[43 Pa.B. 6764]
[Saturday, November 16, 2013]
[Continued from previous Web Page]
CHAPTER 437a. GAMING SERVICE PROVIDER CERTIFICATION AND REGISTRATION § 437a.1. General gaming service provider requirements.
(a) [A] Except as provided in § 437a.10 (relating to emergency gaming service provider), a gaming service provider or person seeking to conduct business with a slot machine applicant or licensee[, except as provided in § 437a.10 (relating to emergency gaming service provider),] shall apply to the Board for registration if:
(1) The total dollar amount of the goods or services to be provided to a single slot machine applicant or licensee or to multiple slot machine applicants or licensees will be or is anticipated to be equal to or greater than $100,000 but less than or equal to $500,000 within a consecutive 12-month period.
(2) The employees of the gaming service provider or person seeking to conduct business with a slot machine applicant or licensee will be working [on the gaming floor or in restricted areas unless all of the following conditions are met] in either:
(i) A restricted area of the licensed facility.
(ii) On the gaming floor unless all of the following conditions are met:
[(i)] (A) The employees will be on the gaming floor for less than 24 hours within a 72-hour period no more than once in any consecutive 3-month period.
[(ii)] (B) The employees sign-in with the security department at the licensed facility and the Board's casino compliance representatives prior to entering the gaming floor.
[(iii)] (C) The gaming service provider has received written approval from the Bureau of Licensing for the gaming service provider's employees to be on the gaming floor.
(b) [A] Except as provided in § 437a.10, a gaming service provider or person seeking to conduct business with a slot machine applicant or licensee[, except as provided in § 437a.10,] shall apply to the Board for certification if the total dollar amount of the goods or services to be provided to a single slot machine applicant or licensee or to multiple slot machine applicants or licensees will be or is anticipated to be greater than $500,000 within a consecutive 12-month period.
(c) A person that provides goods or services indirectly to a slot machine applicant or licensee through an intermediary, holding company or affiliate of the slot machine applicant or licensee shall be required to be registered or certified if the cost of the goods or services provided to the slot machine applicant or licensee exceeds the monetary thresholds in subsections (a) and (b).
(d) The following persons are exempt from the gaming service provider registration and [the gaming service provider] certification requirements of this chapter:
(1) Public utilities which provide [only] one or more of the following services to a slot machine applicant or licensee:
* * * * * (g) [A person, or subsidiary of a person, that has a class of equity securities listed on the New York Stock Exchange, the NASDAQ Stock Market, the American Stock Exchange or a foreign stock exchange determined by the Bureau of Licensing to have similar listing requirements may be authorized to provide goods or services to slot machine applicants and licensees without applying for registration or certification if the person or subsidiary of the person] Notwithstanding subsections (a) and (b), a publicly traded corporation or subsidiary thereof will not be required to be registered or certified as a gaming service provider if the publicly traded corporation or subsidiary thereof submits a completed Publicly Traded Gaming Service Provider Form to the [Board] Bureau of Licensing accompanied by the filing fee posted on the Board's web site [(www.pgcb.state.pa.us)]. A [person] publicly traded corporation or subsidiary [of a person] thereof that is authorized to provide goods and services under this subsection shall be required to:
(1) Comply with § 437a.7 (relating to registered [and], certified and authorized gaming service provider responsibilities).
(2) [Immediately notify the Board if the person or subsidiary of the person ceases to have a class of equity securities listed on the New York Stock Exchange, the NASDAQ Stock Market, the American Stock Exchange or a foreign stock exchange determined by the Bureau of Licensing to have similar listing requirements.] Immediately notify the Bureau of Licensing if the publicly traded corporation or subsidiary thereof ceases to meet the definition of a publicly traded corporation.
* * * * * § 437a.2. Gaming service provider registration applications.
(a) A gaming service provider seeking registration shall do one of the following:
(1) [Complete] If the gaming service provider has or will be entering into an agreement to provide goods or services to a specific slot machine applicant or licensee, the gaming service provider shall complete an original and [four copies] one copy of a Gaming Service Provider Registration Form—Sponsored. The original [and copies] copy and the fee toward the cost of the investigation of the applicant posted on the Board's web site [(www.pgcb.state.pa.us)] shall be submitted to the Bureau of Licensing by the slot machine applicant or licensee for whom the gaming service provider will provide goods or services unless otherwise directed by the [Board] Bureau of Licensing.
(2) [Complete] If a gaming service provider does not have an agreement to provide goods or services to a specific slot machine applicant or licensee but is seeking to conduct business with slot machine applicants or licensees, the gaming service provider shall complete an original and [four copies] one copy of a Gaming Service Provider Registration Form—Unsponsored. The original [and copies], copy and the fee toward the cost of the investigation of the applicant posted on the Board's web site [(www.pgcb.state.pa.us)] shall be submitted to the Bureau of Licensing by the gaming service provider unless otherwise directed by the [Board] Bureau of Licensing.
(b) In addition to the materials required under subsection (a), an applicant for a gaming service provider registration shall:
(1) Submit the nonrefundable application fee posted on the Board's web site [(www.pgcb.state.pa.us)].
(2) [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.
(3)] Comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
[(4)] (3) Submit fingerprints of the following individuals [to the Board] in a manner prescribed by [BIE] the Bureau:
* * * * * (c) A person who holds any direct or indirect ownership or beneficial interest in a registered gaming service provider or applicant for gaming service provider registration, or has the right to any profits or distributions directly or indirectly, from the registered gaming service provider or applicant for gaming service provider registration may be required to submit fingerprints if the [Board] Bureau determines that the submission of fingerprints of the person is necessary to protect the public interest or to enhance the integrity of gaming in this Commonwealth.
(d) Each of the individuals required to submit fingerprints under subsection [(b)(4) or (c)] (b)(3) must be found qualified by the Board. An individual who is found qualified and is also a gaming or nongaming employee as defined in § 401a.3 (relating to definitions) shall obtain a gaming employee occupation permit in accordance with § 435a.3 (relating to occupation permit) or a nongaming employee registration in accordance with § 435a.5 (relating to nongaming employee registration).
(e) An applicant for a gaming service provider registration [will be required to] shall reimburse the Board for costs incurred [by the Board] in conducting the [review] investigation of the [application] applicant.
(f) A gaming service provider registration will not be issued until all fees and costs have been paid.
§ 437a.3. Gaming service provider certification applications.
(a) A gaming service provider seeking certification shall complete and the slot machine applicant or licensee for whom the gaming service provider will provide goods or services shall submit:
(1) An original and [four copies] one copy of a Gaming Service Provider Certification Application and Disclosure Information Form unless otherwise directed [by the Board].
(2) The nonrefundable application fee posted on the Board's web site [(www.pgcb.state.pa.us)].
(3) Applications and release authorizations for each individual required to be qualified under § 437a.4 (relating to qualification of individuals and entities).
(b) In addition to the [materials required under] requirements of subsection (a), an applicant for a gaming service provider certification shall[:
(1) Promptly provide information requested by the Board relating to is application or regulation and cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions.
(2) Comply] comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(c) An applicant for a gaming service provider certification shall reimburse the Board for costs incurred in conducting the investigation of the applicant.
(d) A gaming service provider certification will not be issued until all fees and costs have been paid.
[(d) A person required to be a certified gaming service provider under this chapter may request that the Board waive its obligation to be certified by filing a Single Transactional Waiver Form. To be eligible to receive this waiver from the requirements of certification, the person shall demonstrate that the person is proposing to engage in a single transaction with a slot machine applicant or licensee and satisfies the following requirements:
(1) The person's required performance under the contract with the slot machine applicant or licensee does not require the person's employees to be on the gaming floor or in a restricted area.
(2) The person has not filed a Single Transactional Waiver Form with the Board within 2 years of the current waiver request.
(3) The person will not have a continuing business relationship with the slot machine applicant or licensee or have a continuing onsite presence at the licensed facility.
(e) The Board may, in response to misrepresentations or a change in circumstances, revoke a waiver granted under this section and require the recipient of the waiver to comply with the gaming service provider certification requirements of this chapter.
(f) A person who has requested a waiver under this section may not provide goods or services to a slot machine applicant or licensee prior to Board approval of the person's waiver request.]
(Editor's Note: The following section is new and printed in regular type to enhance readability.)
§ 437a.3a. Single transaction waiver.
(a) A gaming service provider required to be registered or certified under this chapter may request that the Board waive its obligation to be registered or certified by filing a Single Transactional Waiver Form. To be eligible to receive a waiver, the gaming service provider shall demonstrate that it is proposing to engage in a single transaction and satisfies the following requirements:
(1) The gaming service provider's required performance under the contract with the slot machine licensee does not require the gaming service provider's employees to be on the gaming floor or in a restricted area.
(2) The gaming service provider has not filed a Single Transactional Waiver Form within 2 years of the current waiver request.
(3) The gaming service provider will not have a continuing business relationship with the slot machine licensee or have a continuing onsite presence at the licensed facility.
(b) The Board may, in response to misrepresentations or a change in circumstances, revoke a waiver granted under this section and require the recipient of the waiver to comply with the gaming service provider registration or certification requirements of this chapter.
(c) A gaming service provider that has requested a waiver under this section may not provide goods or services to a slot machine applicant or licensee prior to Board approval of the gaming service provider's waiver request.
§ 437a.4. Qualification of individuals and entities.
* * * * * (b) Each entity that directly owns 20% or more of the voting securities of a certified gaming service provider or person applying for gaming service provider certification shall [be required to] file a Gaming Service Provider Certification Form—Private Holding Company with the [Board] Bureau of Licensing and be found qualified by the Board.
(c) The following persons may be required to submit a Gaming Service Provider Certification Form—Private Holding Company or a Pennsylvania Personal History Disclosure Form and be found qualified by the Board if the [Board] Bureau of Licensing determines that the qualification of the person is necessary to protect the public interest or to enhance the integrity of gaming in this Commonwealth:
* * * * * (d) The Bureau of Licensing may issue a temporary credential to an individual who is required to be qualified by the Board under this section if:
(1) The individual's presence in the licensed facility is needed.
(2) The company with which the individual is associated is on the Authorized Gaming Service Provider List.
(e) [The] Upon request, the Bureau of Licensing will issue a [permanent] credential to an individual who has been found [to be] qualified under this section if the Gaming Service Provider has been certified.
§ 437a.5. Construction subcontractors.
(a) [A] Instead of filing for registration or certification, a construction subcontractor [who] that is otherwise required to be certified or registered may elect to file an On-site Subordinate Pre-Opening Construction Notification Form with the [Board in lieu of registration or certification] Bureau of Licensing if:
(1) The subcontractor is not providing goods or services through an agreement with a slot machine applicant or licensee.
(2) The subcontractor is not a first-tier subcontractor providing goods or services to [a person who] the general contractor that has entered into a contract with a slot machine applicant or licensee for the construction of a licensed facility.
(b) The On-site Subordinate Gaming Service Provider Notification Form shall be valid for the construction of only one licensed facility, and shall [be valid for only 1 year unless the Board, at its sole discretion, renews the On-site Subordinate Gaming Service Provider Notification Form after a showing by the subcontractor that its obligations pursuant to the subcontract have not been fully performed and good cause exists for the delay in the performance] expire upon completion of the contract.
(c) A subcontractor [who] that elects to file an On-site Subordinate Gaming Service Provider Notification Form as outlined in subsection (a) shall be prohibited from:
(1) Employing any person to work [on the gaming floor or] in a restricted area of a licensed facility or on the gaming floor after onsite Board staff designates the area as a gaming floor.
(2) Providing, directly or indirectly, goods or service to any other slot machine applicant or licensee other than the slot machine applicant or licensee identified in the On-site Subordinate Gaming Service Provider Notification Form.
§ 437a.6. Registration and certification term and renewal.
(a) Gaming service provider certifications, registrations and renewals issued under this chapter shall be valid for 4 years from the date of Board approval.
(b) Publicly traded gaming service provider authorizations approved under § 437a.1(g) (relating to general gaming service provider requirements) will be valid for 4 years from the date of authorization.
(c) Registered [and], certified and authorized publicly traded gaming service providers shall submit to the Board a completed renewal application or form and renewal fee at least 60 days prior to the expiration of a certification [or], registration or authorization.
[(c)] (d) A certification or registration for which a completed renewal application and fee has been received by the [Board] Bureau of Licensing will continue in effect until the Board sends written notification to the holder of the certification or registration that the Board has approved or denied the certification or registration.
(e) A publicly traded gaming service provider authorization for which a completed renewal form and fee has been received by the Bureau of Licensing will continue in effect unless the Bureau of Licensing sends written notification to the publicly traded gaming service provider that the authorization has been rescinded.
§ 437a.7. Registered [and], certified and authorized gaming service provider responsibilities.
(a) A holder of a gaming service provider certification [or], registration or authorization shall have a continuing duty to[:] comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
[(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 gaming service provider certification or registration ineligible, unqualified or unsuitable to hold a certification or registration under the standards and requirements of the act and of this part.]
(b) An employee of a [registered or certified] gaming service provider shall be required to obtain an occupation permit under § 435a.3 (relating to occupation permit) if:
(1) The employee is the onsite supervisor of other gaming employees, as defined in § 401a.3 (relating to definitions), of the gaming service provider [whose duties of employment or incidental activities related to employment require the employees to be on the gaming floor or in a restricted area].
(2) The [employee's duties of employment or incidental activities related to employment require the employee to be on the gaming floor or in a restricted area and require the employee to touch or have contact with a slot machine or associated equipment] employee is a gaming employee as defined in § 401a.3.
(c) An employee of a [certified] gaming service provider [that] who is not required to obtain an occupation permit under subsection (b) shall be required to obtain a nongaming employee registration under § 435a.5 (relating to nongaming employee registration) if:
(1) The employee is the onsite supervisor of [other employees who are involved in the construction of a licensed facility.]:
(i) Other nongaming employees as defined in § 401a.3.
(ii) Employees of the gaming service provider who are involved in the construction of the licensed facility.
(2) [The employee's duties of employment or incidental activities related to employment require the employee to be on the gaming floor but do not require the employee to touch or have contact with a slot machine or associated equipment other than exterior cleaning.] The employee is a nongaming employee as defined in § 401a.3.
[(3) The employee's duties of employment or incidental activities related to employment require the employee to be in a restricted area, but do not require the employee to touch or have contact with a slot machine or associated equipment other than exterior cleaning and the employee is under the constant supervision of an employee of the slot machine licensee who is licensed or permitted and who is authorized to be in the restricted area.
(4) The employee is the offsite supervisor of employees of the registered or certified gaming service provider working at the licensed facility.]
(d) Employees of a [registered or certified] gaming service provider who are not required to obtain an occupation permit or a nongaming employee registration under subsection (b) or (c) may be required to obtain an occupation permit or nongaming employee registration if the Board determines, after a review of the work being performed, that obtaining a permit or registration is necessary for the protection of the integrity of gaming.
(e) Workers employed by a [registered or certified] gaming service provider that is a construction company, who are completing work on the gaming floor or in a restricted area under their original contract, change orders, punch lists, periodic repairs or warranty work, will not be required to comply with the requirements in subsection (b) or (c) if the [following] conditions in § 435a.9a (a) and (b) (relating to gaming service provider employee temporary access credentials) are met[:].
[(1) The employee's duties of employment or incidental activities related to employment do not require the employee to touch or have contact with a slot machine or associated equipment other than exterior cleaning.
(2) The employee is under the supervision of an employee of the slot machine licensee's security department who is authorized to have access to the area where the work is being performed.
(3) The employee has been issued a Gaming Service Provider Employee Temporary Access Credential by one of the Board's casino compliance representatives at the licensed facility.]
(f) A certified, registered or authorized gaming service provider operating within a licensed facility that cashes personal checks shall comply with § 465a.20 (relating to personal check cashing).
§ 437a.8. Authorized gaming service providers list; prohibited gaming service providers.
(a) The Board will maintain a list of authorized gaming service providers and a list of prohibited gaming service providers. The authorized list will contain the names of persons who:
(1) Have been registered or certified.
(2) Are eligible to file and have filed a completed publicly traded gaming service provider form under § 437a.1(g) (relating to general gaming service provider requirements).
(3) Have been [permitted] authorized to conduct business with a slot machine licensee or applicant under § 437a.9 (relating to permission to conduct business prior to certification or registration).
(b) Except as permitted under § 437a.1(a)(2), (d) and (g) and § 437a.10 (relating to emergency gaming service provider), a slot machine licensee or applicant may not purchase goods or services from a gaming service provider, when the employees of the gaming service provider will be working on the gaming floor or in a restricted area or compensate a gaming service provider $100,000 or more within a consecutive 12-month period, unless the person is on the authorized gaming service provider list. A slot machine licensee or applicant or any affiliate, intermediary, subsidiary or holding company thereof acting on behalf of the slot machine licensee or applicant may not enter into an agreement or continue to do business with a gaming service provider on the prohibited gaming service providers list.
(c) The Board may place a person on the prohibited gaming service providers list if:
(1) The gaming service provider has failed to comply with this chapter.
(2) The gaming service provider has failed to cooperate with [the Board in the Board's] Board staff in its review and investigation of the gaming service provider's application [for certification or registration].
* * * * * § 437a.10. Emergency gaming service provider.
(a) A slot machine licensee may utilize a gaming service provider that is not registered [or], certified or authorized to conduct business in accordance with § 437a.8 (relating to authorized gaming service providers list; prohibited gaming service providers) when a threat to public health, welfare or safety of the building or its occupants exists or circumstances outside the control of the slot machine [applicant or] licensee create an urgency of need which does not permit the delay involved in using the formal method of gaming service provider certification or registration. A slot machine licensee may not use a gaming service provider on the prohibited list.
(b) When using a gaming service provider that is not registered [or], certified or authorized to conduct business to respond to an emergency, the slot machine [applicant or] licensee shall:
(1) Immediately notify the onsite casino compliance representatives in the licensed facility of the emergency and the gaming service provider that was selected to provide emergency services.
(2) File a Gaming Service Provider Emergency Notification Form with the [Board] Bureau of Licensing within 72 hours [of] after commencement of the gaming service provider's [commencement of] services and a written explanation of the basis for the procurement of the emergency gaming service provider.
[(2) Provide a written explanation to the Board of the basis for the emergency gaming service provider procurement and for the selection of the particular gaming service provider.
(3) File a Gaming Service Provider Registration Form or Gaming Service Provider Certification Form on behalf of the gaming service provider within 20 business days of the filing of the Gaming Service Provider Notification Form.]
(c) An employee of the emergency gaming service provider who is providing emergency services in the licensed facility shall obtain a temporary access credential in accordance with § 435a.9a(d) (relating to gaming service provider employee temporary access credentials) prior to performing any work.
(d) If the slot machine licensee continues to utilize the gaming service provider after the emergency circumstances have passed or if the Bureau of Licensing determines that the circumstances did not necessitate the use of an emergency gaming service provider that was not registered, certified or on the authorized list, the slot machine license and gaming service provider shall comply with the requirements in this chapter.
§ 437a.11. Slot machine applicants' and licensees' duty to investigate.
* * * * * (b) An applicant for or holder of a slot machine license shall have an affirmative duty to avoid agreements or relationships with persons applying for gaming service provider registration or certification whose background or [association is] associations are injurious to the public health, safety, morals, good order and general welfare of the people of this Commonwealth, or who threaten the integrity of gaming in this Commonwealth.
* * * * *
CHAPTER 440a. MANAGEMENT COMPANIES § 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] the commencement of gaming operations.
* * * * * § 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] form.
(2) The nonrefundable application fee posted on the Board's [website (pgcb.state.pa.us)] web site.
(b) In addition to the [materials] application 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] comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
§ 440a.3. Management company license term and renewal.
(a) A management company license or renewal will be valid for 3 years from the date on which the initial license is issued or the renewal is approved by the Board. The management company license will not be issued or renewed until all fees and costs have been paid.
(b) A renewal application shall be submitted to the [Board] Bureau of Licensing 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] Bureau of Licensing 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.
(d) A management company license issued by the Board is nontransferable.
§ 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.] A management company that requests Board approval of a management contract shall disclose its financial interests in the slot machine applicant or licensee and, if applicable, any exercisable option that may constitute a change in ownership or control of a slot machine licensee as described in § 441a.17 (relating to change in ownership or control of slot machine licensee and multiple slot machine license prohibition).
* * * * * (f) A management contract submitted for [Board review and] approval must [enumerate with specificity] specify the terms and conditions of the management contract and 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:
* * * * * (vi) Surveillance.
(viii) Table games.
(2) Design, construction, improvement [or] and maintenance[, or both,] of the licensed facility.
(3) [Provision] Sources of operating capital and financing for the development of the licensed facility.
(4) Payment of the slot machine license fee and the table games operation certificate fee, if applicable.
(5) Purchase or lease of slot machines, table games, table game devices or associated equipment.
(6) Design, implementation [or] and 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.
* * * * * (12) Procurement of [vendors] gaming service providers and gaming [junkets] junket enterprises.
(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.
CHAPTER 441a. SLOT MACHINE LICENSES § 441a.1. Definitions.
For purposes of this subpart, the following words and terms have the following meanings, unless the context clearly indicates otherwise:
* * * * * Applicant—A person who applies to the Board to receive a slot machine license as defined in this section.
Debt transaction—A transaction or series of transactions in which the entity incurs any of the following types of debt:
(i) Loans, lines of credit or similar financing.
(ii) Public and private debt offerings.
(iii) Note issuance, exchange or bond offering.
(iv) Any transaction that provides guarantees or encumbers assets of the licensee.
Developer—A person engaged by a slot machine applicant or licensee to construct a proposed licensed facility or to otherwise make land or buildings suitable for use as a licensed facility.
Guest rooms under common ownership—A room or group of rooms, including timeshare units, that are owned by a well-established resort hotel and that are available for rental.
Initial plan of development—The slot machine licensee's financing, construction schedule, comprehensive design plan and projected expenditure for the licensed facility as described by the licensee in its application and presented at the licensee's initial suitability hearing before the Board.
Licensing hearing—A hearing before the Board in which an applicant for a [grant of a permanent] slot machine license [or a Conditional Category 1 slot machine license] will have an opportunity to present to the Board:
(i) Evidence concerning its eligibility for a license.
(ii) Evidence concerning its suitability for a license.
(iii) Evidence of how its proposed facility and operation addresses the criteria identified in section 1325(c) of the act (relating to license or permit issuance).
(iv) For applicants seeking licensure under section 1304 of the act (relating to Category 2 slot machine license), evidence which sets forth a comparison between the applicant and other applicants within the same category of licensure on the standards and criteria in the act.
Material change in financial status—A default in any covenant or condition specified in any loan document or other debt instrument under which the slot machine licensee, or any of its intermediaries, subsidiaries, holding companies or management companies thereof, is a borrower or guarantor.
Material debt transaction—
(i) A debt transaction of $25 million or more in a single transaction or cumulative transactions during any 12-month period.
(ii) The term does not include transactions under a Board-approved line of credit, revolver or similar type of loan.
Modified plan of development—An alteration to a slot machine licensee's initial plan of development.
Non-de minimis consideration—A payment of fair market value of at least $10 per patron paid to the resort hotel for use of one or more amenities.
* * * * * § 441a.2. Slot machine application [restrictions and] deadlines.
[(a) Under section 1304 of the act (relating to category 2 slot machine license), an applicant for a Category 2 slot machine license under section 1301 of the act (relating to authorized slot machine licenses), its affiliate, intermediary, subsidiary or holding company, may not possess any ownership or financial interest in any person eligible to apply for a Category 1 slot machine license or its affiliates, intermediaries, subsidiaries or holding companies.
(b)] The Board will initiate the formal procedure for the acceptance, consideration and final resolution of applications for slot machine licenses by setting a filing period for filing of Category 1, 2 or 3 slot machine license applications. The filing period set by the Board will be posted on the Board's [website (www.pgcb.state.pa.us)] web site.
[(c) After the expiration of the filing period established by the Board under subsection (b), the Board will set a completion date by which all filed applications are to be complete. An application that is not complete, as determined by the Board, by the completion date will not be considered. The completion date set by the Board under this subsection will be published in the Pennsylvania Bulletin at least 30 days prior to the completion date.]
§ 441a.3. Slot machine license application.
(a) An applicant for a slot machine license shall submit an application which includes the following:
(1) An original and [three copies] one copy of the Conditional[/]Category 1, Category 2, or Category 3 Application and Disclosure Information Form.
(2) The nonrefundable application fee posted on the Board's [website (www.pgcb.state.pa.us)] web site.
(3) [A license or waiver] An application for each principal [and key employee] under [Chapters 433a and 435a (relating to principal licenses; and employees), including an original and three copies of the Multi Jurisdictional Personal History Disclosure Form, the Pennsylvania Supplement and a nonrefundable background investigation deposit to be set by the Board and provided in a fee schedule for each principal and each key employee] Chapter 433a (relating to principal licenses).
(4) Fingerprints for [the applicant and] each principal [and key employee].
(5) 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), which shall be signed by the chief executive officer of the applicant or authorized designee.
(6) If a temporary land-based facility is to be licensed, a plan for how the licensee will transition to a permanent facility, including a date for completion of the permanent facility. A permanent facility shall be the facility proposed by the applicant, which is designated, identified and made part of the evidentiary record by the applicant at the applicant's licensing hearing. Modifications to the [proposed] approved permanent facility following the applicant's licensing hearing [shall be approved by] require approval of the Board in accordance with § 441a.20a (relating to changes to a slot machine licensee's initial or modified plan of development).
(7) 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).
(8) A statement demonstrating compliance with the geographical requirements of section 1302 of the act (relating to Category 1 slot machine license), section 1304 of the act (relating to Category 2 slot machine license) or section 1305 of the act (relating to Category 3 slot machine license).
(b) Failure to provide the information required in subsection (a) may result in the application being [returned to the applicant or result in an application being] deemed incomplete.
(c) In addition to the materials required under subsection (a), an applicant for a slot machine license shall[:
(1) Promptly provide information requested by the Board relating to its application, financial fitness, character, honesty and integrity, or regulation and cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions.
(2) Comply] comply with the general application requirements in Chapters 421a and 423a (relating to general provisions; and applications).
(d) A copy of the local impact report required as part of the application shall be provided to the political subdivisions in which the licensed facility will be located at the same time as the filing of the application for a slot machine license. The applicant shall file a proof of service with the [Board] Bureau of Licensing within 5 business days after filing the application for a slot machine license.
[(e) An applicant for a slot machine 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.]
§ 441a.4. Alternative Category 1 licensing standards.
* * * * * (b) The Board may use the abbreviated process if:
(1) The Board determines, after investigation, that the licensing standards in the other jurisdiction in which the applicant or its affiliate, intermediary, subsidiary or holding company is licensed is similarly comprehensive and thorough and provides safeguards that are equal to or greater than those provided in the act and granting the request would be in the public interest.
(2) A completed application for a Category 1 license has been filed with the [Board] Bureau of Licensing which includes the name and address of the regulatory agency in the other jurisdiction.
(3) The [Board] Bureau of Licensing has received a copy of the completed application, renewal applications and accompanying documents filed in the other jurisdiction.
(4) The applicant has provided current, updated information to the [Board] Bureau of Licensing and the Bureau regarding the license in the other jurisdiction and information relating to its financial viability and suitability and good character.
(5) The applicant has no administrative or enforcement actions pending in other jurisdictions that could render the applicant ineligible or unsuitable for licensure or the applicant has disclosed and explained these actions to the satisfaction of the Board.
(6) There are no pending or ongoing investigations of possible [material] violations by the applicant in other jurisdictions that could render the applicant ineligible or unsuitable for licensure or the applicant has disclosed and explained these investigations to the satisfaction of the Board.
* * * * * (e) Following the issuance of a Category 1 license under this section, the Bureau will initiate a complete review of the information submitted under this subpart. If the applicant does not meet the requirements of the act or this part, the Board [will] may revoke, suspend or condition the license until the applicant meets the requirements of the act.
§ 441a.5. License fee payment bond or letter of credit requirements.
(a) An application for a slot machine license shall at all times throughout the period in which the application is on file with the Board include original payment bonds or original irrevocable letters of credit, or some combination thereof, that include draw instructions guaranteeing the applicant's payment of the slot machine license fee required by sections 1209(a) and 1305(d) of the act (relating to slot machine license fee; and category 3 slot machine license) if the license is approved and issued.
(1) Payment bonds or irrevocable letters of credit shall be submitted [and approved by the Board] to the Bureau of Licensing for review before an application may be accepted for filing. The [Board's] review of the payment bond or irrevocable letter of credit will include an assessment of both the proposed terms [of the payment bond or irrevocable letter of credit] and [of] the surety or financial institution that will issue the payment bond or irrevocable letter of credit. An application will be deemed incomplete if at any time during the period the application is on file with the Board payment bonds or letters of credit [approved by the Board] in the amounts required in paragraph (2) are not in full force and effect.
* * * * * (e) The payment bond or irrevocable letter of credit provided under this section must provide that if the slot machine license has been approved [and issued] by the Board and the license fee has not been paid in full within 5 business days following the [issuance of the license] deadline for payment set by the Board or Board staff, the Commonwealth will have the right to request immediate payment under the payment bond or irrevocable letter of credit for payment of the slot machine license fee.
* * * * * (h) This section does not preclude a slot machine license applicant from substituting or replacing a payment bond or letter of credit during the period the application is on file with the Board provided the replacement payment bond or letter of credit is [approved] reviewed by the [Board under this section] Bureau of Licensing.
§ 441a.6. Public input.
* * * * * (c) The Board will develop and post the procedures that will be used to conduct public input hearings on the Board's [website (www.pgcb.state.pa.us)] web site.
(d) The Board will make public a list of all witnesses scheduled to testify at a public input hearing at least 7 days prior to the hearing. The list of witnesses will be updated at least 3 days prior to the hearing. Additional witnesses will be posted on the Board's [website (www.pgcb.state.pa.us)] web site as they are added to the witness list.
§ 441a.7. Licensing hearings for slot machine licenses.
(a) A schedule of licensing hearings for all slot machine license applicants will be posted on the Board's [website (www.pgcb.state.pa.us)] web site.
(b) The Board may schedule prehearing conferences under § 491a.9 (relating to prehearing and other conferences) to address issues related to licensing hearings.
(c) The Board will allot each applicant a specified time for its presentation. The length of the presentations, which shall be the same for each applicant within each category, will be established [at the prehearing conferences] by the Board.
(d) At a licensing hearing, an applicant shall appear before the Board and at all times have the burden to establish and demonstrate, by clear and convincing evidence, its eligibility and suitability for licensure and to address the criteria identified in section 1325(c) (relating to license or permit issuance) of the act.
(e) For the purposes of this section, an applicant's demonstration of eligibility must include a showing of compliance [which] with:
* * * * * (f) For the purposes of this section, an applicant's demonstration of suitability must include a showing of:
(1) Good character, honesty and integrity in compliance with section 1310 of the act (relating to slot machine license application character requirements).
(2) Financial fitness in compliance with section 1313 of the act (relating to slot machine license application financial fitness requirements).
(3) Operational viability, including:
(i) The quality of the proposed licensed facility, and temporary land-based facility, if applicable, including the number of slot machines and table games proposed and the ability of the proposed licensed facility to comply with statutory, regulatory and technical standards applicable to the design of the proposed licensed facility and the conduct of slot machine and table game operations therein.
(ii) The projected date of the start of operations of the proposed licensed facility and any accessory uses such as hotel, convention, retail and restaurant space proposed in conjunction therewith. Applicants shall provide the Board with a time line on the deliverability of proposed temporary land-based or phased permanent licensed facilities and the accessory uses proposed in conjunction therewith.
(iii) The ability of the applicant's proposed licensed facility to generate and sustain an acceptable level of growth of revenue.
(g) For the purposes of this section, an applicant's demonstration of how it addresses the criteria identified in section 1325(c) of the act must include:
(1) The location and quality of the proposed facility, including, but not limited to, road and transit access, parking and the facility's [centrality] proximity to its anticipated market service area.
(2) The potential for new job creation and economic development which are expected to result from granting a license to an applicant.
(3) The applicant's good faith plan to recruit, train and [upgrade] enhance diversity in all employment classifications in the facility.
(4) The applicant's good faith plan for enhancing the representation of diverse groups in the operation of its facility through the ownership and operation of business enterprises associated with or utilized by its facility or through the provision of goods or services utilized by its facility and through the participation in the ownership of the applicant.
(5) The applicant's good faith effort to assure that all persons are accorded equality of opportunity in employment and contracting by it and any contractors, subcontractors, assignees, lessees, agents, gaming service providers and suppliers [it] the applicant may employ directly or indirectly.
* * * * * (14) Areas of deficiency in the applicant's application previously identified by the Bureau or the Bureau of Licensing [or Chief Enforcement Counsel] that have not been resolved.
(h) The applicant's demonstration of how it addresses section 1325(c) of the act and subsection (g) may include information relating to its affiliates, intermediaries, subsidiaries or holding companies.
(i) No later than 30 days before the first scheduled licensing hearing in the category of license for which the applicant has filed an application, the applicant shall file with the Board a memorandum identifying all evidence it intends to use in support of its presentation before the Board. At the same time, Category 1 and Category 3 applicants shall serve the memorandum on the other applicants in the same category. At the same time, Category 2 applicants shall serve the memorandum on all other applicants whose proposed facility meets the same location criteria as the applicant's proposed facility as specified in subsection (n)(1)(i)—(iii). The memorandum must include the following:
(1) The name of the applicant and docket number of the applicant's application to which the evidence will relate.
(2) Identification of each standard and criterion in subsections (d)—(f) to which the evidence will relate.
(3) As to each criterion identified, whether the evidence will be presented through oral testimony [or], the proffer of documents, or both. If any portion of the evidence will be presented through oral testimony, the notice must include the name, address and telephone number of each testifying witness, the identified criteria about which the witness will testify and a detailed summary of the witness' testimony. If any portion of the evidence will be presented through the proffer of documents, including reports and exhibits, the memorandum must include a copy of each document to be proffered and the name, address and telephone number of the persons who prepared the document.
(4) If any person identified in paragraph (3) will testify as an expert, the person's qualifications, including the person's education, experience and training, and a listing of the other jurisdictions where the person has been qualified as an expert witness[,] within the last 5 years, shall be attached to the notice. A copy of the results or reports of any tests, experiments, examinations, studies or documents prepared or conducted by the expert or about which the expert will testify or which will be relied upon by the expert to render an opinion shall be attached to the notice.
(5) Documents required under paragraphs (3) and (4) that have already been submitted to the Board and made part of the public record may be referenced instead of being included with the memorandum identifying all evidence an applicant intends to use in support of its presentation before the Board.
(j) The Board will serve on all applicants within that category any expert reports developed for and requested by the Board that [pertains] pertain to the applicants.
(k) Applicants, at the time of filing, shall provide the Board with an electronic version, in a format prescribed by the Board, of the reports and exhibits provided in paper form.
(l) If an applicant designates any submitted report or exhibit as confidential under § 401a.3 (relating to definitions) or section 1206(f) of the act (relating to Board minutes and records), the applicant shall:
(1) Clearly and conspicuously indicate that the report or exhibit is confidential in both the paper and electronic format and provide these exhibits separately from the nonconfidential exhibits.
(2) Request that the confidential information be presented to the Board in [closed deliberations, under section 1206(a) of the act] an executive session in accordance with 65 Pa.C.S. § 708(a)(5) (relating to executive sessions) and provide an explanation of the need for the designation of confidentiality and [closed deliberations] presentation during an executive session or authorize the release of the report or exhibit in compliance with section [1206(f)] 1206(f)(5) of the act.
(m) Applicants are prohibited from relying upon or introducing new evidence, including witnesses' testimony, reports or exhibits, not identified under subsection (i) or (n), except in the following circumstances:
(1) Applicants may update or supplement evidence, including witnesses' testimony, reports or exhibits to respond to requests from the Board or Board staff.
(2) Applicants may update or supplement evidence, including witnesses' testimony, reports or exhibits to respond to issues raised subsequent to the filing of the memorandum required by subsection (i) at a prehearing conference if the issues could not have been reasonably anticipated by the applicant.
(n) For Category 2 and Category 3 applicants only, in addition to the applicant's presentation of evidence to the Board relative to its eligibility and suitability for a license, an applicant may, during its licensing hearing, present evidence which sets forth a comparison between the applicant and other applicants within the same category with respect to the standards and criteria in subsections (e)—(h).
* * * * * (2) If an applicant desires to present comparative evidence under this subsection, the applicant shall, no later than 20 days prior to the commencement of the first scheduled licensing hearing in the category of license for which the applicant has filed an application, file with the Board Clerk a separate written notice evidencing the intent [with the Board] identifying each other applicant about whom the applicant desires to present evidence. A copy of the notice shall [also] be served on the applicants about whom the evidence will be presented and on the Chief Enforcement Counsel. The notice must include:
* * * * * (4) If the applicant plans to present evidence to the Board concerning another applicant in [closed deliberations] an executive session, the applicant shall provide notice to the other applicant and provide any report or exhibit relied upon to the other applicant. The other applicant may be represented in the [closed deliberations] executive session.
* * * * * (r) Information obtained by [BIE] the Bureau during an applicant's background investigation based upon public record or upon information otherwise in the public domain will be heard by the Board during the licensing hearing. Information submitted by an applicant under 4 Pa.C.S. § 1310(a) (relating to slot machine license application character requirements) or obtained by the Board or [BIE] Bureau as part of a background investigation from any source not in the public domain is considered confidential. The Board may not require an applicant to waive any confidentiality provided for in 4 Pa.C.S. [§§] § 1206(f) [and 1310(a)] as a condition for the approval of a slot machine license or any other action of the Board. The Board may request that an applicant respond to inquiries related to confidential information during a licensing hearing to promote transparency in the regulation of gaming in this Commonwealth. An applicant who does not waive the right to confidentiality shall:
* * * * * § 441a.9. Approval of a slot machine license.
* * * * * (b) For Category 1 slot machine applications, the State Horse Racing Commission or the State Harness Racing Commission may submit [additional] information [to the Board] if it believes the information will assist the Board in making a determination relating to the operational, financial or character fitness of the applicant.
* * * * * § 441a.10. Notification of anticipated or actual changes in principals or key employees.
Each slot machine applicant or licensee shall notify the [Board] Bureau of Licensing, in writing, as soon as it becomes aware, of the proposed appointment, appointment, proposed nomination, nomination, election, hiring, promotion, intended resignation, resignation, removal, firing, incapacitation or death of any person required to be licensed as a principal or key employee under Chapter 433a and § 435a.2 (relating to principal licenses; and key employee license). The notice must be addressed to the Bureau of Licensing.
§ 441a.11. [Notification of new financial sources] (Reserved).
[Each slot machine applicant or licensee shall notify the Board, in writing, as soon as it becomes aware that it intends to enter into a transaction which may result in any new financial backers. The notice shall be sent to the Bureau of Licensing and the Bureau of Corporate Compliance and Internal Controls.]
(Editor's Note: The following section is new and printed in regular type to enhance readability.)
§ 441a.11a. Duty to maintain financial suitability; notification of change in financial status.
(a) A slot machine licensee and its intermediaries, subsidiaries and holding companies shall, at all times, remain financially suitable. In determining whether a licensee is financially suitable, the Board will consider the following factors:
(1) The ability to develop the proposed project.
(2) The ability to obtain financing.
(3) The ability to maintain a steady level of growth of revenue to the Commonwealth.
(4) The historical financial suitability and financial wherewithal of the slot machine licensee, its intermediaries, subsidiaries and holding companies.
(b) A slot machine licensee shall notify the Bureau and the Bureau of Licensing in writing within 24 hours if the slot machine licensee or any intermediary, subsidiary or holding company of the slot machine licensee incurs a material change in financial status.
§ 441a.15. Slot machine license issuance bond requirement.
* * * * * (b) Unless otherwise required by the Board, the payment bond must comply with the following:
(1) The payment bond must be issued by a surety company that is both licensed by the Insurance Department and assigned a credit rating within the three highest categories, without regard to numerics or other modifiers, by Moody's or Standard & Poor's, or upon the discontinuance of Moody's or Standard & Poor's, by another Nationally recognized rating service. Proof that the surety is licensed by the Insurance Department and has been assigned the required credit rating must accompany any payment bond submitted under this section.
(2) A slot machine licensee shall submit its proposed payment bond to the Board prior to the issuance of a slot machine license. [The Board will investigate and approve both the proposed terms of the payment bond and the surety that will issue the payment bond.]
(3) The payment bond must state that it is payable to ''The Commonwealth of Pennsylvania'' as the obligee for immediate payment of the slot machine licensee's financial obligations to the Commonwealth under the act and as security to guarantee that the slot machine licensee faithfully makes the payments, keeps its books and records, makes reports and conducts its operations in conformity with the act, this part and the rules and orders promulgated by the Board.
(4) A payment bond issued in accordance with this section will remain in full force and effect throughout the period of time that the slot machine license is in effect. If a bond is canceled and the slot machine licensee fails to file a new bond with the [Board] Bureau of Licensing in the required amount on or before the effective date of the cancellation, the slot machine licensee's license will be revoked or suspended.
(5) Any notice provision [to the Board] in a payment bond applicable to an election by a surety to cancel a then current payment bond must provide that the Board will receive at least 30 days written notice, by registered mail or overnight courier service, of the surety's election to cancel.
* * * * * § 441a.17. Change in ownership or control of slot machine licensee and multiple slot machine license prohibition.
(a) A slot machine licensee shall notify the [Board] the Bureau and the Bureau of Licensing by filing a Slot Machine Licensee's Notification of Proposed Transfer of Interest Form prior to or immediately upon becoming aware of any proposed or contemplated change in ownership of the slot machine licensee by a person or group of persons acting in concert which involves any of the following:
(1) More than 5% of a slot machine licensee's securities or other ownership interests.
(2) More than 5% of the securities or other ownership interests of a corporation or other form of business entity that owns, directly or indirectly, at least 20% of the voting or other securities or other ownership interest of the slot machine licensee.
(3) The sale[, other than in the normal course of business,] of a slot machine licensee's assets, other than in the ordinary course of business.
(4) Other transactions or occurrences deemed by the Board to be relevant to license qualification.
[(b) Notice to the Board and Board approval shall be required prior to completion of any proposed change of ownership of a slot machine licensee that meets the criteria in subsection (a).
(c) A person or group of persons acting in concert desiring to acquire an interest in a slot machine licensee that meets the criteria in subsection (a) shall submit an application for approval of the transfer which includes the following:
(1) An application for transfer on a form prescribed by the Board.
(2) A copy of all documents, contracts and agreements related to the transfer.
(3) A principal license application for each person seeking to acquire an interest that does not currently hold a principal license.
(4) Application fees specified by the Board to cover the cost of investigations of the transfer application and persons seeking to acquire an interest. The applicant for the transfer shall be responsible for and remit to the Board any costs associated with the investigation of the transfer that exceed the amount covered by the fees.
(d) A person or group of persons acting in concert that acquires more than 20% of a slot machine licensee's securities or other ownership interests or purchases the assets, other than in the normal course of business, of any slot machine licensee shall independently qualify for a license in accordance with the act and this part and shall pay the licensing fee required by section 1209 of the act (relating to slot machine license fee), except as otherwise required by the Board.
(e) The requirements in subsections (a)—(d) do not apply to:
(1) An underwriter who will hold a security for less than 90 days.
(2) An institutional investor, if:
(i) The institutional investor holds less than 10% of the securities or other ownership interests referred to in subsection (a)(1) or (2).
(ii) The securities or interests are publicly traded securities.
(iii) The institutional investor's holdings if the securities were purchased for investment purposes only and the institutional investor files a certified statement with the Board stating that the institutional investor has no intention of influencing or affecting, directly or indirectly, the affairs of the slot machine licensee.]
(b) A transaction set forth in subsection (a) may not be consummated without:
(1) Obtaining the prior approval of the Board.
(2) Each principal involved in the transaction obtaining a license in accordance with Chapter 433a (relating to principal licenses).
(c) A request for approval required under subsection (b)(1) shall be made by filing a petition with the Board in accordance with § 493a.4 (relating to petitions generally).
(d) Notwithstanding the requirement in subsection (b)(2), the Board may approve a transaction under subsection (a) prior to the licensure of the person or group of persons acting in concert if all of the following apply:
(1) The person or group of persons acting in concert are proposing to acquire 20% or less of the voting securities of a publicly traded holding company of a slot machine licensee.
(2) The person or group of persons acting in concert affirm that the person or group of persons will not control or influence the affairs of or benefit from the slot machine licensee prior to being licensed as principals in accordance with Chapter 433a.
(3) The person or group of persons have filed applications with the Board for licensure as principals in accordance with Chapter 433a.
(4) The approval of the transaction is expressly conditioned upon the person or group of persons being licensed as principals in accordance with Chapter 433a.
(e) The Board will not approve a transaction under subsection (a), which involves a change in control unless the person or group of persons:
(1) Acting in concert demonstrates by clear and convincing evidence that the slot machine licensee's gaming facility will remain or become a financially successful, suitable and efficient business operation.
(2) Acquiring the interest pay a new slot machine license fee as determined by the Board. The Board may condition its approval of the transaction on the payment of the fee.
(f) The following transactions are not be subject to subsections (a)—(c):
(1) A transaction through which an underwriter will possess a security for less than 90 days.
(2) A transaction through which an institutional investor acquires less than 20% of the securities of a slot machine licensee's holding company, provided that the securities were acquired for investment purposes only and the institutional investor complies with § 433a.5 (relating to institutional investors).
[(f)] (g) In accordance with section 1330 of the act (relating to multiple slot machine license prohibition), a slot machine licensee, its affiliates, intermediaries, subsidiaries and holding companies, may not possess an ownership or financial interest in any other slot machine licensee or in any other person eligible to apply for a Category 1 slot machine license or its affiliates, intermediaries, subsidiaries or holding companies that exceeds 33.3%.
[(g)] (h) Nothing in subsection [(f)] (g) prevents a slot machine licensee from possessing ownership or financial interests of 33.3% or less, in multiple slot machine licensees or in persons eligible to apply for a Category 1 slot machine license or its affiliates, intermediaries, subsidiaries or holding companies.
[(h)] (i) If a slot machine licensee, its affiliates, intermediaries, subsidiaries or holding companies has an ownership or financial interest in another slot machine licensee that is in violation of subsection [(f)] (g), the slot machine licensee will be required to divest that interest which is in excess of 33.3% in compliance with section 1330 of the act.
[(i)] (j) Nothing in this section concerning ownership or financial interests applies to contractual interests including those in the nature of management contracts, options to purchase exercisable after a license has been issued or leases.
§ 441a.18. Employee status report.
* * * * * (b) Each month each slot machine licensee shall generate a monthly employee status report of the slot machine licensee's and management company's employees. The report shall be submitted to the Bureau of Licensing no later than the 15th calendar day of the following month. The report must include the following information:
* * * * * (2) The total number of persons employed by the slot machine [applicant or] licensee and management company during the preceding month.
* * * * * (c) The reports shall be [signed by the slot machine licensee and] transmitted to the Bureau of Licensing by means of electronic data transmission or in a form prescribed by the Board.
* * * * * § 441a.19. Notice of employee misconduct and offenses and employee resignations.
* * * * * (c) Notwithstanding subsection (a), a slot machine licensee shall, within 24 hours, notify the [Board] Bureau upon learning of the arrest, charging, indictment or conviction of any of its affiliates, intermediaries, subsidiaries, holding companies, principals, key employees, permittees or registrants, for any of the following:
* * * * * (Editor's Note: The following section is new and printed in regular type to enhance readability.)
§ 441a.20a. Changes to a slot machine licensee's initial or modified plan of development.
(a) A slot machine licensee shall obtain Board approval prior to implementing any change to the slot machine licensee's initial or modified plan of development as defined in § 441a.1 (relating to definitions).
(b) A request for approval of a change to a slot machine licensee's initial or modified plan of development shall be made by filing a petition with the Board in accordance with § 493a.4 (relating to petitions generally).
(c) The licensee shall demonstrate that the contemplated change in the development plan is substantially similar to the currently approved plan of development or show good cause as to why a contemplated plan of development that is different from the licensee's currently approved plan should be approved.
§ 441a.21. [Management contracts] Liability for management companies.
Notwithstanding any provision to the contrary in the management contract, each slot machine licensee may be jointly and severally liable for any act or omission by [the] its management company in violation of the act or this part, regardless of actual knowledge by the slot machine licensee of the act or omission.
(Editor's Note: Sections 441a.24—441a.26 are new and printed in regular type to enhance readability.)
§ 441a.24. Notification of equity securities offering.
(a) A slot machine licensee or an intermediary or holding company of a slot machine licensee shall notify the Board in writing at least 15 business days prior to the commencement of an offering of equity securities or other ownership interests.
(b) A notification under subsection (a) shall be made on a Notification of Financial Transaction form accompanied by current drafts of all documentation relating to the offering of equity securities or other ownership interests.
(c) All final executed documents relating to the offering of the equity securities or other ownership interests shall be transmitted to the Bureau and the Bureau of Licensing within 5 business days following the commencement of the offering.
§ 441a.25. Approval of material debt transactions.
(a) A slot machine licensee may not consummate a material debt transaction without the prior approval of the Board.
(b) An intermediary or holding company of a slot machine licensee may not consummate a material debt transaction without the prior approval of the Board if the slot machine licensee is a guarantor of the debt or if the assets or income of the slot machine licensee are being used as collateral.
(c) Notwithstanding subsections (a) and (b), a publicly traded corporation may consummate a material debt transaction without Board approval, provided that:
(1) The publicly traded corporation notifies the Bureau and the Bureau of Licensing in writing at least 15 business days prior to the consummation of the material debt transaction by submitting a Notification of Financial Transaction form accompanied by current drafts of all documentation relating to the material debt transaction.
(2) The publicly traded corporation transmits to the Bureau and the Bureau of Licensing all final, executed documents relating to the material debt transaction within 5 business days following the consummation of the material debt transaction.
(3) The publicly traded corporation's debt transaction is $50 million or less.
(d) Any subsequent borrowings under a revolving line of credit, previously approved under this section, do not require subsequent approval of the Board.
(e) A debt transaction that does not otherwise qualify as a material debt transaction may require Board approval if Board staff determines that approval is necessary to protect the integrity of gaming.
§ 441a.26. Notification of refinancing transaction.
(a) A slot machine licensee or an intermediary or holding company of a slot machine licensee shall provide the Bureau and the Bureau of Licensing with all documents relating to a transaction to refinance $25 million or more of its outstanding indebtedness at least 10 business days prior to the consummation of the transaction.
(b) A notification required under subsection (a) shall be made on a Notification of Financial Transaction form accompanied by current drafts of all documentation relating to the refinancing transaction. All final executed documents relating to a refinancing shall be transmitted to the Bureau within 5 business days following the consummation of the refinancing transaction.
(c) A refinancing transaction that results in the incurrence of $25 million or more of additional indebtedness shall be subject to § 441a.25 (relating to approval of material debt transactions).
(d) Notwithstanding subsection (c), a publicly traded corporation may consummate a refinancing transaction that results in the incurrence of $50 million or less of additional indebtedness.
(e) A refinancing transaction that does not otherwise require approval in accordance with subsections (c) and (d) may require Board approval if Board staff determines that approval is necessary to protect the integrity of gaming.
Subpart E. SLOT MACHINES AND ASSOCIATED EQUIPMENT; ACCOUNTING AND INTERNAL CONTROLS
CHAPTER 461a. SLOT MACHINE AND TABLE GAME DEVICE TESTING AND CONTROL § 461a.7. Slot machine minimum design standards.
(a) A slot machine may not be set to pay out less than the theoretical payout percentage, which may not be less than 85%, calculated using the lowest possible wager that could be played for any single play, or equal or exceed 100%, calculated using the highest eligible wager available. The theoretical payout percentage for the total value of slot machine wagers will be calculated using the following:
* * * * *
CHAPTER 465a. ACCOUNTING AND INTERNAL CONTROLS § 465a.24. Count room characteristics.
(a) A slot machine licensee shall have adjacent or proximate to the cage a room, to be known as a count room, specifically designated, designed and used for counting the contents of slot cash storage boxes and table game drop boxes.
(b) The count room shall be designed and constructed to provide maximum security for the materials housed therein and for the activities conducted therein. Each slot machine licensee shall design and construct a count room with the following security measures:
(1) A metal door installed on each entrance and exit equipped with an alarm device which audibly signals the surveillance department monitoring room [and] or the security department whenever a door to the count room is opened [at times other than those times for which the slot machine licensee has provided prior notice under § 465a.25 (relating to counting and recording of slot cash storage boxes and table game drop boxes)].
(2) Each entrance [and exit] door to the count room must be equipped with two separate locks, the keys to which must be different from each other and different from the lock securing the contents of each slot cash storage box or table game drop box. The keys shall be maintained and controlled as follows:
(i) The key to one of the locks shall be maintained and controlled by the security department.
(ii) The key to the other lock shall be maintained and controlled by finance.
(iii) Sign out and sign in procedures shall be established for both keys.
(3) To exit the count room, the count room door must be equipped with an automatic release mechanism or other device as specified in the slot machine licensee's internal controls.
(c) The following must be located within the count room:
* * * * *
Subpart K. TABLE GAMES
CHAPTER 609a. CREDIT § 609a.4. Approval of credit limits.
(a) A credit limit, and any temporary or permanent increases thereto, shall be approved by either:
* * * * * (c) Prior to approving a temporary or permanent credit limit increase, an employee of the certificate holder's credit department shall:
(1) Obtain a written request from the patron which includes:
(i) The date and time of the patron's request.
(ii) The amount of credit limit increase requested by the patron and if the increase requested is temporary or permanent.
(iii) The signature of the patron.
(2) Reverify the patron information required under [§ 609a.3(c)(2) and (3)] § 609a.3(c)(2) (relating to application and verification procedures for granting credit).
(3) Consider the patron's player rating based on a continuing evaluation of the amount and frequency of play subsequent to the patron's initial receipt of credit.
(4) Include the information and documentation required under paragraphs (1)—(3) in the patron's credit file.
(5) Comply with subsections (a) and (b).
§ 609a.5. Derogatory information; reduction or suspension of credit.
* * * * * (c) [Whenever] In addition to the requirements in subsection (d), whenever derogatory information is received by a certificate holder's credit department relating to the patron's continued creditworthiness[, other than a returned check,] the certificate holder's credit department shall reverify the patron information required under [§ 609a.3(c)(2) and (3)] § 609a.3(c)(2) (relating to application and verification procedures for granting credit).
(d) A patron having a check returned to any certificate holder unpaid by the patron's bank shall have credit privileges suspended unless the returned check was due to a processing error and an explanation for the error is noted in the patron's credit file or until the returned check has been paid in full. Prior to reinstating a patron's credit privileges, the certificate holder shall comply with subsection (e).
(e) If a patron's credit privileges have been suspended for any reason, the certificate holder's credit department shall reverify the patron's information, as required under [§ 609a.3(c)(1)—(4)] § 609a.3(c)(2) and (3), before reinstating the patron's credit privileges.
CHAPTER 623a. CRAPS AND MINI-CRAPS § 623a.4. Making and removal of wagers.
* * * * * (c) A wager made on any bet may be removed or reduced at any time prior to a roll that decides the outcome of the wager except that:
(1) A Pass Bet may not be wagered, removed or reduced after a come out point is established with respect to the Pass Bet.
* * * * * § 623a.5. Payout odds.
* * * * * (g) A certificate holder that offers Buy Bets and Lay Bets:
* * * * * (3) [May collect, at time the player makes the wager, a vigorish of up to 5%, as specified in the certificate holder's Rules Submission, of the amount wagered on the Buy or Lay Bet or may collect the vigorish only on a winning Buy or Lay Bet. If collecting a vigorish, the certificate holder shall specify in its Rules Submission which vigorish procedure it will utilize.] May collect a vigorish of up to 5%, as specified in the certificate holder's Rules Submission, in accordance with the following requirements:
(i) For Buy Bets, the certificate holder may utilize one of the following vigorish procedures as specified in its Rules Submission:
(A) At the time the player makes a Buy Wager, the dealer shall collect a vigorish based on the amount wagered on the Buy Bet. The vigorish amount collected may not be included in the wager amount.
(B) The dealer shall collect a vigorish only on a winning Buy Bet. If the certificate holder utilizes this vigorish procedure for Buy Bets, it shall specify the wagers on which this vigorish will be applicable. For example, vigorish based on winning Buy Bets placed on the 4 or 10.
(ii) For Lay Bets, the certificate holder may utilize one of the following vigorish procedures as specified in its Rules Submission:
(A) At the time the player makes a Lay Wager, the dealer shall collect a vigorish based on the amount potentially won on the Lay Bet. The vigorish amount collected may not be included in the wager amount.
(B) The dealer shall collect a vigorish only on a winning Lay Bet. If the certificate holder utilizes this vigorish procedure for Lay Bets, it shall specify the wagers on which this vigorish will be applicable. For example, vigorish based on winning Lay Bets placed on the 4 or 10.
(h) Except as permitted under subsection (g)(3), a certificate holder may not charge a percentage, fee or vigorish to a player in making any wager in the game of Craps or Mini-Craps.
(i) Except as permitted under § 623a.6(e) (relating to supplemental wagers made after the come out roll in support of Pass, Don't Pass, Come and Don't Come Bets (taking and laying odds)), a certificate holder may not accept any wager in excess of the maximum bet posted at the table.
CHAPTER 633a. BLACKJACK § 633a.7. Procedure for dealing the cards; completion of each round of play.
* * * * * (i) After the procedures in subsection (h) have been completed, if necessary, the dealer shall start with the player farthest to the dealer's left and continue around the table in a clockwise direction and if the player:
(1) Has Blackjack and the dealer's up card:
(i) Is a 2, 3, 4, 5, 6, 7, 8 or 9, the dealer shall announce and pay the Blackjack and remove the player's cards.
(ii) Is an ace, king, queen, jack or 10 but the dealer's hole card will not give the dealer a Blackjack, the dealer shall announce the player's Blackjack [but may not make a payment nor remove any cards until all other cards are dealt to the players and the dealer reveals the hole card.] and either:
(A) Immediately pay the player's Blackjack and remove the player's cards.
(B) Leave the player's cards on the table and not make a payment to the player. After all other cards are dealt to the players and the dealer reveals his hole card, the dealer shall pay the player's Blackjack and remove the player's cards.
(2) Does not have Blackjack, the player shall indicate whether he wishes to surrender, as permitted under § 633a.9 (relating to surrender), double down as permitted under § 633a.10 (relating to Double Down Wager), split pairs as permitted under § 633a.11 (relating to splitting pairs), stand or draw additional cards.
(j) As each player indicates his decision, the dealer shall deal face upwards whatever additional cards are necessary to effectuate the player's deceision.
* * * * * § 633a.9. Surrender.
(a) After the first two cards are dealt to the player, the player may elect to discontinue play on his hand for that round by surrendering 1/2 his wager. All decisions to surrender shall be made prior to the player indicating whether he wishes to double down as permitted under § 633a.10 (relating to Double Down Wager), split pairs as permitted under § 633a.11 (relating to splitting pairs), stand or draw. If the first card dealt to the dealer:
(1) Is not an ace or 10 value card, the dealer shall immediately collect 1/2 of the wager and return 1/2 to the player.
(2) Is an ace or 10 value card, the dealer will [place] either:
(A) Place the player's wager on top of the player's cards. When the dealer's second card is revealed, the hand will be settled by immediately collecting the entire wager if the dealer has Blackjack or collecting 1/2 of the wager and returning 1/2 of the wager to the player if the dealer does not have Blackjack. The player's cards shall then be collected.
(B) Immediately after utilizing the card reader device in accordance with § 633a.7(h) (relating to procedure for dealing the cards; completion of each round of play), the hand shall be settled by immediately collecting the entire wager if the dealer has Blackjack or collecting 1/2 of the wager and returning 1/2 of the wager to the player of the dealer does not have Blackjack. The player's cards shall then be collected.
(b) If the player has made an Insurance Wager and then elects to surrender, each wager will be settled separately in accordance with subsection (a) and § 633a.8 (relating to Insurance Wager).
CHAPTER 643a. LET IT RIDE POKER § 643a.12. Payout odds; payout limitation.
* * * * * (b) If a certificate holder offers the Five Card Bonus Wager, the certificate holder shall pay out winning Five Card Bonus Wagers at the amounts in one of the following paytables selected by the certificate holder in its Rules Submission filed in accordance with § 601a.2:
* * * * *
Hand Paytable D Paytable E Paytable F Paytable G Royal flush $10,000 $10,000 $10,000 $25,000 Straight flush $2,000 $2,000 $2,000 $2,500 Four-of-a-kind $200 $200 $100 $400 Full house $75 $100 $75 $200 Flush $50 $50 $50 $50 Straight $25 $25 $25 $25 Three-of-a-kind $5 $10 $9 $5 Two pair $4 $6 $6 Pair of tens, jacks, queens, kings or aces $1 $0 $0 * * * * *
CHAPTER 645a. PAI GOW POKER § 645a.5. Shuffle and cut of the cards; procedures for determining the starting position for dealing cards.
* * * * * (i) To determine the starting position for the dealing of cards, the certificate holder shall use one of the following:
* * * * * [(3) If an automated card shuffling device and dealing shoe are used under § 645a.10, a flat button to indicate the starting position. At the commencement of play, the button shall be placed in front of the dealer. Thereafter, the button shall rotate around the table in a clockwise manner after each round of play.]
(j) After the starting position for a round of play has been determined, a certificate holder may mark that position with an additional cover card or similar object approved in accordance with § 601a.10(a) (relating to approval of table game layouts, signage and equipment).
[Pa.B. Doc. No. 13-2151. Filed for public inspection November 15, 2013, 9:00 a.m.]
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