CHAPTER 1114. ACCOUNTING AND INTERNAL CONTROLSTEMPORARY REGULATIONS
1114.1. Video gaming accounting and internal controls.
§ 1114.1. Video gaming accounting and internal controls.
(a) At least 90 days before the commencement of video gaming, a terminal operator licensee or an applicant for a terminal operator license shall submit to the Board for approval all internal control systems and audit protocols for the video gaming operations.
(b) A terminal operator licensees internal controls and audit protocols must include all of the following:
(1) Provide for reliable records, accounts and reports of any financial event that occurs in the conduct of video gaming, including reports to the Board related to video gaming.
(2) Provide for accurate and reliable financial records related to the conduct of video gaming.
(3) Establish procedures and security for the recordation of wagering, winnings, gross terminal revenue and taxation.
(4) Establish procedures and security standards for the maintenance of video gaming terminals and associated equipment used in connection with the conduct of video gaming.
(5) Establish procedures and rules to govern the conduct of video gaming and the responsibility of employees related to video gaming.
(6) Establish procedures for the collection, recording and deposit of revenue from the conduct of video gaming.
(7) Establish reporting procedures and records required to ensure that all money generated from video gaming is accounted for.
(8) Ensure that all functions, duties and responsibilities related to video gaming are appropriately segregated and performed in accordance with sound financial practices by qualified employees.
(9) Permit access to the establishment licensee premises and terminal operator premises used in connection with video gaming for the Board, the Bureau, the Department and the Pennsylvania State Police to facilitate the ability to perform regulatory oversight and law enforcement functions, respectively.
(c) The submission required under subsection (a) must include a detailed description of the terminal operators administrative and accounting procedures related to video gaming, including its written system of internal controls, each written system of internal controls must include:
(1) An organizational chart depicting appropriate functions and responsibilities of employees involved in video gaming.
(2) A description of the duties and responsibilities of each position shown on the organizational chart.
(3) The record retention policy of the terminal operator.
(4) The procedure to be utilized to ensure that money generated from the conduct of video gaming is safeguarded, including mandatory counting and recording procedures.
(5) The procedures and controls for ensuring that video gaming terminals directly provide and communicate all required activities and financial details to the central control computer system as established by the Board.
(6) Procedures to ensure that recorded accountability for assets is compared with actual assets at intervals required by the Board and appropriate action is taken with respect to discrepancies.
(7) Procedures to be utilized by an employee of a terminal operator and establishment licensee in the event of a malfunction of a video gaming terminal that fails to dispense a redemption ticket, or of a redemption terminal which fails to dispense cash upon redemption of the ticket.
(8) Procedures to be utilized by an establishment to prevent minors from entering the video gaming area, which include acceptable documentation relating to proof of age and the examination of these documents by a responsible employee.
(9) Other items the Board may request in writing to be included in the internal controls.
(d) Prior to authorizing a terminal operator licensee to commence the conduct of video gaming, the Board will review the system of internal controls and audit protocols submitted under subsection (a) to determine whether it conforms to the requirements in this chapter and whether it provides adequate and effective controls for the conduct of video gaming.
(e) If a terminal operator licensee intends to make a change or amendment to its system of internal controls, it shall submit the change or amendment electronically to the Bureau of Gaming Operations in a manner prescribed by the Bureau of Gaming Operations. The terminal operator licensee may implement the change or amendment on the 30th calendar day following the filing of a complete submission unless the terminal operator licensee receives written notice tolling the change or amendment in accordance with subsection (g) or written notice from the Boards Executive Director rejecting the change or amendment.
(f) If during the 30-day review period in subsection (e), the Bureau of Gaming Operations preliminarily determines that a procedure in a submission contains an insufficiency likely to negatively affect the integrity of video gaming or the control of revenue generated from video gaming, the Bureau of Gaming Operations, by written notice to the terminal operator licensee, will do all of the following:
(1) Specify the nature of the insufficiency and, when possible, an acceptable alternative procedure.
(2) Direct that the 30-calendar day review period in subsection (e) be tolled and that any internal controls at issue not be implemented until approved under subsection (i).
(g) Examples of submissions that may contain an insufficiency likely to negatively affect the integrity of video gaming include the following:
(1) Submissions that fail to provide information sufficient to permit the review of video gaming.
(2) Submissions that fail to provide for the segregation of incompatible functions so that an employee is not in a position to commit an error or perpetrate a fraud and conceal the error or fraud in the normal course of the employees duties.
(3) Submissions that do not include forms or other materials referenced in the submission or required under 4 Pa.C.S. (relating to amusements) or this part.
(4) Submissions that would implement operations or accounting procedures not authorized by 4 Pa.C.S. (relating to amusements) or this part.
(5) Submissions that are dependent upon the use of equipment or related devices or software not approved by the Board unless the submissions are required as part of an authorized test of the equipment or related device or software.
(h) Whenever a change or amendment has been tolled under subsection (f), the terminal operator licensee may submit a revised change or amendment within 30 days of receipt of the written notice from the Bureau of Gaming Operations. The terminal operator licensee may implement the revised change or amendment upon receipt of written notice of approval from the Boards Executive Director or on the 30th calendar day following the filing of the revision unless the terminal operator licensee receives written notice tolling the change or amendment in accordance with subsection (f) or written notice from the Boards Executive Director rejecting the change or amendment.
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