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Casino Gaming Industry Vendor Licensing
Casino City’s
Casino Vendors Guide - Visit CasinoVendors.com today for current information
Casino Gaming Industry Vendor Licensing
Overview
By Regulatory Management Counselors, P.C.
Companies that have never done business with casinos or
businesses that are looking to expand their business to new
geographic areas may be surprised to learn that they must often
meet strict and complicated “licensing” requirements to legally
sell goods or services to a casino. A governmental body having
jurisdiction over regulating the casino (i.e., the country, state,
province, band or tribe) normally grants these licenses. Usually, a
“gaming control board” or “gaming commission” is appointed by
the governmental body to handle the complicated steps involved
in granting licenses.
The vendor licensing section of the CasinoVendors.com website
includes a global directory of both regulatory agencies and
gaming licensing and compliance advisors. In addition, you
will find the Licensing by Jurisdiction section of the website,
which is summarized on the following pages, very helpful as it
provides a broad look at the various licensing requirements and
ongoing reporting obligations for suppliers/vendors working with
casinos located in various jurisdictions offering commercial and
tribal casino gaming. This section also includes links to detailed
jurisdictional analyses summarizing the licensing and reporting
obligations for individual jurisdictions.
The systems of supplier licensing are used as a method to ensure
that unsuitable parties do not infiltrate the gaming industry and
impact its integrity. Companies wishing to conduct business with
casinos in more than one jurisdiction face unique challenges
because the requirements vary widely from state to state. In most
jurisdictions, a vendor can expect to be closely scrutinized to
ensure that its owners and key employees do not have criminal
histories as well as to ensure the financial viability of the business
applying for a license. Gaming control authorities typically
conduct thorough and extensive background investigations.
All gaming jurisdictions, however, have unique and varying
approaches to regulating supplier activity. For example, almost
every state requires a manufacturer of items specifically for
gaming activity to be licensed and to undergo a suitability
determination. Many states, however, also require manufacturers
or suppliers of non-gaming related goods or services to also
receive a license before conducting business with a gaming
facility. In addition, some jurisdictions require suppliers meeting
certain dollar thresholds of business with casinos, regardless of
the product or service, to become licensed with the state agency.
Thus, even businesses that are supplying goods or services totally
unrelated to the industry (e.g., carpet suppliers) may need to
take the necessary steps to get licensed. Because of the disparity
between licensing and other regulatory requirements, a number
of the U.S. gaming regulatory agencies (e.g., New Jersey and
Nevada) are in the process of reviewing their regulations in order
to ensure that they are operating effectively and efficiently in
order relieve the industry of unnecessary regulatory burdens, as
well to keep up with technological advancements. Any business
seeking to enter into a new market should conduct a jurisdictional
“License Analysis” to verify the licensing requirements of a
particular jurisdiction. Most jurisdictions have license
applications to be completed and filed with the gaming control
authorities. In many cases, the owners and employees of the
business seeking licensure will need individual applications for
certain “Key Persons” as well as fingerprint cards and a criminal
history summary.
Frequently, gaming jurisdictions have strict provisions prohibiting
people who have been convicted of felonies, gaming-related
crimes, and, in some jurisdictions, misdemeanors involving
dishonesty, from becoming licensed as suppliers. If any of your
owners or employees has had problems in the past, you may wish
to consult legal counsel for assistance with the process.
Suppliers, owners, and key employees of suppliers of goods and
services may also be asked for extensive financial information
and personal balance sheets. Gaming jurisdictions examine this
information to determine whether the potential licensee has
financial issues that may provide a vulnerability or inclination
to criminal elements to attempt to exert influence within the
industry. Gaming regulators are concerned that individuals who
are in desperate financial straits may be susceptible to attempts
by criminals to get assistance in illegal endeavors.
Frequently gaming control authorities are empowered with
broad discretion to deny licensure based on a lack of “business
probity” or a lack of “financial stability.” Importantly, each gaming
jurisdiction tends to have unique requirements or restrictions that
apply to licensed gaming industry suppliers. Additionally, initial
licensing is not the end of the process. Most gaming jurisdictions
impose ongoing reporting and disclosure requirements on gaming
suppliers and require licenses to be renewed on a periodic (e.g.,
annual or biannual) basis.
Very typically, gaming industry suppliers will be subject to a wide
variety of additional criminal law provisions as a result of their
participation in the casino industry.
In the state of Michigan, for example, gaming suppliers are
prohibited from making political contributions to state or
local candidates. Violation of this law can result in 10 years’
imprisonment and up to a $100,000 fine. It is imperative that any
company beginning to supply casinos with goods or services finds
out what unusual or peculiar laws there may be in a particular
jurisdiction as this is the only way to ensure that an inadvertent
criminal violation does not occur.
Please see the “Licensing by Jurisdiction” section on the following
pages for a broad look at the various licensing requirements and
ongoing reporting obligations for suppliers/vendors working with
casinos located in a variety of international and North American
commercial and tribal gaming jurisdictions. Detailed jurisdictional
analysis summarizing the licensing and reporting obligations for
individual jurisdictions is available on Casino City’s CasinoVendors.
com website.
This article is provided by Regulatory Management Counselors,
P.C. For information about the services they provide please see
their company listing on page 16.
