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Mississippi at a Glance
Gaming License: Yes
Non-Gaming License: No
Vendor License Exemptions Available: No
Temporary License: No
Ownership Disclosure Threshold: 10% - Public
Institutional Investor Waiver: Yes
Fees: $5,000
State Gaming Lab: Public/
Private
Term of License: Up to 3 Years
Deadline to Reapply: 90 Days Prior to Expiration
Political Contribution Restrictions: No

Mississippi Gaming Commission

www.msgamingcommission.com
More Mississippi Gaming Commission Info

Mississippi Gaming Supplier Regulatory Overview


Introduction

In 1990, the Mississippi Legislature legalized casino gambling through the Mississippi Gaming Control Act ("Act"). The Mississippi Gaming Commission ("Commission") regulates the 30 dockside and land-based casinos that are currently operating in Mississippi, the first of which opened in August of 1992.

The current annual revenue generated by the Mississippi casinos is approximately $2.465 billion, resulting in $296.34 million in tax revenue for the state. Mississippi's casino industry attracts nearly 34 million visitors every year.

The Commission requires that manufacturers and distributors of gaming-related equipment be licensed. In addition, certain employees of manufacturers and distributors must be found suitable by completing individual licensing applications.


Manufacturer's License Requirements

Persons or entities that manufacture, assemble, program, or modify any gaming device in the state must first obtain a Manufacturer's License.1

Duration

Manufacturer's licenses may be granted by the Commission for a period of no longer than three years. The Commission has the discretion to grant a Manufacturer's License for a period of less than three years.2 It should be noted that the company must also post a bond conditioned on the payment of fees with the state before receiving any license.3

Fees

A $1,000 application fee is due at the time application materials are submitted to the Commission. Once issued, an annual $1,000 licensing fee is due.4

Application

Applicants must complete the Mississippi Addendum to the Multi-Jurisdictional Gaming Application Form ("Addendum"). Note that the Addendum is used by all license applicants, so portions of the application will not apply to manufacturers and should be left blank. Information necessary for manufacturers to complete the Addendum include:

1. Basic identity information;
2. Type of ownership;
3. Professional and regulatory license history;
4. Civil, criminal, and regulatory history;
5. Identity of officers, directors, and shareholders; and
6. Total number of shares authorized, if applicable.

In addition, the following documents must be submitted in connection with the Addendum:

1. Certificate of Good Standing from the Mississippi Secretary of State;
2. Articles of Incorporation;
3. Charter; and
4. Proof that the applicant has authority to conduct business in Mississippi.

Distributor's License Requirements

All individuals or entities that lend, lease, sell, give, or distribute any gaming device in the state must first obtain a Distributor's License.5

Duration

The Commission may grant a Distributor's License for a period of no more than three years. The Commission has the discretion to grant a distributor's license for less than three years.6

Fees

A $500 application fee is due at the time application materials are submitted to the Commission. Once issued, an annual $500 licensing fee is due.7 It should be noted that the company must also post a bond conditioned on the payment of fees with the state before receiving any license.8

Application

Applicants must complete the Mississippi Addendum to the Multi-Jurisdictional Gaming Application Form ("Addendum"). Note that the Addendum is used by all license applicants, so portions of the application will not apply to manufacturers and should be left blank. Information necessary for manufacturers to complete the Addendum include:

1. Basic identity information;
2. Type of ownership;
3. Professional and regulatory license history;
4. Civil, criminal, and regulatory history;
5. Identity of officers, directors, and shareholders; and
6. Total number of shares authorized, if applicable.

In addition, the following documents must be submitted in connection with the Addendum:

1. Certificate of Good Standing from the Mississippi Secretary of State;
2. Articles of Incorporation;
3. Charter; and
4. Proof that the applicant has authority to conduct business in Mississippi.

Individual Employee Licensing Requirements

Certain individuals may be required to be found suitable for licensure in the state. These individuals include officers, directors, managers, and those receiving compensation or rents based on a percentage of gaming proceeds. Employees who are hired and must be found suitable must file an application within 30 days from the date of hire.9

Any shareholder of a voting class of security may be required by the Commission to file for a finding of suitability.10 Shareholders who are employed by the company and have the shares solely though a bonus, pension, or benefit plan do not have to be licensed if the plan is approved by the Commission, the employee has no voting rights, and the employee receives no dividends.11

Stockholders of 10 percent or more of voting-class securities in a publicly traded licensee must file for a finding of suitability.12

Duration

All individual findings of suitability may be issued for a period of up to 10 years. The Commission has the discretion to issue findings of suitability for less than 10 years.13

Fees

There is no fee for individuals applying for a finding of suitability.

Application

All individuals who must apply for a finding of suitability in Mississippi must complete the Multi-Jurisdictional Personal History Disclosure Form and portions of the Addendum.

The Multi-Jurisdictional Personal History Disclosure Form is a lengthy application requiring detailed personal information. Information required to be disclosed includes:

1. Basic identity information;
2. Citizenship and passport;
3. Residence information, past 15 years;
4. Family relationships;
5. Occupation information for family members, including spouses of family members;
6. Military service background;
7. Education;
8. Offices and positions held, including fiduciary, government, and trust relationships;
9. Offices and positions held by spouse, past one year;
10. Employment history, past 20 years;
11. Spouse employment history, past one year;
12. Professional or regulatory licensing;
13. Gaming licenses applied for or held;
14. Business ownership information, 5 percent threshold;
15. Civil suit and criminal history;
16. Vehicle operation permits and licenses;
17. Financial schedules and bankruptcy history;
18. Net worth statement and schedules including assets and liabilities; and
19. Three references over 18 years old who are not related to the applicant.14

The Addendum contains forms and releases that must be signed by the applicant and notarized. These allow the Commission to fully conduct the background investigation into the applicant. It should be noted that applicants must submit two fingerprint cards in addition to signing the forms and releases contained in the Addendum.

Licensing Process

Interested applicants should complete the appropriate forms and submit all materials and fees to the Commission. After receipt, the Commission will review the materials and provide an estimate as to the cost of the investigation. The investigation will include personal interviews, review of financial background, and a general background check.

At all times during the application process, the burden is on the applicant to establish that the applicant is suitable for licensure.15

At any point during the application process, the applicant may make a written request for withdrawal of the application. The Commission has the discretion to grant, grant with prejudice, or deny the application and will notify the applicant in writing of the final disposition. If the Commission grants the request with prejudice, then the applicant must wait one year before reapplying.16

Disclosure and Reporting Requirements

Before License Is Issued

All applicants must fully and honestly disclose all information requested to the Commission. Failure to do so may result in delays, denial, or perjury charges being filed against the applicant.

After License Is Issued

Any licensed manufacturer or distributor must receive prior approval before moving any gaming devices into or out of the state.

All corporate licensees must keep a current stock ledger available for inspection upon request of the Commission.17

Publicly traded companies must report the following items:

1. Any change of directors, officers, or employees involved in gaming-related activities, in writing;
2. Profit and loss statements, annually;
3. Federal tax returns, within 30 days after the return is filed with the federal government;
4. Any statement of a stockholder or stockholder group pursuant to Section 13(d) of the Securities and Exchange Act of 1934, within 10 days of receipt;
5. If a single or group of stockholders acquires 10 percent or more in equity-class securities, then the company must promptly notify the Commission. These stockholders must file for a finding of suitability with the Commission; and
6. Any public documents filed with the Securities and Exchange Commission ("SEC") or other exchanges, upon request of the Commission.18

It should be noted that publicly traded companies formed in foreign countries must report any foreign equivalent items contained in the above list.

If any person or single group acquires between 5 and 10 percent of the voting-class securities in a publicly traded licensee, then the company must send the appropriate SEC documents to the Commission within 10 days of submission to the SEC.19

Individuals who must be found suitable must file an annual "Investigations Division Annual Report" that describes any changes in position that may relate to a finding of suitability.20
Gaming Technology Standards

All new gaming devices must be approved for play by the Commission or through a field test of the device.21 The Commission may request two models of each new device to be sent to the gaming lab for testing.22

Gaming devices must have a payout percentage of at least 80 percent. Devices that utilize player skill must meet this percentage using the method of play that will provide the greatest return to the player.23

When submitting a gaming device to the gaming lab, the manufacturer must submit copies of all executable software, source code, and graphical images for review.24
All gaming devices must have clear identification plates that contain the name of the manufacturer, the serial number, and the model number.25

In addition to other technical requirements, gaming devices must be compatible with online monitoring systems and must be able to communicate with a state-controlled central computer system.26

Gaming devices must not contain themes that would run counter to the public policy of the state.27

Exemptions

The Commission has the authority to waive licensing provisions for corporations if the Commission states in writing the reasons why the waiver is consistent with state policy.28

The Commission may exempt publicly traded companies from complying with licensing standards requiring all shareholders to be licensed and the transfer of shares. The Commission may also exempt publicly traded companies from licensing requirements if the companies are sufficiently regulated by another government agency.29

The Commission may waive the licensing and suitability requirements for institutional investors if the investor has acquired securities for a purpose other than exercising control over the applicant. The Commission will consider the investor's affiliates, past actions regarding the securities held, and regulatory actions, among other items that may reveal an intent to control the licensee.30
1R. II-A-3(b).
2R. II-A-3(b).
3Miss. Code § 75-76-85.
4'Mississippi Gaming Commission – Procedural Fact Sheet for Manufacturer and Distributor License.' See also Miss. Code § 75-76-79(4).
5R. II-A-3(c).
6R. II-A-3(c).
7'Mississippi Gaming Commission – Procedural Fact Sheet for Manufacturer and Distributor License.' See also Miss. Code § 75-76-79(4).
8Miss. Code § 75-76-85.
9Miss. Code § 75-76-79(5).
10Miss. Code § 75-76-263(1).
11R. II-E-2.
12Miss. Code § 75-76-263(3).
13R. II-A-3(e).
14'Multi-Jurisdictional Personal History Disclosure Form.'
15Miss. Code § 75-76-79(1)(d).
16R. II-A-9.
17Miss. Code § 75-76-203(d).
18Miss. Code § 75-76-259.
19Miss. Code § 75-76-263(2).
20R. II-A-3(e).
21See R. IV-4.
22R. IV-9.
23R. IV-5(b).
24R. IV-4(c)(2).
25R. IV-5(h).
26R. IV-5.
27R. IV-3.
28Miss. Code § 75-76-201.
29See Miss. Code § 75-76-253.
30See R. II-H-23.

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.