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Pennsylvania Online Regulation Analysis

13 October 2020

Regulatory Management Counselors, P.C.

Pennsylvania authorized interactive gaming (or, iGaming) in 20171, yet the first online casino was not launched until July 2019.2 The Pennsylvania Gaming Control Board (the Board) has regulatory oversight of interactive gaming in the Commonwealth, including licensing, testing devices, rulemaking, and other related duties.3

An interactive gaming certificate is required to conduct interactive gaming.4 The Board is permitted to issue a total of 39 interactive gaming certificates, including 13 certificates for peer-to-peer poker games, 13 certificates for non-peer-to-peer simulated slot machines, and 13 certificates for non-peer-to-peer simulated banked table games.5 The slot machine licensees licensed at the time of the enactment of Pennsylvania’s law authorizing interactive gaming (the Act), were given 120 days to apply for certificates before the application was opened to other applicants.6

After this initial period reserved for slot machine licensees, the application period was opened to qualified gaming entities (QGE). A QGE is “a gaming entity licensed in any jurisdiction which has satisfied the requirements of this chapter and any other criteria established by the board, including financial and character suitability requirements.”7

Statutory and Regulatory Structure for Internet and Mobile Gaming

Location of Operators and Equipment

The law requires that all interactive gaming devices and associated equipment be located: i) in an interactive gaming restricted area on the premises of the licensed facility; ii) in an interactive gaming restricted area within the geographic limits of the county in Pennsylvania where the licensed facility is located; or iii) in any other area approved by the Board.8

Location of Patrons

Pennsylvania law states that all wagers made through interactive gaming are deemed to be initiated, received, or otherwise made within the geographic boundaries of the Commonwealth.9 Wagers are deemed to be placed by the interactive gaming certificate holder.10

Patron Accounts

Players must first register for and establish an interactive gaming account before playing a game or placing a wager.11 The interactive gaming account must have the ability to verify the player’s age, identity, and physical address to ensure compliance with the Act.12 Persons excluded from registering for or maintaining an account include those under the age of 21, those on any self-exclusion or ejection list, and those who are gaming employees, key employees, or principal employees of a slot machine licensee or interactive gaming operator.13

Interactive Gaming Service Provider Certification

An Interactive Gaming Service Provider is a person who provides goods or services to an Interactive Gaming Certificateholder or Operator, who is not required to be licensed as a manufacturer, supplier, management company, or junket enterprise.14

Application

An applicant for an Interactive Gaming Service Provider Certification must submit to the Board a Certification Application and Disclosure form, along with the application fee of $500.15

In addition to submitting the form, an applicant will also have to do the following:

1. Submit applications and release authorizations for each individual required to be qualified under the Act;
2. Comply with the application requirements of the Act; and
3. Reimburse the Board for investigation costs incurred during the licensing process.16

An Interactive Gaming Service Provider Certification will not be issued until all fees and costs have been paid.17

In addition, individuals involved with the business-applicant are required to be qualified.18 The following individuals are required to submit a Pennsylvania Personal History Disclosure Form for qualification by the Board:

1. Officers and directors of an Interactive Gaming Service Provider or applicant thereof;
2. Each individual who has a direct or indirect ownership or beneficial interest of 10% or greater in the Interactive Gaming Service Provider or applicant;
3. Each salesperson of an Interactive Gaming Service Provider or applicant who solicits business from, or has regular contact with, any representatives of an Interactive Certificateholder or Interactive Gaming Operator, or any employee of a Certified Interactive Gaming Service Provider or applicant.19
4. Each entity that owns 20% or more of the voting securities of a Certified Interactive Gaming Provider must file a Certification Form – Private Holding Company with the Bureau of Licensing and found to be qualified by the Board.20

The Board may also require the following persons related to a Certified Interactive Gaming Service Provider or applicant to submit a Certification Form – Private Holding Company or a Pennsylvania Personal History Disclosure Form:

1. An intermediary or holding company;
2. An officer or director;
3. An employee;
4. A person who holds any direct or indirect ownership or beneficial interest, or has the rights to any profits or distribution, directly or indirectly; or
5. A trustee of a trust that is required to be found qualified under the Act.21

Duration

A license is valid for 5 years from the date of approval by the Board. Renewal applications should be filed at least 6 months prior to expiration of the current license. A license with a completed renewal application and fee will continue in effect until acted upon by the Board.22

Interactive Gaming Supplier License

An Interactive Gaming Supplier is a person who sells, leases, offers, or otherwise provides, distributes, or services an interactive gaming device or associated equipment for use or play of interactive games in Pennsylvania, including multiuse computing devices approved by the Board.23

Application

An applicant for an Interactive Gaming Supplier License must submit to the Board:

1. The Enterprise Entity Application and Disclosure Information Form;
2. A nonrefundable application fee of $5,000;
3. A diversity plan in accordance with Section 1325(b) of the Act and Chapter 481a;
4. An application from every key employee, principal, and other persons as determined by the Board;
5. An affirmation that neither the applicant nor any of its affiliates, intermediaries, subsidiaries, or holding companies is an applicant for or holder of a slot machine license, and that the applicant has neither applied for nor holds an Interactive Gaming Manufacturer license; and
6. A sworn or affirmed statement that the applicant has developed and implemented internal safeguards and policies to prevent a violation of the Act, and a copy of those safeguards and policies.24

The Board may also use an abbreviated licensing process for an applicant who already holds a license to manufacture slot machines, table games, table game devices, or associated equipment.25 All of the following must apply for the abbreviated process:

1. The license was issued within a 36-month period immediately preceding the date of application for an Interactive Gaming Supplier License;
2. The applicant affirms that there has been no material change in circumstances relating to the license;
3. The Board determines that there has been no material change in circumstances relating to the licensee that would not permit the abbreviated process to be used; and
4. The appropriate fees must still be paid by the applicant.26

Duration

A license is valid for 5 years from the date of approval by the Board. Renewal applications should be filed at least 6 months prior to expiration of the current license. A license with a completed renewal application and fee will continue in effect until acted upon by the Board.27

Interactive Gaming Manufacturer License

An Interactive Gaming Manufacturer is a person who manufactures, builds, rebuilds, fabricates, assembles, produces, programs, designs, or otherwise makes modifications to an authorized interactive game.28

Application

An applicant for an Interactive Gaming Manufacturer License must submit to the Board:

1. The Enterprise Entity Application and Disclosure Information Form;
2. A nonrefundable application fee of $5,000;
3. A diversity plan in accordance with Section 1325(b) of the Act and Chapter 481a;
4. An application from every key employee, principal, and other persons as determined by the Board;
5. An affirmation that neither the applicant nor any of its affiliates, intermediaries, subsidiaries, or holding companies is an applicant for or holder of a slot machine license, and that the applicant has neither applied for nor holds an Interactive Gaming Supplier license; and
6. A sworn or affirmed statement that the applicant has developed and implemented internal safeguards and policies to prevent a violation of the Act, and a copy of those safeguards and policies.29

The Board may also use an abbreviated licensing process for an applicant who already holds a license to manufacture slot machines, table games, table game devices, or associated equipment.30 All of the following must apply for the abbreviated process:

1. The license was issued within a 36-month period immediately preceding the date of application for an Interactive Gaming Manufacturer License;
2. The applicant affirms that there has been no material change in circumstances relating to the license;
3. The Board determines that there has been no material change in circumstances relating to the licensee that would not permit the abbreviated process to be used; and
4. The appropriate fees must still be paid by the applicant.31

Duration

A license is valid for 5 years from the date of approval by the Board. Renewal applications should be filed at least 6 months prior to expiration of the current license. A license with a completed renewal application and fee will continue in effect until acted upon by the Board.32

Interactive Gaming – General Resources

Those interested in learning more about interactive gaming in Pennsylvania should visit the Pennsylvania Gaming Control Board’s website for current application forms, proposed and final rules, and licensing updates.
14 Pa. Cons. Stat. 13B (2017).
2 https://www.onlinepokerreport.com/us/pa/.
34 Pa. Cons. Stat. 13B02 (2017).
4 Interactive Gaming Qualified Gaming Entity Licensing Process,” Pennsylvania Gaming Control Board.
5 Interactive Gaming Qualified Gaming Entity Licensing Process,” Pennsylvania Gaming Control Board.
6 Interactive Gaming Qualified Gaming Entity Licensing Process,” Pennsylvania Gaming Control Board.
7 Interactive Gaming Qualified Gaming Entity Licensing Process,” Pennsylvania Gaming Control Board.
84 Pa. Cons. Stat. 13B31(b) (2017).
94 Pa. Cons. Stat. 13B21 (2017).
104 Pa. Cons. Stat. 13B31(b) (2017).
114 Pa. Cons. Stat. 13B22(a) (2017).
124 Pa. Cons. Stat. 13B22(b) (2017).
134 Pa. Cons. Stat. 13B22(f) (2017).
14Title 58, Part VII, Subpart L § 801a.2 (2018).
15Title 58, Part VII, Subpart L § 807a.2 (2018).
16Title 58, Part VII, Subpart L § 807a.2 (2018).
17Title 58, Part VII, Subpart L § 807a.2 (2018).
18Title 58, Part VII, Subpart L § 807a.4 (2018).
19Title 58, Part VII, Subpart L § 807a.4 (2018).
20Title 58, Part VII, Subpart L § 807a.4 (2018).
21Title 58, Part VII, Subpart L § 807a.4 (2018).
22 Title 58, Part VII, Subpart L § 807a.5 (2018); “Registration Form,”.
23Title 58, Part VII, Subpart L § 801a.2 (2018).
24Title 58, Part VII, Subpart L § 806a.2 (2018).
25Title 58, Part VII, Subpart L § 805a.4 (2018).
26Title 58, Part VII, Subpart L § 806a.4 (2018).
27Title 58, Part VII, Subpart L § 806a.3 (2018).
28Title 58, Part VII, Subpart L § 801a.2 (2018).
29Title 58, Part VII, Subpart L § 805a.2 (2018).
30Title 58, Part VII, Subpart L § 805a.4 (2018).
31Title 58, Part VII, Subpart L § 805a.4 (2018).
32Title 58, Part VII, Subpart L § 805a.3 (2018).

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