Ohio Gaming Supplier Regulatory Overview

In 2008, voters in Ohio approved a constitutional amendment that authorized the operation of four casinos in the state, one each in Toledo, Cleveland, Cincinnati, and Franklin County (Columbus). Matters of casino vendor licensure and subsequent regulation are under the jurisdiction of the Ohio Casino Control Commission (“Commission”).

The first three properties opened in 2012 and saw total gross gaming revenue of $429.83 million and employ approximately 4,197 individuals in the state’s gaming industry.¹ The final casino, located in Cincinnati, opened in 2013.

Ohio Revised Code 3772 (“Code”) requires any person who supplies any gaming-associated equipment, services, or goods to a casino operator to obtain a gaming-related vendor license. Further, the Code requires all casino gaming employees to have a casino gaming employee license. Moreover, entities owning greater than or equal to 5 percent, but less than 15 percent, of ownership in a casino facility, casino operator, management company, holding company, or gaming-related vendor, are prescribed to complete the Institutional Investor Certification Form.

Gaming-Related Vendor License

Under the Ohio Casino Control Commission (“Commission”) regulations and state law, those individuals or entities that supply gaming related goods or services must first obtain a valid supplier’s license from the Commission. These suppliers are classified as “gaming-related vendors,” and are defined as:

. . . any individual, partnership, corporation, association, trust, or any other group of individuals, however organized, who supplies gaming-related equipment, goods, or services to a casino operator or management company, that are directly related to or affect casino gaming authorized under this chapter, including, but not limited to, the manufacture, sale, distribution, or repair of slot machines and table game equipment.²

Those requiring a gaming-related vendor’s license must complete the appropriate application forms from the Commission prior to engaging in any sales to casino customers in the state.

Duration

A license is valid for three years.³ Renewal periods after the initial licensure are also for periods of three years.⁴ Gaming-related vendor licenses renewal materials must be provided to the Commission at least 90 days before expiration of license.⁵

Fees

Applicants for gaming-related vendor licenses shall pay the nonrefundable application fee of $10,000. The application fee for initial licensure or renewals may be increased to the degree that the costs of background investigations, concerning the applicant, exceed the aforementioned application fee.

Upon Commission approval of the license application, the applicant for a gaming-related vendor license or renewal license shall pay a nonrefundable license fee of $15,000. The Executive Director of the Commission shall advise the applicant, in writing, of any additional required fees. After an applicant is advised to submit additional fees, the Commission shall take no further steps in regards to the application until the supplementary fees are paid.⁶

Application

Applicants and licensees for gaming-related vendor licenses shall complete and submit the appropriate forms and pay all fees required by the Commission. An applicant must also supply two sets of the applicant’s fingerprints and a list of all equipment, devices, and supplies offered for sale or lease in connection with casino games.⁷

The following forms must be completed and submitted to the Ohio Casino Control Commission through a secure transmission:

1. Gaming- Related Vendor Application;
2. ACH Credit Authorization Agreement; and
3. Institutional Investor Certification Form (if applicable).

1. Gaming Related Vendor Application

In order to complete the Gaming- Related Vendor Application, an applicant must provide the following information:

1. Basic identification information (name, address, phone, etc.);
2. Basic description of the goods or services to be provided;
3. Company description and formation history;
4. Description of present business conducted;
5. List of current and former principal employees;
6. List of all employees earning over $150,000/year;
7. Description of benefit and other compensation plans;
8. Description of stock issuance, security options, and shareholders/members;
9. List of all debt;
10. Information related to all financial institutions utilized by the applicant for the past 10 years;
11. Descriptions of the applicant’s top 10 contracts;
12. Gaming, regulatory, and other licensing history;
13. List of all companies/entities in which the applicant holds 5 percent or more in equity securities;
14. List of all criminal (all), civil (past 10 years), and regulatory (past 10 years) actions;
15. Tax and bankruptcy history; and
16. List of all significant company contributions within the past 10 years.

In addition, the applicant must also provide copies of the following documents with the application forms:

1. Articles of incorporation, bylaws, charter, and/or any other governing documents;
2. Price lists for equipment, goods, or services to be provided to the casino property;
3. Security option plans and related proxy statements;
4. SEC filings (13(d), 10-K, Registration Statements, Definitive Proxy Statements, 16(a) filings, etc.), past five years;
5. Financial statements, past three years;
6. Annual reports, past three years;
7. Interim reports for the applicant, its parents, subsidiaries, and affiliates;
8. Independent audit reports, past three years;
9. Tax returns, past five years;
10. Details of planned, committed, and uncommitted future capital expenditures;
11. Other evidence of the applicant’s financial suitability and probity;
12. Statement from applicant’s parent company, if applicable, attesting to the applicant’s financial security;
13. Organizational chart; and
14. Copies of all gaming licenses held by the applicant.⁸

The Commission can request any other information that could affect the applicant's or licensee's aptness to attain and hold a gaming-related vendor license. The applicant or licensee shall furnish all materials at the applicant's or licensee's expense.

Restrictions on Supplier Licensees

Any gaming-related vendor's equipment, devices, or supplies that are used by an individual in an unsanctioned casino gaming operation shall be surrendered to the state.⁹

Key Persons Licensing Requirements

In addition to the corporate licensing process, certain individuals employed or associated with the applicant may be required by the Commission to obtain a Key Person License in connection with the Gaming-Related Vendor License for the company. These individuals include those with the authority to oversee management decisions for the company or who will access the casino floor or other sensitive areas of the casino in connection with providing goods or services to a casino facility. For a more detailed outline of positions that require a Key Person License, please visit the Ohio Gaming Commission website.¹⁰

In order to obtain a Key Person License in connection with a Gaming-Related Vendor, an applicant must complete the Multijurisdictional Personal History Disclosure Form, as well as the Ohio Casino Commission Supplemental Form.

Duration

A key employee license expires three years after the date of licensure. An applicant for a key employee license may request renewal of the license by completing and submitting the mandatory forms and paying an application and license fee. Requests for renewal shall be completed and submitted no less than 90 days before the expiration of the license. An applicant for a renewal license must provide all information requested by the Commission.¹¹

All applicants must be at least 21 years of age and meet all standards prescribed by the Commission.¹²

All key employee applicants must submit to an investigation at least once every three years to conclude that the applicant or licensee remains in compliance with Ohio Revised Code.¹³

Fees

An applicant for a key employee license shall pay a nonrefundable application fee of $2,000. The application fee for a key employee license may be increased to include the cost of a background investigation, should costs exceed the application fee. The Executive Director of the Commission, or his or her designee, shall instruct the applicant, in writing, of supplementary application fees. The Ccommission will take no further actions with the application until the supplementary application fee is paid.¹⁴

If approved by the Commission, an applicant for a key employee license shall pay a nonrefundable license fee of $500. All fees are to be submitted to the Commission in the form of a certified check, cashier's check, or electronic funds transfer payable to the treasurer of the State of Ohio.¹⁵

Application

Each application for a casino gaming employee license shall be on a form prescribed by the Commission and shall encompass all information required by the Commission. The following forms must be completed and submitted to the Ohio Casino Control Commission, via secure transfer:

1. Key Employee Ohio Supplement;
2. Multi-jurisdictional Personal History Disclosure Form; and
3. ACH Credit Authorization Agreement.¹⁶

1. Multi-jurisdictional Personal History Disclosure Form and Key Employee Ohio Supplement

The Multi-jurisdictional Personal History Disclosure Form is a standard individual gaming application used in several gaming jurisdictions. In order to complete the form, an applicant must provide the following information:

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.

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

1. Photo; and
2. Military records, if applicable.

The Key Person Supplement form requires the applicant to provide basic identification information, questions related to the applicant’s relationships with Ohio casinos, citizenship information, business ownership information, and additional tax history.

Disclosure and Reporting Requirements

The gaming-related vendor licensee must continually meet all conditions or compliance for licensure as long as the license is held. Should the licensee fail to meet all conditions or restrictions to sustain licensure, the Commission may issue and order limiting, conditioning, restricting, suspending, revoking, denying, or not renewing an issued license.¹⁷

Furthermore, a licensee must submit to the Commission, in writing, any changes in information submitted in the application, or any situation that renders the licensee unsuitable to hold a gaming-related vendor’s license.¹⁸

All information submitted must include the name and license number of the gaming-related vendor applicant or licensee and be submitted within 10 calendar days of the change in information or incident.

Gaming Technology

Only Commission-approved electronic gaming devices may be installed, maintained, and operated. A casino operator, management company, or holding company licensee planning to use any device, software, hardware, or other technology that does not meet the standards of the Commission must seek the Commission's approval by requesting, in writing, inclusion of such device, software, hardware, or other technology.¹⁹

Exemptions

Institutional investors may submit a certification form in lieu of completing the licensure process for investments held in Ohio casino facilities or entities that are licensed as a gaming-related vendor by the Commission. The certification form acknowledges that the investor is holding securities for investment purposes only and, that it will not attempt to influence or affect the affairs of the issuer, among other statements noting that the investor will remain passive in nature.

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¹2013 AGA State of the States report.
²O.R.C. 3772.01 (L).
³O.R.C. 3772.15 (A).
⁴O.A.C. 3772-6-02 (A).
⁵O.A.C. 3772-6-02 (C).
⁶O.A.C. 3775-6-03 (A-D).
⁷O.R.C. 3772.121 (A)(B)(C).
⁸Gaming-Related Vendor License Application.
⁹O.R.C. 3772.121 (C).
¹⁰See http://codes.ohio.gov/oac/3772-5.
¹¹O.A.C 3772-5-02 (B)(C).
¹²O.R.C. 3772.131 (C).
¹³O.A.C. 3772-5-02 (D).
¹⁴O.A.C. 3772-5-03 (A)(B).
¹⁵O.A.C. 3772-5-03 (C)(D).
¹⁶See http://casinocontrol.ohio.gov/LicenseApplications/KeyEmployeeofGamingRelatedVendor.aspx.
¹⁷O.R.C. 3772.04 (a)(3).
¹⁸O.A.C. 3772-6-04 (A).
¹⁹O.A.C. 3772-9-02 (A).