PAVGA

Legislation

Pennsylvania HB 271 & SB 628 Overview

Pennsylvania’s HB 271 and SB 628 are the bills that allow for video gaming terminals (“VGTs”) at specific liquor-licensed locations. The terms are as follows:

Licensing

  • Each terminal operator licensee, manufacturer and establishment licensee must be licensed by the Pennsylvania Gaming Board
     
  • Manufacturers, terminal operators, suppliers and establishment licensee may only possess one type of license
     
  • All terminal operator licensee applicants must provide:
     
    • The name, address and photograph of the applicant and of all directors and owners and key employees and their positions within the corporation or organization, as well as additional financial information required by the board
    • A current tax lien certificate issued by the department
    • The details of any gaming license applied for, granted to or denied to the applicant by another jurisdiction where the form of gaming is legal and the consent for the board to acquire copies of the application submitted or license issued in connection with the application
    • The details of any loan obtained from a financial institution or not obtained from a financial institution
    • The consent to conduct a background investigation by the board, the scope of which investigation shall be determined by the board in its discretion consistent with the provisions of this part, and a release signed by all persons subject to the investigation of all information required to complete the investigation
    • The details of the applicant's diversity plan to assure that all persons are accorded equality of opportunity in employment and contracting by the applicant, its contractors, subcontractors, assignees, lessees, agents, vendors and suppliers
    • Any other information determined to be appropriate by the board
       
  • The initial license for a terminal operator shall be for a period of one year and, if renewal is submitted at least two months prior to expiration, the board shall have discretion to renew the license for a period of up to three years
     
  • All supplier licenses applicants must provide:
     
    • The name and business address of the applicant and the applicant's affiliates, intermediaries, subsidiaries and holding companies; the principals and key employees of each business; and a list of employees and their positions within each business, as well as financial information required by the board
    • A statement that the applicant and each affiliate, intermediary, subsidiary or holding company of the applicant are not terminal operator licensees
    • Proof that the applicant has or will establish a place of business in this Commonwealth. A supplier licensee shall maintain its place of business in this Commonwealth to remain eligible for licensure
    • The consent to a background investigation of the applicant, its principals and key employees or other persons required by the board and a release to obtain the information necessary for the completion of the background investigation
    • The details of any supplier license issued by the board to the applicant under section 1317 (relating to supplier licenses), if applicable
    • The type of goods and services to be supplied and whether those goods and services will be provided through purchase, lease, contract or otherwise
    • Other information determined by the board to be appropriate
       
  • The initial license for a supplier shall be for a period of one year, and, if renewal is submitted at least two months prior to expiration, the board shall have discretion to renew the license for a period of up to three years
     
  • All manufacturer licenses applicants must provide:
     
    • The name and business address of the applicant and the applicant's affiliates, intermediaries, subsidiaries and holding companies; the principals and key employees of each business; and a list of employees and their positions within each business, as well as financial information required by the board
    • A statement that the applicant and each affiliate, intermediary, subsidiary or holding company of the applicant are not terminal operator licensees
    • The consent to a background investigation of the applicant, its principals, its key employees, its intermediaries, its subsidiaries or other persons required by the board and a release to obtain the information necessary for the completion of the background investigation 
    • The details of any equivalent license granted or denied by other jurisdictions where gaming activities as authorized by this part are permitted
    • The details of any manufacturer license issued by the board to the applicant under section 1317.1 (relating to manufacturer licenses), if applicable
    • The type of video gaming terminals, redemption terminals or associated equipment to be manufactured or repaired
    • Other information determined by the board to be appropriate
       
  • The initial license for a manufacturer shall be for a period of one year, and, if renewal is submitted at least two months prior to expiration, the board shall have discretion to renew the license for a period of up to three years
     
  • All establishment licenses must provide:
     
    • The name, address and photograph of the applicant and additional financial information required by the board
    • A description of the proposed surveillance and security measures to ensure the security of the proposed video gaming area
    • A current tax lien certificate issued by the department
    • The criminal history record of the applicant, principal and key employees and a consent for the Pennsylvania State Police to conduct a background investigation on the applicant, principals and key employees
    • If the applicant is a liquor establishment, documentation showing that the establishment's liquor or retail dispenser license is valid and is in good standing with the Pennsylvania Liquor Control Board
    • If the applicant is a liquor establishment, disclosure of conditional license agreements entered into under the act of April 12, 1951 (P.L.90, No.21), known as the Liquor Code
    • Other information determined to be appropriate by the board
  • The initial license for an establishment licensee shall be for a period of one year, and, if renewal is submitted at least two months prior to expiration, the board shall have discretion to renew the license for a period of up to three years


License Prohibitions

  • A person that has been convicted of a felony in any jurisdiction is prohibited from receiving a license
     
  • A person convicted of and gambling offense in any jurisdiction is prohibited from receiving a license unless 15 years have elapsed from the date of conviction for the offense
     
  • A liquor establishment whose liquor or retail dispenser license is not in good standing with the Pennsylvania Liquor Control Board


Video Gaming Limitations

  • For an establishment licensee that is a truck stop establishment, no more than 10 video gaming terminals
     
  • For an establishment licensee that is a nonprimary location, no more than 10 video gaming terminals
     
  • For an establishment licensee that is not a truck stop establishment or nonprimary location, no more than five video gaming terminals
     
  • With the exception of tickets, video gaming machines may not dispense any coin, cash, token, or anything else of value
     
  • Terminal placement agreements shall be valid for a minimum of 60-month term but shall not exceed a 120-month term
     
  • No video gaming terminal may be placed in an area that is easily accessible to a minor
     
  • The entrance to the video gaming area shall be secure and easily seen and observed by the employees or management of the licensed Establishment
     
  • Unless approved by the board, no establishment licensee may advertise gaming to the general public
     
  • Unless approved by the board, no establishment licensee may provide an incentive


Additional Requirements and Allowances

  • All video gaming terminals must be linked to a central computer system under the control of the department and accessible by the board
     
  • Video gaming terminals and redemption terminals that include hardware and software must be approved by the board
     
  • Rules of play must be clearly displayed on the video gaming terminal face or screen as promulgated by the board
     
  •  The cost of credit shall be 1ȼ, 5ȼ, 10ȼ, 25ȼ, and the maximum wager shall not exceed $5.00
     
  • The maximum cash award for any individual game may not exceed $1,000
     
  • Each video gaming terminal shall pay out a minimum of 85% of the amount wagered
     
  • Persons under the age of 21 shall not be permitted to play video gaming terminals


Distribution of Funds

  • Video gaming terminal tax and assessment:
     
    • 37.5% to the Commonwealth
    • 4% local share assessment
  • Municipality – 2% of the gross terminal revenue of each video gaming terminal operating within the municipality
     
  • County – 2% of the gross terminal revenue of each video gaming terminal operating within the county 
     
    • 26% to the establishment licensee
    • 1.5% to the department of revenue to cover regulatory assessment costs or expenses


Application and Renewal Fees

  • All manufacturer or supplier license applicants must pay a nonrefundable application fee of $50,000 as well as a $10,000 annual fee
     
  • All terminal operator license applicants must pay a nonrefundable application fee of $25,000 as well as an annual fee of $5,000
     
  • All key employee or principal license applicants must pay a nonrefundable application fee of $500 as well as an annual fee of $500
     
  • Establishment licensee must pay a nonrefundable application fee of $100 and annual license fee of $250 per each video gaming terminal in operation at the premises of the establishment licensee



Slot Machine Licensee

  • Beginning July 1, 2018, each slot machine licensee shall pay a 29% tax rate on gross terminal revenue on the slot machines in operation compared to the current slot tax rate of 34%
     
  • Beginning July 1, 2017, the assessment rate shall not exceed an amount equal to 1.7% of slot machine licensee’s gross terminal revenue
     
  • Beginning July 1, 2018, and each year thereafter, the assessment rate shall not exceed an amount equal to 1.5% of slot machine licensee’s gross terminal revenue
     
  • Reduction in the number of Category 3 (resort casino) licensed facilities from three to two
     
  • Delay in the acceptance and issuance of a Category 1 (racino) slot machine license through July 1, 2020