Gambling Laws In Pennsylvania

1. Gambling Laws In Pennsylvania Sergeant James A. Jones Jr. Corporal Rick Goodling Pennsylvania State Police Bureau of Liquor Control Enforcement

2. Overview What is Gambling? Facts The Law Final Thought & Discussion

3. Legal vs. Illegal Gambling • Currently, the authorized and only legal forms of gambling in Pennsylvania are: • Gambling activities conducted pursuant to the Horse Racing Industry Reform Act. • Pennsylvania Lottery • Bingo conducted pursuant to the Bingo Law • Gambling activities conducted pursuant to the Local Option Small Games of Chance Act • Gambling activities conducted pursuant to the Pennsylvania Race Horse Development and Gaming Act (slots).

4. WHAT TYPES OF ACTIVITIES CONSTITUTE GAMBLING?

5. “GAMBLING” • Legal Definition • Behavioral Definition • Behavior is the same, however activity does not meet legal definition of gambling. Chance vs. Skill.

6. GAMBLINGLegal Definition • Gambling is not specifically defined by Statute in Pennsylvania • Instead we have to refer to Court Cases to define gambling

7. GAMBLINGLegal Definition THE PENNSYLVANIA COURTS HAVE DETERMINED THAT GAMBLING CONSISTS OF THREE BASIC ELEMENTS: (PLCB V. PPC CIRCUS BAR, INC.) +REWARD = CONSIDERATION + CHANCE GAMBLING

8. CONSIDERATION • COST TO BEGIN PLAY OR EVENT • BET • WAGER • EXAMPLES • BLOCK PURCHASE IN POOL • “BUY-IN” IN POKER TOURNAMENT • PURCHASE OF PULL TAB • MONEY IN SLOT MACHINE

9. CHANCE • EVENT OUTCOME BASES WHOLLY OR PREDOMINANTLY ON CHANCE • LITTLE OR NO SKILL • EXAMPLES • ROLL OF DICE OR TURN OF CARD • RESULT OF RACE OR SPORTING EVENT • SKILL – MOST ARGUED DEFENSE • TO BE CONSIDERED A SKILL, A PERSON WOULD HAVE TO BE ABLE TO MASTER THE GAME • DARTS, BILLIARDS, ETC. • PLAYING POKER MAY INVOLVE SOME SKILL OR KNOWLEDGE, HOWEVER THE CARDS ARE STILL DEALT RANDOMLY

10. REWARD • RETURN TO PLAYER FOR WINNING EVENT • MAY BE CASH, MERCHANDISE, SERVICE OR ANYTHING OF VALUE • IF VALUE OF PRIZE IS LESS THAN OR EQUAL TO THE CONSIDERATION THEN THE CONTEST IS NOT GAMBLING • E.G. DUCK POND GAME

11. Common Unlawful Gambling Activities • Texas Hold’em Tournaments • “Night at the Races” • “50/50 Drawings” • Casino Nights • Pools – football, basketball, NASCAR, etc. • Chinese Auctions • “Chuck-a-luck Wheel” • Video Gambling Devices - video poker or slots NONE OF THESE ACTIVITIES ARE AUTHORIZED BY THE SMALL GAMES OF CHANCE ACT

12. Texas Hold’em Is it legal???

13. Yes and No When is it lawful: U.S. ex rel. Yate v. Rundle, 326 F. Supp. 344 - States that casual wagering or the occasional playing of cards for money does not constitute an indictable offense. -A friendly “Neighborhood Game” between friends - Between “Friends” does not mean at Joe’s garage every Saturday and anyone can show and play - The “House” DOES NOT take a cut of the pot or accepts cash to get into the game for any reason. (ie.. For food, alcohol etc..)

14. How to Bars and Clubs get away with it • Remember “Consideration and Reward”???? • For Bars and Clubs to lawfully allow Texas Hold’em: - Allow you as the patron to enter the game with out any consideration (money). This includes paying a cover charge, two drink minimum, having to buy the buffet etc.. - The Reward (winnings) is LESS THAN the Consideration (buy in money). If the buy in is $20.00 and you can only win $15.00 this is a legal game.

15. Night at the Races • Usually used as a Fundraiser where a DVD, or Tape of an actual or simulated horse race is played and bets or wagers are placed that are not in an authorized Horse Racing facility. • There are companies that sell Night at the Races “kits”

16. Legal or Illegal??? Answer: Illegal • It is based solely on “Chance”. There is no skill involved in predicting the winner. However • Could be legal if the wager is more than the reward. • (Example: you wager $10.00 but can only win $5.00)

17. “50/50 Drawings”

18. Legal or Illegal??? Answer: Illegal However: When used to determine the outcome for a Small Games of Chance “Daily or Weekly” drawing, it could be legal.

19. Casino Nights • Usually used as a Fundraiser • Usually consist of utilizing multiple gambling games, poker, 50/50 tickets, roulette etc.. to raise money.

20. Legal or Illegal??? Answer: Illegal Again CHANCE, CONSIDERATION, REWARD However • Could be legal if the wager is more than the reward. • (Example: you wager $10.00 but can only win $5.00)

21. Pools • Football, Basketball, Nascar etc..

22. NCAA Brackets

23. Legal or Illegal??? Answer: Illegal However • Could be legal if the wager is more than the reward. (Example: you wager $10.00 but can only win $5.00) • Buck Pools – Legal due to skill?

24. Chinese Auctions • In a Chinese auction, bidders are not prospective buyers (as in the conventional English auction). Instead, they buy tickets, which are chances to win items. The tickets themselves are often as inexpensive as a penny, and bidders may buy hundreds of these tickets. Bidders buy as many tickets as they like, and bid them on any item(s) they want by placing one or more ticket in the "hat" beside the item(s) they are trying to win. At the conclusion of bidding, one winning ticket is drawn from the "hat" beside each item, and the item is given to the owner of that ticket.

25. Legal or Illegal??? Answer: Illegal However • Could be legal if the wager is more than the reward. (Example: you place $10.00 of tickets in hat but can only win $5.00 worth in prizes)

26. Chuck-a-Luck Wheel

27. Legal or Illegal??? Answer: Illegal However • Could be legal if the wager is more than the reward. (Example: you wager $10.00 but can only win $5.00)

28. Video Gambling Devices

29. PA Crimes Code • § 5513. Gambling devices, gambling, etc.(a) Offense defined.--A person is guilty of a misdemeanor of the first degree if he: (1) intentionally or knowingly makes, assembles, sets up, maintains, sells, lends, leases, gives away, or offers for sale, loan, lease or gift, any punch board, drawing card, slot machine or any device to be used for gambling purposes, except playing cards; (2) allows persons to collect and assemble for the purpose of unlawful gambling at any place under his control; (3) solicits or invites any person to visit any unlawful gambling place for the purpose of gambling; or (4) being the owner, tenant, lessee or occupant of any premises, knowingly permits or suffers the same, or any part thereof, to be used for the purpose of unlawful gambling.

30. ????? • SO is it legal for you as the patron to play a video gambling device?

31. Answer : Yes. You as the patron cannot be arrested for playing a video gambling device. What makes the video gambling devices illegal is the intentionally or knowingly makes, assembles, sets up, maintains, sells, lends, leases, gives away, or offers for sale, loan, lease or gift, any slot machine or any device to be used for gambling purposes, except playing cards; (2) allows persons to collect and assemble for the purpose of unlawful gambling at any place under his control; (3) solicits or invites any person to visit any unlawful gambling place for the purpose of gambling; or (4) being the owner, tenant, lessee or occupant of any premises, knowingly permits or suffers the same, or any part thereof, to be used for the purpose of unlawful gambling.

32. So how do we seize unlawful gambling devices? - Receive a payout on the device - Observe a payout on the device - Get a confession that they are being used for unlawful gambling purposes

33. How do we seize unlawful gambling devices without proving their paying out on them? • Case Law • Remember Chance, Consideration, Reward

34. Case Law • Commonwealth v. Kevin G. Dumont, 536 A.2d 342 (Pa.Super. 1987). This is the controlling case which sets forth the criteria which the Bureau must satisfy in order to seize a video gambling device. The Court held that “probable cause” is to be determined using a flexible common sense standard, and the Bureau does not need to prove the three elements of gambling prior to seizure. Officers must demonstrate that the game is “set up” for play, that it accepts U.S. currency (consideration), that its game result is determined primarily by chance (not by skill), and that as articulated by the Court, a knock-off device allows accumulated points to be erased. • Commonwealth v. Two Electronic Poker Game Machines, 465 A.2d 973 (Pa. 1983). The court held that the key determination in deciding whether a video gaming device was an amusement device (legal) or an unlawful gambling device, was to evaluate it against the three traditional elements of gambling: consideration, chance and reward. If the video gaming device required consideration to play; if the result of the game was determined primarily by chance; and if there was a reward for winning, then the video gaming device would be considered so “intrinsically connected to gambling as to constitute a gambling device per se.” In this case, the issue was not “consideration” or “chance”. The issue focused on the question of “reward.” In cases where the Bureau must prove “reward” through circumstantial evidence, the Pennsylvania Supreme Court provided a specific test.

35. Internet Cafes

37. Definition A sweepstakes parlor (or sweepstakes cafe) is an establishment that offers games of chance with prizes in conjunction with other services, like Internet access or telephone cards.[1] Although often seen as gambling, owners of sweepstakes parlors claim to operating under sweepstakes law and thus legal because the winners are predetermined and the entries are offered in conjunction with the purchase of a product. According to such laws sweepstakes parlors do not meet a 3 prong test for gambling: 1. prize 2. chance 3. consideration

38. Games on Sweepstakes

39. Actual Café in PA

40. B I N G O

41. Bingo Act • “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. 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, and any such person may award a prize to any player or players first completing any combination constituting bingo. • NOTE: Any deviation from this definition, such as video bingo or instant bingo ticket does not meet the above definition and are not approved games under the Bingo Act.

42. Bingo Act • Under Title 40, Section 5.32-4(i)(ii), bingo can be conducted as an event/tournament/or contest on any licensed premises as long as the association that holds the bingo permit is a bona fide charitable organization registered with the Pennsylvania Department of State.

43. Requirements 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. In addition, an association shall be further permitted to conduct the game of bingo for a period not to exceed ten days at the association’s exposition, carnival, or fair site. Each association shall keep written records of the total proceeds collected, the total prize money distributed, the total value of all merchandise awarded as a prize, and the amount of moneys paid as rentals or wages, and to whom such rentals or wages were paid. All prizes awarded having a value greater than $250.00 shall be specifically described in the association’s records. 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. In addition, no more than $4,000.00 in prizes shall be awarded in any calendar day. Each association shall deposit with a financial institution all proceeds for each day’s bingo game in an account in the association’s name. This 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.

44. Bingo • Funds derived from the operation of the game of bingo are to be used to support the non-profit purposes of the association. • No association shall permit any person who is not a bona fide member of the association or who has been convicted of a felony or a violation of this act to manage, set up, supervise or participate in the operation of the association’s bingo games. Nothing contained in this act shall be construed to prohibit individuals under 18 years of age from participating in the operation of the game and being compensated if written permission is obtained from their parent or guardian. • 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. • No person may be employed in the operation or the actual running of a bingo game for compensation greater than $50.00 per day, except employees of outside operators. Any person compensated shall be paid individually by check or by cash, in which case the payee shall sign a written receipt. In addition, no person shall receive compensation from more than one source for services rendered in the operation of a bingo game.

45. Bingo • No person under the age of 18 shall be permitted to play bingo unless accompanied by an adult. • Only associations licensed to conduct bingo shall be permitted to advertise their bingo games. Such advertisements shall contain the date, time, location, whether cash or merchandise prizes will be awarded, and the name of the association licensed to conduct the bingo game and the name of the individual in charge of the operation of the game. An association shall not advertise the prizes which will be awarded, or their dollar value, nor shall they advertise a guaranteed prize dollar value. • The association shall own both the premises upon with the bingo is played and the personal property used in the conduct of the game, or shall sign a written agreement leasing such premises or personal property 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. An association shall not lease such premises or personal property from any person who has been convicted of a felony of a violation of the Bingo Act. • No supplier of merchandise, nor any person who has been convicted of a felony or a violation of this act, shall have a pecuniary interest in the operation of or proceeds from the bingo game.

46. Electronic Bingo Legal or Illegal?

47. Electronic Bingo • Answer: Illegal • This is a unlawful gambling device disguised as a Bingo machine. • No skill, push a button, win or loose.

48. THE SMALL GAMES OF CHANCE ACTGateway to gambling?

49. ORIGIN AND PURPOSE • The Pennsylvania Local Option Small Games of Chance Act (the Act) was passed in 1988. • The Act permits certain eligible organizations, “to conduct small games of chance for the purpose of raising funds for the promotion of public interest purposes. • The Department of Revenue promulgates regulations pursuant to the Act . • Significant changes made by Act 2 of 2012.

50. LEGISLATIVE INTENT § 312. Legislative intent The General Assembly hereby declares that the playing of small games of chance for the purpose of raising funds, by certain nonprofit associations, for the promotion of charitable or civic purposes, is in the public interest. In some cases the proceeds from games of chance may be utilized to support certain operating expenses of certain organizations. It is hereby declared to be the policy of the General Assembly that all phases of licensing, operation and regulation of small games of chance be strictly controlled, and that all laws and regulations with respect thereto as well as all gambling laws should be strictly construed and rigidly enforced. The General Assembly recognizes the possibility of association between commercial gambling and organized crime, and wishes to discourage commercialization of small games of chance, prevent participation by organized crime and prevent the diversion of funds from the purposes herein authorized. (EMPHASIS ADDED)