What happens if someone in a company cannot be licensed due to background standards?

Q: What happens if one or more persons involved in the company cannot be licensed due to background standards?

A: Before submitting a license application, it is important to ensure that all “key persons” meet the licensing standards of a specific jurisdiction. There may be circumstances, however, where a key person is either ruled ineligible for a license or becomes ineligible due to an event that occurs after the initial gaming license is issued.

First, if a key person is arrested, convicted or otherwise subject to an event that may affect his or her licensing status, it is of paramount importance that the company notifies the gaming authorities of the occurrence as soon as possible. This is covered in more detail in the Q&A responses related to updating the gaming commission after licensure. It is extremely important for a supplier licensee to act promptly to notify its gaming regulators, as failure to do so could lead to severe fines or possible loss of the supplier's license, or both.

In many cases, however, a supplier may be able to maintain its gaming license by moving the individual to a non-key role, separating the individual from any involvement with gaming-related work, or, if an owner, having the individual divest his or her ownership interest in the supplier. This can be accomplished in a number of ways, but any potential solution should be created with the involvement of the gaming authorities to ensure that the solution is viable.

Importantly, any change in one jurisdiction will almost always require the filing of updated information with each other gaming jurisdiction where the supplier holds a gaming-related approval. Thus, it is important to ensure that such a solution is in compliance with all gaming jurisdictions where the supplier operates.

Gaming industry advisor Regulatory Management Counselors, P.C. authored this article. Visit the Gaming Advisors section of this website to find out more about gaming licensing and compliance advisors.