Presented by the Pennsylvania State Police Bureau of Liquor Control Enforcement

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Presented by the

Pennsylvania State PoliceBureau of Liquor Control

Enforcement

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OVERVIEWOVERVIEW

• GamblingGambling– DefinitionDefinition– Legal vs. Illegal GamblingLegal vs. Illegal Gambling

• Small Games of Chance ActSmall Games of Chance Act– ApplicationApplication– Permitted GamesPermitted Games– Use of ProceedsUse of Proceeds– Prize LimitsPrize Limits

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OVERVIEWOVERVIEW(CONTINUED)(CONTINUED)

• Small Games of Chance Act Small Games of Chance Act (CONTINUED)(CONTINUED)

– Discussion of Individual GamesDiscussion of Individual Games– Licensed Premises and Location of GamesLicensed Premises and Location of Games– Gambling in P.L.C.B. licensed Gambling in P.L.C.B. licensed

establishmentsestablishments– Record Keeping/Reporting RequirementsRecord Keeping/Reporting Requirements– EnforcementEnforcement– PenaltiesPenalties

• QUESTION AND ANSWER PERIODQUESTION AND ANSWER PERIOD

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GAMBLINGGAMBLING

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GAMBLINGGAMBLING

• What activities constitute What activities constitute “gambling?”“gambling?”

• Gambling is not specifically defined Gambling is not specifically defined by Statute in Pennsylvaniaby Statute in Pennsylvania

• Instead we must to refer to Instead we must to refer to Commonwealth Court Decisions to Commonwealth Court Decisions to define gamblingdefine gambling

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GAMBLINGGAMBLINGTHE PENNSYLVANIA COURTS HAVE THE PENNSYLVANIA COURTS HAVE DETERMINED THAT GAMBLING DETERMINED THAT GAMBLING CONSISTS OF THREE BASIC ELEMENTS:CONSISTS OF THREE BASIC ELEMENTS:(PLCB V. PPC CIRCUS BAR, INC.)(PLCB V. PPC CIRCUS BAR, INC.)

CONSIDERATIONCONSIDERATION + + CHANCECHANCE ++ REWARD =REWARD =

GAMBLINGAMBLINGG

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ELEMENTS OF GAMBLINGELEMENTS OF GAMBLING• Let’s look at each of the three Let’s look at each of the three

elements individually:elements individually:

– ConsiderationConsideration– ChanceChance– RewardReward

All three elements All three elements mustmust be present to be present to establish that an activity constitutes establish that an activity constitutes gambling. gambling.

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CONSIDERATIONCONSIDERATION• COST TO BEGIN PLAY OR EVENTCOST TO BEGIN PLAY OR EVENT

– BETBET– WAGERWAGER

• EXAMPLESEXAMPLES– BLOCK PURCHASE IN POOLBLOCK PURCHASE IN POOL– ““BUY-IN” IN POKER TOURNAMENT BUY-IN” IN POKER TOURNAMENT – PURCHASE OF PULL TABPURCHASE OF PULL TAB– MONEY IN SLOT MACHINEMONEY IN SLOT MACHINE

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CHANCECHANCE• EVENT OUTCOME BASED WHOLLY OR EVENT OUTCOME BASED WHOLLY OR

PREDOMINANTLY ON CHANCEPREDOMINANTLY ON CHANCE– LITTLE OR NO SKILLLITTLE OR NO SKILL

• EXAMPLESEXAMPLES– ROLL OF DICE OR TURN OF CARDROLL OF DICE OR TURN OF CARD– RESULT OF RACE OR SPORTING EVENTRESULT OF RACE OR SPORTING EVENT

• SKILLSKILL– TO BE CONSIDERED A SKILL, A PERSON TO BE CONSIDERED A SKILL, A PERSON

WOULD HAVE TO BE ABLE TO MASTER THE WOULD HAVE TO BE ABLE TO MASTER THE GAMEGAME• DARTS, BILLIARDS, ETC.DARTS, BILLIARDS, ETC.• PLAYING POKER MAY INVOLVE SOME SKILL OR PLAYING POKER MAY INVOLVE SOME SKILL OR

KNOWLEDGE, HOWEVER THE CARDS ARE STILL KNOWLEDGE, HOWEVER THE CARDS ARE STILL DEALT RANDOMLYDEALT RANDOMLY

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REWARDREWARD• RETURN TO PLAYER FOR RETURN TO PLAYER FOR

WINNING EVENTWINNING EVENT– MAY BE CASH, MERCHANDISE, MAY BE CASH, MERCHANDISE,

SERVICE OR ANYTHING OF VALUESERVICE OR ANYTHING OF VALUE• IF VALUE OF PRIZE IS LESS THAN IF VALUE OF PRIZE IS LESS THAN

THE CONSIDERATION THEN THE THE CONSIDERATION THEN THE CONTEST IS NOT GAMBLINGCONTEST IS NOT GAMBLING– E.G. DUCK POND GAMEE.G. DUCK POND GAME

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LEGAL VS. ILLEGAL LEGAL VS. ILLEGAL GAMBLINGGAMBLING

• Currently, the only forms of gambling Currently, the only forms of gambling authorized by statute in Pennsylvania authorized by statute in Pennsylvania are:are:– Gambling activities conducted pursuant to Gambling activities conducted pursuant to

the Horse Racing Industry Reform Act.the Horse Racing Industry Reform Act.– Pennsylvania LotteryPennsylvania Lottery– Bingo conducted pursuant to the Bingo LawBingo conducted pursuant to the Bingo Law– Gambling activities conducted pursuant to Gambling activities conducted pursuant to

the Local Option Small Games of Chance Actthe Local Option Small Games of Chance Act– Gambling activities conducted pursuant to Gambling activities conducted pursuant to

the Pennsylvania Race Horse Development the Pennsylvania Race Horse Development and Gaming Act (slots).and Gaming Act (slots).

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COMMON UNLAWFUL COMMON UNLAWFUL GAMBLING ACTIVITIESGAMBLING ACTIVITIES

• Texas Hold’em TournamentsTexas Hold’em Tournaments• ““Night at the Races”Night at the Races”• ““50/50 Drawings”50/50 Drawings”• Casino NightsCasino Nights• Pools – football, basketball, NASCAR, etc.Pools – football, basketball, NASCAR, etc.• ““Chinese Auction”Chinese Auction”• Vertical wheel or “Chuck-a-luck Wheel”Vertical wheel or “Chuck-a-luck Wheel”• Video Gambling Devices - video poker or slotsVideo Gambling Devices - video poker or slots

NONE OF THESE ACTIVITIES ARE AUTHORIZEDNONE OF THESE ACTIVITIES ARE AUTHORIZEDBYTHE SMALL GAMES OF CHANCE ACTBYTHE SMALL GAMES OF CHANCE ACT

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THE SMALL GAMES THE SMALL GAMES OF CHANCE ACTOF CHANCE ACT

APPLICATIONAPPLICATION

•Effective March 3, 2012, each application for a Effective March 3, 2012, each application for a license must include the results of a criminal license must include the results of a criminal history check from the Pennsylvania State history check from the Pennsylvania State Police for the executive officer and secretary of Police for the executive officer and secretary of the eligible organization making the the eligible organization making the application.application.

•Effective Feb. 1, 2013, each application for a Effective Feb. 1, 2013, each application for a club license must include the most recent club license must include the most recent report filed with the department.report filed with the department.

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TYPES OF LICENSESTYPES OF LICENSES• ““Regular” License Regular” License – issued to eligible organizations – issued to eligible organizations

which own their own premise or lease a specific which own their own premise or lease a specific location to conduct normal business. Permits location to conduct normal business. Permits holders to operate SGOC during entire licensing year.holders to operate SGOC during entire licensing year.

• Limited Occasion License Limited Occasion License – issued to eligible – issued to eligible organizations which organizations which do not do not own their own premises own their own premises or which do not lease a specific location to conduct or which do not lease a specific location to conduct their normal business.their normal business.– no more than three occasions covering a total of seven days no more than three occasions covering a total of seven days

a year.a year.– no more than two raffles during a licensed year where prizes no more than two raffles during a licensed year where prizes

may not exceed the established limits for regular monthly may not exceed the established limits for regular monthly raffles. raffles.

•

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PERMITTED GAMESPERMITTED GAMES

• The Act is very specific as to the The Act is very specific as to the games of chance that are permitted. games of chance that are permitted. They are:They are:– PunchboardsPunchboards– Pull-TabsPull-Tabs– Raffles (including lotteries)Raffles (including lotteries)– Daily DrawingsDaily Drawings– Weekly DrawingsWeekly Drawings

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OPERATION OF GAMESOPERATION OF GAMES

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OPERATION OF GAMESOPERATION OF GAMES

• Only licensed eligible organizations or Only licensed eligible organizations or auxiliary group managers, officers, auxiliary group managers, officers, directors, bar personnel or bona fide directors, bar personnel or bona fide members of the licensed eligible members of the licensed eligible organization may conduct games of organization may conduct games of chance.chance.

• A person may not be compensated A person may not be compensated conducting games of chance.conducting games of chance.– Example: seller of winning ticket wins a Example: seller of winning ticket wins a

prize or a prize is provided to the top prize or a prize is provided to the top ticket seller. ticket seller.

OPERATION OF GAMESOPERATION OF GAMES(CONTINUED)(CONTINUED)

• No person under the No person under the age of 18 may age of 18 may operate or participate operate or participate in S.G.O.C.in S.G.O.C.

• No one visibly No one visibly intoxicated may intoxicated may purchase or sell a purchase or sell a chance.chance.

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• An officer or employee of a An officer or employee of a clubclub licensee who operates a game of licensee who operates a game of chance shall not participate in the chance shall not participate in the game. game. [§502(B)(2)] [§502(B)(2)]

– This This does not apply to a raffle. does not apply to a raffle.

• Intent of Subsection 502(B)(2):Intent of Subsection 502(B)(2):– This subsection is intended to prohibit This subsection is intended to prohibit

persons with inside knowledge, influence persons with inside knowledge, influence or control of a game from participating in or control of a game from participating in that game in an effort to prevent any that game in an effort to prevent any fraudulent or criminal activities. fraudulent or criminal activities.

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• What is meant by the phrase, What is meant by the phrase, “operates a game of chance?”“operates a game of chance?”– As the wording, “the game of chance "and As the wording, “the game of chance "and

not “games of chance” is used in the not “games of chance” is used in the Subsection it not a blanket prohibition for Subsection it not a blanket prohibition for officers and employees of club licensees.officers and employees of club licensees.

– The prohibition would apply only to those The prohibition would apply only to those particular games in which they particular games in which they participated in the operation.participated in the operation.

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• When determining whether an individual’s When determining whether an individual’s involvement in a specific game of chance involvement in a specific game of chance constitutes “OPERATING”, the following constitutes “OPERATING”, the following activities should be considered. activities should be considered.

• selling of chances.selling of chances.• paying winnerspaying winners• note-taking or recording of information note-taking or recording of information

(winners, payouts, etc of the individual (winners, payouts, etc of the individual game)game)

• involvement in the process of selecting a winner. involvement in the process of selecting a winner.

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• No person who has be convicted of No person who has be convicted of a Felony within the last five years a Felony within the last five years or of a violation of the S.G.O.C. Act or of a violation of the S.G.O.C. Act or Bingo Act within the past ten or Bingo Act within the past ten years may:years may:

– Manage S.G.O.C.Manage S.G.O.C.– Set-up S.G.O.C.Set-up S.G.O.C.– Supervise S.G.O.C.Supervise S.G.O.C.– Participate in the operation of S.G.O.C.Participate in the operation of S.G.O.C.

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USE OF PROCEEDSUSE OF PROCEEDS

USE OF PROCEEDSUSE OF PROCEEDS

PROCEEDSPROCEEDS - Defined in the Act as - Defined in the Act as the difference between:the difference between:– the actual gross revenue collected by a the actual gross revenue collected by a

licensed eligible organization from a game licensed eligible organization from a game of chance; andof chance; and

– the actual amount of prizes paid by a the actual amount of prizes paid by a licensed eligible organization from a game licensed eligible organization from a game of chance, plus the cost to purchase of chance, plus the cost to purchase games of chance.games of chance.

Proceeds are to be maintained in a Proceeds are to be maintained in a

Separate bank account.Separate bank account.

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USE OF PROCEEDSUSE OF PROCEEDS(CONTINUED)(CONTINUED)

• The proceeds from the operation The proceeds from the operation of small games of chance may be of small games of chance may be used for used for onlyonly three purposes: three purposes:– purchase of small games of chance.purchase of small games of chance.– public interest purposes.public interest purposes.– Certain operating expenses of Certain operating expenses of

certain eligible organizations.certain eligible organizations.

• Public interest purposes are Public interest purposes are defined in the Act as:defined in the Act as:

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1.1. The activities and operations of a The activities and operations of a nonprofit benevolent, religious, nonprofit benevolent, religious, educational, philanthropic, humane, educational, philanthropic, humane, scientific, patriotic, social welfare, scientific, patriotic, social welfare, social advocacy, public health, public social advocacy, public health, public safety, emergency response, safety, emergency response, environmental or civic objective.environmental or civic objective.

2.2. Initiating, performing or fostering Initiating, performing or fostering worthy public works or enabling or worthy public works or enabling or furthering the erection or furthering the erection or maintenance of public structures. maintenance of public structures.

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3.3. Lessening the burdens borne by Lessening the burdens borne by government or voluntarily supporting, government or voluntarily supporting, augmenting or supplementing services augmenting or supplementing services which the government would normally which the government would normally render to the people. render to the people.

4.4. Improving, expanding, maintaining or Improving, expanding, maintaining or repairing real property owned or leased repairing real property owned or leased by an eligible organization and relating by an eligible organization and relating operational expenses used for purposes operational expenses used for purposes specified in paragraphs (1), (2) and (3).specified in paragraphs (1), (2) and (3).– The term does not include the erection or The term does not include the erection or

acquisition of any real property, unless the acquisition of any real property, unless the property will be used property will be used exclusivelyexclusively for one or for one or more of the purposes specified in this more of the purposes specified in this definition. definition.

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USE OF PROCEEDSUSE OF PROCEEDSCLUB LICENSEESCLUB LICENSEES

• The proceeds from games of chance The proceeds from games of chance received by a received by a clubclub licensee shall be licensee shall be distributed as follows:distributed as follows:– No less than 70% of the proceeds shall No less than 70% of the proceeds shall be be

paid paid to organizations for public interest to organizations for public interest purposes in the calendar year in which purposes in the calendar year in which the proceeds were obtained.the proceeds were obtained.

– No more than 30% of the proceeds may No more than 30% of the proceeds may be be retainedretained by a club licensee and used by a club licensee and used for certain operational expenses relating for certain operational expenses relating to the club licensee.to the club licensee.

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• Approved “operational expenses”:Approved “operational expenses”:– Real property taxes.Real property taxes.– Utility and fuel costs.Utility and fuel costs.– Heating and air conditioning equipment or repair Heating and air conditioning equipment or repair

costs.costs.– Water and sewer costs.Water and sewer costs.– Property or liability insurance costs.Property or liability insurance costs.– Mortgage payments.Mortgage payments.– Interior and exterior repair costs, including repair to Interior and exterior repair costs, including repair to

parking lots.parking lots.– New facility construction costs.New facility construction costs.– Entertainment equipment, including television, video Entertainment equipment, including television, video

and electronic games.and electronic games.

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• Proceeds retained by a club licensee Proceeds retained by a club licensee for approved operational expenses for approved operational expenses (30%) (30%) shall be expended within the shall be expended within the same calendar year same calendar year unlessunless the club the club notifies the Department of Revenue notifies the Department of Revenue that funds are being retained for a that funds are being retained for a substantial purchase or project. substantial purchase or project.

• Notification shall include: Notification shall include: – a description of the purchase or project.a description of the purchase or project.– the cost.the cost.– the anticipated date of the purchase or the the anticipated date of the purchase or the

project. project.

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• PROCEEDS FROM SGOC SHALL PROCEEDS FROM SGOC SHALL NOTNOT BE UTILIZED FOR: BE UTILIZED FOR:– WAGESWAGES– ALCOHOL OR FOOD PURCHASESALCOHOL OR FOOD PURCHASES– FOR THE PAYMENT OF ANY FINE LEVIED FOR THE PAYMENT OF ANY FINE LEVIED

AGAINST THE CLUB LICENSEE.AGAINST THE CLUB LICENSEE.

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EXAMPLES OF “PUBLIC EXAMPLES OF “PUBLIC INTEREST PUPOSE” INTEREST PUPOSE”

EXPENSESEXPENSES• Support of youth programs Support of youth programs

– e.g. sports, youth centers, etc.e.g. sports, youth centers, etc.• Donations to food pantriesDonations to food pantries• Community projectsCommunity projects• Donation to Donation to certaincertain charitable or non- charitable or non-

profit organizationsprofit organizations– ““Non-profit” does not necessarily indicate Non-profit” does not necessarily indicate

an organization serves a “public interest an organization serves a “public interest purpose.”purpose.”

• Purchase of fire and rescue Purchase of fire and rescue equipmentequipment

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PRIZE LIMITSPRIZE LIMITS

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PRIZE LIMITSPRIZE LIMITS

• General Prize limits – All games of General Prize limits – All games of chance EXCEPT weekly drawings:chance EXCEPT weekly drawings:

– $1,000 for single chance.$1,000 for single chance.– $25,000 total for operating week.$25,000 total for operating week.

• Listed in the Act as the “Aggregate Prize Limit”Listed in the Act as the “Aggregate Prize Limit”

• Weekly drawings are only limited Weekly drawings are only limited by the $25,000 weekly limit.by the $25,000 weekly limit.

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PRIZE LIMITSPRIZE LIMITS(CONTINUED)(CONTINUED)

• Prize limit for raffles:Prize limit for raffles:– $10,000 per month$10,000 per month

• Exception – Special Permit Raffles Exception – Special Permit Raffles – $100,000 per year. $100,000 per year. ($150,000 for certain organizations)($150,000 for certain organizations)

– No $1,000 limit on individual chance.No $1,000 limit on individual chance.– Not added to weekly prize total.Not added to weekly prize total.– Not available to Limited Occasion Not available to Limited Occasion

Licensees.Licensees.

• There are other exceptions for Daily There are other exceptions for Daily and Weekly Drawing prizes under and Weekly Drawing prizes under specific circumstances.specific circumstances.

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DISCUSSION OF DISCUSSION OF INDIVIDUAL GAMESINDIVIDUAL GAMES

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DAILY DRAWINGSDAILY DRAWINGS

• Term includes Sign-in Drawings and Term includes Sign-in Drawings and Half-and Half Drawings.Half-and Half Drawings.

• Requirements:Requirements:– Chances may only be purchased by Chances may only be purchased by bona bona

fide members.fide members.– May only be sold on the licensed May only be sold on the licensed

premises.premises.– No more than $1 per chance.No more than $1 per chance.– No more than one chance per member.No more than one chance per member.– Drawing MUST be conducted during same Drawing MUST be conducted during same

operating day in which chances were operating day in which chances were sold.sold.

– No requirement that person be present.No requirement that person be present.• May not reduce prize if winner is not present .May not reduce prize if winner is not present .

((§901.784)§901.784)

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DAILY DRAWINGSDAILY DRAWINGS(CONTINUED)(CONTINUED)

• BONA FIDE MEMBERBONA FIDE MEMBER– Any individual who holds a Any individual who holds a

membership in the eligible membership in the eligible organization as defined by that organization as defined by that organization's constitution, charter, organization's constitution, charter, articles of incorporation or bylaws. articles of incorporation or bylaws. • Social members may or may not be Social members may or may not be

“bona fide members.”“bona fide members.”• Ensure by-laws permit social members.Ensure by-laws permit social members.• In most cases, bona fide members have In most cases, bona fide members have

voting rights and may hold office.voting rights and may hold office.

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• Daily Drawing prize limitsDaily Drawing prize limits– Generally subject to $1,000/chance Generally subject to $1,000/chance

limit and prizes are added when limit and prizes are added when calculating $25,000/week prize limit.calculating $25,000/week prize limit.

– EXCEPTIONS:EXCEPTIONS:• Prize may exceed the $1,000 per chance Prize may exceed the $1,000 per chance

limit if a portion of the prize is a limit if a portion of the prize is a “carryover” of a drawing with “carryover” of a drawing with nono winner. winner.

• Not applicable if no drawing is held or if Not applicable if no drawing is held or if chances are sold for more than $1.chances are sold for more than $1.

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• PRIZE LIMIT EXCEPTIONS PRIZE LIMIT EXCEPTIONS (continued)(continued)

– Prizes in daily drawings may cause an Prizes in daily drawings may cause an organizations prize total to exceed the organizations prize total to exceed the $25,000 weekly limit if the drawing is $25,000 weekly limit if the drawing is set up to pay out 100% of the gross set up to pay out 100% of the gross revenues. revenues. • In this case, the prizes are not added to In this case, the prizes are not added to

the weekly total.the weekly total.• Such prizes may not, however, exceed the Such prizes may not, however, exceed the

$1,000 per chance limit unless it is paid $1,000 per chance limit unless it is paid pursuant to a “carryover” drawing.pursuant to a “carryover” drawing.

– The rules of the game must be The rules of the game must be prominently displayed.prominently displayed.

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WEEKLY DRAWINGSWEEKLY DRAWINGS

• Requirements:Requirements:– Chances may only be purchased by Chances may only be purchased by bona bona

fide members.fide members.– May only be sold on the licensed May only be sold on the licensed

premises.premises.– No more than $1 per chance.No more than $1 per chance.– One drawing per operating week.One drawing per operating week.

• Drawing MUST be conducted during same Drawing MUST be conducted during same operating week in which chances were sold.operating week in which chances were sold.

– More than one chance per member More than one chance per member permitted.permitted.

– No requirement that person be present.No requirement that person be present.• May not reduce prize if winner is not present.May not reduce prize if winner is not present.

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WEEKLY DRAWINGSWEEKLY DRAWINGS(CONTINUED)(CONTINUED)

• Weekly Drawing prize limits:Weekly Drawing prize limits:– Prize Prize may may exceed $1,000 per chance limit.exceed $1,000 per chance limit.– Generally prizes in a weekly drawing are Generally prizes in a weekly drawing are

added when calculating aggregate added when calculating aggregate (weekly) prized totals. ($25,000 per (weekly) prized totals. ($25,000 per week limit.)week limit.)

– EXCEPTIONEXCEPTION• A weekly drawing may also exceed the $25,000 A weekly drawing may also exceed the $25,000

prize limit if it is prize limit if it is set upset up to pay out 100% of the to pay out 100% of the revenues generated.revenues generated.

– In this case, the prizes are not added when In this case, the prizes are not added when calculating the organization’s weekly prize total.calculating the organization’s weekly prize total.

• Not applicable if chances are sold for more Not applicable if chances are sold for more than $1.than $1.

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PUNCHBOARDSPUNCHBOARDS• A Punchboard must comply with A Punchboard must comply with

the following:the following:– Must be purchased from licensed Must be purchased from licensed

distributor.distributor.– Minimum 60% payout.Minimum 60% payout.– Winning punchboard plays should be Winning punchboard plays should be

perforated, punched or marked when perforated, punched or marked when redeemed.redeemed.

– Prize for individual punch may not Prize for individual punch may not exceed $1,000.exceed $1,000.

– Flare provided by manufacturer must Flare provided by manufacturer must be unaltered and on display.be unaltered and on display.

• Substitute flare may be displayed if it meets Substitute flare may be displayed if it meets all requirements.all requirements.

– All winners must be predetermined by All winners must be predetermined by the manufacturer the manufacturer

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PULL-TABSPULL-TABS• A pull-tab deal must comply with A pull-tab deal must comply with

the following:the following:– Must be purchased from licensed Must be purchased from licensed

distributor.distributor.– Minimum 65% payout.Minimum 65% payout.– Prize for individual pull-tab may not Prize for individual pull-tab may not

exceed $1,000.exceed $1,000.– Flare provided by manufacturer Flare provided by manufacturer

must be unaltered and on display.must be unaltered and on display.• Substitute flare may be displayed if it Substitute flare may be displayed if it

meets all requirements.meets all requirements.– No more than 4,000 pull-tabs per No more than 4,000 pull-tabs per

deal.deal.– Only one flare displayed per deal.Only one flare displayed per deal.– Winners and prizes must be Winners and prizes must be

predetermined by the manufacturer.predetermined by the manufacturer.

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PULL-TABSPULL-TABS(CONTINUED)(CONTINUED)

– Winning pull-tabs should be Winning pull-tabs should be perforated, punched or perforated, punched or marked when redeemed.marked when redeemed.

• Tip Boards are a form of Tip Boards are a form of pull-tabpull-tab– Must meet all requirements Must meet all requirements

for pull-tabs.for pull-tabs.– Prizes must be Prizes must be

predetermined by predetermined by manufacturer.manufacturer.

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RAFFLESRAFFLES• Two types:Two types:

– Regular RaffleRegular Raffle• Prizes counted towards $25,000 weekly limit.Prizes counted towards $25,000 weekly limit.• Limited to $10,000 per month in prizes.Limited to $10,000 per month in prizes.

– Special Permit RaffleSpecial Permit Raffle• Licensed organizations may apply for eight per Licensed organizations may apply for eight per

license year.license year.– Ten for fire, ambulance and rescue organizations.Ten for fire, ambulance and rescue organizations.

• May award a total of $100,000 in prizes per May award a total of $100,000 in prizes per license year.license year.

– $150,000 for fire, ambulance and rescue organizations.$150,000 for fire, ambulance and rescue organizations.

• Prizes do not count towards weekly prize Prizes do not count towards weekly prize limits.limits.

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RAFFLESRAFFLES(CONTINUED)(CONTINUED)

• Both types of raffles must comply Both types of raffles must comply with the following:with the following:– TicketsTickets

• Must be sequentially numbered and have a Must be sequentially numbered and have a detachable stub with the same number.detachable stub with the same number.

• Must be accounted for by the use of a logbook Must be accounted for by the use of a logbook showing to whom they were given to be sold.showing to whom they were given to be sold.

• Stub must contain the purchaser’s name Stub must contain the purchaser’s name address and phone number.address and phone number.

• Must contain:Must contain:– The date time and location of drawingThe date time and location of drawing– The name of the licenseeThe name of the licensee– SGOC license number SGOC license number – Special raffle permit number if applicable. Special raffle permit number if applicable.

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RAFFLESRAFFLES(CONTINUED)(CONTINUED)

– Tickets (con’t)Tickets (con’t)• Must list the cost of the ticket and the available Must list the cost of the ticket and the available

prizes.prizes.

• There There mustmust be a winner in a raffle. be a winner in a raffle.• Drawing must be conducted in plain view of Drawing must be conducted in plain view of

players present.players present.– Use of state lottery number is permissible.Use of state lottery number is permissible.

• Only when tickets sales equal the total possible Only when tickets sales equal the total possible numbers. numbers.

• E.g. 1000 tickets must be sold to utilize the daily E.g. 1000 tickets must be sold to utilize the daily number.number.

• Winners need not be present.Winners need not be present.• Tickets do not have to be purchased from Tickets do not have to be purchased from

licensed distributors.licensed distributors.

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LICENSED PREMISES AND LICENSED PREMISES AND LOCATION OF GAMESLOCATION OF GAMES

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• GENERAL RULEGENERAL RULE

– Games of chance may only be Games of chance may only be conducted on the licensed conducted on the licensed eligible organizations licensed eligible organizations licensed premises.premises.•Address / location on SGOC license.Address / location on SGOC license.•Eligible organization may not share Eligible organization may not share the same premise.the same premise.

– One license per location.One license per location.

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(CONTINUED)(CONTINUED)

• When a premises exists, the eligible When a premises exists, the eligible organization shall identify its licensed organization shall identify its licensed premises on its license application.premises on its license application.

– When a premises consists of more than When a premises consists of more than one building, the organization must one building, the organization must indicate the specific building where the indicate the specific building where the game will be conducted.game will be conducted.

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• When a organization does not own When a organization does not own or lease a specific location to or lease a specific location to conduct its normal business, they conduct its normal business, they may obtain a Limited Occasion may obtain a Limited Occasion License and utilize another licensed License and utilize another licensed (SGOC) organization’s premises to (SGOC) organization’s premises to conduct games or enter into a conduct games or enter into a written lease agreement at an written lease agreement at an unlicensed location.unlicensed location.– In cases were an organization uses the In cases were an organization uses the

premises of another, the “host” organization premises of another, the “host” organization may not operate SGOC at the same time.may not operate SGOC at the same time.



• A licensed eligible organization A licensed eligible organization may not permit another licensed may not permit another licensed eligible organization holding a eligible organization holding a SGOC license to conduct games SGOC license to conduct games of chance on their licensed of chance on their licensed premise.premise.– Does not apply to limited occasion Does not apply to limited occasion

licensees.licensees.

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• EXCEPTIONSEXCEPTIONS– Raffle tickets may be sold in Raffle tickets may be sold in

any municipality that has any municipality that has approved a small games of approved a small games of chance referendum.chance referendum.• If an licensed organization If an licensed organization

plans to sell raffle tickets in a plans to sell raffle tickets in a county other than that in which county other than that in which it is licensed, they must notify it is licensed, they must notify the District Attorney and the District Attorney and licensing authority of the other licensing authority of the other county as to the dates and county as to the dates and location of sales.location of sales.

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• EXCEPTIONS: EXCEPTIONS: (CONTINUED)(CONTINUED)

– Annual Carnivals, Fairs, Picnics or Annual Carnivals, Fairs, Picnics or BanquetsBanquets•A licensed eligible organization may

conduct games of chance at a location off its premises when they are part of an annual carnival, fair, picnic or banquet held or participated in by that licensed eligible organization on a historical basis.

– Notification in writing to the district attorney and licensing authority.

– Notification must include the location, date and Notification must include the location, date and times of the event.times of the event.

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GAMBLING ON P.L.C.B. GAMBLING ON P.L.C.B. LICENSED PREMISESLICENSED PREMISES

CLUB LICENSEESCLUB LICENSEES

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• Generally, the five forms of Generally, the five forms of gambling previous listed are gambling previous listed are permitted on a P.L.C.B. licensed permitted on a P.L.C.B. licensed premises with the proper license premises with the proper license or authority.or authority.– State Lottery, Horse Racing, Bingo, State Lottery, Horse Racing, Bingo,

S.G.O.C. & SlotsS.G.O.C. & Slots• However, these are the However, these are the onlyonly forms forms

of gambling (legal or illegal) of gambling (legal or illegal) permitted on a licensed premise.permitted on a licensed premise.

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(continued)(continued)

• Even activities that would be Even activities that would be permissible elsewhere, are not permissible elsewhere, are not permitted on P.L.C.B. licensed permitted on P.L.C.B. licensed establishments.establishments.– Examples:Examples:

• ““Neighborhood Poker Game”Neighborhood Poker Game”• Sale of raffle tickets (with no S.G.O.C. Sale of raffle tickets (with no S.G.O.C.

license)license)

• Commonwealth vs. KehlerCommonwealth vs. Kehler

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(continued)(continued)

• Where all three elements of Where all three elements of gambling exist, if one or more gambling exist, if one or more element occurs on the P.L.C.B. element occurs on the P.L.C.B. licensed premise, gambling is licensed premise, gambling is considered to have occurred on considered to have occurred on the premise. the premise. – Example: Dice & Poker Runs – the Example: Dice & Poker Runs – the

element of chance FREQUENTLY element of chance FREQUENTLY occurs on P.L.C.B. licensed premises.occurs on P.L.C.B. licensed premises.

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GAMBLING ON P.L.C.B. LICENSED GAMBLING ON P.L.C.B. LICENSED PREMISES PREMISES


• If a P.L.C.B . licensee wishes to If a P.L.C.B . licensee wishes to permit another organization to permit another organization to conduct S.G.O.C. on their premise, conduct S.G.O.C. on their premise, that organization MUST be that organization MUST be registered as a charitable registered as a charitable organization with the Pennsylvania organization with the Pennsylvania Department of State.Department of State.– Self sponsored event regulations.Self sponsored event regulations.– Administrative violation for the Administrative violation for the

P.L.C.B. licensee.P.L.C.B. licensee.

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REQUIRED RECORDSREQUIRED RECORDS

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REQUIRED RECORDSREQUIRED RECORDS

• GENERAL REQUIREMENTSGENERAL REQUIREMENTS– Generally SGOC records must be Generally SGOC records must be

maintained for a period of two years.maintained for a period of two years.• From last day of month in which game From last day of month in which game

ended.ended.

– Club licensees must retain records Club licensees must retain records for five years.for five years.

– Records must include separate totals Records must include separate totals for each operating week.for each operating week.

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REQUIRED RECORDSREQUIRED RECORDS(CONTINUED)(CONTINUED)

• GENERAL RECORDS INCLUDEGENERAL RECORDS INCLUDE ::

– Number of W-2G forms issued and Number of W-2G forms issued and the gross winnings reported.the gross winnings reported.

– Gross revenue collected.Gross revenue collected.– Total expensesTotal expenses– Total prizes paidTotal prizes paid– Proceeds – separate bank account Proceeds – separate bank account

MUST be maintained.MUST be maintained.– Amount of proceeds used for public Amount of proceeds used for public

interest purposesinterest purposes

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• GENERAL RECORDS FOR GENERAL RECORDS FOR CLUB CLUB LICENSEES INCLUDE:LICENSEES INCLUDE:

– Number of W-2G forms issued and Number of W-2G forms issued and the gross winnings reported.the gross winnings reported.

– Gross revenue collected, itemized Gross revenue collected, itemized by week and type of game.by week and type of game.

– Total expenses, itemized by week Total expenses, itemized by week and type of game.and type of game.

– Total prizes paid, itemized by week Total prizes paid, itemized by week and type of game.and type of game.

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• GENERAL RECORDS FOR GENERAL RECORDS FOR CLUB CLUB LICENSEES LICENSEES (CONTINUED):(CONTINUED):

– Proceeds, itemized by week and Proceeds, itemized by week and type of game, detailing the type of game, detailing the following:following:• Separate bank account must be Separate bank account must be

utilized.utilized.• Amount of proceeds used for public Amount of proceeds used for public

interest purposes.interest purposes.– Dates, recipients and amounts.Dates, recipients and amounts.

• Amount of proceeds used for Amount of proceeds used for operational expenses.operational expenses.

– Details regarding amount used for each Details regarding amount used for each permitted expense.permitted expense.

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RAFFLESRAFFLES•Record for each raffle should Record for each raffle should include:include:

– Gross proceeds received.Gross proceeds received.– Expenses.Expenses.– List of merchandise, prizes and List of merchandise, prizes and

their receipts.their receipts.– Names and address for all winners Names and address for all winners

over $100.over $100.– Cash value of all prizes.Cash value of all prizes.

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PUNCH-BOARDS AND PULL-TABSPUNCH-BOARDS AND PULL-TABS

•Punch-Board and Pull-Tab records should Punch-Board and Pull-Tab records should include:include:

– Name and serial number of games.Name and serial number of games.– Date placed into and removed from play.Date placed into and removed from play.– Total number of plays in each game.Total number of plays in each game.– Cost per play, cost of prizes paid and cash value Cost per play, cost of prizes paid and cash value

of all prizes in games.of all prizes in games.– If a prize is awarded in excess of $100:If a prize is awarded in excess of $100:

• The form and serial number of the game.The form and serial number of the game.• The name of the game.The name of the game.• Date of win.Date of win.• The amount of cash or the cash value and The amount of cash or the cash value and

description of merchandise.description of merchandise.• The full name and address of the winner.The full name and address of the winner.

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PUNCH-BOARDS AND PULL-TABS PUNCH-BOARDS AND PULL-TABS (CONTINUED)(CONTINUED)

•All unplayed chances must be All unplayed chances must be retained for two yearsretained for two years

•All winning chances for prizes in All winning chances for prizes in excess of $100 must also be excess of $100 must also be retained for two years.retained for two years.

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DAILY AND WEEKLY DRAWINGSDAILY AND WEEKLY DRAWINGS

•Eligible organizations records must Eligible organizations records must include:include:

– Type of drawing (daily and/or weekly).Type of drawing (daily and/or weekly).– Operating day or week in which chances are sold Operating day or week in which chances are sold

and the date/time of drawing.and the date/time of drawing.– List of entrants.List of entrants.– Each entrant’s assigned number.Each entrant’s assigned number.– Gross proceeds and payout percentage.Gross proceeds and payout percentage.– Winner’s name. (and address if > $100)Winner’s name. (and address if > $100)– Winners signed acknowledgment of receipt of Winners signed acknowledgment of receipt of

prize.prize.– Notation if the drawing is a “carryover” and the Notation if the drawing is a “carryover” and the

amount carried over. amount carried over.

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• Additionally, separate annual Additionally, separate annual records must be kept for:records must be kept for:– The number and amount of all The number and amount of all

prizes awarded in excess of $100.prizes awarded in excess of $100.– The total amount of all prizes The total amount of all prizes

awarded in each 7-day period.awarded in each 7-day period.– The amount of raffle prizes awarded The amount of raffle prizes awarded

each month.each month.

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REPORTING REPORTING REQUIRMENTSREQUIRMENTS

REPORTING REQUIREMENTSREPORTING REQUIREMENTS

•Each eligible organization shall submit an annual report to the department including:

– 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.

• Prizes a that require the issuance of IRS Form W-2G.

– Amounts expended for public interest purposes.

•Eligible organizations may complete reports online.


CLUB LICENSEES

•Beginning in 2013 club licensees shall submit semi-annual reports to the Department of Revenue for the preceding six-month period.

– The report must be filed under oath or affirmation of an authorized officer of the club licensee.

– Clubs will be able to complete the report online– Reports will be provided to B.L.C.E. and made

available to the public.– Semi-annual reports will meet the general annual

reporting requirement.


CLUB LICENSEES•The report shall include all of the following information:

– The proceeds received by the club licensee from each game of chance conducted, itemized by week.

– The amount of prizes paid from all games of chance, itemized by week.

– Other costs incurred related to the conduct of games of chance.– The verification of amounts distributed for public interest

itemized by the recipient.– An itemized list of expenditures made or amounts retained and

expenditures . (30% for operating expenses)– The address and the county in which the club licensee is

located.

•

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ENFORCEMENTENFORCEMENT

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ENFORCEMENTENFORCEMENT

• District Attorneys and other law District Attorneys and other law enforcement officials investigate enforcement officials investigate criminal violations of the Act.criminal violations of the Act.

• The Act provides for civil penalties, The Act provides for civil penalties, criminal penalties and SGOC permit criminal penalties and SGOC permit suspensions for violations.suspensions for violations.

• BLCE handles most violations BLCE handles most violations administratively.administratively.– Egregious or continued violations may Egregious or continued violations may

result in criminal charges against result in criminal charges against individuals and/or the eligible organization.individuals and/or the eligible organization.

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ENFORCEMENTENFORCEMENT(CONTINUED)(CONTINUED)

• ACCESS TO RECORDSACCESS TO RECORDS

– Licensees are required, upon request, to provide their license, books, accounts and records relating to the conduct of games of chance to:

• The licensing authority.• The Bureau Of Liquor Control Enforcement.• A law enforcement agency or official. [701(B)]

– The Liquor Code gives B.L.C.E. officers access to The Liquor Code gives B.L.C.E. officers access to the business records of all establishments the business records of all establishments licensed by the P.L.C.B.licensed by the P.L.C.B.

• Generally, records must be maintained on site.Generally, records must be maintained on site.• May be reviewed without a warrant.May be reviewed without a warrant.• These include all small games of chance records.These include all small games of chance records.

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ENFORCEMENTENFORCEMENT(CONTINUED)(CONTINUED)

• CLUB LICENSEESCLUB LICENSEES– Violations of the S.G.O.C. Act Violations of the S.G.O.C. Act

do not constitute violations of do not constitute violations of the Liquor Code until a club the Liquor Code until a club licensee has committed three licensee has committed three or more.or more.• Violations may still be addressed either Violations may still be addressed either

civilly or criminally pursuant to the civilly or criminally pursuant to the SGOC Act.SGOC Act.

– B.L.C.E. IS MANDATED TO AUDIT 5% OF B.L.C.E. IS MANDATED TO AUDIT 5% OF CLUB LICENSEES ANNUALLY.CLUB LICENSEES ANNUALLY.

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PENALTIESPENALTIES

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PENALTIESPENALTIESCRIMINALCRIMINAL

Eligible organizationsEligible organizations• An eligible organization violating the act is An eligible organization violating the act is

guilty of a summary offense, and shall pay a guilty of a summary offense, and shall pay a fine of up to $1000 for a first offense and fine of up to $1000 for a first offense and $1,500 for each subsequent offense and:$1,500 for each subsequent offense and:– 11stst offense – forfeit its license for not more than offense – forfeit its license for not more than

30 days.30 days.– 22ndnd or subsequent offense - forfeit its license for or subsequent offense - forfeit its license for

not less than 30 nor more than 180 days.not less than 30 nor more than 180 days.– 33rdrd or subsequent offense For a third offense or subsequent offense For a third offense

within three years of the first offense, the eligible within three years of the first offense, the eligible organization shall forfeit its license and be organization shall forfeit its license and be ineligible for a license renewal for 30 months ineligible for a license renewal for 30 months thereafter.thereafter.

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IndividualsIndividuals• A person who conducts, or who A person who conducts, or who

assists in the conduct of games of assists in the conduct of games of chance in violation of the act is guilty chance in violation of the act is guilty of:of:– 11stst offense - a summary offense - a summary– 22ndnd offense - a misdemeanor of the third offense - a misdemeanor of the third

degreedegree– 33rdrd offense - a misdemeanor of the first offense - a misdemeanor of the first

degree degree

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• Rigging games or accepting Rigging games or accepting contingency fees on the contingency fees on the operation of games in a operation of games in a Misdemeanor of the First Misdemeanor of the First Degree.Degree.

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PENALTIESPENALTIESCIVIL PENALTIESCIVIL PENALTIES

• ELIGIBLE ORGANIZATIONS, OTHER THAN A CLUB LICENSEES: – FOR AN INITIAL VIOLATION, UP TO

$500.– FOR A SECOND VIOLATION, UP TO

$1,000.– FOR A THIRD OR SUBSEQUENT

VIOLATION, UP TO $1,500.

•

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PENALTIESPENALTIESCIVIL PENALTIESCIVIL PENALTIES

• CLUB LICENSEES: – FOR AN INITIAL VIOLATION, UP TO $800.– FOR A SECOND VIOLATION, UP TO $1,000.– FOR A THIRD OR SUBSEQUENT VIOLATION, UP

TO $2,000.

THE INTENTIONAL OR WILLFUL FAILURE OF A CLUB LICENSEE TO PROVIDE ACCURATE RECORDS SHALL RESULT IN A LICENSE SUSPENSION OF A MINIMUM OF SIX MONTHS.

•

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PENALTIES PENALTIES (CONTINUED)(CONTINUED)

•The licensing authority, or, in the case of a club licensee, the Bureau Of Liquor Control enforcement may impose the following penalties:– A civil penalty.– Suspension or revocation of the

license. [702(D)]

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• Grounds for suspension, revocation or non-renewal of license:– Use of proceeds for other than authorized purposes.– Permitting persons under 18 to operate or play games of

chance.– Permitting person convicted of enumerated crimes to set up,

manage, supervise or participate n the operation of games of chance.

– Facility does not meet minimum requirements.– Permitting unauthorized persons to operate games of chance.– Compensating persons for conducting games of chance.– Exceeding prize limits.– Violation the provisions of a special permit.– Providing false or erroneous information to the Dept. Of

Revenue or issuing authority.

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• Grounds for suspension, revocation or non-renewal of license (CONTINUED):

– A criminal conviction of an eligible organization for a violation of the Act.

– Conducting games of chance while permitting another organization to do so.

– Failure to file required reports.– Failing to file an accurate semi-annual report. (Club

Licensees)– Failure to comply with regulations with respect to

distribution of proceeds. (Club Licensees)

• The issuing authority plays an important role.– Responsible to suspend or revoke license upon notification

and verification of violation.– Non-renewals.

BINGOBINGO

BingoBingo

• “Bingo” is identified as a game in which each player has a card or board containing five horizontal rows, all but the central one containing five figures. The central row has four figures with the word “free” marked in the center thereof. Any pre-announced combination of spaces when completed by a player constitutes bingo.

BingoBingo

• In the absence of a preannouncement of a combination of spaced, any combination of five in a row whether horizontal or vertical when completed by a player constitutes bingo when its numbers are announced and covered.

• A wheel or other mechanical device may be used by any person conducting the game of bingo.

• A prize may be awarded to any player or players first completing any combination constituting bingo.

BingoBingo(Who is eligible)(Who is eligible)

• ASSOCIATION – A volunteer fire or ASSOCIATION – A volunteer fire or ambulance co, religious, charitable, ambulance co, religious, charitable, fraternal, veterans, civic, county fraternal, veterans, civic, county fair, or agricultural assoc., or any fair, or agricultural assoc., or any separate chartered auxiliary of any separate chartered auxiliary of any of the above associations, organized of the above associations, organized as a nonprofit organization which as a nonprofit organization which shall have existed, and conducted shall have existed, and conducted business for two years prior to business for two years prior to application. application.

BingoBingo

• Exception – Elderly residents of a Exception – Elderly residents of a senior citizens housing project senior citizens housing project may apply immediately upon it may apply immediately upon it being organized.being organized.

BingoBingo(When can the game be conducted)(When can the game be conducted)

•Each bingo permit allows for bingo to be conducted two times a week.

•A facility can host up to two bingo permits for a total of four bingo sessions per week.

BingoBingo(Who can be compensated)(Who can be compensated)

• No person may be employed in the operation or the actual running of a bingo game for compensation greater than $50.00 per day.

• No person shall participate in the operation of bingo games on more than four days in any calendar week, except at expositions, carnivals, or fairs where merchandise is being awarded as a prize.

•

BingoBingo

• Individuals under 18 years of age may participating in the operation of the game and being compensated if written permission is obtained from their parent or guardian.

BingoBingo(Who can play)(Who can play)

• No person under the age of 18 shall be permitted to play bingo unless accompanied by an adult.

BingoBingo(Prizes)(Prizes)

• Prizes awarded shall not exceed a value of $250.00 for any one game of bingo, except for jackpot games, which shall not exceed a value of $2,000.00 for one such game.

• no more than $4,000.00 in prizes shall be awarded in any calendar day.

BingoBingo(advertising)(advertising)

• Only associations licensed to conduct bingo shall be permitted to advertise their bingo games.

• Advertisements may contain: date, time, location, cash or prizes, and the name of the association.

• . An association shall not advertise the prizes which will be awarded, or their dollar value, nor shall they advertise a guaranteed prize dollar value.

• An association shall not advertise the prizes which will be awarded, or their dollar value, nor shall they advertise a guaranteed prize dollar value.

BingoBingo(Bank account)(Bank account)

• Each association shall deposit with a financial institution all proceeds for each day’s bingo game in an account in the association’s name.

• Deposit shall be made before any of the proceeds may be used for any other purpose, except for payment of prize money and compensation to members employed in the operation of the game.

BingoBingo(Records)(Records)

• Each association shall keep written records of :

• - total proceeds collected• - total prize money distributed• - total value of all merchandise

awarded as a prize• - the amount of moneys paid as

rentals or wages, and to whom such rentals or wages were paid.

BingoBingo

• All prizes awarded having a value greater than $250.00 shall be specifically described in the association’s records.

• Funds derived from the operation of the game of bingo are to be used to support the non-profit purposes of the association

BingoBingo(Rental agreements)(Rental agreements)

• If an association doesn’t own the premises where bingo is played, the personal property used, or the equipment, they shall sign a written agreement leasing such premises, property, and/or equipment from the owner for a fee.

• The fee may not be determined by either the amount of receipts realized from the playing of bingo or the number of people attending bingo games.

BingoBingo

• The fee may not be determined by either the amount of receipts realized from the playing of bingo or the number of people attending bingo games.

• An association shall not lease such premises, property or equipment from any person who has been convicted of a felony or a violation of the Bingo Act

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QUESTIONSQUESTIONS??

Presented by the Pennsylvania State Police Bureau of Liquor Control Enforcement

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Transcript of Presented by the Pennsylvania State Police Bureau of Liquor Control Enforcement