Small Games of Chance Changes on Hold for 2013

One of the most controversial pieces of legislation passed in Harrisburg last year was Act 2 of 2012, which dealt with reporting requirements for organizations with a Small Games of Chance (SGOC) license.

Although labeled as “reforms,” many of the new requirements sparked an outcry from local social clubs, veterans’ organizations and fire departments that depend on these small games to survive.

Apparently these changes had been negotiated and approved by the statewide organizations without any real input from the local chapters; as a result, no one realized there was a problem until the bill had already been signed by Gov. Tom Corbett. The new requirements were set to take effect in February 2013, and after talking with many of the clubs in my district, it became clear there was a real danger of many places shutting their doors unless something changed and changed quick.

Fortunately, this is one instance where speaking up made a difference. Because of the advocacy of so many officers and members of organizations who would have been impacted, my colleagues and I were able to convince the Corbett administration to delay the implementation of the new requirements for one year so we can go back and fix Act 2 in a way that allows for organizations to be accountable, but in a way that doesn’t bury them in paperwork or force them to close their doors.

Beginning Feb. 1, 2014, eligible organizations (non-club licensees) with proceeds in excess of $2,500 in a year must electronically file an annual report with the department for the preceding calendar year. Eligible organizations will be required to report the following with respect to small games of chance: number of W-2G forms issued, 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 and amount of proceeds used for public interest purposes.

Beginning Feb. 1, 2014, club licensees (organizations with liquor licenses that hold licenses to conduct small games of chance) are required to electronically file semi-annual reports with the department. These reports are due Feb. 1 for the preceding six-month period beginning July 1 and ending Dec. 31, and Aug. 1 for the preceding six-month period beginning Jan. 1 and ending June 30.

Club licensees will be required to report the following with respect to small games of chance: number of W-2G forms issued, total gross winnings reported on W-2G forms, gross revenue collected for all games of chance, itemized by week and type of game, total small games of chance expenses, itemized by week and type of game, and total prizes paid, itemized by week and type of game.

These licensees will also be required to report proceeds, itemized by week and type of game, detailing the amount of proceeds used for public interest purposes, including details regarding the date(s) distributed, name of recipient(s) and the amount(s) distributed; and amount of proceeds used for operational expenses, including details regarding amount used for real property taxes, utility and fuel costs; heating and air conditioning equipment or repair costs; water and sewer costs; property or liability insurance costs; mortgage payments; interior and exterior repair costs, including repair to parking lots; new facility construction costs; entertainment equipment, including television,video and electronic games; small games of chance license and criminal history record information check fees and the description, completion date and amount retained for a substantial purchase or project.

All reports must be filed electronically at www.revenue.state.pa.us/SGOC, and the online filing application walks organizations, step-by-step, through reporting requirements and fields with detailed instruction.

As we begin the 2013-14 legislative session, I am committed to fixing Act 2 to reflect what it should have been to begin with. We need to hear from the real people and groups running small games of chance, not just their statewide organizations that may lack the real world experience and common sense needed to provide practical and realistic ways to keep our social clubs, veterans’ organizations and fire departments equipped with the tools they need to keep their doors open permanently.

I welcome any ideas or suggestions on this issue and would be more than willing to come speak to any organization impacted by these changes; just call my office at 724-746-3677 for more details.