Pennsylvania Act 2012-184 — LOCAL OPTION SMALL GAMES OF CHANCE ACT - OMNIBUS AMENDMENTS

Act text

Session of 2012

No. 2012-184

SB 444

AN ACT

Amending the act of December 19, 1988 (P.L.1262, No.156), entitled, as amended, "An act providing for the licensing of eligible organizations to conduct games of chance, for the licensing of persons to distribute games of chance, for the registration of manufacturers of games of chance, and for suspensions and revocations of licenses and permits; requiring records; providing for local referendum by electorate; and prescribing penalties," further providing for definitions and for games of chance permitted; providing for major league sports drawing; further providing for registration of manufacturers, for regulations and for licensing of eligible organizations to conduct games of chance; providing for applicability; and further providing for enforcement.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1. The definitions of "eligible organization" and "games of chance" in section 103 of the act of December 19, 1988 (P.L.1262, No.156), known as the Local Option Small Games of Chance Act, renumbered and amended February 2, 2012 (P.L.7, No.2), are amended and the section is amended by adding definitions to read:

Section 103. Definitions.

The following words and phrases when used in this act shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"50/50 drawing." A game in which:

(1) A participant buys a ticket for a chance to win a prize where the winner is determined by a random drawing of corresponding tickets sold for that drawing.

(2) The prize paid to the winner is comprised of one-half of the money collected from tickets from the drawing and the remaining money retained by the eligible organization for distribution in accordance with this act.

"Affiliated nonprofit organization." An organization established by or affiliated with a Major League Baseball, National Hockey League, National Basketball Association or Major League Soccer team for the purpose of raising funds for charity, which is qualified for an exemption under section 501(c)(3) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 101(c)(3)).

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"Eligible organization." A charitable, religious, fraternal or veterans' organization, club, club licensee or civic and service association. In order to qualify as an eligible organization for purposes of this act, an organization shall have been in existence and fulfilling its purposes for one year prior to the date of application for a license. The term shall include an affiliated nonprofit organization licensed under section 307.

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"Games of chance." Punchboards, daily drawings, weekly drawings, 50/50 drawings, raffles and pull-tabs, as defined in this act, provided that no such game shall be played by or with the assistance of any mechanical or electrical devices or media other than a dispensing machine or passive selection device and further provided that the particular chance taken by any person in any such game shall not be made contingent upon any other occurrence or the winning of any other contest, but shall be determined solely at the discretion of the purchaser. This definition shall not be construed to authorize any other form of gambling currently prohibited under any provision of Title 18 of the Pennsylvania Consolidated Statutes (relating to crimes and offenses) or authorized under 4 Pa.C.S. (relating to amusements). Nothing in this act shall be construed to authorize games commonly known as "slot machines" or "video poker."

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"Major league sports drawing." A 50/50 drawing conducted by an affiliated nonprofit organization at a home game of a major league sports team in which 50% of the money collected from ticket sales from the drawing are offered as the prize and the remaining 50% is retained by the affiliated nonprofit organization sponsoring the drawing for distribution to charitable organizations.

"Major league sports team." A professional team that is a member of Major League Baseball, the National Hockey League, the National Basketball Association or Major League Soccer.

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Section 2. Section 301 of the act, renumbered and amended February 2, 2012 (P.L.7, No.2), is amended to read:

Section 301. Games of chance permitted.

Every eligible organization to which a license has been issued under the provisions of this chapter may conduct games of chance for the purpose of raising funds for public interest purposes. Except as provided in Chapter 5, all proceeds of a licensed eligible organization shall be used exclusively for public interest purposes [or] , for the purchase of games of chance [as permitted] , for the payment of the license fee or for the payment of the fee for background checks, as required by this act.

Section 3. The act is amended by adding a section to read:

Section 304.1. Major league sports drawing.

(a) General rule.--A person may purchase one or more major league sports drawing tickets at a home game, and each ticket purchased shall represent one entry in the drawing for a winner. A single ticket shall be randomly chosen as the winner after a certain number of tickets are sold or a specified time period expires as designated by the affiliated nonprofit organization.

(b) Frequency.--An affiliated nonprofit organization may conduct no more than one major league sports drawing per home game.

(b.1) Sales restricted.--Tickets for a major league sports drawing may not be sold in any seating area designated as a family section.

(c) Distribution.--The prize amount of a major league sports drawing shall be 50% of the total amount collected from the sale of major league sports drawing tickets. The other 50% of the total amount collected from the sale of major league sports drawing tickets shall be donated within seven days from the date of the drawing by the affiliated nonprofit organization conducting the major league sports drawing to a designated charitable organization for which the drawing was conducted.

(d) Designated charitable organization.--The affiliated nonprofit organization conducting the major league sports drawing shall disclose to all ticket purchasers the designated charitable organization for which the major league sports drawing is being conducted.

(e) Eligibility.--In order to receive proceeds from a major league sports drawing, a charitable organization must be in existence and fulfilling its purposes for at least two years prior to the drawing and shall be eligible for exemption under section 501(c)(3) of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3)). A political subdivision shall not qualify as a charitable organization under this section.

(f) Unclaimed prizes.--Any major league baseball sports drawing prize remaining unclaimed by a winner at the end of the major league sports team's season shall be donated within 30 days from the end of the season by the affiliated nonprofit organization to the designated charitable organization for which the major league sports drawing was conducted.

(g) Applicability.--The limitations under sections 302, 303(b), 308 and 704 shall not apply to a major league sports drawing.

Section 4. Sections 305, 306 and 307(b.1), (d)(6) and (h) of the act, renumbered and amended February 2, 2012 (P.L.7, No.2), are amended to read:

Section 305. Registration of manufacturers.

(a) Registration required.--No manufacturer of games of chance shall sell any games of chance to any person unless the manufacturer has registered with the department and has been issued a certificate of registration.

(b) Annual certificate; fee.--A certificate under this section shall be valid for one year. The annual fee for registration shall be $2,000.

(c) Prohibited sales.--A manufacturer shall not sell games of chance to any person not licensed as a distributor unless the manufacturer is also a licensed distributor.

(d) Exception.--This section shall not apply to the manufacture or distribution of raffle tickets , 50/50 drawings, daily drawings or weekly drawings .

Section 306. Regulations of department.

(a) Authorization.--The department shall promulgate regulations to:

(1) Impose minimum standards and restrictions applicable to games of chance manufactured for sale in this Commonwealth, which may include standards and restrictions which specify the maximum number of chances available to be sold for any single game of chance or prize and such other standards and restrictions as the department deems necessary for the purposes of this chapter. The department shall consider standards adopted by the National Association of Gambling Regulatory Agencies and other standards commonly accepted in the industry.

(2) Establish procedures by which manufacturers may register and distributors of games of chance may apply for licensure on forms which the department shall provide. Procedures shall include a requirement that manufacturer and distributor applicants provide criminal history record information obtained from the Pennsylvania State Police under 18 Pa.C.S. § 9121(b) (relating to general regulations) for each officer and manager of the manufacturer's or distributor's organization and for any other individual specified by the department. As used in this paragraph, the term "criminal history record information" has the meaning given in 18 Pa.C.S. § 9102 (relating to definitions).

(3) Provide for the suspension or revocation of distribution licenses or manufacturer certificates for violations of this act or regulations of the department.

(4) Carry out other provisions of this act.

(b) Limitation on recordkeeping requirements.--This section shall not be construed to authorize the department to promulgate regulations providing for recordkeeping requirements for licensed eligible organizations which require unreasonable or unnecessary information or a repetitious listing of information. The department shall strive to keep such recordkeeping requirements from being an undue hardship or burden on licensed eligible organizations. Except as provided under section 701(b), the department may not require the retention of records for a period in excess of two years.

(c) Reporting requirements.--Each eligible organization which has proceeds in excess of $2,500 in a calendar year shall submit an annual report to the department including:

(1) Prizes awarded as required under section 335 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.

(2) Amounts expended for public interest purposes.

Section 307. Licensing of eligible organizations to conduct games of chance.

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(b.1) Location of games of chance.--

(1) [Every] Except as otherwise provided in this section, a licensed eligible organization, except a limited occasion licensee, may conduct small games of chance [only] at a licensed premises. The licensed premises shall be indicated on the eligible organization's license application. Only one license shall be issued per licensed premises. Except as provided under paragraph (4), a licensed eligible organization may not share a licensed premises with another licensed eligible organization; and no licensed eligible organization may permit its premises to be used for small games of chance by another licensed eligible organization.

(2) Where there exists a location or premises which is the normal business or operating site of the eligible organization and the location or premises is owned or leased by that eligible organization to conduct its normal business, that site shall be the eligible organization's licensed premises. If that location consists of more than one building, the eligible organization shall [choose] identify the building that will be designated as the licensed premises.

(3) When an eligible organization does not own or lease a specific location to conduct its normal business, the eligible organization may make arrangements that are consistent with this act to establish a licensed premises, including leasing a premise under a written agreement for a rental; however, the rental may not be determined by either the amount of receipts realized from the conduct of games of chance or the number of people attending. An eligible organization may lease a facility for a banquet in connection with the serving of a meal based on a per-head charge.

(3.1) Notwithstanding paragraphs (1), (2) and (3), if an eligible organization is unable to conduct games of chance at the location listed on its application and license due to natural disaster, fire or other circumstance that renders the location unusable, the eligible organization may submit a written request to the district attorney to conduct games of chance in a different location, including the licensed premises of another eligible organization. The request must include the change in the location and the dates and times the games of chance will be operated at the alternative location. The district attorney shall establish a limit on the duration of the authorization to conduct games of chance at the alternative location. Following the expiration of the authorization period, the eligible organization must return to the location specified in its application and license or apply to the licensing authority for a new permanent location for the conduct of games of chance. The district attorney may approve or deny the request or stipulate additional requirements as a condition of approval. If an eligible organization permits another eligible organization to use its licensed premises to conduct games of chance under this paragraph, the eligible organization shall cease its operation of games of chance during the time the eligible organization utilizing its premises is conducting its games of chance.

(3.2) Notwithstanding paragraphs (1), (2) and (3), the following eligible organizations established to raise funds shall not be required to conduct a 50/50 drawing or a raffle at a licensed premises or to own, lease or establish a licensed premises:

(i) A nonprofit sports team.

(ii) A primary or secondary school-sponsored club, sports team or organization.

(4) An eligible organization that has obtained a limited occasion license under subsection (b.3) may use another eligible organization's licensed premises to conduct its games of chance. When a licensed eligible organization is permitting a limited occasion licensee to use its licensed premises for purposes of games of chance, it shall cease the operation of its own games of chance during the period that the limited occasion licensee is conducting its games on the premises.

(5) For purposes of major league sports drawings, the facility at which a major league sports team conducts its games shall constitute a premises for purposes of this act.

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(d) Operation.--Each licensed eligible organization shall be prohibited from the following:

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(6) Purchasing games of chance, other than raffles, 50/50 drawings, daily drawings and weekly drawings, from any person other than a registered manufacturer or licensed distributor approved by the department.

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(h) Background checks.--Each application for a license submitted by an eligible organization which has proceeds in excess of $2,500 in a year shall include the results of a criminal history record information check obtained from the Pennsylvania State Police, as defined in 18 Pa.C.S. § 9102 (relating to definitions) and permitted by 18 Pa.C.S. § 9121(b) (relating to general regulations), for the executive officer and secretary of the eligible organization making the application for a license or any other person required by the department.

Section 5. The act is amended by adding a section to read:

Section 506. Applicability.

This chapter shall only apply to eligible organizations that have a club license.

Section 6. Section 702(b) of the act, renumbered and amended February 2, 2012 (P.L.7, No.2), is amended to read:

Section 702. Enforcement.

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(b) Bureau of Liquor Control Enforcement.--If the licensee is a club licensee, the Bureau of Liquor Control Enforcement may enforce the provisions of this act in accordance with subsection (g) . An administrative law judge under section 212 of the act of April 12, 1951 (P.L.90, No.21), known as the Liquor Code, may impose the penalties under subsection (d) following the issuance of a citation by the bureau.

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Section 7. This act shall take effect in 60 days.

APPROVED--The 24th day of October, A.D. 2012.

TOM CORBETT