HomePublicationsNewsletter ArchiveNewslettersVolume 18Issue 20Summer Compliance Series: Non-Gaming Supplier Initial Licensing Process

In addition to its traditional coverage of developments in the state’s gaming industry, The Michigan Gaming Newsletter is proud to announce its first annual Summer Compliance Series. From June until the end of August, The Michigan Gaming Newsletter will be publishing a regular column in order to provide readers with a basic understanding of Michigan gaming regulatory structures and considerations. The following is a general discussion of the state’s compliance requirements and should not be considered legal advice.

The Michigan Gaming Control Board (“MGCB”) requires that certain individuals or entities that supply goods or services to the Detroit casinos apply for and receive a valid supplier license, vendor registration, or exemption from the licensing process. This article will broadly discuss the initial Non-Gaming Supplier License application and review process.

Non-Gaming Suppliers are defined as a person or entity that supplies goods or services that “are not related to, used in connection with, or affect, gaming” on a regular and continuing basis to one or more of the Detroit casinos. MGCB Rule 322. These types of goods or services include, but are not limited to, food and beverages, garbage handling, construction services, and the management of casino enterprises (i.e., restaurants, bars, retail locations, and other businesses that operate in the same or connected buildings to the casino). The categories of qualifying goods or service providers are further detailed in MGCB Resolution No. 2009-01, enacted September 8, 2009 (“Resolution 2009-01”) that provides details for the Non-Gaming Supplier License process. The resolution is available in its entirety at the following link: www.michigan.gov/mgcb/0,4620,7-120-57615_58037-252211--,00.html.

Resolution 2009-01 exempts certain business activities and fields of commerce from the licensing process in order to establish a more detailed list of criteria for individuals to use to determine whether a certain business activity would require a Non-Gaming Supplier License. The resolution both provides guidance as to the MGCB’s interpretation of what constitutes providing goods or services on “a regular and continuing basis,” provides exemptions for certain fields of commerce, as well as details the process for issuing licenses and exemptions.

For Non-Gaming Suppliers, Resolution 2009-01 establishes volume thresholds that trigger certain licensing requirements. Those persons or businesses that supply up to $5,000 worth of  non-gaming goods or services to casino operators in a 12-month period are automatically exempt from licensure. Those that offer between $5001 and $300,000 to a single casino licensee (or up to $600,000 to multiple casino licensees) in a 12-month period may apply for an exemption from the licensing process by the Executive Director. This process requires the completion of the Vendor Exemption Form, which is an abbreviated version of the Non-Gaming Supplier application forms, and required fees.

Finally, if a person or business supplies greater than $300,000 in goods or services to any single casino license or more than $600,000 in goods or services to multiple licensees, then the person or business must first apply for and receive a valid Non-Gaming Supplier License. This requires completion of the Non-Gaming Supplier License application, personal disclosure forms for those principal and key employees of the business, business disclosure forms for parent/holding/affiliate companies, as well as payment of the required application fees. Those qualifying as a Non-Gaming Supplier may be issued a temporary license by the Executive Director upon the submission of a complete license application, confirmation that the applicant has an agreement to supply goods or services to a casino licensee, and provided the MGCB has no initial indication that the applicant would be unsuitable for licensure. SeeMGCB Rule 325.

Exemptions issued to Non-Gaming Suppliers are valid for a period of 1 year and renewal materials must be submitted at least 30 days prior to the expiration of the exemption. In addition, the exemption is only valid as long as the holder continues to meet the standards and criteria for its issuance. Those holding an exemption that approach the $300,000/$600,000 dollar licensing threshold, for example, must submit the appropriate licensing application forms as soon as they believe that they will meet or exceed the threshold in any 12-month period.

In addition to detailing the licensing thresholds for Non-Gaming Suppliers, Resolution 2009-01 provides exemptions for certain fields of commerce or similarly regulated businesses. The Executive Director may issue exemptions to medical corporations or insurance companies licensed as such by the State of Michigan, government agencies (such as the USPS), certain publicly-traded companies and financial institutions, professional entertainers, advertisers, and others providing services that are outlined in Section IV of the resolution.

In addition, those holding a Non-Gaming Supplier License, Vendor Exemption, or temporary license must continue to comply with all MGCB reporting requirements and other stipulations placed on the license or exemption issued.  The political contribution prohibitions included in Volume 18, Issue 19of The Michigan Gaming Newsletter is one regulation that such companies should be knowledgeable of.

Those interested in learning more about the Non-Gaming Supplier licensing process, including whether certain business activities qualify for exemptions and/or licensure, may refer to the MGCB’s “Licensing Determination Flowchart,” located at the following link: http://www.michigan.gov/mgcb/0,4620,7-120-57233_57052---,00.html.

 

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