Casino City's Casino Vendors Guide - 2014 Edition

56 GamingProducts andServices Sponsored by CasinoCity’s CasinoVendorsGuide - Visit CasinoVendors.com today for current information CasinoGaming IndustryVendor Licensing ByRegulatoryManagementCounselors, P.C. Companies that havenever donebusinesswith casinosor businesses that are looking toexpand their business tonew geographic areasmaybe surprised to learn that theymust often meet strict and complicated “licensing” requirements to legally sell goodsor services toa casino. Agovernmental bodyhaving jurisdictionover regulating the casino (i.e., the country, state, province, bandor tribe) normallygrants these licenses. Usually, a “gaming control board”or “gaming commission” is appointedby thegovernmental body tohandle the complicated steps involved ingranting licenses. The vendor licensing sectionof theCasinoVendors.comwebsite includes aglobal directoryof both regulatoryagencies and gaming licensingand complianceadvisors. Inaddition, you will find the Licensingby Jurisdiction sectionof thewebsite, which is summarizedon the followingpages, veryhelpful as it provides abroad lookat thevarious licensing requirements and ongoing reportingobligations for suppliers/vendorsworkingwith casinos located in various jurisdictionsoffering commercial and tribal casinogaming. This sectionalso includes links todetailed jurisdictional analyses summarizing the licensingand reporting obligations for individual jurisdictions. The systemsof supplier licensingareusedas amethod toensure that unsuitablepartiesdonot infiltrate thegaming industryand impact its integrity. Companieswishing to conduct businesswith casinos inmore thanone jurisdiction faceunique challenges because the requirements varywidely from state to state. Inmost jurisdictions, avendor canexpect tobe closely scrutinized to ensure that itsowners andkeyemployeesdonot have criminal histories aswell as toensure thefinancial viabilityof thebusiness applying for a license. Gaming control authorities typically conduct thoroughandextensivebackground investigations. All gaming jurisdictions, however, haveuniqueand varying approaches to regulating supplier activity. For example, almost every state requires amanufacturer of items specifically for gamingactivity tobe licensedand toundergoa suitability determination.Many states, however, also requiremanufacturers or suppliersof non-gaming relatedgoodsor services toalso receivea licensebefore conductingbusinesswithagaming facility. Inaddition, some jurisdictions require suppliersmeeting certaindollar thresholdsof businesswith casinos, regardlessof theproduct or service, tobecome licensedwith the stateagency. Thus, evenbusinesses that are supplyinggoodsor services totally unrelated to the industry (e.g., carpet suppliers)mayneed to take thenecessary steps toget licensed. Becauseof thedisparity between licensingandother regulatory requirements, anumber of theU.S. gaming regulatoryagencies (e.g., New Jerseyand Nevada) are in theprocessof reviewing their regulations inorder toensure that theyareoperatingeffectivelyandefficiently in order relieve the industryof unnecessary regulatoryburdens, as well tokeepupwith technological advancements. Anybusiness seeking toenter intoanewmarket should conduct a jurisdictional “LicenseAnalysis” toverify the licensing requirementsof a particular jurisdiction.Most jurisdictionshave license applications tobe completedandfiledwith thegaming control authorities. Inmany cases, theowners andemployeesof the business seeking licensurewill need individual applications for certain “KeyPersons” aswell asfingerprint cards anda criminal history summary. Frequently, gaming jurisdictionshave strict provisionsprohibiting peoplewhohavebeen convictedof felonies, gaming-related crimes, and, in some jurisdictions,misdemeanors involving dishonesty, frombecoming licensedas suppliers. If anyof your ownersor employeeshashadproblems in thepast, youmaywish to consult legal counsel for assistancewith theprocess. Suppliers, owners, andkeyemployeesof suppliersof goods and servicesmayalsobeasked for extensivefinancial information andpersonal balance sheets. Gaming jurisdictions examine this information todeterminewhether thepotential licenseehas financial issues thatmayprovideavulnerabilityor inclination to criminal elements toattempt toexert influencewithin the industry. Gaming regulators are concerned that individualswho are indesperatefinancial straitsmaybe susceptible toattempts by criminals toget assistance in illegal endeavors. Frequentlygaming control authorities areempoweredwith broaddiscretion todeny licensurebasedona lackof “business probity”or a lackof “financial stability.” Importantly, eachgaming jurisdiction tends tohaveunique requirementsor restrictions that apply to licensedgaming industry suppliers. Additionally, initial licensing isnot theendof theprocess.Most gaming jurisdictions imposeongoing reportinganddisclosure requirementsongaming suppliers and require licenses tobe renewedonaperiodic (e.g., annual or biannual) basis. Very typically, gaming industry supplierswill be subject toawide varietyof additional criminal lawprovisions as a result of their participation in the casino industry. In the stateofMichigan, for example, gaming suppliers are prohibited frommakingpolitical contributions to stateor local candidates. Violationof this law can result in10years’ imprisonment andup toa$100,000fine. It is imperative that any companybeginning to supply casinoswithgoodsor services finds outwhat unusual or peculiar laws theremaybe inaparticular jurisdictionas this is theonlyway toensure that an inadvertent criminal violationdoesnot occur. Please see the “Licensingby Jurisdiction” sectionon the following pages for abroad lookat the various licensing requirements and ongoing reportingobligations for suppliers/vendorsworkingwith casinos located ina varietyof international andNorthAmerican commercial and tribal gaming jurisdictions. Detailed jurisdictional analysis summarizing the licensingand reportingobligations for individual jurisdictions is availableon theCasinoVendors.com website. This information is providedbyRegulatoryManagement Counselors, P.C. For informationabout the services theyprovide please see their company listingonpage55.