Pennsylvania Gaming Laws on Slot Machines

by David Ferris
State law requires licensing fees for slot machines.

State law requires licensing fees for slot machines.

Photos.com/Photos.com/Getty Images

Motivated chiefly by a desire for increased state revenues, Pennsylvania decriminalized slot machines in 1999. Until then, many residents of and visitors to the state gravitated toward New Jersey, Delaware, and other neighboring states where gambling was legal. However, just because slot machines are permitted in Pennsylvania does not mean anyone can set up a casino in their basement. Slots are governed by very specific state statutes.

Confiscation of Slot Machines

Unlicensed slot machines may be seized by state authorities and forfeited to the government. The law specifically addresses antique slot machines, which are classified as antiques if the defendant can demonstrate "with the preponderance of the evidence that it was manufactured at least 25 years before the current year and that it was not used or attempted to be used for any unlawful purposes." Such machines are protected from destruction by the state if their owner can prove they are antiques, as long as they're not used for gambling.

License Fee and Taxes

Each slot machine operated as a gambling device in Pennsylvania must be licensed. Owners (such as casinos and race tracks) must pay a license fee of $50 million or in certain circumstances, $5 million as of June 2011, to be deposited in the State Gaming Fund. The license fee is paid once and is not charged for each individual slot machine. Slot machine manufacturers in the state must also pay a license fee of $50,000. Section 1403 of the law imposes a tax, which is 34% as of June 2011, on the daily gross revenues of each licensed slot machine. If this tax rate increases after a license has been granted, the machine owner is entitled to a tax credit equal to the difference between the current and revised tax rate (within a ten-year period after the granting of the license).

Possession and Transportation

Transporting a slot machine into the state requires the following: The owner must submit to the state gaming board, in writing, the name and address of the owner, the name and address of the transporter (if different from the owner), the delivery date and the reason for transport. Slot machines must be hooked up to a central computer system before being put into use as a gambling device.

Testing

The state gaming board subjects all slot machines to testing prior to use, at the expense of the slot machine licensee. The machines must be retested following any mechanical modifications as well. Licensees must submit to the board a report that includes detailed mathematical explanations of payout systems, hardware schematic diagrams, a wiring harness connection diagram and a technical operation manual.

Photo Credits

  • Photos.com/Photos.com/Getty Images