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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
A Category 2 applicant deals with two separate instruments, not one. Gaming Control Board rules call for a $50,000,000 payment bond or letter of credit before the application is accepted for filing, then a $1,000,000 payment bond when the slot machine license is issued. Knowing which one you are placing, and the surety rating each requires, keeps the license file moving.
A Category 2 slot machine license under the Pennsylvania Race Horse Development and Gaming Act (4 Pa.C.S. Part II) is the stand alone casino license, available to applicants not eligible for a Category 1 license, which is reserved for licensed horse racing entities. Under 58 Pa. Code 441a.5 an applicant posts a $50,000,000 payment bond or irrevocable letter of credit guaranteeing the license fee, and under 58 Pa. Code 441a.15 the licensee posts a $1,000,000 payment bond at issuance. Both run to the Commonwealth of Pennsylvania.
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The Race Horse Development and Gaming Act gives the Gaming Control Board several slot machine license categories. A Category 1 license under 4 Pa.C.S. 1302 is for an entity licensed by the State Horse Racing Commission or State Harness Racing Commission to conduct race meetings with pari-mutuel wagering that has run live races for at least two years. A Category 2 license under 4 Pa.C.S. 1304 is for an applicant not otherwise eligible for a Category 1 license, and no racetrack license is needed. The Act allows two Category 2 facilities in a city of the first class and one in a city of the second class, with distance limits from Category 1 facilities.
4 Pa.C.S. 1209 imposes a one time slot machine license fee of $50,000,000 on each successful Category 1 or Category 2 applicant at license issuance. Under 58 Pa. Code 441a.5, an applicant must submit an original payment bond or irrevocable letter of credit of $50,000,000 for a Category 1 or Category 2 application to the Bureau of Licensing before the application is accepted for filing. It must name the Commonwealth of Pennsylvania as obligee, have an expiry date at least 12 months from issuance, and renew automatically at intervals of at least 3 months. If the license is approved and the fee is not paid in full within 5 business days after the payment deadline, the Commonwealth may demand immediate payment. The instrument ends when the issuer receives the Board's signed statement that the application was denied.
Under 58 Pa. Code 441a.15, a slot machine licensee posts an original $1,000,000 payment bond upon issuance of the license. It guarantees that the licensee faithfully makes the payments, keeps its books and records, makes reports and conducts its operations in conformity with the Act. The proposed bond goes to the Board before the license is issued, stays in force for as long as the license is in effect, and requires at least 30 days written notice to the Board, by registered mail or overnight courier, before the surety can cancel.
For both instruments the surety must be licensed by the Insurance Department and carry a credit rating within the three highest categories from Moody's or Standard and Poor's. Section 441a.15 also accepts a rating from another nationally recognized rating service. Confirm the surety meets the rating test before the bond is submitted.
Licenses under the Act are subject to renewal every five years unless otherwise provided, and the renewal application is due at least 180 days before expiration.
No. Category 1 is for licensed horse racing entities that have run live races for at least two years. Category 2 is for applicants not eligible for Category 1, and no racetrack license is needed.
Board rules call for two instruments. A $50,000,000 payment bond or letter of credit guarantees the license fee during the application, and a $1,000,000 payment bond is posted when the license is issued.
For the $50,000,000 license fee guarantee, 58 Pa. Code 441a.5 accepts either a payment bond or an irrevocable letter of credit. Section 441a.15 calls for a payment bond for the $1,000,000 requirement.
The instrument expires when the issuer receives the Board's signed statement that the application was denied.
For the entire period the slot machine license is in effect. A surety that wants to cancel must give the Board at least 30 days written notice.
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