PRINTER'S NO.

809

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL
No. 695

Session of
2015

INTRODUCED BY MICCARELLI, DIAMOND, BARRAR, COHEN AND DeLUCA,

MARCH 3, 2015
REFERRED TO COMMITTEE ON GAMING OVERSIGHT, MARCH 3, 2015
AN ACT
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Amending Title 4 (Amusements) of the Pennsylvania Consolidated

Statutes, providing for authorized interactive gaming and for
duties of Pennsylvania Gaming Control Board and Department of
Health; imposing an interactive gaming tax; and prescribing
penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1.

Title 4 of the Pennsylvania Consolidated Statutes

is amended by adding a chapter to read:

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CHAPTER 13B

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AUTHORIZED INTERACTIVE GAMING

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Sec.

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13B01.

Legislative policy.

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13B02.

Definitions.

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13B03.

Regulation and enforcement by board.

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13B04.

Prohibition on unauthorized Internet gaming.

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13B05.

Application for license.

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13B06.

Board consideration of application.

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13B07.

Institutional investors.

13B08.

Presumption of unsuitability.

13B09.

Licensing fee.

13B10.

Accounting and operational internal controls.

13B11.

Interactive gaming tax.

13B12.

Prohibition on Internet cafes.

13B13.

Testing of hardware, software and equipment.

13B14.

Expanded compulsive and problem gambling programs.

13B15.

Application of other provisions of this part.

13B01.

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Legislative policy.

The General Assembly recognizes the following public policy

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purposes and declares that the following objectives of the

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Commonwealth are to be served by this chapter:

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(1)

The legalization of slot machines and table games in

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Pennsylvania has delivered substantial benefits to the

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Commonwealth, including tax revenue for property tax relief

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and general economic development, the creation of more than

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15,000 jobs and significant contributions to the horse racing

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and agricultural industries.

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(2)

Developments in technology and recent legal

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decisions have created an opportunity to legalize interactive

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poker as a means to further enhance and complement the

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benefits delivered by casino gaming and licensed facilities

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to or for the benefit of the communities in which they

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operate.

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(3)

Interactive gaming operates by having players

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establish and draw funds from an individual account to place

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a wager in authorized games through the Internet and similar

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communications media. The Commonwealth currently authorizes

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gaming in the form of slot machines and banking and

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nonbanking table games, including poker. These gaming

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operations provide licensed entities in this Commonwealth the

appropriate level of experience to introduce a platform for

interactive gaming that protects the player and the integrity

of the game.

(4)

It is a vital public interest that licensed entities

retain responsibility for the interactive gaming software and

hardware which shall remain under their ultimate operational

and supervisory control. Vendors' ability to provide the

interactive gaming platform must depend solely on, and be

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tied to, the status of the licensed entity for which they are

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providing their services. To ensure that actual control and

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supervision remains with the licensed entity, the licensed

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entity's publicly accessible Internet website or similar

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public portal must be marketed and made available to the

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public under the licensed entity's own name and brands and

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not the brands of third parties.

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(5)

Poker is unlike banking games in important respects

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that make it well-suited for interactive gaming. Poker

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operators are not participants in the games and are

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indifferent to the outcome because winnings come from the

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pool of other players, not the house. In addition, winning at

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poker involves some measure of skill. Skillful poker players

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can earn winnings in the long term, while players of banking

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games play against odds favoring the house.

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(6)

Any interactive gaming enforcement and regulatory

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structure must begin from the premise that participation in a

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lawful and licensed gaming industry is a privilege, not a

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right and that regulatory oversight is intended to safeguard

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the integrity of the games and participants and to ensure

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accountability.

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(7)

The passage of the Unlawful Internet Gambling

Enforcement Act of 2006, codified at 31 U.S.C. Ch. 53, Subch.

IV (relating to prohibition on funding of unlawful Internet

gambling), clarified issues concerning the scope and

interpretation of State law, including the importance of the

location of the wager, wagering activity and website. For

purposes of suitability for licensing under this act, persons

who provided goods or services related to Internet gaming

involving citizens of this Commonwealth that ceased

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operations as a result of the enactment of the Unlawful

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Internet Gambling Enforcement Act should be regarded

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differently from those that continued to flout Federal and

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State law. Granting licenses or allowing the use of the

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assets of persons who ignored Federal and State law would

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reward unlawful gaming activity, permit manifestly unsuitable

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persons to profit from their unlawful gaming activity and

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create unfair competition with licensees that respected

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Federal and State law.

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(8)

The Commonwealth has entrusted the control and

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regulation of gaming to the Pennsylvania Gaming Control Board

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for the past seven years. Based on that experience, it is now

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appropriate to delegate the responsibility for the

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implementation and regulation of interactive gaming to the

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board.

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(9)

Authorized interactive gaming, once fully developed,

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will allow persons in this Commonwealth to participate in

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interactive poker, not only with other persons in this

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Commonwealth, but with persons in other cooperating United

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States jurisdictions where interactive gaming has been

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authorized.

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(10)

The expansion of gaming through the authorization

of interactive gaming requires the Commonwealth to take steps

to increase awareness of problem gambling across interactive

channels and to implement effective strategies for

prevention, assessment and treatment of this behavioral

disorder.

13B02.

Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

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context clearly indicates otherwise:

"Affiliate."

As defined in section 1103 (relating to

definitions). The term does not include an individual.

"Authorized game."

Any interactive poker game approved by

the board pursuant to this chapter.

"Authorized participant."

A person placing a wager who is

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either physically present in this Commonwealth or located in a

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jurisdiction with which the Commonwealth has negotiated an

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interactive gaming agreement. The intermediate routing of

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electronic data in connection with interactive games shall not

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determine the location or locations in which a wager is

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initiated, received or otherwise made.

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"Covered asset."

Any of the following categories of assets,

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if specifically designed for use and knowingly and willfully

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used in connection with wagers or gambling games, using the

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Internet and involving customers located in the United States

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after December 31, 2006, unless licensed by a Federal or State

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authority to engage in such activity:

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(1)

any trademark, trade name, service mark or similar

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intellectual property that is used to identify any aspect of

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the Internet website or the operator offering the wagers or

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interactive games to its customers;

(2)

any database or customer list of individuals

residing in the United States who placed wagers or

participated in interactive games with or through an Internet

website or operator not licensed by a Federal or State

authority to engage in such activity;

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(3)

any derivative of a database or customer list

described in paragraph (2); or

(4)

software, including any derivative, update or

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customization of such software, or hardware relating to the

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management, administration, development, testing or control

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of the Internet website, the interactive games or wagers

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offered through the website or the operator.

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"Gross interactive gaming revenue."

The total of all cash or

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cash equivalents paid by authorized participants to a licensee

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in consideration for the play of interactive games minus:

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(1)

The total of cash or cash equivalents paid out to

players as winnings.

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(2)

Promotional gaming credits.

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(3)

The cash equivalent value of any personal property

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or other noncash item of value included in a drawing, contest

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or tournament and distributed to players.

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(4)

Taxes paid to other states or territories of the

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United States pursuant to interactive gaming agreements

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implemented under this chapter.

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(5)

Revenues from nongaming sources, such as food,

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beverages, souvenirs, advertising, clothing or other

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nongaming sources.

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Amounts deposited with a licensee for purposes of interactive

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gaming and amounts taken in fraudulent acts perpetrated against

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a licensee for which the licensee is not reimbursed shall be

considered to have been paid to the licensee for purposes of

calculating gross interactive gaming revenue.

"Interactive game."

Any game offered through the use of

communications technology that allows a person, utilizing money,

checks, electronic checks, electronic transfers of money, credit

cards, debit cards or any other instrumentality, to transmit to

electronic information to assist in the placing of a wager and

corresponding information related to the display of the game,

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game outcomes or other similar information. The term does not

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include the conduct of gaming that occurs entirely among

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participants located within the licensed facility of the

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licensee or its affiliate, to the extent that any such gaming

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may be authorized by the board, or nongambling games that do not

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otherwise require a license under the laws of this Commonwealth.

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For purposes of this definition, "communications technology"

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means any method used and the components employed by an

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establishment to facilitate the transmission of information,

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including, but not limited to, transmission and reception by

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systems based on wire, cable, radio, microwave, light, optics or

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computer data networks, including, but not limited to, the

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Internet and intranets.

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"Interactive gaming agreement."

A negotiated agreement

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between the Commonwealth and one or more of the states or

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territories of the United States in which interactive gaming is

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legally authorized that permits persons located in such other

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jurisdictions to place wagers on interactive games with

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licensees in this Commonwealth or to permit persons located in

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this Commonwealth to place wagers on interactive games with

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licensees in such other jurisdictions, or both. Agreements may

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contain other provisions the board deems appropriate, except

that only authorized games may be permitted to be offered to

persons located in this Commonwealth pursuant to an agreement.

"Interactive gaming license."

A license issued by the board

pursuant to this chapter which authorizes the holder to offer

authorized games for play by, and to accept bets and wagers

associated with authorized games from, authorized participants.

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"Interactive gaming platform."

The combination of hardware

and software designed and used to manage, conduct or record

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interactive games or the wagers associated with those games and

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which has been approved by the board for purposes of the conduct

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of authorized games.

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"Interactive gaming skin."

The portal to an interactive

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gaming platform or Internet website through which an authorized

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game is made available to customers in this Commonwealth.

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"Internet."

A computer network of interoperable packet-

switched data networks.

"Key interactive gaming employee."

An individual employed by

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a licensee, significant vendor or applicant, or by a holding or

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intermediary company of a licensee, significant vendor or

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applicant, who is involved in the operation of, or of the wagers

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associated with, interactive gaming and who is empowered to make

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discretionary decisions that regulate interactive gaming

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operations.

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"Licensee."

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gaming license.

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"Poker."

A licensed entity that holds an interactive

Any of several card games traditionally known as

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poker, in which players compete against each other and not

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against the person operating the game, including a game using an

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electronic device that simulates a deck of cards. The term

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includes cash games and tournaments. Licensees may assess a rake

or any other type of fee associated with the game, contest or

tournament but may not wager with or against any player.

"Promotional gaming credit."

Any bonus, promotion or amount

received by a licensee from an authorized participant for which

the licensee can demonstrate that it or its affiliate has not

received cash.

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"Significant vendor."

A person who offers or proposes to

offer any of the following services with respect to interactive

gaming:
(1)

management, administration or control of wagers or

of the interactive games themselves;

(2)

development, maintenance, provision or operation of

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an interactive gaming platform or any discrete component

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thereof;

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(3)

sale, licensing or other receipt of compensation for

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selling or licensing a database or customer list of

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individuals residing in the United States selected, in whole

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or in part, because they placed wagers or participated in

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gambling games with or through an Internet website or

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operator or any derivative of such a database or customer

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list;

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(4)

provision of any product, service or asset to a

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licensee or significant vendor in return for a percentage of

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interactive gaming revenue, not including fees to financial

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institutions and payment providers for facilitating a deposit

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or withdrawal by an authorized participant; or

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(5)

provision of any trademark, trade name, service mark

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or similar intellectual property under which a licensee or

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significant vendor identifies to customers the authorized

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games, the website or equivalent hosting the authorized

games, any interactive gaming skin or the interactive gaming

platform, but excluding intellectual property of a person

providing only art or graphics.

The term does not include any key interactive gaming employee of

a licensee or significant vendor. A significant vendor must be

licensed by the board to provide these services.

13B03.

(a)

Regulation and enforcement by board.

General rule.--The board shall promulgate regulations

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for the operation and conduct of interactive gaming in this

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Commonwealth and shall enforce the regulations.

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(b)

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Powers and duties.-(1)

The board shall authorize licensees and significant

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vendors to conduct interactive gaming involving authorized

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participants, subject to the provisions of this chapter and

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other applicable provisions of law. The board shall also

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develop standards for evaluating and approving interactive

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gaming platforms for use with interactive gaming.

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(2)

The board may determine in its discretion the

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categories of employees who satisfy the definition of "key

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interactive employee" and may exclude from the scope of this

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definition any particular licensee, significant vendor,

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applicant or employee or category of employee it deems

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appropriate.

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(c)

Delegated authority.--The board is designated as the

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agency of the Commonwealth with the power and authority to

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negotiate and enter into interactive gaming agreements on behalf

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of the Commonwealth consistent with this chapter.

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(d)

Interactive gaming agreements.--To the extent

practicable, the board shall negotiate interactive gaming

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agreements with other states, territories or possessions of the

United States in which interactive gaming has been authorized to

allow players in this Commonwealth to participate in authorized

games with players in such other jurisdictions.

13B04.

(a)

Prohibition on unauthorized Internet gaming.

Unauthorized gaming.--

(1)

It shall be unlawful for any person to willfully and

knowingly operate, carry on, offer or expose for play any

interactive game or to accept any bet or wager associated

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with any interactive game from any person physically located

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in this Commonwealth at the time of such play that is not

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within the scope of a valid and current license issued by the

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board pursuant to this chapter or by another state, territory

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or possession of the United States with which the

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Commonwealth has an interactive gaming agreement that permits

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such activity.

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(2)

It shall be unlawful for any person to willfully and

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knowingly provide services with respect to any interactive

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game, bet or wager specified in paragraph (1).

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(b)

Grading of offense.--A person who violates subsection

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(a) commits a misdemeanor of the first degree. For a second or

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subsequent violation of subsection (a), a person commits a

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felony of the second degree.

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(c)

Penalties.-(1)

For a first violation of subsection (a), a person

shall be sentenced to pay a fine of:

(i)

not less than $75,000 nor more than $150,000, if

the person is an individual;

(ii)

not less than $150,000 nor more than $300,000,

if the person is a licensed manufacturer or supplier; or

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(iii)

not less than $300,000 nor more than $600,000,

if the person is a licensed gaming entity.

(2)

(a), a person shall be sentenced to pay a fine of:

(i)

Not less than $150,000 nor more than $300,000,

if the person is an individual.

(ii)

Not less than $300,000 nor more than $600,000,

if the person is a licensed manufacturer or supplier.

(iii)

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For a second or subsequent violation of subsection

Not less than $600,000 nor more than

$1,200,000, if the person is a licensed gaming entity.

(d)

Forfeiture.--If a person places a wager on an

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interactive game from a location in which such activity is

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unauthorized, the person shall forfeit all entitlement to any

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winnings and the moneys associated with any such forfeited

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winnings shall be deposited by the licensee into the Compulsive

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and Problem Gambling Treatment Fund established under section

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1509(b) (relating to compulsive and problem gambling program).

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(e)

Tax Liability.--An unlicensed person offering

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interactive games to persons in this Commonwealth shall be

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liable for all taxes required by this chapter in the same manner

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and amounts as if such person were a licensee. Timely payment of

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such taxes shall not constitute a defense to any prosecution or

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other proceeding in connection with unauthorized interactive

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gaming, except for a prosecution or proceeding alleging failure

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to make such payment.

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13B05.

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(a)

Application for license.

Filing of application.--Ninety days from the effective

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date of this section, the board shall permit filing of

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applications for licenses pursuant to this chapter. The

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application shall include, as applicable:

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(1)

The name and business address of the applicant,

including an organizational chart which identifies the

applicant's relationship to any person that holds a slot

machine license and a table game operation certificate issued

by the board.

(2)

Identification of and a detailed description of the

qualifications of any proposed significant vendors. Detailed

information shall be provided describing the specific

operational responsibilities of significant vendors and the

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nature of the economic relationship with those significant

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vendors.

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(3)

A detailed description of the technical protocols

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and parameters of the interactive gaming platform proposed to

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be utilized.

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(4)

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Identification and a description of the interactive

games the applicant proposes to make available.

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(5)

Such other information as the board, in its

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discretion, shall determine to require.

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(b)

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Temporary authorization.-(1)

During the first 18 months from the effective date

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of this section, the board may issue temporary authorizations

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to applicants for licensing as a significant vendor, which

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may remain in effect until the shorter of 12 months after the

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date of issue or the date by which the board considers the

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subject application. Temporary authorizations may be renewed

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not more than once, upon a showing of good cause. Temporary

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authorization shall allow the applicant to engage in all of

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the functions of a fully licensed significant vendor for the

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duration of the temporary authorization.

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(2)

No temporary authorization may be issued unless:

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(i)

The applicant has submitted a complete license

application.

(ii)

The applicant agrees to pay the fee prescribed

in section 13B09 (relating to licensing fee) within 60

days of issuance of the temporary authorization, which

may be refundable in the event a permanent license is not

issued. Failure to make timely payment shall result in

revocation of the temporary authorization.

(iii)

The bureau has stated that it has no objection

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to the issuance of a temporary authorization to the

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applicant.

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(3)

Within 45 days of the date that the bureau receives

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the completed application of an applicant for investigation,

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the bureau shall conduct a preliminary investigation of the

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applicant and any key interactive gaming employee of the

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applicant, which shall include:

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(i)

a criminal background investigation of the

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applicant and any key interactive gaming employee of the

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applicant; and

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(ii)

any investigation necessary to determine

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whether the applicant or any key interactive gaming

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employee of the applicant may fall within the scope of

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section 13B08 (relating to presumption of unsuitability).

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(4)

If the bureau's preliminary investigation discloses

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no material adverse information, then the bureau shall issue

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to the executive director a statement of no objection to the

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issuance of a temporary authorization to the applicant.

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(5)

If the bureau's preliminary investigation discloses

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material adverse information or if the bureau is unable to

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confirm that section 13B08 does not apply, it shall register

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an objection and no temporary authorization may be issued

until the material concern is resolved or, if applicable,

confirmation that section 13B08 does not apply is received.

(6)

If the bureau's full investigation of an applicant

discloses material adverse information, the temporary

authorization of any applicant may be suspended or withdrawn

upon a showing of cause by the bureau.

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13B06.
(a)

Board consideration of application.

Suitability.--A holder, or an affiliate of a holder, of

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a slot machine license and table game operation certificate,

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whose license and certificate are in good standing, shall be

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considered suitable to be issued an interactive gaming license

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by the board without additional investigation, subject to the

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provisions of section 13B08 (relating to presumption of

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unsuitability).

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(b)

Significant vendors.--The board shall determine the

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suitability of any significant vendors, consistent with the

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requirements of this chapter.

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(c)

Qualifications.--A review of the suitability of a person

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to hold a license as a licensee or significant vendor shall

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include the review and determination of whether:

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(1)

The person possesses the requisite experience and

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skill to perform the functions consistent with the

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requirements of this chapter.

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(2)

The applicant is a person of good character, honesty

and integrity.
(3)

The applicant is a person whose prior activities,

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criminal record, if any, reputation, habits and associations

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do not:

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(i)

20150HB0695PN0809

pose a threat to the public interest or to the

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effective regulation and control of interactive gaming;

or

(ii)

create or enhance the dangers of unsuitable,

unfair or illegal practices, methods and activities in

the conduct of interactive gaming or in the carrying on

of the business and financial arrangements incidental to

such gaming.

(4)

The applicant has disclosed to the board all known

affiliations or relationships, whether direct or indirect,

10

with persons and covered assets of persons described by

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section 13B08.

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(d)

Owners and key interactive gaming employees.--In

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connection with an application for a license as a licensee or

14

significant vendor, the applicant shall identify and the board

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shall determine the suitability of an applicant's owners, chief

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executive officer, chief financial officer, any other officer

17

whom the board deems significantly involved in the management or

18

control of the applicant and all key interactive gaming

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employees.

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(e)

Brand transparency.--The board may not approve the

21

application of any prospective licensee and shall suspend the

22

license of any licensee if the licensee's Internet website

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through which authorized games are offered to customers in this

24

Commonwealth or any interactive gaming skin with which the

25

licensee is associated is identified by a brand or name that is

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not owned or controlled by the licensee or an affiliate of the

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licensee.

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(f)

Issuance of order.--The board shall issue an order

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granting or denying an application for a license as a licensee

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or significant vendor within 120 days of the date on which a

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properly completed application and any additional information

that the board may require is filed. If the board approves an

application, it may impose reasonable conditions of licensure

consistent with the requirements of this chapter.

13B07.

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(a)

Institutional investors.
Declaration of investment intent.--

(1)

An institutional investor holding less than 25% of

the equity securities of a licensee's, significant vendor's

or applicant's holding or intermediary companies, shall be

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granted a waiver of any investigation of suitability or other

11

requirement if the securities are those of a corporation,

12

whether publicly traded or privately held, and the holdings

13

of the securities were purchased for investment purposes

14

only. The institutional investor shall file a certified

15

statement that it has no intention of influencing or

16

affecting the affairs of the licensee, significant vendor,

17

applicant or its holding or intermediary companies. However,

18

an institutional investor shall be permitted to vote on

19

matters put to the vote of the outstanding security holders.

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(2)

The board may grant a waiver to an institutional

21

investor holding a higher percentage of such securities upon

22

a showing of good cause and if the conditions specified in

23

paragraph (1) are met.

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(3)

An institutional investor granted a waiver under

25

this subsection who subsequently decides to influence or

26

affect the affairs of the licensee, significant vendor or

27

applicant's holding or intermediary company shall provide not

28

less than 30 days' notice of such intent and shall file with

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the board a request for determination of suitability before

30

taking any action that may influence or affect the affairs of

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the issuer. An institutional investor shall be permitted to

vote on matters put to the vote of the outstanding security

holders.

(4)

If an institutional investor changes its investment

intent or if the board finds reasonable cause to believe that

the institutional investor may be found unsuitable, no action

other than divestiture shall be taken by the institutional

investor with respect to its security holdings until there

has been compliance with any requirements established by the

10

board, which may include the execution of a trust agreement.

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(5)

The licensee or significant vendor or applicant and

12

its relevant holding, intermediary or subsidiary company

13

shall notify the board immediately of any information about,

14

or actions of, an institutional investor holding its equity

15

securities where such information or action may impact the

16

eligibility of the institutional investor for a waiver

17

pursuant to this subsection.

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(b)

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Failure to declare.--If the board finds:

(1)

that an institutional investor holding any security

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of a holding or intermediary company of a licensee or

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significant vendor or applicant or, where relevant, of

22

another subsidiary company of a holding or intermediary

23

company of a licensee or significant vendor or applicant

24

which is related in any way to the financing of the licensee

25

or significant vendor or applicant, fails to comply with the

26

provisions of subsection (a); or

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(2)

by reason of the extent or nature of its holdings,

28

an institutional investor is in a position to exercise such a

29

substantial impact upon the controlling interests of a

30

licensee or significant vendor or applicant that

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investigation and determination of suitability of the

institutional investor is necessary to protect the public

interest;

then the board may take any necessary action otherwise

authorized under this chapter to protect the public interest.

13B08.

(a)

Presumption of unsuitability.
General rule.--The board may not issue a license to or

otherwise find suitable any prospective licensee or significant

vendor, or key interactive gaming employee of a licensee or

10
11

significant vender, who has:

(1)

At any time, either directly or through a third

12

party whom it controlled or owned in whole or in significant

13

part, knowingly or willfully:

14

(i)

accepted or made available wagers on interactive

15

games using the Internet from persons located in the

16

United States after December 31, 2006, unless licensed by

17

a Federal or State authority to engage in such activity;

18

or

19

(ii)

facilitated or otherwise provided services with

20

respect to wagers or interactive games using the Internet

21

involving persons located in the United States for a

22

person described in subparagraph (i), if such activities

23

or services would cause such person to be considered a

24

significant vendor if those activities or services were

25

provided with respect to interactive games pursuant to

26

this chapter, and if such person acted with knowledge of

27

the fact that such wagers or interactive games involved

28

persons located in the United States.

29

(2)

30

Purchased or acquired, directly or indirectly, in

whole or in significant part, a third party described in

20150HB0695PN0809

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paragraph (1) or will use that third party or a covered asset

in connection with interactive gaming.

(b)

Appeal procedures.--A prospective licensee, significant

vendor or key interactive gaming employee may appeal a

determination by the board that it is within the scope of

subsection (a) only in accordance with the following procedures:

(1)

The board shall afford the prospective licensee or

significant vendor a hearing at which such person may provide

evidence to support the basis on which it seeks relief.

10
11

(2)

The prospective licensee or significant vendor must

demonstrate by a preponderance of the evidence that:

12

(i)

its conduct in connection with interactive games

13

and wagers involving persons located in the United States

14

was not unlawful; and

15

(ii)

if applicable, the covered assets to be used or

16

that are being used by such person in connection with

17

interactive gaming were not used in a manner that was

18

unlawful, in each case under Federal law and the laws of

19

each state in which persons making the wagers or playing

20

the games were located.

21

(3)

The determination of the board shall be made without

22

regard to whether the person has been prosecuted under the

23

criminal laws of any state, the United States or other

24

jurisdiction or has been prosecuted and the proceeding

25

terminated in a manner other than with a conviction.

26

(4)

If the prohibition is waived, the prospective

27

licensee or significant vendor shall satisfy all otherwise

28

applicable license and suitability requirements.

29
30

13B09.

Licensing fee.

If the board grants an application under section 13B05

20150HB0695PN0809

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(relating to application for license) within 60 days of entry of

the board's order, the successful applicant shall pay a

licensing fee of $5,000,000 if a licensee or $50,000 if a

significant vendor.

13B10.

Accounting and operational internal controls.

Each interactive gaming license applicant shall submit to the

board and department, in such manner as the board shall require,

a description of its administrative and accounting procedures in

detail, including its written system of internal control. In

10

addition to other such standards that the board, in its

11

discretion, may choose to require, the board shall require

12

licensees to implement appropriate safeguards:

13
14
15

(1)

To ensure, to a reasonable degree of certainty, that

authorized participants are not less than 21 years of age.

(2)

To ensure, to a reasonable degree of certainty, that

16

authorized participants are physically located within this

17

Commonwealth or such other jurisdiction that is permissible

18

under this chapter.

19
20
21

(3)

To protect, to a reasonable degree of certainty, the

privacy and online security of authorized participants.

(4)

To ensure, to a reasonable degree of certainty, that

22

the interactive games are fair and honest and that

23

appropriate measures are in place to deter, detect and, to

24

the extent reasonably possible, to prevent cheating,

25

including collusion, and use of cheating devices, including

26

the use of software programs, sometimes referred to as

27

"bots," that make bets or wagers according to algorithms.

28

(5)

To minimize compulsive gambling and to provide

29

notice to authorized participants of resources to help

30

problem gamblers.

20150HB0695PN0809

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(6)

To ensure authorized participants' funds are held in

accounts segregated from the funds of licensees and otherwise

are protected from corporate insolvency, financial risk or

criminal or civil actions against the licensee.

5
6

13B11.
(a)

Interactive gaming tax.

Weekly taxation.--Each licensee shall report to the

department and pay from its daily gross interactive gaming

revenue, on a form and in a manner prescribed by the department,

a tax of 14% of its daily gross interactive gaming revenue,

10

which shall be payable to the department on a weekly basis and

11

shall be based upon gross interactive gaming revenue for the

12

previous week.

13

(b)

Taxes on out-of-State wagering.--The tax rate which

14

shall be assessed and collected by the department with respect

15

to any wagers placed by residents of this Commonwealth with an

16

interactive gaming operator outside of this Commonwealth, but

17

authorized pursuant to an interactive gaming agreement, shall be

18

governed by the agreement but may not exceed 14% of gross

19

interactive gaming revenue derived from residents of this

20

Commonwealth.

21

(c)

Taxes held in trust.--All funds owed to the Commonwealth

22

under this section shall be held in trust for the Commonwealth

23

by the licensee until the funds are paid to the department.

24

Unless otherwise agreed to by the board, a licensee shall

25

establish a separate bank account into which such funds shall be

26

deposited and maintained until paid to the department.

27

(d)

Federal presumption.--In the event Federal law

28

authorizes interactive gaming which establishes a tax based on

29

gross interactive gaming revenue, deposits or the substantial

30

equivalent of or intended substitute for either of them, of

20150HB0695PN0809

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which a portion is allocated to the states, that tax shall

supersede, in its entirety, the tax imposed by this section.

13B12.

(a)

Prohibition on Internet cafes.

General rule.--No organization or commercial enterprise,

other than a licensee, shall operate a place of public

accommodation, club, including a club or association limited to

dues-paying members or similar restricted groups, or similar

establishment in which computer terminals or similar access

devices are advertised or made available to be used principally

10
11

for the purpose of accessing interactive games.

(b)

Construction.--Nothing in this section shall be

12

construed to require the owner or operator of a hotel or motel

13

or other public place of general use in this Commonwealth to

14

prohibit or block guests from playing interactive games.

15

13B13.

16

(a)

Testing of hardware, software and equipment.

Testing by the board.--The board may expand its testing

17

facility, utilize the services of a private testing facility or

18

adopt the testing and certification standards of another

19

jurisdiction and may approve computer hardware, software or

20

associated equipment based on the prior approval of a private

21

testing facility or of another jurisdiction whose standards the

22

board reasonably determines are adequate and comparable to those

23

required by this part. Costs associated with the expansion of

24

its own testing facility shall be assessed on significant

25

vendors licensed to provide interactive gaming platforms.

26
27

(b)

Approval.-(1)

No interactive gaming platform may be utilized by a

28

licensee unless approved by the board or its testing and

29

certification facility under this section. The board shall

30

not approve an interactive gaming platform unless the

20150HB0695PN0809

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platform is subject to the control, and is the ultimate

responsibility, of the licensee.

(2)

This subsection shall not be construed to prohibit a

licensee from licensing use or delegating daily operation of

the interactive gaming platform from or to a significant

vendor.

7
8

13B14.
(a)

Expanded compulsive and problem gambling programs.

Expanded programs.--

(1)

The board and the Department of Health shall jointly

10

develop expanded programs to address compulsive and problem

11

gambling issues relating to interactive gaming.

12

(2)

Licensees shall address compulsive and problem

13

gambling issues in the context of interactive gaming in their

14

respective compulsive and problem gambling plans on file with

15

the board.

16

(b)

Message.--Licensees shall permanently and continuously

17

display the following message to persons at the time of logging

18

on to the Internet websites of the licensees or any interactive

19

gaming skin:

20

If you or someone you know has a gambling problem and

21

wants help, call 1-800-GAMBLER.

22
23

13B15.

Application of other provisions of this part.

The following sections of this part, which are expressly

24

applicable to the conduct or operation of slot machines or table

25

games, are also deemed applicable to interactive gaming under

26

this chapter:

27

(1)

The board's power and duty to require that licensees

28

prohibit persons under 21 years of age from playing

29

interactive games under section 1207(8) (relating to

30

regulatory authority of board).

20150HB0695PN0809

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(2)

The obligation to include information on interactive

gaming in the board's annual report under section 1211(a.1)

(relating to reports of board).

(3)

The procedures, parameters and time frames for

promulgating temporary regulations under section 13A03(a) and

(b) (relating to temporary table game regulations).

7
8
9
10
11
12
13

(4)

Manufacturing licensing requirements pursuant to

section 1317.1 (relating to manufacturer licenses).

(5)

Gaming service provider requirements pursuant to

section 1317.2 (relating to gaming service provider).

(6)

Permit renewal requirements pursuant to section 1326

(relating to license renewals).

(7)

Section 1402 (relating to gross terminal revenue

14

deductions), except that recovery of the costs and expenses

15

of regulating interactive gaming under this chapter shall be

16

limited to 1% of gross interactive gaming revenue.

17

(8)

The declaration that it shall be unlawful for an

18

individual under 21 years of age to wager, play or attempt to

19

play an interactive game under section 1518(a)(13.1)

20

(relating to prohibited acts; penalties).

21

Section 2.

20150HB0695PN0809

This act shall take effect in 60 days.

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