Stephanie Cesare Michele L. Kluk John A. Abom Craig E. Kauzlarich Corey J. Adamson Brian P. Platt

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Pennsylvania Small Games of Chance - Law Changes

The General Assembly of the Commonwealth of Pennsylvania has recently passed new laws that significantly change the existing rules concerning how clubs and other organizations operate small games of chance.

The amendments to the law create new definitions, increase prize limits, add new games, provide additional licensing rules and regulations for organizations, create reporting requirements, and amend enforcement provisions.

Prize Limits Increased: Individual prize limits are increased from $500 to $1,000, and the maximum amount of prizes that may be awarded during a week increases from $5,000 to $25,000.

Criminal History Record Now Required: An organization with proceeds in excess of $2,500 in one year must include with its license application the results of a criminal history record information check from the Pennsylvania State Police for the organization's executive officer and secretary.

Use of Proceeds: Club licensees will be permitted to use up to 30% of proceeds (the difference between gross revenue collected from operating small games of chance and prizes paid) from small games of chance for operating expenses. No less than 70% of proceeds must be used for "public interest purposes" in the calendar year in which the proceeds were obtained.

Annual Report Requirements: Eligible organizations (non-club licensees) with proceeds in excess of $2,500 in a calendar year are required to file an annual report with the Pennsylvania Department of Revenue, which contains the following:

  • Number of W-2G forms issued by the organization
  • Total gross winnings reported on W-2G forms
  • Gross revenue collected from small games of chance
  • Total expenses associated with small games of chance
  • Total prizes paid
  • Proceeds
  • Amount of proceeds used for public interest purposes.

Electronic Semi- Annual Reports: Club licensees – organizations with liquor licenses that are licensed to hold small games of chance – are required to electronically file semi-annual reports with the Pennsylvania Department of Revenue.

Substitution of Games of Chance Location: Licensed eligible organizations whose licensed premises are damaged by a natural disaster, fire, or other similar circumstance that makes the licensed premises unusable, may conduct games of chance at another location upon receiving approval from the District Attorney.

"The above is just a brief summary of the amendments to the law. It is advisable to have an attorney review the new Acts and your organization's small games of chance to ensure proper compliance and to determine any and all amendments that will affect you."