa.us).
(3) A diversity plan as set forth in section 1325(b) of the act (relating to license or permit issuance) and Chapter 481a (relating to diversity).
(4) An application from every key employee under § 435.3 (relating to key employee license) and principal under Chapter 433 (relating to principal licenses) as specified by the Manufacturer Application and Disclosure Information Form and other persons as determined by the Board.
(5) A Gaming Employee Application and Disclosure Information Form for each of the manufacturer's known gaming employees.
(6) If applicable, copies of all filings required by the SEC during the 2 immediately preceding fiscal years, including annual reports filed with the SEC, under section 13 or 15D of the Securities Exchange Act of 1934 (15 U.S.C.A. §§ 78m and 78o-6), quarterly reports filed with the SEC, under section 13 or 15D of the Securities Exchange Act of 1934, current reports filed with the SEC, under section 13 or 15D of the Securities Exchange Act of 1934, and proxy statements issued by the applicant.
(7) An affirmation that neither the applicant nor any of its affiliates, intermediaries, subsidiaries or holding companies is a slot machine licensee; and that the applicant has neither applied for nor holds a supplier license. In applying this provision to an applicant for a manufacturer license, the Board will not include interests that are held by individuals in any of the following manners:
(i) In mutual funds when the value of the interest owned does not exceed 1% of the total fair market value of the applicant or licensee and provided that the mutual fund is not a nondiversified fund invested primarily in entities operating in, or connected with, the gaming industry.
(ii) Through defined benefit pension plans.
(iii) Through deferred compensation plans organized and operated under section 457 of the Internal Revenue Code of 1986 (26 U.S.C.A. § 457).
(iv) In blind trusts over which the holder does not exercise managerial control or receive income during the time period the holder is subject to these provisions.
(v) Through tuition account plans organized and operated under section 529 of the Internal Revenue Code of 1986 (26 U.S.C.A. § 529).
(vi) Through plans described in section 401(k) of the Internal Revenue Code of 1986 (26 U.S.C.A. § 401(k)).
(vii) An interest held by a spouse if an action seeking a divorce and dissolution of marital status has been initiated in any jurisdiction by either party to the marriage.
(8) A sworn or affirmed statement that the applicant has developed and implemented internal safeguards and policies to prevent a violation of section 1513 of the act (relating to political influence) and a copy the safeguards and policies.
(b) In addition to the materials required under subsection (a), an applicant for a manufacturer license shall:
(1) Promptly provide information requested by the Board relating to the manufacturer's application or regulation and cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(3) Demonstrate that the applicant has the ability to manufacture, build, rebuild, repair, fabricate, assemble, produce, program, design or otherwise make modifications to slot machines or associated equipment which meet one or more of the following criteria:
(i) Are specifically designed for use in the operation of a slot machine.
(ii) Are needed to conduct an authorized game.
(iii) Have the capacity to affect the outcome of the play of a game.
(iv) Have the capacity to affect the calculation, storage, collection or control of gross terminal revenue.
(c) An applicant for a manufacturer license will be required to reimburse the Board for any additional costs, based on the actual expenses incurred by the Board, in conducting the background investigation.
(d) In determining whether an applicant is suitable to be licensed as a manufacturer under this section, the Board will consider the following:
(1) The financial fitness, good character, honesty, integrity and responsibility of the applicant.
(2) If all principals of the applicant individually qualify under the standards of section 1317.1 of the act (relating to manufacturer license).
(3) The integrity of all financial backers.
(4) The suitability of the applicant and the principals and key employees of the applicant based on the satisfactory results of:
(i) The background investigation of the principals and key employees.
(ii) A current tax clearance review performed by the Department.
(iii) A current Unemployment Compensation Tax clearance review and a Workers Compensation Tax clearance review performed by the Department of Labor and Industry.
§ 427a.3. Manufacturer license term and renewal.
(a) A manufacturer license or renewal will be valid for 1 year from the date on which the license or renewal is approved by the Board.
(b) A Manufacturer License Renewal Application Form and renewal fee shall be filed at least 6 months prior to the expiration of the current license.
(c) A manufacturer license for which a completed renewal application and fee has been received by the Board will continue in effect for an additional 6 month period or until acted upon by the Board, whichever occurs first.
§ 427a.4. Alternative manufacturer licensing standards.
(a) If an applicant for a manufacturer license holds a similar license in another jurisdiction in the United States, the applicant may submit a Manufacturer Application and Disclosure Information Form Addendum 1 with its application required under § 427a.2(a) (relating to manufacturer license applications and standards) for the Board to adopt an abbreviated licensing process under section 1319 of the act (relating to alternative manufacturer licensing standards) to review a manufacturer license application.
(b) The Board may use the abbreviated process if:
(1) The Board determines, after investigation, that the licensing standards in the jurisdiction in which the applicant is licensed are similarly comprehensive, thorough and provide equal, if not greater, safeguards as provided in the act and that granting the request is in the public interest.
(2) The applicant has provided a copy of its most recent application or renewal for the similar license in the other jurisdiction and a copy of the license or the order issued by the other jurisdiction granting the license.
(3) The applicant has no administrative or enforcement actions pending in another jurisdiction or the applicant has adequately disclosed and explained the action to the satisfaction of the Board.
(4) There are no pending or ongoing investigations of possible material violations by the applicant in another jurisdiction or the applicant has adequately disclosed and explained the investigation to the satisfaction of the Board.
(c) This section may not be construed to waive fees associated with obtaining a license through the application process in this Commonwealth.
§ 427a.5. Responsibilities of a manufacturer.
(a) A holder of a manufacturer license shall have a continuing duty to:
(1) Provide information requested by the Board relating to the manufacturer's licensing or regulation; cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions; and comply with conditions, restrictions, requirements, orders and rulings of the Board in accordance with the act.
(2) Report a change in circumstances that may render the holder of a manufacturer license ineligible, unqualified or unsuitable to hold a license under the standards and requirements of the act and of this part.
(3) Provide a copy of all SEC filings listed in § 427a.2(a)(6) (relating to manufacturer license applications and standards) that are filed after the date of issuance of its license. The copy shall be submitted no later than 30 days after the date of filing with the SEC.
(b) An employee of a licensed manufacturer whose duties of employment or incidental activities related to employment require the employee to be on the gaming floor or in a restricted area shall be required to obtain an occupational permit under § 435.4 (relating to occupation permit).
(c) A slot machine licensee may service or repair slot machines or associated equipment at its licensed facility.
(d) A slot machine licensee may perform routine maintenance directly related to the availability of slot machines for play, customer service or a clean and gracious playing environment. The routine maintenance includes installation or replacement of the following: batteries; hardware, including hinges, screws, bolts and custom handles; light bulbs; locks on slot machines and slot cash storage boxes, including the rekeying of the locks; printers, exclusive of printer software; and paper stock. Routine maintenance also includes external cleaning and the clearing of paper, bill and coin jams which do not require removal or dismantling of the mechanisms.
CHAPTER 431. (Reserved) §§ 431.1--431.5. (Reserved).
CHAPTER 431a. SUPPLIER LICENSES Sec.
431a.1. Supplier general requirements. 431a.2. Supplier license applications and standards. 431a.3. Supplier license term and renewal. 431a.4. Responsibilities of a supplier. 431a.5. Supplier log books. § 431a.1. Supplier general requirements.
(a) A supplier seeking to sell, lease, offer or otherwise provide, distribute or service slot machines or associated equipment to a slot machine licensee within this Commonwealth through a contract with a licensed manufacturer shall apply to the Board for a supplier license.
(b) In accordance with sections 1317 and 1317.1 of the act (relating to supplier licenses; and manufacturer licenses), an applicant for or the holder of a supplier license or any of the applicant's or holder's affiliates, intermediaries, subsidiaries or holding companies, may not apply for or hold a slot machine license or a manufacturer license.
(c) Limitations will not be placed on the number of supplier licenses issued or when an application for a supplier license may be filed.
§ 431a.2. Supplier license applications and standards.
(a) An applicant for a supplier license shall submit:
(1) An original and three copies of the Supplier Application and Disclosure Information Form for the applicant and each of the applicant's affiliated entities.
(2) The nonrefundable application fee posted on the Board's website (pgcb.state.pa.us).
(3) A diversity plan as set forth in section 1325(b) of the act (relating to license or permit issuance) and Chapter 481a (relating to diversity).
(4) An application from every key employee under § 435.3 (relating to key employee license) and principal under Chapter 433 (relating to principal licenses) as specified by the Supplier Application and Disclosure Information Form and other persons as determined by the Board
(5) A Gaming Employee Application and Disclosure Information Form for each of the supplier's known gaming employees.
(6) If applicable, copies of all filings required by the SEC during the 2 immediately preceding fiscal years, including all annual reports filed under section 13 or 15D of the Securities Exchange Act of 1934 (15 U.S.C.A. §§ 78a and 78o(d)), quarterly reports filed under section 13 or 15D of the Securities Exchange Act of 1934, current reports filed under section 13 or 15D of the Securities Exchange Act of 1934, and proxy statements issued by the applicant.
(7) An affirmation that neither the applicant nor any of its affiliates, subsidiaries, intermediaries and holding companies holds any direct or indirect ownership interest in an applicant for or holder of a manufacturer license or slot machine licensee, or employs, directly or indirectly, any person who satisfies the definition of a principal or key employee of a manufacturer or slot machine applicant or licensee. In applying this provision to an applicant for a supplier license, the Board will not include interests that are held by individuals in any of the following manners:
(i) In mutual funds when the value of the interest owned does not exceed 1% of the total fair market value of the manufacturer or slot machine applicant or licensee and provided that the mutual fund is not a nondiversified fund invested primarily in entities operating in, or connected with, the gaming industry.
(ii) Through defined benefit pension plans.
(iii) Through deferred compensation plans organized and operated under section 457 of the Internal Revenue Code of 1986 (26 U.S.C.A. § 457).
(iv) In blind trusts over which the holder does not exercise any managerial control or receive income during the time period the holder is subject to these provisions.
(v) Through tuition account plans organized and operated under section 529 of the Internal Revenue Code (26 U.S.C.A. § 529).
(vi) Through plans described in section 401(k) of the Internal Revenue Code (26 U.S.C.A. § 401(k)).
(vii) An interest held by a spouse if an action seeking a divorce and dissolution of marital status has been initiated in any jurisdiction by either party to the marriage.
(8) A sworn or affirmed statement that the applicant has developed and implemented internal safeguards and policies to prevent a violation of section 1513 of the act (relating to political influence) and a copy the safeguards and policies.
(b) In addition to the materials required under subsection (a), an applicant for a supplier license shall:
(1) Promptly provide information requested by the Board relating to the supplier's application or regulation and cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(3) Demonstrate that the applicant has or will establish a principal place of business in this Commonwealth.
(c) An applicant for a supplier license shall be required to reimburse the Board for any additional costs, based on the actual expenses incurred by the Board, in conducting the background investigation.
(d) In determining whether an applicant is suitable to be licensed as a supplier under this section, the Board will consider the following:
(1) The financial fitness, good character, honesty, integrity and responsibility of the applicant.
(2) If all principals of the applicant individually qualify under the standards of section 1317 of the act (relating to supplier licenses).
(3) The integrity of financial backers.
(4) The suitability of the applicant and principals and key employees of the applicant based on the satisfactory results of:
(i) A background investigation of principals and key employees.
(ii) A current tax clearance review performed by the Department.
(iii) A current Unemployment Compensation Tax clearance review and a Workers Compensation Tax clearance review performed by the Department of Labor and Industry.
§ 431a.3. Supplier license term and renewal.
(a) A supplier license or renewal shall be valid for 1 year from the date on which the license or renewal is approved by the Board.
(b) A Supplier License Renewal Application Form and renewal fee shall be filed at least 2 months prior to the expiration of the current license.
(c) A supplier license for which a completed renewal application and fee has been received by the Board will continue in effect for an additional 6 month period or until acted upon by the Board, whichever occurs first.
§ 431a.4. Responsibilities of a supplier.
(a) Within 1 year of the Board's issuance of a supplier license, the supplier shall establish and maintain a principal place of business in this Commonwealth.
(b) At the time of licensure, a supplier shall have assets or available lines of credit to support the sale, financing, servicing or repair of all slot machines to be placed in service or repaired by the supplier. The assets and available lines of credit shall be from a source independent of slot machine manufacturers and licensed gaming entities. Notwithstanding the forgoing, a licensed manufacturer may extend financing or payment terms to a licensed supplier, at prevailing market rates and terms, for the acquisition or leasing of slot machines, to be secured by the slot machines sold, leased or transferred.
(c) A supplier shall submit to the Board for review any agreements with a licensed manufacturer or with a slot machine licensee and detailed business plans. The Board's review may include, but not be limited to, financing arrangements, inventory requirements, warehouse requirements, warehouse space, technical competency, compensative agreements and other terms or conditions to ensure the financial independence of the licensed supplier from any licensed manufacturer or licensed gaming entity.
(d) A holder of a supplier license shall have a continuing duty to:
(1) Provide information requested by the Board relating to licensing or regulation; cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions; and comply with conditions, restrictions, requirements, orders and rulings of the Board in accordance with the act.
(2) Report a change in circumstances that may render the holder of a supplier license ineligible, unqualified or unsuitable to hold a license under the standards and requirements of the act and of this part.
(3) Provide a copy of the SEC filings listed in § 431a.2(a)(6) (relating to supplier license applications and standards) that are filed after the date of issuance of its license. The copy shall be submitted within 30 days after the date of filing with the SEC.
(e) An employee of a licensed supplier whose duties of employment or incidental activities related to employment allow the employee access to slot machines or associated equipment or require the employee to be on the gaming floor or in a restricted area shall be required to obtain an occupation permit under § 435.3 (relating to occupation permit).
(f) A slot machine licensee may service or repair slot machines or associated equipment at its licensed facility.
(g) A slot machine licensee may perform routine maintenance directly related to the availability of slot machines for play, customer service or a clean and gracious playing environment. The routine maintenance includes installation or replacement of the following: batteries; hardware, including hinges, screws, bolts and custom handles; light bulbs; locks on slot machines and slot cash storage boxes, including the rekeying of the locks; printers, exclusive of printer software; and paper stock. Routine maintenance also includes external cleaning and the clearing of paper, bill and coin jams which do not require removal or dismantling of the mechanisms.
(h) A licensed manufacturer or a manufacturer's designee may supply, install, service or repair slot machines or associated equipment manufactured by the licensed manufacturer.
§ 431a.5. Supplier log books.
(a) A supplier licensee shall maintain a log book to register the individuals who enter the supplier licensee's principal place of business and each physical facility utilized by the supplier licensee to house inventory, replacement parts, supplies, transportation or delivery equipment.
(b) The supplier licensee shall record or cause to be recorded in the log book the following:
(1) The date, entrance time and departure time of each individual.
(2) The name of each individual entering the place of business or physical facility and who they represent.
(3) The signature of each individual.
(4) The purpose for the visit.
(5) If applicable, the individual's Board license, permit, certification or registration number.
(c) Licensed, permitted or registered employees of a supplier are not required to register in the log book.
(d) Each log book required by this section shall be maintained at the entrance of the location to which it pertains and shall be made readily accessible for examination and inspection upon the demand of any agent, employee or representative of the Board, the Department of Revenue or the Pennsylvania State Police.
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[Continued from previous Web Page] CHAPTER 436. (Reserved) §§ 436.1--436.7. (Reserved).
CHAPTER 436a. HORSEMEN'S ORGANIZATIONS Sec.
436a.1. Definitions. 436a.2. Horsemen's organization registration. 436a.3. Permitting of officers, directors, representatives and fiduciaries. 436a.4. Responsibilities of horsemen's organizations, officers, directors, representatives and fiduciaries. 436a.5. Fiduciaries. 436a.6. Health and pension benefit plans. § 436a.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Fiduciary--A person who is entrusted by a horsemen's organization or its members to hold or manage funds received for horsemen under section 1406 of the act (relating to distributions from Pennsylvania Race Horse Development Fund) or who exercises control or discretionary authority over selection or management of a health or pension benefit plan, disposition of its assets or distribution of its funds.
Health benefits--A plan, fund or program which is maintained by a horsemen's organization and that provides healthcare benefits to horsemen at licensed racetracks, their families and employees, and others designated by the rules and eligibility requirements of the organization consistent with the act.
Horsemen--A thoroughbred or standardbred horse owner or trainer who enters and runs a horse at a licensed racing entity in the current or prior calendar year and meets the membership requirements of a horsemen's organization to participate in the receipt of benefits there from.
Horsemen's organization--A trade association which represents the majority of horsemen at a licensed racetrack and which exists for the purpose, in whole or in part, of negotiating a horsemen's contract and resolving grievances, disputes or other matters with management of a licensed racing entity, as defined by section 1103 of the act (relating to definitions).
Horsemen's organization officer--An officer or person authorized to perform the functions of president, vice president, secretary/treasurer or other executive function of a horsemen's organization, and any member of its board of directors or similar governing body.
Horsemen's organization representative--A person, compensated or not, who is authorized to represent a horsemen's organization or members thereof in matters relating to horsemen's agreements with a licensed racing entity, or who undertakes on behalf of a horsemen's organization or members thereof to promote, facilitate or otherwise influence the relations between a horsemen's organization and a licensed racing entity.
Pension benefits--Any plan, fund or program which is maintained by a horsemen's organization and that funds a program which provides retirement income to horsemen at licensed racetracks, their families and employees, and any others so designated by the rules and eligibility requirements of the organization consistent with the act.
§ 436a.2. Horsemen's organization registration.
(a) Each horsemen's organization or affiliate representing horsemen shall register with the Board in accordance with this section.
(b) Each horsemen's organization shall file a completed Horsemen's Organization Registration Statement with the registration fee posted on the Board's website (pgcb.state.pa.us).
(c) Horsemen's organization applicants and registrants shall be subject to the general application requirements of Chapters 421a and 423a (relating to general provisions; and applications).
(d) Horsemen's organization registrations will be valid for 4 years from the date on which the registration is approved by the Board.
(e) Renewals will be valid for 4 years and shall be filed no later than 120 days prior to the expiration of the current registration period.
(f) A registration for which a completed renewal application and fee has been received by the Board will continue in effect until the Board sends written notification to the horsemen's organization that the Board has approved or denied the renewal of the registration.
§ 436a.3. Permitting of officers, directors, representatives and fiduciaries.
(a) Every officer, director or representative of a horsemen's organization who is currently elected or appointed and authorized to act on behalf of the horsemen's organization, or any individual authorized to act in a fiduciary capacity on behalf of horsemen shall be permitted in accordance with this section.
(b) Every officer, director or representative of a horsemen's organization who is currently elected or appointed and authorized to act on behalf of the horsemen's organization, or any individual authorized to act in a fiduciary capacity on behalf of horsemen shall file a completed Horsemen's Permit Application Form with the permit fee posted on the Board's website (pgcb.state.pa.us).
(c) Applicants and permittees under this section shall be subject to the general application requirements of Chapters 421a and 423a (relating to general provisions; and applications).
(d) Permits issued under this section will be valid for 1 year from the date on which the permit is approved by the Board.
(e) Renewals will be valid for 1 year and shall be filed at least 60 days prior to the expiration of the current permit.
(f) A permit for which a completed renewal application and fee has been received by the Board will continue in effect until the Board sends written notification to the permittee that the Board has approved or denied the renewal of the permit.
(g) If a current officer, director or representative of a horsemen's organization is denied a permit required by this section, that officer, director or representative shall be precluded from engaging in any activity of the horsemen's organization involving gaming funds allocated to, received by, or distributed from the horsemen's organization.
(h) A person who is a third-party provider of a health or pension benefit plan to a horsemen's organization shall be exempt from the requirements of this section. A licensed attorney or accountant representing a horsemen's organization who does not meet the conditions in subsection (a) shall also be exempt under this section.
§ 436a.4. Responsibilities of horsemen's organizations, officers, directors, representatives and fiduciaries.
(a) Horsemen's organizations, officers, directors, representatives and fiduciaries shall ensure that the funds allocated to the horsemen and horsemen's organizations are used for the benefit of all horsemen of this Commonwealth.
(b) Funds allocated to horsemen's organizations for benevolent programs are not to be used for the personal benefit of any officer, director, representative or fiduciary of a horsemen's organization except to the extent that the officer, director, representative or fiduciary of the horsemen's organization is a participant in the benevolent programs on the same basis as other eligible program participants.
(c) Horsemen's organizations shall maintain adequate records of receipts and distributions of the funds allocated to them under the act.
(d) By March 30 of each calendar year, each horsemen's organization shall file with the Board two copies of its audited financial statements together with any management letters or reports written thereon as prepared by its independent auditor. These filings will be available for public inspection during the normal operating hours of the Board at its Harrisburg office.
§ 436a.5. Fiduciaries.
Fiduciaries shall:
(1) Ensure that the funds received for the benefit of the horsemen are distributed pursuant to the act.
(2) Manage all health and pension benefit plans for the exclusive benefit of participants and beneficiaries.
(3) Carry out their duties in a prudent manner and refrain from conflict-of-interest transactions.
(4) Comply with limitations on certain plans' investments in particular securities and properties.
(5) Fund benefits in accordance with applicable law and plan rules.
(6) File quarterly reports with the Board within 20 days of the end of each calendar quarter. The reports must detail the expenditure of funds designated by the act for the benefit of horsemen and be in a format and manner designated by the Board.
(7) Provide documents to the Board as may be requested in the conduct of investigations or to ensure compliance with the act and this chapter.
§ 436a.6. Health and pension benefit plans.
(a) Contracts for health and pension benefit plans established for the benefit of members of a horsemen's organization must:
(1) Be submitted to the Board for review at least 90 days prior to the proposed effective date of the contract.
(2) Not be effective until approved by the Board.
(b) Administrative and overhead costs incurred by the horsemen's organization for the administration of health and pension benefit plans must be reasonable. Administrative costs that do not exceed 15% of the statutory allocation are considered reasonable.
CHAPTER 436a. (Reserved) §§ 436a.1--436a.6. (Reserved).
CHAPTER 436b. USE OF FUNDS ALLOCATED TO HORSEMEN'S ORGANIZATIONS--STATEMENT OF POLICY Sec.
436b.1. Scope. 436b.2. Definitions. 436b.3. Responsibilities of horsemen's organizations. 436b.4. Audits of horsemen's organizations. 436b.5. Reports. 436b.6. Responsibilities of Category 1 licensees. § 436b.1. Scope.
The act requires the Board to:
(1) Establish guidelines that ensure that funds distributed from the Fund and which are allocated to horsemen's organizations, as defined by the act, are used to finance programs that benefit the horsemen of this Commonwealth. (See 4 Pa.C.S. § 1406(b) (relating to distributions from Pennsylvania Race Horse Development Fund).)
(2) Ensure that funds allocated to the horsemen's organizations are used to finance programs which benefit the horsemen of this Commonwealth. (See 4 Pa.C.S. § 1406(c).)
(3) Ensure that no more than 15% of funds available annually for benevolent programs, including pension, health and insurance plans, are used to administer the programs.
(4) Ensure that the horsemen's organizations that receive funds from the Fund file an annual audit prepared by a certified public accountant. (See 4 Pa.C.S. § 1406(e).)
(5) Approve the health and pension benefit contracts entered into by the horsemen's organizations. (See 4 Pa.C.S. § 1406(f).)
§ 436b.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Fund--The Pennsylvania Race Horse Development Fund.
Registered horsemen's organization--A horsemen's organization that receives funds from the Fund and which shall register with the Board under § 436a.2 (relating to horsemen's organization registration).
§ 436b.3. Responsibilities of horsemen's organizations.
(a) A horsemen's organization shall register with the Board under § 436a.2 (relating to horsemen's organization registration).
(b) Registered horsemen's organizations shall ensure that funds received from the Fund are used to benefit all horsemen and are kept apart from funds acquired from other sources. Funds that are allocated to horsemen's organizations for benevolent programs are not to be used for the personal benefit of any officer, director, representative or fiduciary of the horsemen's organization.
(c) Registered horsemen's organizations shall ensure that administrative costs are reasonable as required by 4 Pa.C.S. § 1406(d) (relating to distributions from Pennsylvania Race Horse Development Fund). Costs that do not exceed 15% of the annual total statutory allocation are deemed reasonable.
(d) Registered horsemen's organizations shall ensure that health and pension benefits contracts entered into by the horsemen's organizations are approved by the Board.
(e) The officers, directors, fiduciaries and representatives of a registered horsemen's organization shall file an application for a permit with the Board under § 436a.3 (relating to permitting of officers, directors, representatives and fiduciaries).
(f) The officers, directors, fiduciaries and representatives of a registered horsemen's organization shall comply with §§ 436a.4 and 436a.5 (relating to responsibilities of horsemen's organizations, officers, directors, representatives and fiduciaries; and fiduciaries) relative to the responsibilities of the horsemen's organizations and their officers, directors, representatives and fiduciaries.
§ 436b.4. Audits of horsemen's organizations.
(a) Registered horsemen's organizations that receive funds from the Fund shall file annually, with the appropriate racing commission and the Board, an audit prepared by a certified public accountant of the funds received under 4 Pa.C.S. § 1406(e) (relating to distributions from Pennsylvania Race Horse Development Fund). Audits shall be available for public review.
(b) Audits submitted to the Board must reflect all funds received from the Fund which are used or intended to be used for purse supplements under 4 Pa.C.S. § 1406(a)(1)(i) and health and pension benefits under 4 Pa.C.S. § 1406(a)(1)(iii).
(c) Audits shall be mailed to the Pennsylvania Gaming Control Board, Attn: Director, Racetrack Gaming, P. O. Box 69060, Harrisburg, Pennsylvania 17106-9060 in sufficient time to be received no later than March 30th of each calendar year.
§ 436b.5. Reports.
(a) Registered horsemen's organizations shall file with the Board no later than the 20th day of the month following the end of each calendar quarter the following reports:
(1) Quarterly report of funds received from the Fund through the Category 1 licensee conducting live racing into the account established by and for the benefit of the horsemen under 4 Pa.C.S. § 1406(1)(a)(i) (relating to distributions from Pennsylvania Race Horse Development Fund).
(2) Quarterly report of funds distributed for purse supplements from the account established by and for the benefit of the horsemen under 4 Pa.C.S. § 1406(1)(a)(i).
(3) Quarterly report of funds received for health and pension benefits health and pension benefits under 4 Pa.C.S.§ 1406(1)(a)(iii).
(b) Horsemen's organizations shall ensure that funds allocated for thoroughbred jockeys and standardbred drivers are paid as required by 4 Pa.C.S. § 1406(a)(1)(iii) and that the distribution of these proceeds is reflected in the annual audit required by 4 Pa.C.S. § 1406(e).
§ 436b.6. Responsibilities of Category 1 licensees.
Category 1 licensees conducting live racing and who receive distributions from the Fund for distribution to purses shall file with the Board no later than the 20th day of the month following the end of each calendar quarter the following reports:
(1) Quarterly report of funds received from the Fund.
(2) Quarterly report of funds deposited into a separate, interest-bearing purse account established by and for the benefit of the horsemen under 4 Pa.C.S. § 1406(a)(1)(i) (relating to distributions from Pennsylvania Race Horse Development Fund) and § 441.9(b)(3)(reserved) (relating to responsibilities of licensed organizations).
(3) Quarterly report of funds distributed to the horsemen's organization representing the owners and trainers at the racetrack at which the licensed racing entity operates for health and pension benefits under 4 Pa.C.S. § 1406(a)(1)(iii) and § 441.9(b)(3)(ii).
(4) Quarterly report of expenditures for backside improvements in conformity with 4 Pa.C.S. § 1404 (relating to distributions from licensee's revenue receipts).
CHAPTER 438. (Reserved) §§ 438.1--438.4. (Reserved).
CHAPTER 438a. LABOR ORGANIZATIONS Sec.
438a.1. Definitions. 438a.2. Labor organization notification. 438a.3. Permitting of labor organization officers, agents and management employees. § 438a.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Labor organization--An organization, union, agency, employee representation committee, group, association or plan in which employees who are required to obtain a license, permit or registration from the Board participate which exists for the purpose, in whole or in part, of dealing with a slot machine licensee or licensed management company concerning grievances, labor disputes, wages, rates of pay, hours, or other terms or conditions of employment, including any conference, general committee, joint or systems board or international labor organization.
Labor organization agent--A person, compensated or not, who is authorized to represent a labor organization in an employment matter relating to employees who are employed by a slot machine licensee or licensed management company, or who undertakes on behalf of the labor organization to promote, facilitate or otherwise influence the relations between the labor organization and a slot machine licensee or licensed management company.
Labor organization officer--An officer or person authorized to perform the functions of an officer who exercises authority, discretion or influence with regard to matters relating to employees who are employed at a licensed facility.
Labor organization management employee--An employee of a labor organization who serves in a management, supervisory or policy making position, who exercises authority, discretion or influence with regard to matters relating to employees who are employed at a licensed facility.
§ 438a.2. Labor organization notification.
(a) Each labor organization shall file a completed Labor Organization Notification Form with the Bureau of Licensing.
(b) Labor organizations shall file an updated version of the Labor Organization Notification Form with the Bureau of Licensing within 30 days of a change in the information contained on the form.
§ 438a.3. Permitting of labor organization officers, agents and management employees.
(a) Every labor organization officer, agent and management employee shall be permitted in accordance with this section.
(b) Every labor organization officer, agent and management employee shall file a completed Labor Organization Permit Application Form with the permit fee posted on the Board's website (pgcb.state.pa.us).
(c) Applicants and permittees under this section shall be subject to the general application requirements of Chapters 421a and 423a (relating to general provisions; and applications).
(d) Permits issued under this section will be valid for 1 year from the date on which the permit is approved by the Board.
(e) Renewals will be valid for 1 year and shall be filed no later than 60 days prior to the expiration of the current permit.
(f) A permit for which a completed renewal application and fee has been received by the Board will continue in effect until the Board sends written notification to the permittee that the Board has approved or denied the renewal of the permit.
CHAPTER 439. (Reserved) §§ 439.1--439.11. (Reserved).
CHAPTER 439a. JUNKET ENTERPRISES Sec.
439a.1. Definitions. 439a.2. Junket enterprise general requirements. 439a.3. Junket enterprise license applications. 439a.4. Junket enterprise license term and renewal. 439a.5. Junket representative general requirements. 439a.6. Junket representative registration. 439a.7. Junket schedules. 439a.8. Junket arrival reports. 439a.9. Junket final reports. 439a.10. Monthly junket reports. 439a.11. Purchase of patron lists. 439a.12. Junket enterprise and representative prohibitions. § 439a.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Junket--An arrangement made between a slot machine licensee and a junket enterprise or a junket representative, the purpose of which is to induce a person, selected or approved, to come to a licensed facility for the purpose of gambling and pursuant to which, and as consideration for which, some or all of the cost of transportation, food, lodging and entertainment for that person is directly or indirectly paid by a slot machine licensee.
Junket enterprise--A person, other than a slot machine licensee, who employs or otherwise engages the services of a junket representative in connection with a junket to a licensed facility, regardless of whether or not the activities occur within this Commonwealth.
Junket representative--
(i) A natural person who negotiates the terms of, engages in the referral, procurement or selection of persons who may participate in a junket to a licensed facility, regardless of whether or not those activities occur within this Commonwealth.
(ii) A gaming employee of a slot machine licensee who performs the duties and functions listed in subparagraph (i) for the licensed facility is not a junket representative.
§ 439a.2. Junket enterprise general requirements.
(a) A slot machine licensee seeking to conduct business with a junket enterprise or a junket enterprise seeking to conduct business with a slot machine licensee shall file a Junket Enterprise License Form with the Board.
(b) A junket enterprise shall be licensed as a junket enterprise prior to a slot machine licensee permitting a junket involving that junket enterprise to arrive at its licensed facility. A junket enterprise shall be considered ''involved'' in a junket to a licensed facility if it receives any compensation whatsoever from any person as a result of the conduct of the junket. A slot machine licensee may not engage the services of any junket enterprise which has not been licensed.
(c) A junket enterprise may not employ or otherwise engage the services of a junket representative except in accordance with § 439a.5 (relating to junket representative general requirements).
(d) A person may be selected or approved to participate in a junket on the basis of one or more of the following:
(1) The ability to satisfy a financial qualification obligation related to the person's ability or willingness to gamble, which shall be deemed to occur whenever a person, as an element of the arrangement is required to perform one or more of the following:
(i) Establish a customer deposit with a slot machine licensee.
(ii) Demonstrate to a slot machine licensee the availability of a specified amount of cash or cash equivalent.
(iii) Gamble to a predetermined level at the licensed facility.
(iv) Comply with any similar obligation.
(2) The propensity to gamble, which shall be deemed to occur whenever a person has been selected or approved on the basis of one or more of the following:
(i) The previous satisfaction of a financial qualification obligation in accordance with the provisions of paragraph (1).
(ii) An evaluation that the person has a tendency to participate in gambling activities as the result of:
(A) An inquiry concerning the person's tendency to gamble.
(B) Use of other means of determining that the person has a tendency to participate in gambling activities.
(e) A rebuttable presumption that a person has been selected or approved for participation in an arrangement on a basis related to the person's propensity to gamble shall be created whenever the person is provided, as part of the arrangement, with one or more of the following:
(1) Complimentary accommodations.
(2) Complimentary food, entertainment or transportation which has a value of $200 or more.
§ 439a.3. Junket enterprise license applications.
(a) A Junket Enterprise License Form shall be submitted by a slot machine licensee or junket enterprise applicant with a verification provided by the slot machine licensee that the junket enterprise's services will be utilized at the licensed facility.
(b) In addition to the Junket Enterprise License Form, an applicant for a junket enterprise license shall submit:
(1) The nonrefundable application fee posted on the Board's website (pgcb.state.pa.us).
(2) A Junket Enterprise License Form for any principal that is an entity, and for each affiliate, intermediary, subsidiary and holding company of the applicant.
(3) A Junket Enterprise Representative Registration for each principal who is a natural person and for each key employee.
(c) In addition to the materials required under subsections (a) and (b), an applicant for a junket enterprise license shall:
(1) Promptly provide information requested by the Board relating to its application or regulation and cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(d) An applicant for a junket enterprise license will be required to reimburse the Board for any additional costs, based on the actual expenses incurred by the Board, in conducting the background investigation.
§ 439a.4. Junket enterprise license term and renewal.
(a) A junket enterprise license issued under this chapter will be valid for 1 year from the date of Board approval.
(b) A renewal application shall be submitted to the Board at least 60 days prior to the expiration of a junket enterprise license.
(c) A junket enterprise license for which a completed renewal application and fee has been received by the Board will continue in effect until the Board sends written notification to the holder of the junket enterprise license that the Board has approved or denied the junket enterprise license.
§ 439a.5. Junket representative general requirements.
(a) A person may not act as a junket representative in connection with a junket to a licensed facility unless the person has been registered as a junket representative and is employed by a junket enterprise that is licensed by the Board.
(b) A junket representative may only be employed by one junket enterprise at a time. For the purposes of this section, to qualify as an employee of a junket enterprise, a junket representative shall:
(1) Receive all compensation for his services as a junket representative within this Commonwealth through the payroll account of the junket enterprise.
(2) Exhibit other appropriate indicia of genuine employment, including Federal and State taxation withholdings.
§ 439a.6. Junket representative registration.
(a) A natural person applying for a junket representative registration shall submit:
(1) A Junket Representative Registration Form.
(2) The nonrefundable application fee posted on the Board's website (pgcb.state.pa.us).
(b) In addition to the materials required under subsection (a), an applicant for a junket representative registration shall:
(1) Promptly provide information requested by the Board relating to its application or regulation and cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(c) After review of the information submitted under subsections (a) and (b), including a background investigation, the Board may issue a junket representative registration if the individual has proven that he is a person of good character, honesty and integrity and is qualified to hold a junket representative registration.
(d) An individual who wishes to receive a junket representative registration under this chapter may provide the junket enterprise with written authorization to file an application on the individual's behalf.
(e) A junket representative registration issued under this section does not require renewal and is nontransferable.
§ 439a.7. Junket schedules.
(a) A junket schedule shall be prepared by a slot machine licensee for each junket that is arranged through a junket enterprise or its junket representative.
(b) A junket schedule shall be filed with the Bureau of Corporate Compliance and Internal Controls by a slot machine licensee by the 15th day of the month preceding the month in which the junket is scheduled. If a junket is arranged after the 15th day of the month preceding the arrival of the junket, an amended junket schedule shall be filed with the Bureau of Corporate Compliance and Internal Controls by the slot machine licensee by the close of the next business day.
(c) Junket schedules shall be certified by an employee of the slot machine licensee and include the following:
(1) The origin of the junket.
(2) The number of participants in the junket.
(3) The arrival time and date of the junket.
(4) The departure time and date of the junket.
(5) The name and registration number of all junket representatives and the name and license number of all junket enterprises involved in the junket.
(d) Changes in the information which occur after the filing of a junket schedule or amended junket schedule with the Bureau of Corporate Compliance and Internal Controls shall be reported in writing to the Bureau of Corporate Compliance and Internal Controls by the slot machine licensee by the close of the next business day. These changes, plus any other material change in the information provided in a junket schedule, shall also be noted on the arrival report.
§ 439a.8. Junket arrival reports.
(a) A junket arrival report shall be prepared by a slot machine licensee for each junket arranged through a junket enterprise or its junket representative with whom the slot machine licensee does business.
(b) Junket arrival reports must:
(1) Include a junket guest manifest listing the names and addresses of the junket participants.
(2) Include information required under § 439a.7 (relating to junket schedules) that has not been previously provided to the Bureau of Corporate Compliance and Internal Controls in a junket schedule pertaining to the particular junket, or an amendment thereto.
(3) Be certified by an employee of the slot machine licensee.
(c) Junket arrival reports shall be prepared by a slot machine licensee in compliance with the following:
(1) A junket arrival report involving complimentary accommodations shall be prepared within 12 hours of the arrival of the junket participant.
(2) A junket arrival report involving complementary services that does not involve complementary accommodations shall be filed by 5 p.m. of the next business day following arrival. A junket arrival which occurs after 12 a.m. but before the end of the gaming day shall be deemed to have occurred on the preceding calendar day.
(3) Junket arrival reports shall be maintained on the premises of the licensed facility and made available to the Board for inspection during normal business hours.
§ 439a.9. Junket final reports.
(a) A junket final report shall be prepared by a slot machine licensee for each junket for which the slot machine licensee was required to prepare either a junket schedule or a junket arrival report.
(b) A junket final report must include the actual amount of complimentary services provided to each junket participant.
(c) A junket final report shall be:
(1) Prepared within 7 days of the completion of the junket.
(2) Maintained on the premises of its licensed facility and made available to the Board for inspection during normal business hours.
§ 439a.10. Monthly junket reports.
(a) Each slot machine licensee shall, on or before the 15th day of the month, prepare and file with the Bureau of Corporate Compliance and Internal Controls a monthly junket report listing the name and registration number of each person who performed the services of a junket representative during the preceding month.
(b) Copies of the monthly junket reports shall be maintained by the slot machine licensee on the premises of its licensed facility and made available to the Board for inspection during normal business hours.
§ 439a.11. Purchase of patron lists.
(a) Each slot machine licensee, junket representative and junket enterprise shall prepare and maintain a report with respect to each list of names of junket patrons or potential junket patrons purchased from or for which compensation was provided to any source whatsoever.
(b) The report required by subsection (a) must include:
(1) The name and address of the person or enterprise selling the list.
(2) The purchase price paid for the list or any other terms of compensation related to the transaction.
(3) The date of purchase of the list.
(c) The report required by subsection (a) shall be filed with the Bureau of Corporate Compliance and Internal Controls, no later than 7 days after the receipt of the list by the purchaser.
§ 439a.12. Junket enterprise and representative prohibitions.
A junket enterprise or junket representative may not:
(1) Engage in collection efforts.
(2) Individually receive or retain a fee from a patron for the privilege of participating in a junket.
(3) Pay for services, including transportation or other items of value, provided to or for the benefit of any patron participating in a junket, unless otherwise disclosed to and approved by the Board.
(4) Extend credit to or on behalf of a patron participating in a junket.
CHAPTER 440. (Reserved) §§ 440.1--440.4. (Reserved).
CHAPTER 440a. MANAGEMENT COMPANIES Sec.
440a.1. General requirements. 440a.2. Applications. 440a.3. Management company license term and renewal. 440a.4. Management company responsibilities. 440a.5. Management contracts. § 440a.1. General requirements.
(a) A management company shall be required to obtain a management company license from the Board prior to providing any service to a slot machine applicant or licensee under this chapter.
(b) An applicant for or holder of a management company license or any of the applicant's or holder's affiliates, intermediaries, subsidiaries or holding companies, may not apply for or hold a manufacturer or supplier license.
§ 440a.2. Applications.
(a) An applicant for a management company license shall file:
(1) A completed applicable Category 1, Category 2 or Category 3 slot machine license application and disclosure information forms with the applicable appendices as if the management company license applicant were an affiliated entity of the slot machine applicant or licensee.
(2) The nonrefundable application fee posted on the Board's website (pgcb.state.pa.us).
(b) In addition to the materials required under subsection (a), an applicant for a management company license shall:
(1) Promptly provide information requested by the Board relating to its application or regulation and cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
§ 440a.3. Management company license and term and renewal.
(a) A management company license issued under this chapter will be valid for 1 year from the date of Board approval.
(b) A renewal application shall be submitted to the Board at least 60 days prior to the expiration of a management company license.
(c) A management company license for which a completed renewal application and fee has been received by the Board will continue in effect until the Board sends written notification to the holder of the management company license that the Board has approved or denied the management company license.
§ 440a.4. Management company responsibilities.
(a) Notwithstanding any provision to the contrary in a management contract, a management company will be deemed to be an agent of the slot machine licensee for purposes of imposing liability for any act or omission of the management company in violation of the act or this part.
(b) Notwithstanding any provision to the contrary in a management contract, a management company may be jointly and severally liable for any act or omission by the slot machine licensee in violation of the act or this part regardless of actual knowledge by the management company of the act or omission.
§ 440a.5. Management contracts.
(a) A management contract between a slot machine applicant or licensee and management company licensee may not become effective until the Board has reviewed and approved the terms and conditions of the management contract.
(b) A management company licensee shall submit any amendment to a management contract 30 days prior to the effective date of the proposed amendment. The amendment may not become effective until the Board has reviewed and approved the terms and conditions of the amendment.
(c) A management contract or amendment will not be approved by the Board unless the management company proves by clear and convincing evidence that the approval of the contract would not create a monopoly on the control of licensed gaming facilities in this Commonwealth. A management company that seeks Board approval of a management contract shall disclose its financial interests in the slot machine licensee or applicant and, if applicable, proposed or contemplated changes in ownership or control of a slot machine licensee
(d) Requests for approval of a management contract must include a business plan which sets forth the parties' goals and objectives for the term of the management contract.
(e) A management contract, submitted to the Board for approval, must contain the following:
(1) A provision that provides the grounds and mechanisms for modifying or terminating the contract.
(2) A provision that states that the contract will not be effective unless it is approved by the Board.
(3) A provision that describes with particularity the method of compensating and reimbursing the management company.
(4) Provisions that contain a mechanism to resolve patron disputes and disputes between the slot machine licensee and the management company.
(5) A provision that indicates whether and to what extent contract assignments and subcontracting are permissible.
(6) A provision that specifies the duration of the management contract. A management contract may not contain a provision that provides for the automatic renewal of the management contract.
(f) A management contract submitted for Board review and approval must enumerate with specificity the responsibilities of the slot machine applicant or licensee and management company under the terms and conditions of the management contract. At a minimum, the terms should address whether, and to what extent, the management company is involved in the following:
(1) Operation of the following departments:
(i) Information technology.
(ii) Internal audit.
(iii) Slot accounting.
(iv) Slot management.
(v) Security.
(vi) Surveillance.
(2) Design, construction, improvement or maintenance, or both, of the licensed facility.
(3) Provision of operating capital and financing for the development of the licensed facility.
(4) Payment of the slot machine license fee.
(5) Purchase or lease of slot machines or associated equipment.
(6) Design, implementation or amendment, or both, of the system of internal controls required under section 1322 of the act (relating to slot machine accounting controls and audits) and this part including the financial reporting requirements.
(7) Hiring, terminating, training and promoting of employees and the employment practices attendant thereto.
(8) The payment of local, State and Federal taxes and slot machine license deposit required pursuant to the act and this part and any penalties imposed by the Board for violations thereof.
(9) Advertising, player incentive or marketing programs.
(10) Compliance with section 1325(b)(1) of the act (relating to license or permit issuance).
(11) Obtaining and maintaining insurance coverage, including coverage of public liability and property loss or damage.
(12) Procurement of vendors and junkets.
(13) Selection of the licensed facility's independent auditor.
(g) Notwithstanding subsections (a)--(f), a slot machine licensee and licensed management company may not contract for the delegation of any benefits, duties or obligations specifically granted to or imposed upon the slot machine licensee by the act.
[Pa.B. Doc. No. 07-1981. Filed for public inspection October 26, 2007, 9:00 a.m.]
