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Kansas at a Glance
Gaming License: Yes
Non-Gaming License: Yes
Vendor License Exemptions Available: No
Temporary License: Yes
Ownership Disclosure Threshold: 0.5%
Institutional Investor Waiver: Yes
Fees: No Initial Fee
State Gaming Lab: Public/
Private
Term of License: Up to 2 Years
Deadline to Reapply: 120 Days Prior to Expiration
Political Contribution Restrictions: No

Kansas Racing and Gaming Commission

www.krgc.ks.gov
More Kansas Racing and Gaming Commission Info

Kansas Gaming Supplier Regulatory Overview


Introduction

Commercial gaming in Kansas is regulated by the Kansas Racing and Gaming Commission ("Commission"). The Commission was created in April of 2007 by the Kansas Expanded Lottery Act ("Act"), which governs non-tribal casino, gaming-related activity in the state. The Act provides that all casinos in the state are owned by the state. The state's first non-tribal casino was opened in December of 2009.

The Kansas State Gaming Agency ("Agency") regulates the Indian gaming operations by enforcing the Tribal-State Compacts and the Tribal Gaming Oversight Act. The Agency is not part of the Commission but serves as its own agency. Kansas currently has six tribal casinos.

Gaming Supplier Certification Requirements

Those persons or entities that intend to conduct business with a gaming facility manager to provide goods or services directly related to gaming, including gaming machine manufacturers, technology providers, and computer systems providers, must be certified by the Commission.1 Applicants must complete the Gaming and Non-Gaming Supplier Application and Business Entity Disclosure Form.

Duration

A Gaming Supplier Certification is valid for a period of no longer than two years from its issuance.2

Fees

There is no initial application fee. However, the applicant will be assessed the costs of the investigation and background checks.

Required Documents and Information

Information required to complete the Gaming and Non-Gaming Supplier Application and Business Entity Disclosure Form includes:

1. Basic identity information;
2. All other names the entity has done business under;
3. Whether the applicant has applied for, received, or has been denied a gaming license in another jurisdiction;
4. Former addresses, past 10 years;
5. Description of enterprise and present business;
6. Whether the applicant is delinquent in its payment of tax liabilities, judgments, or money owed to any government agency;
7. List of past disciplinary actions;
8. Description of former business operations;
9. Stock description, if applicable;
10. List of shareholders holding 0.5 percent or more interest in any stock;
11. Identity of key personnel;
12. List of former officers and directors, past 10 years;
13. Officer, trustee, and director compensation;
14. Description of partnership interest;
15. Description of long-term debt;
16. Identity of holders of long-term debt;
17. List of other indebtedness and holders of indebtedness;
18. Description of security options and identity of individuals holding security options;
19. List of financial institutions where accounts are held, past 10 years;
20. List of contractors who have provided over $100,000 worth of goods or services over the past six months;
21. List of all stock held by enterprises;
22. Insider transactions of over 10 percent of any class of security, past five years;
23. Criminal, regulatory action, and insolvency history;
24. List of regulatory licenses held in other jurisdictions, past 10 years;
25. List of all gaming licenses held; and
26. List of identities of persons with knowledge of contributions and disbursements of the enterprise.3

Documents required to be submitted in connection with the Gaming and Non-Gaming Supplier License and Business Entity Disclosure Form include:

1. A completed Supplier Sponsored Agreement (to be completed by the gaming facility manager where applicant intends to do business);
2. Copy of bylaws, charter, articles of incorporation, and other organizational documents;
3. Organizational chart;
4. Bonus or profit-sharing plans;
5. Description of existing litigation;
6. Financial statements, past five years;
7. Annual reports, past five years;
8. Quarterly and interim reports since last annual report filed;
9. Last definitive proxy statement issued;
10. Registration statements filed with the SEC, past five years;
11. Tax returns, past five years; and
12. Code of ethics, if applicable.4


Non-Gaming Supplier Certification Requirements

Those persons or entities that intend to conduct business in the amount of $250,000 or more in a single year or whose services may affect the security and integrity of the gaming operation may be required to be certified by the Commission as a Non-Gaming Supplier.5 Applicants must complete the Gaming and Non-Gaming Supplier Application and Business Entity Disclosure Form.

Duration

A Non-Gaming Supplier Certification is valid for a period of no longer than two years from its issuance.6

Fees

There is no initial application fee. However, the applicant will be assessed the costs of the investigation and background checks.

Required Documents and Information

Information required to complete the Gaming and Non-Gaming Supplier Application and Business Entity Disclosure Form includes:

1. Basic identity information;
2. All other names the entity has done business under;
3. Whether the applicant has applied for, received, or denied a gaming license in another jurisdiction;
4. Former addresses, past 10 years;
5. Description of enterprise and present business;
6. Whether the applicant is delinquent in its payment of tax liabilities, judgments, or money owed to any government agency;
7. List of past disciplinary actions;
8. Description of former business operations;
9. Stock description, if applicable;
10. List of shareholders holding 0.5 percent or more interest in any stock;
11. Identity of key personnel;
12. List of former officers and directors, past 10 years;
13. Officer, trustee, and director compensation;
14. Description of partnership interest;
15. Description of long-term debt;
16. Identity of holders of long-term debt;
17. List of other indebtedness and holders of indebtedness;
18. Description of security options and identity of individuals holding security options;
19. List of financial institutions where accounts are held, past 10 years;
20. List of contractors who have provided over $100,000 worth of goods or services over the past six months;
21. List of all stock held by enterprises;
22. Insider transactions of over 10 percent of any class of security, past five years;
23. Criminal, regulatory action, and insolvency history;
24. List of regulatory licenses held in other jurisdictions, past 10 years;
25. List of all gaming licenses held; and
26. List of identities of persons with knowledge of contributions and disbursements of the enterprise.7

Documents required to be submitted in connection with the Gaming and Non-Gaming Supplier License and Business Entity Disclosure Form include:

1. A completed Supplier Sponsored Agreement (to be completed by the gaming facility manager where applicant intends to do business);
2. Copy of bylaws, charter, articles of incorporation, and other organizing documents;
3. Organizational chart;
4. Bonus or profit-sharing plans;
5. Description of existing litigation;
6. Financial statements, past five years;
7. Annual reports, past five years;
8. Quarterly and interim reports since last annual report filed;
9. Last definitive proxy statement issued;
10. Registration statements filed with the SEC, past five years;
11. Tax returns, past five years; and
12. Code of ethics, if applicable.8

Temporary Supplier Permit Requirements

In order for a person or entity to receive a Temporary Supplier Permit, all of the following conditions must be met:

1. The person or entity must have submitted an application for a gaming or non-gaming certificate;
2. The applicant has no known criminal history, reputation, habits, or associations; and
3. The applicant has completed an agreement with each gaming facility that the applicant intends to do business with.9

A Temporary Supplier Permit is valid for a period of up to 90 days. After the initial 90-day period, the Commission may extend the Temporary Supplier Permit for an additional 90-day period.10

Key Persons Certification Requirements

Those persons holding an officer, director, management, or key employee role in a certified supplier must be individually certified by the Commission. This includes those persons or entities that hold 0.5 percent or more ownership interest in the certified supplier.11

Those persons who are officers, directors, managers, or who hold more than 5 percent interest in stock issued by a certified supplier must complete the Level I Personal Disclosure Form. Those persons who are not officers, directors, or managers, but who hold between 0.5 percrnt and 5 percent interest in stock issued by a certified supplier, must complete the Level III Personal Disclosure Form.

Persons who have a material relationship with the applicant, defined as one that participates in the business decisions, finances, or who exercises control over the applicant, must submit to a background check.12

Duration

The duration of a Level I key individual certification is tied to the corporate entity supplier certification. Therefore, the duration of the individual and corporate entity is the same, up to two years.

A Level III certification is valid for two years. The certification expires on the applicant's birth date.

Fees

There is no initial application fee. However, the applicant will be assessed the costs of the investigation and background checks.

Required Documents and Information – Level I Personal Disclosure Form

Information required to complete the Level I Personal Disclosure Form includes:

1. Basic identity information;
2. Identities of family members;
3. Address information, past 20 years or since high school;
4. Education history;
5. Employment history, past 20 years or since high school;
6. Military history;
7. Spouse's employment history, past one year;
8. Professional organization membership, past 20 years or since high school;
9. List of professional certificates or licenses held;
10. Criminal history;
11. Civil litigation history;
12. Identity of four references, known for at least five years and not family members or employers;
13. Financial information;
14. Identity of personal accountants, past 20 years or since high school;
15. List of businesses where the applicant or spouse has been an officer or director, past 20 years or since high school;
16. List of racing or gaming licensing and affiliations;
17. Identity of representatives retained for services before the Commission;
18. Family criminal history;
19. List of past compulsive behavior or substance abuse; and
20. List of four credit references.13

Documents required to be filed in connection with the Level I Personal Disclosure Form include:

1. Color photograph;
2. Digitally scanned fingerprints or fingerprint cards;
3. Passport, driver's license, or other acceptable form of photo identification; and
4. Tax returns, past three years.14

Required Documents and Information – Level III Personal Disclosure Form

Information required to complete the Level III Personal Disclosure Form includes:

1. Basic identity information;
2. Criminal history;
3. Civil litigation history;
4. Employment termination history;
5. Interest held in gaming entities;
6. Tax delinquencies; and
7. Substance abuse treatment history.

Documents required to be filed in connection with the Level III Personal Disclosure Form include:

1. Color photograph;
2. Digitally scanned fingerprints or fingerprint cards; and
3. Passport, driver's license, or other acceptable form of photo identification.

Certification Process

Interested persons must complete Form Packet 430, available on the Commission's website. Form Packet 430 contains all of the necessary forms for suppliers, key persons, and institutional investors. After completing the necessary forms, applicants must submit all required documents to the Commission. Although there is no initial application fee, the applicant will be assessed the cost of all investigations required for evaluation of the application.

All documents and information relating to vendor finances or background information that is reported to the Commission pursuant to the Act or Rules is considered confidential.15

Disclosure and Reporting Requirements

Before Certification Is Issued

Any intentional misrepresentation or false statement made on a gaming application is grounds for revocation of the license or licensing application.16

If there is a material change in any information included on an application form, then the person or entity that submitted the form must notify the Commission within 11 days of the change.17

An applicant for a Gaming Supplier or Non-Gaming Supplier Certification must submit a completed contract or letter of intent indicating that the applicant will conduct business with a licensed gaming facility.18

After Certification Is Issued

If there is a material change in ownership in a certificate holder, then the certificate holder must notify the Commission or face suspension, revocation, or nonrenewal.19

The Commission has the power to request records from a certificate holder in order to ascertain whether the certificate holder is in compliance with the Act or Rules.20

Gaming Technology Standards

The Kansas Lottery is the ultimate owner of all gaming devices in the state.21 In addition, the Kansas Lottery is required to be the licensee or owner of all software used to operate gaming devices at casino gaming facilities.22

Electronic gaming machines must have an average pay out of not less than 87 percent of the amount wagered. The machines must also be constantly linked to a central monitoring station to be monitored by the Commission. Electronic gaming devices are subject to deactivation at any time by order of the executive director of the Commission.23

Each new type of electronic gaming device must be approved by the Commission.24 The Commission may, however, contract with outside agencies or approve machines that have been reviewed in other jurisdictions.25

Exemptions

The Commission may exempt certain entities from the certification process if those entities are licensed in another jurisdiction that has similar or more stringent licensing requirements.26

Institutional investors may qualify for an abbreviated licensing process if the investor applicant owns between 0.5 percent and 10 percent of the certified supplier. Those entities seeking to be certified as an Institutional Investor must complete the Application for Institutional Investor Level Background. This application requires basic identity and business information. Applicants must also attach criminal-history statements (past 10 years), SEC documents, identities of those in control of voting securities, and other information.27
1K.S.A. § 74-8701-20(b).
2'Gaming and Non-Gaming Supplier Application,' p. 2.
3'Gaming and Non-Gaming Supplier Application.'
4'Gaming and Non-Gaming Supplier Application.'
5K.A.R. § 112-102-2(b).
6'Gaming and Non-Gaming Supplier Application,' p. 2.
7'Gaming and Non-Gaming Supplier Application.'
8'Gaming and Non-Gaming Supplier Application.'
9K.A.R. § 112-102-5(a).
10K.A.R. § 112-102-5(b).
11K.S.A. § 74-8701-20(b).
12K.A.R. § 112-102-7(a).
13Level I Personal Disclosure Form.
14Level I Personal Disclosure Form.
15K.S.A. § 74-8701-14(a)-(b).
16K.S.A. § 74-8701-20(c).
17K.A.R. § 112-100-2(c).
18K.A.R. § 112-102-4(c).
19K.S.A. § 74-8701-20(d).
20K.S.A. § 74-8701-21(b)(1).
21K.S.A. § 74-8701-3(n)(2).
22K.S.A. § 74-8701-3(n)(1).
23K.S.A. § 74-8701-18(a).
24K.S.A. § 74-8701-19(a).
25K.S.A. § 74-8701-19(c).
26K.S.A. § 74-8701-20(b).
27'Application for Institutional Investor Level Background,' p. 3.

This article is provided by Regulatory Management Counselors, P.C. For information about the services they provide please visit our information on gaming licensing and compliance advisors.