Pennsylvania Gaming Control Board Becomes Active in Placing Venders on Prohibited List

February 2009Alerts Gaming Practice Alert

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Vendors doing business with slot machine licensees in Pennsylvania need to be aware that the Pennsylvania Gaming Control Board (the Board) recently has become very active in placing vendors on the Board’s Prohibited Vendors List.

The Board’s regulations require that a vendor file for registration if it does over $15,000 of business with slot machine licensees. If the vendor exceeds $200,000 worth of business with one slot machine licensee, or $500,000 with more than one licensee in any consecutive 12-month period, it must file for vendor certification, a higher license. The Board requires that the company and certain officers, directors and employees file applications for vendor certification within 30 days. If the applications are filed, the Board may authorize the vendor, on an interim basis, to continue business pending approval of the vendor certification applications.

Problems develop if the vendor fails to file the necessary applications. The Board’s regulations require the Board to place a vendor on the Prohibited Vendor List if they fail to cooperate and file the application. Recently, the Board has aggressively placed vendors on the Prohibited Vendor List for failure to timely file applications or to provide additional documents that the Board requested from the vendor. A vendor must actively communicate with the Board and filings must be complete to avoid being placed on the Prohibited Vendor List. If a vendor finds itself on the list, it must cease doing business with slot machine licensees and cannot receive payments from licensees until removed from same.

In order to be removed from the Prohibited Vendor List, the vendor must file a complete application and request removal by a petition to the Board. The petition must set forth good cause for removal from the list and explain how the vendor has cured the deficiencies that led to being placed on the list. Petitions can only be heard at Board meetings. The Board’s Office of Enforcement Counsel has also recently requested fines in connection with petitions for removal from the Prohibited Vendor List. The petition process potentially can take 90 days or more and the vendor cannot do business with a slot machine licensee during this time.

It is imperative that vendors applying for certification or registration with the Board prepare the applications properly and cooperate with the Board in order to avoid placement on the Prohibited Vendor List.

For more information about this Alert, contact Marie Jiacopello Jones at 609.572.2259 or via e-mail at [email protected]. Ms. Jones has also written Gaming Manufacturer’s and Supplier’s Desk Reference for obtaining licenses in the Northeast. If you would like a copy, please contact Ms. Jones.