Alberta Gaming Supplier Regulatory Overview

Introduction

Gaming activity in Alberta, Canada is regulated by the Alberta Gaming and Liquor Commission (“Commission”). Casino-style gaming is only available for charitable institutions and causes, and there are currently 24 casino facilities throughout the province that contain a mix of table and electronic games. In addition, slot machines and similar electronic games are permitted in bars, restaurants, and similar establishments, but are owned by the Commission. Revenue from machines operated by the Commission is deposited into the Alberta Lottery Fund, a fund allocated for Alberta communities.

Charities and other eligible institutions may apply for a casino license which authorizes the organization to conduct casino gaming at one of the casino facilities in the province. Casino facilities provide the licensed charitable institution with the equipment and oversight necessary to conduct gaming activities with the charitable organization, paying a fee or percentage of the winnings to the facility. All proceeds from gaming, after costs and expenses, must be used by the organization for a charitable purpose stated in the organization’s casino license application.¹

The Commission issues two types of registrations to gaming suppliers: a Registration to Deal in Gaming Terminals and a Registration to Deal in Gaming Supplies. Although defined as a “gaming supplier” under Alberta regulations, it is important to note that the definition encompasses equipment that may be considered “non-gaming” in many jurisdictions, as discussed below. In addition, certain key employees must also complete disclosure forms in connection with a supplier registration.

Registration to Deal in Gaming Terminals

Those persons or entities that will supply electronic gaming devices to the Commission for use in casino facilities must be registered as a Gaming Terminal dealer. In order to apply for a registration, the applicant must complete the “Applicant Disclosure – Licence/Registration Application” and associated forms from the Commission. Note that this form is used for all applicants, regardless of the registration or license sought.

Duration

Registrations issued by the board are typically issued for a period of one to two years, depending on the characteristics of the applicant and the registration sought. The Commission, however, has the discretion to issue a registration for a longer time period.²

Fees

There is an initial $10,000 (CAD) deposit for use in conducting the required background investigation. Any unused portion of this deposit is returned to the applicant.³

Required Documents and Information

In order to complete the “Applicant Disclosure – Licence/Registration Application” form for a registration to deal in gaming terminals, an applicant must supply the following information:

1. Basic identification information;
2. Registration or license sought;
3. Identity or internal and external attorney and accountant;
4. General description of the applicant’s business;
5. Business structure;
6. List of provinces where required to file with Corporate Registry;
7. List of distributors located in Alberta;
8. List of manufacturers of component parts;
9. Description of ownership changes, past five years;
10. Description of classes of stock or ownership units;
11. List of all owners, investors, parent/holding companies, shareholders, and partners;
12. List of officers and directors;
13. Number of employees;
14. List of key employees;
15. List of associated persons or entities;
16. List of all real estate owned, leased, or rented;
17. List of all gaming licenses held or applied for;
18. List of all criminal investigations, charges, and convictions;
19. List of all gaming license/registration actions;
20. List of all regulatory or administrative actions;
21. Corporate tax account number;
22. List of stock offerings;
23. Bankruptcy history;
24. List of financial institutions where the applicant maintains accounts;
25. List of sources of funding;
26. List of indebtedness; and
27. List of loaned assets.

In addition, the applicant must supply the following documents and attachments:

1. Certificate or articles of incorporation;
2. Memorandum of association;
3. Unanimous shareholders agreement;
4. Partnership agreement;
5. Registration under Canada Corporations Act;
6. Ownership chart;
7. Capital asset schedule (depreciation schedule);
8. Financial statements, past five years;
9. Copies of any stock or ownership agreements;
10. Most recent in-house financial statements;
11. Tax returns, past three years;
12. Credit bureau report from all non-Canadian and non-US jurisdictions where the applicant conducts business; and
13. Most recent stock report (publicly traded applicants only).

Registration to Deal in Gaming Supplies

Those persons or entities that will supply gaming supplies to the Commission for use in casino facilities must be registered as a gaming supply dealer. “Gaming supplies” is defined by the Commission as “[s]upplies, equipment and devices designed to be used in a gaming activity, [but] does not include normal office supplies.”⁴ This includes supplies and equipment used specifically for gambling games, as well as materials, furniture, and other equipment used by a gaming facility in connection with the gaming activity conducted.

In order to apply for a registration, the applicant must complete the “Applicant Disclosure – Licence/Registration Application” and associated forms from the Commission. Note that this form is used for all applicants, regardless of the registration or license sought.

Duration

Registrations issued by the board are typically issued for a period of one to two years, depending on the characteristics of the applicant and the registration sought. The Commission, however, has the discretion to issue a registration for a longer time period.⁵

Fees

There are no fees associated with the application or issuance of a registration; however, the applicant must make an initial $10,000 (CAD) deposit for use in conducting the required background investigation. Any unused portion of this deposit is returned to the applicant.⁶

Required Documents and Information

In order to complete the “Applicant Disclosure – Licence/Registration Application” form seeking a registration to deal in gaming supplies, an applicant must supply the following information:

1. Basic identification information;
2. Registration or license sought;
3. Identity of internal and external attorney and accountant;
4. General description of the applicant’s business;
5. Business structure;
6. List of provinces where required to file with Corporate Registry;
7. Current list of all products distributed/sold in Alberta;
8. List of all current Alberta gaming supply clients;
9. List of all distributors supplying Alberta clients;
10. List of all manufacturers of products distributed to Alberta clients;
11. Description of ownership changes, past five years;
12. Description of classes of stock or ownership units;
13. List of all owners, investors, parent/holding companies, shareholders, and partners;
14. List of officers and directors;
15. Number of employees;
16. List of key employees;
17. List of associated persons or entities;
18. List of all real estate owned, leased, or rented;
19. List of all gaming licenses held or applied for;
20. List of all criminal investigations, charges, and convictions;
21. List of all gaming license/registration actions;
22. List of all regulatory or administrative actions;
23. Corporate tax account number;
24. List of stock offerings;
25. Bankruptcy history;
26. List of financial institutions where the applicant maintains accounts;
27. List of sources of funding;
28. List of indebtedness; and
29. List of loaned assets.

In addition, the applicant must supply the following documents and attachments:

1. Certificate or articles of incorporation;
2. Memorandum of association;
3. Catalogs/brochures or other pertinent publications related to products sold in Alberta;
4. Unanimous shareholders agreement;
5. Partnership agreement;
6. Registration under Canada Corporations Act;
7. Ownership chart;
8. Capital asset schedule (depreciation schedule);
9. Financial statements, past five years;
10. Copies of any stock or ownership agreements;
11. Most recent in-house financial statements;
12. Tax returns, past three years;
13. Credit bureau report from all non-Canadian and non-US jurisdictions where the applicant conducts business; and
14. Most recent stock report (publicly traded applicants only).

Key Persons Licensing Requirements

Certain individuals employed by the applicant must complete a personal disclosure form in connection with the corporate application. These individuals consist of all owners, partners, promoters, shareholders holding 5% or more financial interest in the applicant, directors, officers, and key employees (those exercising significant control over the applicant’s business operations).⁷

In addition to the Commission forms, the Commission also accepts the Multi-Jurisdictional Personal History Disclosure form for required personal disclosures.⁸

Fees
There are no fees associated with an individual personal disclosure form. However, applicants will be required to reimburse the Commission for any investigative costs that exceed the $10,000 (CAD) investigative deposit required for the corporate applicant associated with the key person.

Required Documents and Information

Applicants must complete the “Personal Applicant Disclosure – Licence/Registration Application.” In order to complete the form, the following information is needed:

1. Basic identification information;
2. List of past residences, past 10 years or since the age of 18;
3. Employment history;
4. Ownership interests, including any interest in private companies or interests of 5% or more in publicly traded companies, past 10 years;
5. Management interests in nonprofit organizations;
6. Gaming contracts or agreements, past 10 years;
7. Education history;
8. Family and spouse details;
9. Spouse’s employment history, past one year;
10. Occupational and residence information for family members;
11. Associated persons and businesses;
12. Criminal history;
13. License and regulatory action history;
14. Gaming associations and history;
15. Civil action history;
16. Financial and tax history;
17. Bankruptcy history;
18. Loan, indebtedness, and net worth details;
19. Past insurance claims, over $100,000;
20. Annual income statement;
21. Asset and liability statements; and
22. Cash, real estate, property, insurance, notes, securities, and other financial interest details.

In addition, the following documents must be included with the disclosure form:

1. Photograph, taken within past three months;
2. Copies of all gaming contracts and agreements, past 10 years;
3. Credit bureau reports for past six months, non-Canadian or non-US residents only;
4. Tax returns, past five years; and
5. Financial statements and tax returns for companies that the applicant has a controlling interest in, past five years.

Disclosure and Reporting Requirements

After a registration has been issued, any change of 5% or more in the ownership interest in the registrant must be approved after a due diligence investigation by the Commission.⁹

Technology Approvals

All games used by a licensed facility must be inspected and approved by the Commission prior to use. In addition, the Commission must be notified of the game floor layout, including the mix of all gambling games offered at a facility. Any request for a change in the types of games offered will be reviewed by the Commission for all casino facility licensees in order to insure a consistent and unified approach to gaming across the province.¹⁰

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¹See 'Use of Gaming Proceeds,' Alberta Gaming and Liquor Commission Website at www.aglc.ca/useofproceeds/default.asp.
²AR 143/96, s29.
³'Applicant Disclosure – Licence/Registration Application,' p. vi, Sec. B.
⁴'Applicant Disclosure – Licence/Registration Application,' p. iii, Sec. A(28).
⁵AR 143/96, s29.
⁶'Applicant Disclosure – Licence/Registration Application,' p. vi, Sec. B.
⁷'Personal Applicant Disclosure – Licence/Registration Application, p. iv, Sec. A(43), 'Personal Applicant.'
⁸For more information regarding the Multi-Jurisdictional Personal History Disclosure Form, please refer to the 'Non-Restricted Gaming Employee License Requirements' section of the analysis provided for Nevada.
⁹See 'Applicant Disclosure – Licence/Registration Application,' Instructions.
¹⁰'Casino Terms & Conditions and Operating Guidelines,' Alberta Lottery and Gaming Commission, Sec. 9.1 et seq.