(a) A slot machine licensee shall submit to
the Board and the Department a written description of its initial system of
administrative and accounting procedures, including its internal control
systems and audit protocols (collectively referred to as its "internal
controls") at least 90 days before slot or table game operations are to
commence. A written system of internal controls must include:
(1) Records of direct and indirect ownership
in the slot machine licensee, its affiliates, intermediaries, subsidiaries or
holding companies.
(2) Organization
charts depicting segregation of functions and responsibilities in accordance
with §
465a.11 (relating to slot machine
licensee's organization; jobs compendium).
(3) A description of the duties and
responsibilities of each licensed or permitted position shown on the
organization charts and their respective lines of authority in accordance with
§
465a.11.
(4) A detailed narrative description of the
administrative and accounting procedures designed to satisfy the requirements
of this subpart.
(5) A record
retention policy in accordance with §
465a.6 (relating to retention,
storage and destruction of books, records and documents).
(6) Procedures to ensure that assets are
safeguarded, and counted in conformance with effective count
procedures.
(7) Procedures
governing the conduct of all gaming related promotions to be offered by the
slot machine licensee.
(8) Policies
to prevent political contributions in accordance with section 1513 of the act
(relating to political influence) and an annual certification to the Board and
the Department of State's Bureau of Commissions, Elections and Legislation that
the slot machine licensee has conducted a good faith investigation that has not
revealed any violations of section 1513 of the act.
(9) Procedures to ensure that the slot
machine licensee's employees comply with Chapter 435a (relating to
employees).
(10) Other items the
Board may request in writing to be included in the internal controls.
(b) A submission must be
accompanied by the following:
(1) An
attestation by the chief executive officer or other delegated individual with a
direct reporting relationship to the chief executive officer attesting that the
officer believes, in good faith, that the submitted internal controls conform
to the requirements of the act and this subpart.
(2) An attestation by the chief financial
officer or other delegated individual with a direct reporting relationship to
the chief financial officer attesting that the officer believes, in good faith,
that the submitted internal controls are designed to provide reasonable
assurance that the financial reporting conforms to generally accepted
accounting principles in the United States and complies with applicable laws
and regulations, including the act and this subpart.
(c) The initial submission must also be
accompanied by a report from an independent registered public accounting firm
licensed to practice in this Commonwealth. The report should express an opinion
as to the effectiveness of the design of the submitted system of internal
controls over financial reporting and should further express an opinion as to
whether the submitted system of internal controls materially deviates from the
requirements of applicable laws and regulations, including the act and this
subpart.
(d) A submission by a slot
machine licensee must include, at a minimum, the following:
(1) Administrative controls which include the
procedures and records that relate to the decision making processes leading to
management's authorization of transactions.
(2) Accounting controls that safeguard assets
and revenues and ensure the reliability of financial records. The accounting
controls must be designed to provide reasonable assurance that:
(i) Transactions or financial events which
occur in the operation of a slot machine or table game are executed in
accordance with management's general and specific authorization.
(ii) Transactions or financial events which
occur in the operation of a slot machine or table game are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles in the United States, the act and this
subpart.
(iii) Transactions or
financial events which occur in the operation of a slot machine or table game
are recorded in a manner which provides reliable records, accounts and reports,
including the recording of cash and evidences of indebtedness, for use in the
preparation of reports to the Board related to slot machines or table
games.
(iv) Transactions or
financial events which occur in the operation of a slot machine or table game
are recorded to ensure accountability for assets and to permit the proper and
timely reporting of gross terminal and gross table game revenue, fees and
taxes.
(v) Access to assets is
permitted only in accordance with management's general and specific
authorization.
(vi) The recorded
accountability for assets is compared with existing physical assets at
reasonable intervals and that appropriate action is taken with respect to any
discrepancies.
(3)
Procedures and controls for ensuring, in accordance with section 1323 of the
act (relating to central control computer system), that each slot machine,
electronic wagering terminal and fully automated electronic gaming table
directly provides and communicates all required activities and financial
details to the central control computer system as set by the Board.
(4) Procedures and controls for ensuring that
all functions, duties and responsibilities are segregated and performed in
accordance with sound financial practices by qualified personnel.
(5) Procedures and controls for ensuring,
through the use of surveillance and security departments, that the licensed
facility is secure during normal operations and during any emergencies due to
malfunctioning equipment, loss of power, natural disaster or any other
cause.
(e) The Board, in
consultation with the Department, will review each initial submission made
under subsection (a) and determine whether it conforms to the requirements of
the act and this subpart and provides adequate and effective controls to insure
the integrity of the operation of slot machines and table games at a licensed
facility. If the Board determines that the submission is deficient in any area,
the Board will provide written notice of the deficiency to the slot machine
licensee and allow the slot machine licensee to submit a revision to its
submission. A slot machine licensee is prohibited from commencing slot or table
game operations until its system of internal controls is approved by the
Board.
(f) If a slot machine
licensee intends to make a change or amendment to its system of internal
controls, it shall submit the change or amendment electronically to the Bureau
of Gaming Operations using the Internal Controls & Table Games Submission
Form posted on the Board's web site. The slot machine licensee may implement
the change or amendment on the 30th calendar day following the filing of a
complete submission unless the slot machine licensee receives written notice
tolling the change or amendment in accordance with subsection (g) or written
notice from the Board's Executive Director rejecting the change or
amendment.
(g) If during the 30-day
review period in subsection (f), the Bureau of Gaming Operations preliminarily
determines that a procedure in a submission contains an insufficiency likely to
negatively affect the integrity of slot or table game operations or the control
of gross terminal or gross table game revenue, the Bureau of Gaming Operations,
by written notice to the slot machine licensee, will:
(1) Specify the nature of the insufficiency
and, when possible, an acceptable alternative procedure.
(2) Direct that the 30 calendar day review
period in subsection (f) be tolled and that any internal controls at issue not
be implemented until approved under subsection (i).
(h) Examples of submissions that may contain
an insufficiency likely to negatively affect the integrity of slot or table
game operations or the control of gross terminal or gross table game revenue
may include the following:
(1) Submissions
that fail to provide an audit trail sufficient to permit the review of gaming
operations or the reconstruction of gross terminal or gross table game revenue
transactions.
(2) Submissions that
fail to provide for the segregation of incompatible functions so that no
employee is in a position to both commit an error or perpetrate a fraud and to
conceal the error or fraud in the normal course of the employee's
duties.
(3) Submissions that do not
include forms or other materials referenced in the submission or required under
the act or this part.
(4)
Submissions that would implement operations or accounting procedures not
authorized by the act or this part.
(5) Submissions that are dependent upon the
use of equipment or related devices or software not approved by the Board or
Board staff, unless the submissions are required as part of an authorized test
of the equipment or related device or software.
(i) When a change or amendment has been
tolled under subsection (g), the slot machine licensee may submit a revised
change or amendment within 30 days of receipt of the written notice from the
Bureau of Gaming Operations. The slot machine licensee may implement the
revised change or amendment upon receipt of written notice of approval from the
Board's Executive Director or on the 30th calendar day following the filing of
the revision unless the slot machine licensee receives written notice tolling
the change or amendment in accordance with subsection (g) or written notice
from the Board's Executive Director rejecting the change or
amendment.
(j) A current version of
the internal controls of a slot machine licensee shall be maintained in or made
available in electronic form through secure computer access to the accounting
and surveillance departments of the slot machine licensee and the Board's
onsite facilities required under §
465a.8 (relating to licensed
facility). The slot machine licensee shall also maintain a copy, either in
paper or electronic form, of any superseded internal control procedures for a
minimum of 5 years. The original signed two attestations required under
subsection (b)(1) and (2) shall also be maintained for a minimum of 5 years.
Each page of the internal controls must indicate the date on which it was
approved by the Board.
Notes
The
provisions of this § 465a.2 amended October 10, 2008, effective
10/11/2008, 38 Pa.B. 5652;
amended December 12, 2008, effective 12/13/2008, 38 Pa.B. 6749; amended August 28,
2009, effective 8/29/2009, 39
Pa.B. 5125; amended September 25, 2009, effective
9/26/2009, 39 Pa.B. 5562;
amended February 26, 2010, effective 2/27/2010, 40 Pa.B. 1082; amended May 11, 2012,
effective 5/12/2012, 42 Pa.B.
2585; amended January 31, 2014, effective 2/1/2014, 44 Pa.B. 599; amended June 12, 2015,
effective 6/13/2015, 45 Pa.B.
2829; amended December 15, 2017, effective 12/16/2017, 47 Pa.B.
7563.
The provisions of this § 465a.2 amended under
4
Pa.C.S. §§
1202(b)(9)-(23) and (30),
1205, 1206(f) and (g), 1207, 1208(1)(iii), 1209(b), 1212, 1213, 1321, 1322,
13A02(1)-(6), 13A11, 13A12-13A14, 13A15, 13A25, 13A62(a) and 1802 and Chapter
13.
This section cited in 58 Pa. Code §
461a.8 (relating to gaming
vouchers); 58 Pa. Code §
461a.9 (relating to coupons
utilized in slot machine gaming); 58 Pa. Code §
461a.11 (relating to automated
gaming voucher and coupon redemption machines: accounting controls); 58 Pa.
Code §
461a.12 (relating to progressive
slot machines); 58 Pa. Code §
461a.18 (relating to cashless
funds transfer systems); 58 Pa. Code §
461a.19 (relating to remote system
access); 58 Pa. Code §
461a.20 (relating to server
supported slot systems); 58 Pa. Code §
461a.21 (relating to server based
slot systems) 58 Pa. Code §
461a.22 (relating to automated
jackpot payout machines); 58 Pa. Code §
465a.1 (relating to accounting
records); 58 Pa. Code §
465a.7 (relating to complimentary
services or items); 58 Pa. Code §
465a.9 (relating to surveillance
system; surveillance department control; surveillance department restriction);
58 Pa. Code §
465a.11 (relating to slot machine
licensee's organization; jobs compendium); 58 Pa. Code §
465a.12 (relating to access badges
and temporary access credentials); 58 Pa. Code §
465a.14 (relating to security
department minimum staffing); 58 Pa. Code §
465a.20 (relating to personal
check cashing); 58 Pa. Code §
465a.21 (relating to wire
transfers); 58 Pa. Code §
465a.22 (relating to cash
equivalents); 58 Pa. Code §
465a.23 (relating to customer
deposits); 58 Pa. Code §
465a.25 (relating to counting and
recording of slot cash storage boxes and table game drop boxes); 58 Pa. Code
§
465a.26 (relating to jackpot and
credit meter payouts); 58 Pa. Code §
465a.27 (relating to annuity
jackpots); 58 Pa. Code §
465a.28 (relating to merchandise
jackpots); 58 Pa. Code §
465a.31 (relating to gaming day);
58 Pa. Code §
465a.33 (relating to access areas
containing central control computer equipment); 58 Pa. Code 465a.34 (relating
to automated gaming voucher and coupon redemption machine accounting controls);
58 Pa. Code §
603a.5 (relating to Roulette
chips; permitted uses, inventory and impressments); 58 Pa. Code §
603a.9 (relating to plaques;
issuance and use, denominations and physical characteristics); 58 Pa. Code
§
603a.10 (relating to permissible
wagering; exchange and redemption of gaming chips and plaques); 58 Pa. Code
§
603a.11 (relating to receipt of
gaming chips or plaques from a manufacturer or supplier; inventory, security,
storage and destruction of chips and plaques); 58 Pa. Code §
603a.13 (relating to dice); 58 Pa.
Code §
603a.15 (relating to cards;
physical characteristics); 58 Pa. Code §
603a.16 (relating to cards;
receipt, storage, inspection and removal from use); 58 Pa. Code §
603a.19 (relating to Pai Gow
tiles; receipt, storage, inspection and removal from use); 58 Pa. Code §
603a.20 (relating to Match Play
Coupons; physical characteristics and issuance); 58 Pa. Code §
605a.7 (relating to progressive
table games); 58 Pa. Code §
605a.8 (relating to linked
progressive table games); 58 Pa. Code §
625a.1 (relating to Sic Bo table;
Sic Bo Shaker; physical characteristics); 58 Pa. Code §
627a.5 (relating to shuffle and
cut of the cards); 58 Pa Code §
633a.7 (relating to procedure for
dealing the cards; completion of each round of play); 58 Pa. Code §
633b.9 (relating to Blazing 7's
Progressive wager); 58 Pa. Code §639.11 (relating to procedure for
completion of each round of play); 58 Pa. Code §
641a.11 (relating to procedures
for completion of each round of play); 58 Pa. Code §
643a.11 (relating to procedures
for completion of each round of play); 58 Pa. Code §
647a.11 (relating to procedure for
completion of each round of play); 58 Pa. Code §
649a.11 (relating to procedures
for completion of each round of play); 58 Pa. Code §
651a.5 (relating to shuffle and
cut of the cards); 58 Pa. Code §
653a.11 (relating to procedures
for completion of each round of play); 58 Pa. Code §
655a.11 (relating to procedures
for completion of each round of play); 58 Pa. Code §
657a.11 (relating to procedures
for completion of each round of play); and 58 Pa. Code §
1112a.12 (relating to remote
system access).
