HB 2213 — An Act providing for skill video gaming; imposing duties on the Department of Revenue; providing for issuance of licenses for skill video gaming; imposing a fee and criminal and civil penalties; and providing for zoning.

PRINTER'S NO.   2907

                    THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        HOUSE BILL
                        No. 2213
                                                Session of
                                                  2026

     INTRODUCED BY BURGOS, PASHINSKI, HILL-EVANS, HAMM, RIVERA,
        PIELLI, MALAGARI, CEPEDA-FREYTIZ, SCOTT AND McNEILL,
        FEBRUARY 10, 2026

     REFERRED TO COMMITTEE ON GAMING OVERSIGHT, FEBRUARY 11, 2026


                                     AN ACT
 1   Providing for skill video gaming; imposing duties on the
 2      Department of Revenue; providing for issuance of licenses for
 3      skill video gaming; imposing a fee and criminal and civil
 4      penalties; and providing for zoning.
 5                              TABLE OF CONTENTS
 6   Chapter 1.   Preliminary Provisions
 7   Section 101.   Short title.
 8   Section 102.   Statement of purpose.
 9   Section 103.   Definitions.
10   Chapter 3.   Program
11   Section 301.   Regulation of skill video game systems.
12   Section 302.   Sale, manufacturing, distribution, operation and
13                use of skill video game systems.
14   Chapter 5.   Organization
15   Section 501.   Licenses.
16   Section 502.   Licensing requirements.
17   Section 503.   Granting licenses.
18   Section 504.   Application and renewal costs of licenses.
 1   Section 505.    Issuance of license.
 2   Section 506.    Term of license.
 3   Section 507.    License renewal.
 4   Section 508.    Suspension or revocation of license.
 5   Chapter 7.    Certification Requirements
 6   Section 701.    Skill video game system testing.
 7   Section 702.    Bonding.
 8   Section 703.    Reporting.
 9   Chapter 9.    Distributors
10   Section 901.    Authorization.
11   Section 902.    System requirements.
12   Chapter 11.    Operators
13   Section 1101.    Authorization.
14   Section 1102.    Skill video game system placement agreements.
15   Section 1103.    Player security.
16   Section 1104.    Reporting.
17   Chapter 13.    Establishments
18   Section 1301.    Authorization.
19   Section 1302.    Skill video game placement agreements.
20   Section 1303.    Limits on skill video game terminals.
21   Section 1304.    Prohibition on miniature casinos and stop and
22                 gos.
23   Section 1305.    Limitation of access by individuals under 18
24                 years of age.
25   Section 1306.    Qualifications for establishments.
26   Chapter 15.    Players
27   Section 1501.    Authorization.
28   Section 1502.    Winnings.
29   Chapter 17.    Fee
30   Section 1701.    Fee imposed.

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 1   Chapter 19.    Administration
 2   Section 1901.    Governing practices and procedures.
 3   Section 1902.    Law enforcement notification.
 4   Section 1903.    Temporary regulation.
 5   Section 1904.    Reports by licensees.
 6   Chapter 21.    Offenses Related to Operation of Unlicensed Skill
 7                 Video Games
 8   Section 2101.    Criminal distribution and operation of unlicensed
 9                 skill video game terminals.
10   Chapter 23.    Offenses Related to Illegal Manufacturing,
11                 Distribution or Operation of Skill Video Games
12   Section 2301.    Law enforcement.
13   Section 2302.    Criminal distribution of skill video game
14                 systems.
15   Section 2303.    Criminal alteration of skill video game software,
16                 terminal or related equipment.
17   Section 2304.    Criminal redemption of value to individual under
18                 18 years of age.
19   Section 2305.    Additional penalties.
20   Chapter 25.    Miscellaneous Provisions
21   Section 2501.    Conflict.
22   Section 2502.    Zoning.
23   Section 2503.    Provisional licenses.
24   Section 2504.    Civil actions.
25   Section 2505.    Notice.
26   Section 2506.    Effective date.
27      The General Assembly of the Commonwealth of Pennsylvania
28   hereby enacts as follows:
29                                    CHAPTER 1
30                            PRELIMINARY PROVISIONS

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 1   Section 101.    Short title.
 2      This act shall be known and may be cited as the Skill Video
 3   Gaming Act.
 4   Section 102.    Statement of purpose.
 5      The General Assembly finds and declares as follows:
 6          (1)     This act regulates skill games under the supervision
 7      of the Department of Revenue and the State Lottery.
 8          (2)     The State Lottery has experience operating in a
 9      retail environment similar to the skill games market and has
10      experience managing revenue in a large fund dedicated to
11      specific policy purposes.
12          (3)     This act is intended to eliminate illegal gambling
13      devices that purport to be skill games.
14   Section 103.    Definitions.
15      The following words and phrases when used in this act shall
16   have the meanings given to them in this section unless the
17   context clearly indicates otherwise:
18      "Applicant."    A person which applies for permission to engage
19   in an act or activity that is regulated under the provisions of
20   this act.
21      "Bearer scrip."     A ticket that is a printed receipt from a
22   skill video game system and is redeemable for cash equivalents.
23      "Camera system."    A video camera system approved by the
24   department and provided by an operator to an establishment that
25   meets the specifications approved by the department.
26      "Cash."     United States currency or coin.
27      "Cash equivalents."    Instruments with a value equal to United
28   States currency or coin, including certified checks, cashier's
29   checks, money orders or other representations of value that the
30   department deems a cash equivalent.

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 1      "Central reporting system."     A system provided by the lottery
 2   and accessible by the department to which each skill video game
 3   system communicates for the purpose of auditing capacity and
 4   information retrieval of the details of a financial event that
 5   occurs in the operation of a skill video game system, including
 6   coin in, coin out, ticket in, ticket out and jackpots.
 7      "Controlling interest."    As follows:
 8          (1)     For a publicly traded entity, the term means the
 9      holding of sole voting rights under State law or corporate
10      articles or bylaws that entitle the person to elect or
11      appoint one or more of the members of the board of directors
12      or other governing board or the holding of an ownership or
13      beneficial holding of 5% or more of the securities of the
14      publicly traded legal entity, unless the presumption of
15      control or ability to elect is rebutted by clear and
16      convincing evidence.
17          (2)     For a privately held corporation, partnership,
18      limited liability company or other form of privately held
19      legal entity, the term means the holding of securities in the
20      legal entity, unless the presumption of control is rebutted
21      by clear and convincing evidence.
22      "Department."    The Department of Revenue of the Commonwealth.
23      "Distributor."    An entity licensed by the department that
24   sells, leases, offers or provides and distributes skill video
25   game systems to an operator for use or play in this
26   Commonwealth.
27      "Entity."    A domestic or foreign:
28          (1)     business corporation;
29          (2)     nonprofit corporation;
30          (3)     general partnership;

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 1            (4)    limited partnership;
 2            (5)    limited liability company;
 3            (6)    unincorporated nonprofit association;
 4            (7)    professional association; or
 5            (8)    business trust, common law business trust or
 6        statutory trust.
 7        "Establishment."   An entity licensed by the department that
 8   permits an operator to place and operate skill video game
 9   systems on the establishment's premises under this act.
10        "Fee."    Payment required to be transmitted to the department
11   per terminal monthly prior to games being made available for
12   play in an establishment.
13        "Gross revenue."   The total of cash or cash equivalents
14   received by a skill video game system minus the total of cash or
15   cash equivalents paid out to players as a result of playing a
16   skill video game system. The term does not include counterfeit
17   cash or cash taken in a fraudulent act perpetrated against an
18   operator or establishment for which the operator or
19   establishment is not reimbursed.
20        "Independent testing laboratory."    A nongovernmental entity
21   engaged in the business of examining skill video game software
22   and capable of providing the certification specified in Chapter
23   7.
24        "Initial license."    A license issued by the department to an
25   approved applicant under this act.
26        "Lottery."    The Pennsylvania State Lottery.
27        "Net profits."    The gross revenue after applicable fees are
28   paid to the department.
29        "Operator."    An entity licensed by the department to operate
30   a skill video game system by:

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 1          (1)     Purchasing or leasing skill video game systems from
 2      a licensed skill video game system distributor.
 3          (2)     Providing skill video game systems to licensed
 4      establishments.
 5          (3)     Providing onsite collection of skill video game
 6      system revenue and skill video game system data reporting as
 7      required by this act.
 8      "Payout."    The payment of cash or cash equivalent to player
 9   as a result of playing a skill video game system.
10      "Person."    Includes a corporation, partnership, limited
11   liability company, business trust, other association, government
12   entity, other than the Commonwealth, estate, trust, foundation
13   or natural person.
14      "Player."    An individual who is at least 18 years of age when
15   the individual plays a skill video game system.
16      "Principal."    Any of the following:
17          (1)     An officer.
18          (2)     A director.
19          (3)     A person who directly holds a beneficial interest in
20      or ownership of the securities of an applicant or licensee.
21          (4)     A person who has a controlling interest in an
22      applicant or licensee or has the ability to elect a majority
23      of the board of directors of a licensee or to otherwise
24      control a licensee, lender or other licensed financial
25      institution of an applicant or licensee, other than a bank or
26      lending institution which makes a loan or holds a mortgage or
27      other lien acquired in the ordinary course of business,
28      underwriter of an applicant or licensee.
29          (5)     A person deemed to be a principal by the department.
30      "Program."    The program to regulate the distribution, sale,

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 1   transportation, storage and use of skill video game systems
 2   established under Chapter 3.
 3      "Provisional license."   A license issued under section 2503.
 4      "Registration information."     The information required on the
 5   registration form provided by the department.
 6      "Skill video game."   A game played on skill video game
 7   software that meets the qualifications specified in Chapters 5
 8   and 7 and has been licensed by the department as part of a skill
 9   video game system.
10      "Skill video game placement agreement."       An agreement entered
11   into by a distributor with an operator or an operator with an
12   establishment for the placement, operation, service or
13   maintenance of skill video game terminals.
14      "Skill video game software."     A distributor's proprietary
15   software program developed and designed for a skill video game
16   system as approved by the department.
17      "Skill video game system."    A terminal that is equipped with
18   skill video game software connected to a terminal reporting
19   system.
20      "Terminal identification number."       The unique number utilized
21   to identify and verify a licensed skill video game system.
22      "Ticket redemption terminal."        A terminal where a bearer
23   scrip from a skill video game system may be redeemed for cash
24   after a player has validated the player's age by utilizing a
25   State-issued driver's license or identification card. A device
26   used to validate the player's age may only read and verify the
27   age from a State-issued driver's license or identification card
28   and may not collect or retain any additional player information.
29                               CHAPTER 3
30                                  PROGRAM

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 1   Section 301.    Regulation of skill video game systems.
 2      (a)   Establishment.--A program to regulate the distribution,
 3   sale, transportation, storage and use of skill video game
 4   systems is established. The program shall be implemented and
 5   administered by the lottery under the oversight of the
 6   department. The lottery shall:
 7            (1)   Issue licenses to participating individuals or
 8      companies to authorize them to design, program, license,
 9      sublicense, manufacture, transport, store and make available
10      to the public a skill video game system within this
11      Commonwealth in accordance with this act and regulations
12      promulgated by the lottery.
13            (2)   Establish regulator and enforcement authority over
14      the program.
15            (3)   Develop enforcement procedures.
16      (b)   General authority and duties.--The department and the
17   lottery, which operates under the department's jurisdiction,
18   shall have regulatory authority over the sale, distribution and
19   use of a skill video game system as described under this act.
20      (c)   Specific authority and duties of department.--The
21   department shall have the specific power and duty to:
22            (1)   Collect fees from a distributor.
23            (2)   Require and conduct or cause to be conducted
24      criminal history investigations on applicants and licenses
25      under this act.
26            (3)   For purposes of licensing and enforcement and
27      background investigations, receive information otherwise
28      protected by 18 Pa.C.S. Ch. 91 (relating to criminal history
29      record information).
30            (4)   Issue, approve, renew, revoke, suspend, condition or

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 1      deny issuance or renewal of a license or approval provided
 2      under this act.
 3          (5)     Require prospective and existing applicants and
 4      licensees to submit to fingerprinting by the Pennsylvania
 5      State Police, who shall submit the fingerprints to the
 6      Federal Bureau of Investigation or an agency approved by the
 7      department for purposes of verifying the identity of the
 8      individual and obtaining records of criminal arrest and
 9      convictions.
10          (6)     Promulgate rules and regulations necessary for the
11      administration and enforcement of this act. Except as
12      provided in section 1903, regulations shall be adopted as
13      provided under the act of July 31, 1968 (P.L.769, No.240),
14      referred to as the Commonwealth Documents Law, and the act of
15      June 25, 1982 (P.L.633, No.181), known as the Regulatory
16      Review Act.
17          (7)     Require each person that holds a license issued
18      under this act to provide the periodic reports required of
19      licensees under this act.
20   Section 302.    Sale, manufacturing, distribution, operation and
21                use of skill video game systems.
22      The sale, distribution, operation, possession, transportation
23   and use of a skill video game system in compliance with this act
24   are authorized in this Commonwealth. A skill video game system
25   shall not be deemed:
26          (1)     A lottery, gambling device, slot machine, device
27      intrinsically connected with gambling or coin-operated
28      amusement device.
29          (2)     "Games of chance" as defined under section 103 of
30      the act of December 19, 1988 (P.L.1262, No.156), known as the

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 1      Local Option Small Games of Chance Act.
 2            (3)   As conducting another business on a licensed
 3      premises under the act of April 12, 1951 (P.L.90, No.21),
 4      known as the Liquor Code, or 40 Pa. Code § 3.52 (relating to
 5      connection with other business).
 6                                 CHAPTER 5
 7                                ORGANIZATION
 8   Section 501.    Licenses.
 9      (a)   Issuance.--The department shall have the authority to
10   issue licenses under this act.
11      (b)   Provisional licenses.--The department shall issue a
12   provisional license to operate a skill video game system
13   beginning on the effective date of this subsection to a
14   distributor, operator or establishment that meets the
15   requirements of section 2503.
16      (c)   Skill video game system license.--An initial application
17   period shall commence at a date set by the department. An
18   initial license may be utilized on the date the department
19   issues the initial license and shall remain valid for a minimum
20   of one year or until the department establishes a date for the
21   annual renewal of licenses.
22      (d)   License criteria.--The granting of a license by the
23   department shall be subject to and dependent upon criteria
24   established under regulations promulgated by the department.
25      (e)   License renewal.--An application to renew a license
26   shall be filed with the department prior to the expiration of
27   the license.
28   Section 502.    Licensing requirements.
29      An entity, including each principal holding a controlling
30   interest, which seeks a distributor, operator and establishment

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 1   licensee shall be considered an applicant and shall provide the
 2   following information for an initial or renewal license:
 3            (1)   Identification, including a driver's license or
 4      passport.
 5            (2)   Naturalization papers or resident alien
 6      identification, if applicable.
 7            (3)   Resident information for the previous five years.
 8            (4)   Employment information for the previous five years,
 9      including dates employed and the name and address of the
10      employers so that a criminal history and credit check can be
11      completed. A criminal history may not automatically
12      disqualify an applicant from obtaining a license. The
13      department shall have the discretion to decide whether any
14      particular criminal history disqualifies an applicant for a
15      license.
16            (5)   An individual questionnaire provided by the
17      department for each principal who lives outside of this
18      Commonwealth.
19            (6)   Proof that the applicant has timely filed and
20      satisfied all Federal, State and local taxes.
21   Section 503.    Granting licenses.
22      (a)   Process.--The department may grant, deny or revoke a
23   license under this act.
24      (b)   Determination.--In making a decision under subsection
25   (a), the department shall determine whether the applicant is
26   able to comply with all applicable laws of this Commonwealth and
27   regulations relating to the activities in which the applicant
28   intends to engage under this act.
29      (c)   Privilege.--The issuance or renewal of a license shall
30   be a revocable privilege.

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 1      (d)     Multiple licenses.--An entity holding a license may only
 2   hold one type of license and may not hold another type of
 3   license.
 4      (e)     Appeals.--If the department denies an application, the
 5   applicant shall have 30 days from the date of the department's
 6   mailing of the denial to the applicant to file an appeal of the
 7   denial. The appeal shall be filed with the Secretary of Revenue.
 8   The appeal of a decision by the Secretary of Revenue shall be
 9   filed with Commonwealth Court.
10      (f)     Prior operation.--Prior operation of a skill game shall
11   not be a basis for denying a license.
12   Section 504.    Application and renewal costs of licenses.
13      (a)     Payment.--The fee for an initial or renewal license
14   application shall be payable to the department when the
15   application or renewal is submitted.
16      (b)     Initial license and costs.--An initial license
17   application fee shall be as follows:
18            (1)   A skill video game system distributor initial
19      application fee, $1,000,000.
20            (2)   A skill video game system operator initial license
21      application fee, $25,000.
22            (3)   A skill video game system establishment initial
23      license application fee, $250.
24      (c)     Renewal license and costs.--A renewal license
25   application fee shall be nonrefundable. Renewal license
26   application fees shall be as follows:
27            (1)   A skill video game system distributor annual renewal
28      license application fee, $100,000.
29            (2)   A skill video game system operator annual renewal
30      license application fee, $5,000.

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 1            (3)   A skill video game system establishment annual
 2      renewal license application fee, $250.
 3   Section 505.    Issuance of license.
 4      A license issued by the department to a participant shall be
 5   effective only for the specified period and shall include
 6   information required by the department.
 7   Section 506.    Term of license.
 8      (a)   Provisional license.--A provisional license shall be
 9   valid until the issuance or denial of an initial license.
10      (b)   Initial license.--An initial license shall remain valid
11   for one calendar year.
12      (c)   Renewal license.--A renewal license shall be valid for
13   one calendar year from the date of issuance.
14   Section 507.    License renewal.
15      (a)   Renewal.--An application for a renewal license shall
16   include information required by the department.
17      (b)   Approval.--The department shall renew a license using
18   the same process for granting licenses under this chapter.
19      (c)   Nonrenewal decision.--A decision to deny or not renew a
20   license by the department shall include a notice specifying in
21   detail how the applicant has not satisfied the department's
22   requirements for renewal. The department may request additional
23   information from the applicant before deciding to grant or deny
24   an application for renewal. If the department denies a renewal,
25   the applicant may appeal the decision to Commonwealth Court.
26   Section 508.    Suspension or revocation of license.
27      The department may suspend or revoke a license if the
28   participant violates any provision of this act or regulation of
29   the department.
30                                 CHAPTER 7

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 1                            CERTIFICATION REQUIREMENTS
 2   Section 701.     Skill video game system testing.
 3      (a)   Certification.--Prior to obtaining an initial license
 4   under Chapter 5, a skill video game system must be certified
 5   under subsection (b) in accordance with the following:
 6            (1)   Before the distributor sells, leases, licenses,
 7      provides or distributes game software not qualified or
 8      approved by the program as skill video game software, the
 9      distributor shall supply to the department an engineering
10      report and opinion in complete forensic detail by an
11      independent testing laboratory, with experience in testing
12      skill video game software and approved by the department, and
13      based on an examination of a prototype or production sample
14      of the skill video game software and approved skill video
15      game system to be certified. The testing required under this
16      paragraph shall be based only on skill video game software,
17      and the technical specifications shall be agreed to be
18      independent from slot machine technical specifications
19      engineered for casino or video game terminal play. The
20      engineering report and opinion shall:
21                  (i)    Be restricted in scope to technical detail and
22            shall not be otherwise relied upon as a legal opinion
23            regarding whether skill or chance are predominant in
24            winner determination or as an interpretation of law.
25                  (ii)    Be signed by a principal or executive officer
26            of an independent testing laboratory, which signature
27            shall constitute the laboratory's certification regarding
28            its contents.
29                  (iii)   State, at a minimum, a written certification
30            to the department that the skill video game software is

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 1        one in which:
 2                  (A)   Skill of the player rather than an element
 3             of chance is the predominant factor affecting the
 4             skill video game's outcome.
 5                  (B)   The skill video game requires the prize
 6             outcome for the single play and over a session of
 7             gameplay to be such that without the player
 8             exercising skill during the main phases of gameplay,
 9             it would be impossible to win the prize offered.
10                  (C)   There must be no hard-coded minimum or
11             maximum payout percentage for a skill video game.
12                  (D)   There must not be any reflexive,
13             compensating algorithm that makes the skill video
14             game harder when it detects a highly skilled player
15             or when the skill video game's payout percentage goes
16             above 100%.
17                  (E)   An average player can learn to score and win
18             effectively on a skill video game.
19                  (F)   A player is informed of the criteria used in
20             selecting winners and rules are available for viewing
21             at any time other than in the middle of a skill video
22             game in play.
23                  (G)   Skill video games must be programmed to keep
24             true and accurate gameplay records, with a minimum of
25             10 game recall, and the number of payouts from the
26             skill video game, with a minimum of 10 voucher
27             recall. Accounting meters must be at least eight
28             digits in length, with six digits to the left of the
29             decimal.
30                  (H)   The skill video game is programmed so that a

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 1                  maximum price to play is $5 and the maximum winnings
 2                  per individual game are $5,000.
 3                      (I)   The skill video game allows for the display
 4                  of the software version, as well as lists of hardware
 5                  components of the approved terminal, in an easily
 6                  identifiable and accurate manner.
 7            (2)   A skill video game system shall remain certified and
 8      valid unless material changes are made to the skill video
 9      game software or equipment as deemed necessary by the
10      department.
11            (3)   A distributor applicant applying for an initial
12      license shall provide the distributor applicant's skill video
13      game software in a manner consistent with rules and
14      regulations promulgated by the department.
15            (4)   Certification of the requirements under this
16      subsection shall be made to the department by the
17      distributor, who shall represent that the certification is
18      being made subject to the penalties of 18 Pa.C.S. § 4904
19      (relating to unsworn falsification to authorities).
20      (b)   Certification.--An independent testing laboratory
21   approved by the department shall provide a certification as
22   provided under this act.
23      (c)   Field verification of certified skill video game
24   software.--The software distributor's skill video game software
25   shall allow for random field verification by an agent or
26   designee of the department. The distributor shall supply the
27   department with the unique signature of the application software
28   being tested and instructions allowing an agent or designee of
29   the department to field verify a production copy of the skill
30   video game system.

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 1      (d)   Trademark, copyright, trade secret and confidential
 2   proprietary material.--Nothing in this act is intended to
 3   violate, compromise or facilitate infringement of or make public
 4   material created, owned or possessed by a distributor.
 5   Intellectual property or other material or information provided
 6   by a software distributor to the department for inspection shall
 7   be deemed as trademarked, copyrighted, a trade secret or
 8   confidential proprietary material, and the material shall not be
 9   subject to public access or inspection.
10   Section 702.   Bonding.
11      (a)   Eligibility.--To be eligible for a provisional or
12   initial license, a distributor shall execute a $1,000,000 bond
13   within 30 days of issuance of the license. The bond shall
14   specifically protect fees owed to the department under this act,
15   not the software provider.
16      (b)   Surety.--Each bond shall have as a surety a duly
17   authorized surety company or two sufficient individual sureties
18   approved by the department.
19      (c)   Condition.--The bond is conditioned for the faithful
20   performance of the duties of the software provider to pay
21   applicable taxes, fees and fines required by this act.
22      (d)   Suspension or revocation.--Unless the bond is filed with
23   the department within the 30-day time period under subsection
24   (a), the department may suspend the initial license. Failure to
25   maintain an acceptable bond shall be grounds for license
26   revocation.
27   Section 703.   Reporting.
28      (a)   Monthly report.--Each distributor shall utilize a
29   terminal reporting system for the distributor's skill video game
30   system. A distributor shall submit a monthly report to the

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 1   department providing the following for the prior month:
 2            (1)   The complete tracking of all revenue derived through
 3      the operation of all skill video game systems in operation
 4      within all establishments.
 5            (2)   The reporting of gameplay statistics, including cash
 6      in, cash out and numbers of games played.
 7            (3)   The physical locations of all skill video game
 8      systems in possession of a distributor, operator or
 9      establishment in this Commonwealth.
10      (b)   Annual report.--By July 30 of each year, for the prior
11   year's business, each distributor shall report to the department
12   the following:
13            (1)   The total number of skill video game systems that
14      operators purchased from a distributor, including all
15      terminal identification numbers.
16            (2)   The number and type of skill video game systems that
17      operators have located within each establishment.
18            (3)   The total number of skill video game systems and the
19      terminal identification numbers that each entity has in
20      inventory as of June 30.
21            (4)   The total number of skill video game systems in
22      operation by county.
23            (5)   The total number of skill video game systems in
24      operation by municipality.
25                                 CHAPTER 9
26                                DISTRIBUTORS
27   Section 901.    Authorization.
28      A distributor, once licensed by the department, shall be
29   authorized to distribute terminals and associated devices for
30   skill video gaming that comply with the requirements under

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 1   Chapter 5.
 2   Section 902.     System requirements.
 3      (a)     Currency.--A skill video game system shall be equipped
 4   with the ability to accept currency and shall distribute
 5   winnings by ejection of a bearer scrip, card or other means
 6   approved by the department redeemable only for cash at the
 7   establishment where played. Winnings from players shall be
 8   redeemed at a ticket redemption terminal or by an attendant
 9   within the establishment where the bearer scrip or card was
10   created.
11      (b)     Internet.--A skill video game system shall be connected
12   to the Internet for purposes of security, authentication and
13   redemption or data collection and control.
14      (c)     External ports.--Except as may be approved by the
15   department for the field verification of skill video game
16   software signatures, a skill video game system shall not have an
17   external data port or disk drive outside of a locked area within
18   the terminal.
19      (d)     Rules of play.--The skill video game system shall
20   prominently display the rules of play either on the game screen
21   or on the terminal.
22      (e)     Placard.--Each skill video game system shall bear a
23   placard in a prominent location and in a prominent color stating
24   as follows:
25            This game is licensed by the Pennsylvania Department of
26            Revenue. Players must be 18 years of age or older to
27            play.
28      (f)     Age verification.--The skill video game system shall be
29   operated only if the establishment has validated the player's
30   age by utilizing a State-issued driver's license or

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 1   identification card. A device used to validate the player's age
 2   may only read and verify the age from a State-issued driver's
 3   license or identification card and may not collect or retain any
 4   additional player information.
 5      (g)   Other markings.--Each skill video game system shall
 6   display a permanently affixed marker with the name of the
 7   distributor of the terminal and contact information for the
 8   operator, including a mailing address and telephone number.
 9                                 CHAPTER 11
10                                 OPERATORS
11   Section 1101.    Authorization.
12      An operator shall do the following:
13            (1)   Purchase, lease, license, sublicense or provide
14      approved skill video game systems from a distributor.
15            (2)   Distribute skill video game systems to
16      establishments under terms approved by the department.
17            (3)   Collect and report skill video game system income
18      and reconcile with a terminal reporting system.
19            (4)   Accept returns of skill video game systems from
20      establishments per regulations promulgated by the department.
21   Section 1102.    Skill video game system placement agreements.
22      (a)   Contract.--Within 60 days of receiving an initial
23   license, an operator shall enter into a contract with a licensed
24   distributor. In addition to any additional minimum standards for
25   the contract that the department requires, a skill video game
26   placement agreement shall include a provision rendering the
27   agreement invalid if either party's license or application is
28   denied, revoked, not renewed, withdrawn or surrendered.
29      (b)   Term.--A skill video game placement agreement may be
30   active for a minimum term of five years but shall not exceed 10

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 1   years.
 2   Section 1103.    Player security.
 3      Each establishment shall be provided a camera system from the
 4   operator which shall be pointed directly on skill video game
 5   systems and shall always be active. The camera system shall
 6   record and collect all video footage. The video footage shall be
 7   maintained and stored for the immediately prior 60 days.
 8   Section 1104.    Reporting.
 9      An operator using the terminal reporting system shall submit
10   a monthly report to the distributor. The distributor shall
11   provide to the department a monthly report that includes the
12   terminal identification number in an operator's inventory and
13   within each establishment for the prior month.
14                                   CHAPTER 13
15                                 ESTABLISHMENTS
16   Section 1301.    Authorization.
17      An establishment shall do the following:
18            (1)   Utilize skill video game systems from operators for
19      entertainment and play by the public.
20            (2)   Return unused, damaged or inoperable skill video
21      game systems to the operator.
22   Section 1302.    Skill video game placement agreements.
23      (a)   Contract.--Within 60 days of receiving an initial
24   license, an establishment shall enter into a contract with an
25   operator. In addition to any minimum standards for contract that
26   the department requires, a skill video game placement agreement
27   shall include a provision rendering the skill video game
28   placement agreement invalid if either party's license or
29   application is denied, revoked, not renewed, withdrawn or
30   surrendered.

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 1      (b)   Term.--A skill video game placement agreement may be
 2   active for a minimum term of five years but shall not exceed 10
 3   years.
 4   Section 1303.     Limits on skill video game terminals.
 5      (a)   Terminals.--An establishment may have a maximum of two
 6   skill video game terminals per 500 square feet of public floor
 7   common space available to the patrons of the establishment.
 8      (b)   Number of terminals.--
 9            (1)   An establishment may not exceed five approved skill
10      video game terminals.
11            (2)   An establishment that is owned by an organization
12      under 26 U.S.C. § 501(c) (relating to exemption from tax on
13      corporations, certain trusts, etc.) may not exceed 10
14      approved skill video game terminals.
15      (c)   Placement.--Skill video game terminals shall be placed
16   in public floor space visible to patrons and employees.
17   Section 1304.     Prohibition on miniature casinos and stop and
18                  gos.
19      (a)   General rule.--An operator is prohibited from installing
20   skill video game systems in an establishment where the sole or
21   primary source of annual net revenue is derived from skill video
22   game systems.
23      (b)   Exemption.--Subsection (a) shall not apply to an
24   organization established under 26 U.S.C. § 501(c) (relating to
25   exemption from tax on corporations, certain trusts, etc.).
26   Section 1305.     Limitation of access by individuals under 18
27                  years of age.
28      The department shall promulgate regulations, including
29   employee training for detecting fake identification cards, for
30   licensed establishments to ensure the play of skill video game

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 1   systems by individuals under 18 years of age. Under no
 2   circumstances shall an establishment redeem a skill video game
 3   system redeemable bearer scrip, card or other means approved by
 4   the department from an individual under 18 years of age.
 5   Establishment licensees are required to post problem gaming
 6   signage and make problem gaming informational materials, the
 7   terms of which shall be established by the department, available
 8   at the establishment.
 9   Section 1306.    Qualifications for establishments.
10      (a)   Play.--Skill video game systems shall be played only at:
11            (1)   an establishment licensed by the Pennsylvania Liquor
12      Control Board or the Pennsylvania State Lottery; or
13            (2)   an organization established under 26 U.S.C. § 501(c)
14      (relating to exemption from tax on corporations, certain
15      trusts, etc.).
16      (b)   License required.--An establishment under subsection (a)
17   must be licensed by the Commonwealth to operate a skill video
18   game system.
19      (c)   Subdivision prohibited.--An establishment shall consist
20   of one physical building and may not be subdivided for the
21   purposes of obtaining additional licenses to operate skill video
22   game systems.
23                                 CHAPTER 15
24                                  PLAYERS
25   Section 1501.    Authorization.
26      It shall be lawful for a user to play and receive winnings
27   from a skill video game system dispensed in the form of a bearer
28   scrip, card or other means approved by the department which is
29   redeemable only at the establishment for cash. Cash shall not be
30   dispensed directly by the terminal.

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 1   Section 1502.    Winnings.
 2      A player's net winnings from the play of a licensed skill
 3   video game terminal shall be classified as compensation under
 4   section 303 of the act of March 4, 1971 (P.L.6, No.2), known as
 5   the Tax Reform Code of 1971.
 6                                   CHAPTER 17
 7                                      Fee
 8   Section 1701.    Fee imposed.
 9      (a)   Fee.--A fee of $500 per month shall be assessed to each
10   skill video game system made available for play to the
11   Commonwealth by the distributor. This fee shall be assessed
12   prior to making a skill video game system available to play.
13      (b)   Deposit.--Revenue received from the fee imposed under
14   this section shall be distributed by the department and shall be
15   proportioned monthly under the following formula:
16            (1)   Forty percent of the revenue shall be deposited into
17      the General Fund to be used for the purposes of public
18      transportation and infrastructure.
19            (2)   Twenty percent of the revenue shall be distributed
20      to individual counties proportionally based upon the gross
21      profits derived from the operation of all skill video game
22      systems within that county.
23            (3)   Twenty percent of the revenue shall be distributed
24      to individual municipalities based on the gross profits
25      derived from the operation of skill video game systems within
26      that municipality.
27            (4)   Ten percent of the revenue shall be deposited into
28      the Clean Streams Fund.
29            (5)   Five percent of the revenue shall be distributed to
30      the Pennsylvania State Police for the purpose of enforcing

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 1      this act.
 2            (6)   Five percent of the revenue shall be distributed to
 3      the Pennsylvania State Lottery for the purpose of carrying
 4      out the regulations promulgated under this act.
 5      (c)   Exemption.--Revenue generated from approved skill video
 6   game terminals being played by the public and game credit
 7   licenses to supply skill video game systems shall not be
 8   subjected to the tax imposed under section 202 of the act of
 9   March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
10   1971.
11      (d)   Information.--The distributor, operator and
12   establishment shall provide to the department any information
13   required by the department for the department's assessment and
14   review of fees under this section.
15      (e)   Prohibition on local fees and taxes.--No additional
16   taxes or fees, including amusement taxes, may be imposed on the
17   placement of a skill video game system or the revenue generated
18   by a terminal unless specifically authorized under this act.
19                                 CHAPTER 19
20                               ADMINISTRATION
21   Section 1901.    Governing practices and procedures.
22      The provisions of 2 Pa.C.S. (relating to administrative law
23   and procedure) shall apply to all actions of the department
24   under this act constituting an adjudication as defined in 2
25   Pa.C.S. § 101 (relating to definitions).
26   Section 1902.    Law enforcement notification.
27      The department may notify law enforcement of information
28   relating to any violation or suspected violation of this act.
29   Section 1903.    Temporary regulation.
30      (a)   Promulgation.--In order to facilitate the prompt

20260HB2213PN2907                    - 26 -
 1   implementation of this act, the department shall promulgate
 2   temporary regulations as outlined in section 2503. The
 3   department may promulgate temporary regulations not subject to
 4   sections 201, 202, 203, 204 and 205 of the act of July 31, 1968
 5   (P.L.769, No.240), referred to as the Commonwealth Documents
 6   Law, sections 204(b) and 301(10) of the act of October 15, 1980
 7   (P.L.950, No.164), known as the Commonwealth Attorneys Act, and
 8   the act of June 25, 1982 (P.L.633, No.181), known as the
 9   Regulatory Review Act.
10      (b)   Expiration.--The department's authority to adopt
11   temporary regulations under subsection (a) shall expire two
12   years after the effective date of this subsection. Regulations
13   adopted after this period shall be promulgated as provided by
14   law.
15      (c)   Publication.--The department shall transmit notice of
16   the temporary regulations to the Legislative Reference Bureau
17   for publication in the next available issue of the Pennsylvania
18   Bulletin no later than six months after the effective date of
19   this subsection.
20   Section 1904.   Reports by licensees.
21      An operator and establishment shall file a monthly report
22   with the distributor as designated by the department. The
23   distributor shall make the reports available to the department.
24                                 CHAPTER 21
25                      OFFENSES RELATED TO OPERATION OF
26                        UNLICENSED SKILL VIDEO GAMES
27   Section 2101.   Criminal distribution and operation of unlicensed
28               skill video game terminals.
29      (a)   Penalties.--In addition to any other penalty provided by
30   law, a person commits a misdemeanor of the first degree if the

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 1   person owns, operates, maintains, places into operation or has a
 2   financial interest in an unlicensed skill video game, skill
 3   video game system or skill video game software or a business
 4   that owns, operates, maintains or places into operation or has a
 5   financial interest in an unlicensed skill video game, skill
 6   video game system or skill video game software:
 7            (1)   which is offered or made available to persons to
 8      play or participate for direct or indirect consideration,
 9      including consideration associated with a related product,
10      service or activity; and
11            (2)   for which the person playing the unlicensed skill
12      video game system may become eligible for a cash or cash-
13      equivalent prize, whether or not the eligibility for or value
14      of the cash or cash-equivalent prize is determined by or has
15      any relationship to the outcome of or play of the unlicensed
16      skill video game system.
17      (b)   Forfeiture.--An unlicensed skill video game, skill video
18   game system or skill video game software owned, operated
19   maintained or placed into operation in violation of subsection
20   (a) shall be seized and forfeited to the Commonwealth. The
21   forfeiture shall be conducted in accordance with 42 Pa.C.S. §§
22   5803 (relating to asset forfeiture), 5805 (relating to
23   forfeiture procedure), 5806 (relating to motion for return of
24   property), 5807 (relating to restrictions on use), 5807.1
25   (relating to prohibition on adoptive seizures) and 5808
26   (relating to exceptions).
27                                  CHAPTER 23
28                  OFFENSES RELATED TO ILLEGAL MANUFACTURING,
29              DISTRIBUTION OR OPERATION OF SKILL VIDEO GAMES
30   Section 2301.     Law enforcement.

20260HB2213PN2907                    - 28 -
 1      (a)   General criminal enforcement.--Except as provided in
 2   subsection (b), the Bureau of Liquor Control Enforcement of the
 3   Pennsylvania State Police shall be responsible for enforcement
 4   of the criminal provisions of this act.
 5      (b)   Counties of the first class.--In addition to the Bureau
 6   of Liquor Control Enforcement of the Pennsylvania State Police,
 7   a local law enforcement agency may enforce the criminal
 8   provisions of this act in a county of the first class.
 9      (c)   Definition.--As used in this section, the term "local
10   law enforcement agency" includes the Philadelphia Police
11   Department.
12   Section 2302.     Criminal distribution of skill video game
13                  systems.
14      In addition to any other penalty provided by law, a person
15   commits a misdemeanor of the first degree if the person
16   illegally sells, leases, licenses, sublicenses or distributes to
17   any person or entity a skill video game system without being
18   properly licensed by the department and contracted with a
19   software provider.
20   Section 2303.     Criminal alteration of skill video game software,
21                  terminal or related equipment.
22      In addition to any other penalty provided by law, a person
23   commits a felony of the third degree if the person
24   intentionally, knowingly or recklessly alters a skill video game
25   system, skill video game software or skill video game terminal
26   in any manner so that:
27            (1)   chance, rather than predominant skill, is the factor
28      affecting the prize outcome of the skill video game on a
29      single-play basis and on the basis of a session of single
30      plays;

20260HB2213PN2907                     - 29 -
 1            (2)   a player does not have an opportunity on every play
 2      to win back more than what was spent to play the skill video
 3      game; or
 4            (3)   a skill video game terminal is capable of issuing
 5      currency, coins, a stored-value card or other cash equivalent
 6      or other medium of exchange.
 7   Section 2304.        Criminal redemption of value to individual under
 8                  18 years of age.
 9      In addition to any other penalty provided by law, a person
10   commits a summary offense if the person provides value of any
11   kind to an individual under 18 years of age in exchange for an
12   approved skill video game terminal redeemable bearer scrip.
13   Section 2305.        Additional penalties.
14      (a)   Civil penalties.--In addition to any other remedy
15   available to the department, the department may assess a civil
16   penalty for any violation of this act, a regulation promulgated
17   under this act or order issued under this act. The following
18   penalties shall apply:
19            (1)   The department may assess a civil penalty of not
20      more than $25,000 for each violation and an additional
21      penalty of not more than $1,000 for each day of a continuing
22      violation. In determining the amount of each penalty, the
23      department shall take the following into consideration:
24                  (i)    The gravity of the violation.
25                  (ii)    The willfulness of the violation.
26                  (iii)    Previous violations, if any, by the person
27            being assessed.
28                  (iv)    The economic benefit to the person being
29            assessed for failing to comply with the requirements of
30            this act, a regulation promulgated under this act or an

20260HB2213PN2907                       - 30 -
 1            order issued under this act.
 2            (2)    The department may issue a written warning in lieu
 3      of a civil penalty to a person or entity who aids, abets,
 4      counsels, induces, procures or causes another person to
 5      violate this act, a regulation promulgated under this act or
 6      an order issued under this act.
 7      (b)   Sanctions.--
 8            (1)    In addition to any other penalty authorized by law,
 9      the department may impose the following sanctions:
10                   (i)    The revocation or suspension of the license of a
11            person found to be in violation of this act, a regulation
12            promulgated under this act or an order issued under this
13            act.
14                   (ii)    The revocation or suspension of the license of
15            a person for conduct or activity or the occurrence of an
16            event that would have disqualified the person from
17            receiving the license.
18                   (iii)   The ordering of restitution of money or
19            property unlawfully obtained or retained by a licensee.
20            (2)    A person who aids, abets, counsels, induces,
21      procures or causes another person to violate this act shall
22      be subject to the sanctions provided under paragraph (1).
23      (c)   Cost of action.--The department may assess against a
24   person determined to be in violation of this act the cost of
25   investigation of the violation.
26      (d)   Insignificant violations.--Nothing in this section shall
27   be construed to require the assessment of a civil penalty or the
28   imposition of a sanction for an insignificant violation of this
29   act if the department determines that the public interest will
30   be adequately served under the circumstances by the issuance of

20260HB2213PN2907                        - 31 -
 1   a written warning.
 2                                    CHAPTER 25
 3                             MISCELLANEOUS PROVISIONS
 4   Section 2501.        Conflict.
 5      The sale, manufacture, distribution, possession and use of
 6   approved skill video games, skill video game terminals or other
 7   related skill video game equipment approved by the department in
 8   compliance with this act shall not be deemed to be a violation
 9   of 4 Pa.C.S. Pt. II (relating to gaming), 18 Pa.C.S. § 5513
10   (relating to gambling devices, gambling, etc.) or the act of
11   December 19, 1988 (P.L.1262, No.156), known as the Local Option
12   Small Games of Chance Act.
13   Section 2502.        Zoning.
14      (a)   Municipal zoning requirements.--A distributor, operator
15   and establishment shall only have to meet the same municipal
16   zoning and use requirements as other similar business types that
17   are located in the same zoning district. A municipality may not:
18            (1)   prohibit the placement or play of skill games; or
19            (2)   approve municipal zoning or land use requirements
20      that restrict or prohibit placement, use or play of an
21      approved skill video game terminal in a zoning district that
22      allows any of the following:
23                  (i)    the sale of beer, wine and spirits;
24                  (ii)    the sale or play of State lottery games at
25            commercial establishments; or
26                  (iii)    gaming or wagering conducted under 4 Pa.C.S.
27            Pt. II (relating to gaming).
28      (b)   Exception for cities of the first class.--
29            (1)   A city of the first class shall have sole authority
30      to enforce all provisions related to rejecting skill video

20260HB2213PN2907                       - 32 -
 1      game permits from stop-and-go establishments.
 2            (2)   A business determined to be a chronic nuisance
 3      business under the local laws of a city of the first class
 4      according to local regulations may not be issued a permit for
 5      skill video games under this act.
 6            (3)   Penalties for any establishment determined to be a
 7      chronic nuisance business under the local laws of a city of
 8      the first class that maintains skill games, with or without a
 9      permit, shall be fined not less than $100,000 and not more
10      than $500,000, as determined by the city of the first class.
11            (4)   All fines collected under this subsection shall be
12      deposited into an account designated by the city of the first
13      class where the violation occurred for the enforcement of the
14      provisions of this act and local regulations within the city
15      of the first class.
16   Section 2503.        Provisional licenses.
17      (a)   Provisional licenses.--
18            (1)   A distributor that has filed registration
19      information with the department under this section shall be
20      permitted to continue operation.
21            (2)   Within 30 days after the effective date of this
22      paragraph, a distributor shall collect and submit to the
23      department the licenses application fee payments and
24      registration information of all licensees. The following
25      shall apply:
26                  (i)    A submission to the department under this
27            paragraph shall include prepayment of the initial license
28            fee and the registration information.
29                  (ii)    A distributor shall promptly submit
30            registration information to the department as the

20260HB2213PN2907                       - 33 -
 1        information pertains to operators and establishments in
 2        compliance with the guidelines provided by the
 3        department.
 4             (iii)    Upon submission of registration information, a
 5        participant shall be considered to have a provisional
 6        license pending.
 7             (iv)    The fee shall be the same as the initial
 8        license application fee under section 504. A payment
 9        under this paragraph shall be considered payment in full
10        for an initial license application fee.
11             (v)    A provisional license shall be valid until the
12        department approves and issues the initial license under
13        this act.
14             (vi)    A payment shall be forfeited if the department
15        declines to issue the initial license or revokes the
16        provisional license.
17             (vii)    If a license is denied or revoked, the
18        licensee shall cease the distribution, operation or use
19        of skill video game systems or related equipment.
20             (viii)    An establishment shall not be allowed to
21        operate with a provisional license without having been
22        approved by a distributor who has submitted the
23        establishment's name and information to the department.
24             (ix)    A distributor, operator and establishment may
25        buy, use, sell, lease, license or otherwise provide skill
26        video game systems or related equipment as prescribed by
27        the department.
28             (x)    A distributor

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