CasinoVendors.com

New Jersey at a Glance
Gaming License: Yes
Non-Gaming License: No
Vendor License Exemptions Available: Yes
Temporary License: Yes
Ownership Disclosure Threshold: 5%
Institutional Investor Waiver: Yes
Fees: $3,000 - $5,000
State Gaming Lab: Public
Term of License: 4 Years
Deadline to Reapply: 90 Days Prior to Expiration
Political Contribution Restrictions: No

New Jersey Casino Control Commission

www.state.nj.us/casinos
More New Jersey Casino Control Commission Info

New Jersey Division of Gaming Enforcement

www.nj.gov/oag/ge
More New Jersey Division of Gaming Enforcement Info

New Jersey Supplier License Jurisdictional Analysis


Introduction

New Jersey was the first state outside of Nevada to legalize commercial casino gaming by passing the Casino Control Act in 1976 (“Act”). Currently, the state’s 11 commercial casinos generate approximately $3.05 billion in annual revenue and constitute the second-largest casino gaming market in the country. In 2011, the Act was amended to remove many of the filing requirements for non-gaming suppliers, as well as change the filing process for gaming-related suppliers.

The New Jersey Casino Control Commission (“Commission”) was established to administer the Act and put forth administrative rules (“Rules”) regarding casino gaming within the state. In connection with administering the Act and Rules, the Commission has established several different business and individual licenses for manufacturers and suppliers of products and services to casino gaming facilities.

Casino Service Industry Enterprise License

Those entities that deal in supplies that relate to casino or gaming activity must be licensed as a Gaming-Related Casino Service Industry provider. In order to complete the application process, the applicant must complete the Business Entity Disclosure Form – Gaming, Multi-Jurisdictional Personal History Disclosure and New Jersey Supplemental Form, and the Equal Opportunity and Affirmative Action Obligations Form. Each of these forms is discussed below.

1. Fees

Each applicant must submit a $5,000 initial application fee which covers the first 333 hours spent by Commission staff reviewing and investigating the applicant. After the first 333 hours, the applicant will be required to pay an additional $5,000 fee for each additional 333 hours up to 1,000 hours. Payment after 1,000 hours will be billed to the applicant at an hourly rate. Installment plans are available upon request.1

2. Duration

The initial term for a Gaming-Related Casino Service Industry Licensee is three years. If renewed, it will be for a period of five years.

3. Application

Each applicant must complete a Business Entity Disclosure Form – Gaming. The following information is necessary to complete the application:

1. Basic identity information;
2. Past or other names and addresses used by the applicant;
3. Description of past and present business activity;
4. Description of stocks issued and authorized;
5. List of non-voting shareholders;
6. List of qualifiers;
7. Ownership chart;
8. List of former officers and directors;
9. List of the compensation of officers, directors, and partners;
10. List of all employees receiving $300,000 or more in compensation per year;
11. Description of bonus, profit sharing, retirement, and deferred compensation;
12. Descriptions of the ownership interests held by partners;
13. Description and identity of holders of debt;
14. List of securities options, if applicable;
15. List of financial institutions used;
16. List of contracts with suppliers, top 10 contracts by value;
17. Stock held by the applicant;
18. List of insider transactions, past five years;
19. Criminal history;
20. Regulatory and civil action history;
21. Bankruptcy history; and
22. List of gaming and professional licenses.

The following documents must be submitted in connection with the Business Entity Disclosure Form – Gaming:

1. Organization documents (charter, bylaws, etc.);
2. New Jersey business registration certificate;
3. Ownership chart;
4. Financial statements, past five years;
5. Annual reports, past five years;
6. Any quarterly or interim reports filed since the last annual report submitted;
7. Last proxy statement issued;
8. Registration statements, past five years;
9. All reports and correspondence with independent accountants pertaining to financial reporting requirements, past five years; and
10. Tax returns, past five years.

Each applicant is required by law to be photographed and fingerprinted.2

Gaming-Related Qualifying Individuals

Certain individuals who are employed by Gaming-Related Casino Service Industry License applicants or licensees must file as qualifying individuals. These individuals include officers, directors, sales representatives, signatories on agreements, partners, sole proprietors, and direct or indirect beneficial interest holders holding 5 percent or more interest in the applicant.3

These individuals must complete a Multi-Jurisdictional Personal History Disclosure Form and New Jersey Supplement Form.

Duration

A casino service employee registration is valid indefinitely unless revoked, suspended, or limited by the Commission.4

Fee

A onetime $60 fee is required for licensure as a casino service industry employee.5

Application

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.6

In addition to the information requested in the application, the following documents need to be attached in order to complete the application.

1. Fingerprint card;
2. Photo; and
3. Military records, if applicable.7

The New Jersey Supplement Form requires the applicant to disclose the following information:

1. Basic identity information;
2. Enterprise applicant identity information;
3. Citizenship information;
4. Civil or criminal records that have been expunged;
5. Ownership interest in certain business enterprises; and
6. Tax return information.

The following documents must be submitted in connection with the New Jersey Supplement Form:

1. IRS 1040 forms, past five years;
2. Immigration documents, if applicable; and
3. Photograph.8

Non-Gaming Vendor Registration

A non-gaming vendor offering goods or services is required to complete a two-step vendor registration process. This process requires action on the part of the Vendor as well as the Casino transacting business. Each Vendor must complete and submit a Vendor Registration Form (VFR) to the casino that it wishes to transact business with. The casino is then required to submit the VRF to the State of New Jersey Division of Gaming Enforcement, on the vendor’s behalf.

Within 30 days of the filing of a Vendor Registration Form, the Vendor must complete and file a Vendor Registration Supplemental Disclosure Form directly to the State of New Jersey Division of Gaming Enforcement. These forms provide basic information to the Commission regarding the nature and structure of the vendor’s business and a brief background regarding the business. Once the Commission takes favorable action on both forms, the vendor may conduct business with other casino licensees.9

1. Duration

A Vendor Registration is effective upon issuance, and will remain in effect unless revoked, suspended, limited, or otherwise restricted by the Division of Gaming Enforcement.

2. Fee

There is no fee associated with the filing of a Vendor Registration Form or Vendor Registration Supplemental Disclosure Form.

3. Application

Each Vendor must submit a Vendor Registration Form and Vendor Registration Supplemental Disclosure Form. Information required to be disclosed includes:

1. Basic enterprise information;
2. Type of business conducted with the casino license or applicant; and
3. Names, addresses, dates of birth, and percentage of ownership held by each entity or person directly owning more than 5 percent of the enterprise.

Licensing Process

After submission of the necessary materials and fees, the licensing division will begin an investigation into the applicant. The investigation may require additional materials and interviews.10

After the investigation is complete, the Commission will either grant or deny the application. If the application is denied, then the Commission will issue a statement in writing regarding the reasons for the denial.11 Applications may be granted subject to limitations or restrictions in order to protect the public interest.12

Final action on an application must be taken by the Commission within 90 days after the completion of the licensing division’s investigation.13

At all times during the licensing process, the burden is on the applicant/licensee to provide the necessary information to maintain compliance with the Act or Rules.14

Disclosure and Reporting Requirements

Before Licensure

All applicants must honestly and fully disclose any information requested on application forms or from the Commission.

After Licensure

Prior to the transportation of any slot machine, the licensee must notify the Commission of the scheduled move and the identities of the individuals involved in the move.15

The following records must be kept by licensees and made available to the Commission upon request:

1. All correspondence with the Commission and with casino licensees;
2. Copies of all advertising and promotional materials;
3. Personnel files on each employee; and
4. Financial records of all gaming-related transactions.16

All records must be kept for at least five years.

Gaming Technology Standards

All gaming equipment must first be inspected and approved, or be identical to a previously approved prototype, before being placed for use at a licensed facility.17 Prototypes of any device may be requested by the Commission and must be accompanied by a written description in accordance with Commission Rules.18

Slot machine cabinets are required to be sealed by the Commission when on the casino floor.19 Slot machines are also required to display signage and lighting in accordance with specific Rules.20 The payout of a single slot machine must average between 83 percent and 99.99 percent.21

Certain software and hardware are required to maintain specific failure rates and be able to notify casino licensees of any failure in the system.22 Any change to the software or hardware of a gaming device must receive prior approval of the Commission.23

The Commission has put forth several rules regarding the characteristics of physical gaming equipment, such as chips, tables, and dice.24

Exemptions

The Commission may exempt any person or field of commerce from the licensing requirements if: (1) the person or field is regulated by another public agency that determines whether a person subject to its jurisdiction possesses good character, honesty and integrity or (2) the person demonstrates that it is a publicly traded company or a wholly owned subsidiary of a publicly traded company, and that the amount of revenue received by the person from all New Jersey casino applicants and licensees within the 12-month period in which the greatest amount of casino business was conducted by the person seeking exemption is less than 0.1% of all revenues received by the person and its holding and intermediary companies during the same 12-month period, and such regulation is not needed to protect the public.25

Corporate officers of a non-gaming casino service industry applicant or licensee may request a waiver of the qualifier disclosure requirements by completing the Certification of Corporate Officers Seeking Waiver in Connection with a Non-Gaming Related Casino Service Industry License Application. In order to qualify for the waiver, the officer must certify that he or she is not significantly involved in and has no authority over the company’s conduct of business with any casino licensee.

Institutional investors connected with license applicants may qualify for a waiver of the licensing requirements by completing the Institutional Investor Certification, Casino Service Industry Form. The waiver request requires the institutional investor to certify that its interest in the license applicant is merely for investment purposes and that the institutional investor will not attempt to exercise control over the applicant.
1'Instructions for Filing an Application for a Gaming Related Casino Service Industry License.'
2N.J.S.A. 5:12-80(f).
3See 'Business Entity Disclosure Form – Gaming,' p. 7.
4N.J.A.C. 19:41-9.15.
5N.J.A.C. 19:41-9.15.
6'Multi-Jurisdictional Personal History Disclosure Form.'
7Id.
8'Gaming Enterprise New Jersey Supplemental Form to Multi-Jurisdictional Personal History Disclosure Form.'
9See 'Vendor Registration/Casino Service Industry Licensing & Reports,' www.nj.gov/oag/ge/sils_licensing.htm.
10N.J.S.A. 5:12-94.
11N.J.S.A. 5:12-94(c).
12N.J.S.A. 5:12-94(d).
13N.J.S.A. 5:12-94(e).
14N.J.S.A. 5:12-80.
15N.J.A.C. 19:46-1.23.
16N.J.A.C. 19:51-1.9.
17N.J.A.C. 19:46-1.20.
18See N.J.A.C. 19:46-1.28 for an outline of the specific requirements for submitting a prototype to the Commission.
19N.J.A.C. 19:46-1.24.
20See N.J.A.C. 19:46-1.26.
21N.J.A.C. 19:46-1.28A.
22See N.J.A.C. 19:46-1.26 et seq.
23N.J.A.C. 19:46-1.29.
24See N.J.A.C. 19:46-1.10-1.19b et seq.
25N.J.S.A. 5:12-92(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.