Pennsylvania Code & Bulletin
COMMONWEALTH OF PENNSYLVANIA

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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 51 Pa.B. 1118 (February 27, 2021).

58 Pa. Code § 441a.17. Change in ownership or control of slot machine licensee and multiple slot machine license prohibition.

§ 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 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 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)  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).

 (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%.

 (h)  Nothing in subsection (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.

 (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 (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.

 (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.

Authority

   The provisions of this §  441a.17 amended under 4 Pa.C.S. § §  1202(b)(9)—(23), 1205, 1206(f) and (g), 1207(1) and (2), 1208(1)(iii), 1209(b), 1212, 1213, 13A11, 13A12—13A14, 13A15 and 1802 and Chapter 13.

Source

   The provisions of this §  441a.17 amended June 12, 2015, effective June 13, 2015, 45 Pa.B. 2829. Immediately preceding text appears at serial pages (367903) to (367904).

Cross References

   T his section cited in 58 Pa. Code §  440a.5 (relating to management contracts).



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