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Bullet Points on Table Games

License Fee:
The license fee for Category 1 and Category 2 licensed facilities is $16.5
Million.

The license fee for Category 3 licensed facilities is $7.5 Million.

Tax Rate:
The tax rate is 14% (plus 2% local share assessment) for the first 2 years of
table game operations at each licensed facility; thereafter the tax rate is 12% (plus
2% local share assessment). In addition to this tax rate, there is an additional tax
of 34% on gross table game revenue derived from table games played on fully
automated electronic gaming tables.

Number of Tables:
Category 1 and Category 2 licensed facilities may be authorized to operate
up to 250 gaming tables, no more than 30% of which may be used to conduct non-
banking games at any one time.

Category 3 licensed facilities may be authorized to operate up to 50 gaming


tables, no more than 30% of which may be used to conduct non-banking games at
any one time.

Application period opened:


The PGCB is directed to “open up” the application period for the currently
available Category 3 slot machine license to allow additional applicants to compete
for this license.

New license created:


An additional Category 3 license is created effective July 20, 2017 provided
all Category 3 licenses authorized under current law are issued and operational on
that date. If this is not the case on July 20, 2017, the new license is created when
the Board reports that all Category 3 licenses authorized under current law are
issued and operational.

Tournaments authorized:
Licensed facilities are authorized to conduct table game tournaments at any
time so long as the tournaments do not involve more gaming tables than the
number of nonbanking gaming tables authorized at the facility. In addition,
Category 1 and Category 2 facilities can submit a tournament schedule to the
PGCB for approval and these tournaments can use an unlimited number of gaming
tables; Category 3 licensed facilities may obtain approval for an additional 15
gaming tables for tournament play one day per month.
Summary of Conference Committee Report on Senate Bill
711
REFORM PROVISIONS:

Political contributions:

The legislative intent section of the act is amended to address the recent
Pennsylvania Supreme Court case holding the prohibition on political contributions
inapplicable to certain applicants/licensees. The section is amended to clarify that it is the
intent of the General Assembly to prohibit ALL campaign contributions from applicants,
licensees and other entities involved in gaming.

Felony ban imposed:

Lifetime ban: Any individual convicted of a felony offense in any jurisdiction is


prohibited for life from being licensed as a principal (owner) or as a key employee (top
management).

15 year ban: Any individual convicted of misdemeanor gambling offense in any


jurisdiction is prohibited for being licensed as a principal or key employee.

The board would also be prohibited from issuing a gaming employee permit or a
license (other than a principal or key employee license) to an individual convicted in any
jurisdiction for a felony offense or a misdemeanor gambling offense within 15 years.

Disclosure of information:

All applicants for a license or permit to disclose all arrests and citations issued for
non-traffic summary offenses. In addition, all applicants must include in their applications
all convictions that were expunged, overturned, pardoned or for which an order or ARD
was issued. The PGCB would be required to consider such information as part of its review
of an applicant’s suitability for licensure.

Employment Prohibitions/Restrictions:

Gaming Control Board:

Members of the board would be prohibited from holding outside employment if the
salary or compensation exceeded 15% of the member’s gross annual salary.

Employees of the board, independent contractors and their employees whose duties
involve the regulation of gaming would be prohibited from accepting employment with an
applicant or licensed entity for 2 years following termination of employment or the
contract with the board.

Other regulators:
Employees of the Department of Revenue, the Office of Attorney General, and the
State Police whose job duties involve the regulation of gaming would also be subject to the
employment prohibitions/restrictions.

Powers and duties of PGCB:

The gaming control board would be prohibited from hiring an individual to serve as
ED, chief counsel, director of the Bureau of Investigation and Enforcement, and director of
the Office of Enforcement Counsel before receiving the Pennsylvania State Police
background investigation report.

The gaming control board would be given the authority to appoint a trustee to
supervise the operations of a suspended or revoked slot machine licensee or principal.

The gaming control board would be required to convene at least one public input
hearing before approving or renewing a slot machine license, awarding a table game
operation certificate, and before approving the structural redesign of a licensed facility in
Philadelphia.

Ex parte communications:

The ex parte communications provisions of current law are clarified to provide a


process to govern the disclosure of such communications between board members and
certain employees of the board.

Specific information submitted by an applicant for a license would be made


confidential, including personal, financial, proprietary, security information, and nonpublic
information.

Current and former gaming control board members and their employees,
independent contractors and their employees and members and employees of the
Pennsylvania State Police, the Department of Revenue and the Office of Attorney General
would be prohibited from publicly disclosing confidential information.

The unlawful disclosure of confidential information would be a misdemeanor or the


3rd degree.

Diversity:

Diversity provisions are expanded to ensure that contracts and subcontracts


awarded for construction, renovation and reconstruction of a licensed facility, and that
professional services rendered to licensed entities contain provisions that promote t he
participation of divers groups and afford equal access to employment opportunities and
professional service contractual opportunities.
Requires slot machine licenses to report to the board each quarter all activities
undertaken in support of their facility’s diversity plan and requires that the PGCB conduct
annual reviews of each slot machine licensee’s activities.

Reports:

Requires the board to include table game information in their annual report to the
General Assembly, including gross table game revenue, number and win by type of game
at each facility, and all taxes, fees, fines and revenues collected.

Requires DCED to submit an annual report of all distributions from the Pennsylvania
Gaming Economic Development and Tourism Fund. Requires municipalities that received
money from the fund pursuant to an Economic Development Capital Budget Itemization
Act to submit an annual report of expenditures and payments each year.

TABLE GAME PROVISIONS:

Authorizes the conduct of table games in the Commonwealth.

License Fees:

A Category 1 and Category 2 slot machine licensed facility must pay a $16.5 Million
licensing fee for the privilege of conducting table game operations at its licensed facility.
If the fee is not paid in full on or before June 1, 2010, the PGCB shall impose a penalty and
may grant the certificate holder an additional 6 months to pay all sums due. If a Category
1 or Category 2 slot machine licensee files their petition for a table game operation
certificate AFTER June 1, 2010, the fee increases to $24.75 Million.

A Category 3 slot machine licensed facility must pay a $7.5 Million licensing fee for
the privilege of conducting table game operations at its licensed facility. If the fee is not
paid in full on or before June 1, 2010, the PGCB shall impose a penalty and may grant the
certificate holder an additional 6 months to pay all sums due. If awarded a table game
operation certificate, this fee includes authorization to add an additional 100 slot
machines. If a Category 3 slot machine licensee files their petition for a table game
operation certificate AFTER June 1, 2010, the fee increases to $11.25 Million.

Tax rate:

For a period of 2 years following the start of table games at a licensed facility the
tax rate is 14% of gross table game revenue generated at that licensed facility. 2 years
after the start of table games at a licensed facility the tax rate is 12% of gross table game
revenue for that licensed facility.

The tax rate on gross table game revenue derived from table games played on a
fully automated gaming table is an additional 34% of gross table game revenue derived
from play on these tables (48% total for the first 2 years and 46% total thereafter). A fully
automated gaming table is a gaming table on which a table game is played without the
required interaction of a gaming employee.

Deposit of Table Game Funds:


All fees, fines, penalties and taxes related to table games shall be deposited into
the General Fund for use by the Commonwealth until the Secretary of the Budget certifies
that the balance in the Rainy Day Fund has reached $750 Million at which time all such
funds shall be deposited into the Property Tax Relief Fund.

Local share:

In addition to the tax paid on gross table game revenue, each licensed facility will
pay a 2% local share assessment (1% county share; 1% municipal share) which is
distributed according to Section 1363A.

Number of gaming tables:

Category 1 and Category 2 licensed facilities may be initially authorized to place


250 gaming tables on the licensed facility’s gaming floor, no more than 30% of which can
be non-banking game at any one time. A non-banking game is a table game in which the
players compete amongst each other rather than against the house. After 6 months, a Cat
1 or Cat 2 slot machine licensee that holds a table game operation certificate can seek
board permission to increase the number of gaming tables at its licensed facility.

Category 3 licensed facilities may be authorized to place 50 gaming tables on the


licensed facility’s gaming floor, no more than 15 of which can be non-banking at any one
time.

Table game tournaments:

All licensed facilities can conduct table game tournaments whenever they want
provided they don’t exceed the maximum permissible number of non-banking gaming
tables authorized at their facility.

In addition, Cat 1 and Cat 2 licensed facilities may obtain authorization from the
board to increase the number of gaming tables for tournament play. One day each
month, a Cat 3 licensed facility may obtain authorization from the board for an additional
15 gaming tables for tournament play.

Slot machine licenses:

The PGCB would be required to accept additional applications for the currently
available Category 3 slot machine license.

An additional Category 3 slot machine license would be created after July 20, 2017,
if all available Category 3 licenses are awarded and the Category 3 licensed facilities are
conducting slot machine operations.

The PGCB is authorized to allow a Category 1 and Category 2 slot machine licensee
up to the later of 36 months or December 31, 2012, to make 1500 slot machines available
for play following the initial one period following licensure.

The amount that each slot machine licensee must maintain in the regulatory
assessment accounts established under section 1401 is reduced. For Category 1 and
Category 2 licensees the amount is reduced from $5 Million to $1.5 Million and for
Category 3 licensees the amount is reduced from $5 Million to $1 Million.

Prohibits a slot machine licensee who holds a table game operation certificate from
permanently removing slot machines in order to make room for gaming tables. Requires
that each slot machine licensee maintain the same number of slot machines in play as it
had in play on October 1, 2009. Permits, with board approval, 2% reductions in the
number of slot machines and also temporary reductions in the number of slot machines for
construction/renovation and for emergencies. Category 1 and Category 2 licensed
facilities may never have less than 1500 slot machines in operation and Category 3
licensed facilities may never have less than 250 slot machines in operation.

Provides a statutory framework and criteria for the PGCB to approve a requested
relocation of a licensed facility within the county where the facility was originally located.

A Category 3 slot machine licensee that holds a table game operation certificate
may operate up to 600 slot machines at its licensed facility.

Manufacturers and Suppliers:

Manufacturers and Suppliers would be required to pay the required fee and obtain
a license to manufacture or supply table game devices and associated equipment related
to the conduct of table games. A slot machine license will not permit the manufacture or
sale of table games devices and associated equipment.

Residency Requirements:

Establishes as a goal that 85% of the table game employees of a licensed facility be
residents of the Commonwealth within 3 years of the commencement of table game
operations at the licensed facility.

Credit:

Slot machine licensees that hold a table game operation certificate may extend
casino credit to players. Credit extended must be interest free and unsecured. Credit
card advances and debit cards are prohibited.

Junkets:

Includes statutory provisions requiring the PGCB to regulate gaming junket


enterprises.

MISCELLANEOUS PROVISIONS:

Temporary regulations:
The PGCB is authorized to adopt temporary regulation to facilitate the prompt
implementation of table game operations at licensed slot machine facilities.

Gaming Schools:

Department of Labor and Industry will develop curriculum guidelines to govern


gaming school instruction to ensure that graduates acquire skills necessary to secure
employment with a licensed entity.

Airport funds:

Provides that all money designated from the Pennsylvania Economic Development
and Tourism Fund to the Pittsburgh airport be distributed directly to the airport.

Clean Indoor Air Act:

Provides that the provisions of the Clean Indoor Air Act shall apply to the conduct of
table games at ALL licensed facilities in this Commonwealth.

Liquor Code:

Licensed facilities are exempted from the “three strikes penalties” of the liquor
code but will be subject to higher financial penalties for any violations of the code.

Transfers:

Horseman Funds: Transfers approximately $40 Million from the Race Horse
Development Fund to the General Fund for 4 consecutive years. The transfers are part of
the budget agreement.

Law Enforcement Funds: Transfers approximately $12 Million in unused funds from
the law enforcement grant funds to the General Fund. $2 Million annually is maintained
for law enforcement grants to local law enforcement. Permitted uses of these funds are
expanded to include enforcement of all laws related to illegal gambling and the
Pennsylvania State Police are permitted to apply in areas where they provide primary law
enforcement.

Compulsive and Problem Gambling: Transfers $3 Million annually from the State
Gaming Fund to the Department of Health for compulsive gambling and drug and alcohol
treatment. No less than 50% of these funds are to be made available to single county
authorities each year.

Appropriations:

A supplemental appropriation of $2.1 Million is made to the PGCB to implement


table games.

Effective Date and Applicability:

Certain provisions relating to economic development funding in the City of


Pittsburgh are effective January 1, 2011. The remainder of the Act is effective
immediately. Provisions transferring revenue from the Race Horse Development Fund to
the General Fund are applicable beginning January 1, 2010.