HomePublicationsNewsletter ArchiveNewslettersVolume 18Issue 22Summer Compliance Series: 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 now 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 and Revenue Act (the "Act") and the Michigan Gaming Control Board Rules (the "Rules") regulate providers of gaming and non-gaming goods and services to Detroit casino license applicants and casino licensees. This article will broadly discuss the initial supplier license application and review process for gaming-related suppliers and individuals.  In a prior article, the topic of “nongaming” supplier licensing and/or registration was discussed.

The Michigan Gaming Control Board (“MGCB” or “Board”) requires that certain individuals or entities supplying gaming-related goods or services to the Detroit casinos apply for and receive a valid supplier license prior to conducting business.

Gaming suppliers are generally defined as persons or businesses providing gaming-related goods/services to a casino and must file for licensure regardless of the amount of business conducted. Gaming-related goods/services are generally defined as those directly related to the conduct of gambling, or which otherwise affect the play and results of gambling games or devices (dice, tables, gaming chips, tokens, security cameras, etc.). Each supplier license is issued for a period of one year and must be renewed annually.

The MGCB may issue a gaming supplier license an entity that applies for a license and pays the applicable fee set by the board.  Under the Rules, an applicant must pay a $5,000 annual license fee.  Additional application fees ranging between $500 and $2,500 apply to companies depending on the dollar amount of business conducted with the casino.  Importantly, it is the burden of the applicant to establish by clear and convincing evidence its suitability as to integrity, moral character, and reputation; personal and business probity; financial ability and experience; responsibility; and other criteria considered appropriate by the board. MCL 432.207a(1).

Additionally, a separate Occupational License is required if an individual is employed by a supplier licensee and his or her work duties are related to or involved with the gambling operation, or if the individual performs work in a restricted area of a casino. Key management officials may also be identified by the MGCB as requiring a suitability determination in connection with the issuance of a gaming-related supplier’s license. In general, individual licenses or suitability reviews are required for those participating in senior management positions and for those workers that directly access the goods provided or provide services to the casino property.

During the interim background investigation phase of the MGCB licensing process, a temporary license may be issued to a supplier of goods or services.  To obtain a temporary license, the applicant must: submit a completed application and applicable fees; submit a written statement of intent from the casino evidencing a business engagement; pass a preliminary review of the application and criminal history investigation; and have no apparent deficiencies in the application that would warrant denial.

Depending on the number of individual qualifiers identified by the MGCB as requiring licensure or a suitability determination, the background investigations could take six weeks or more to complete.  Background investigations will include MGCB background checks as well as personal interviews with key qualifying individuals to review the individual’s personal history. Once the  MGCB staff has concluded its review of the application, a staff report recommending a licensing action will be drafted and submitted to the Board. The Board will then make a final determination on the license application at a regular public meeting.

If the applicant is denied licensure, the MGCB has established an Administration Review process that calls for a hearing officer to make a final recommendation to the MGCB.  If the MGCB issues a denial, the statute  allows for appeals to be made to a Circuit Court.  If a request is not made in a timely manner, then the notice of denial becomes the Board’s final decision. Those who have been denied a license must wait one year before reapplying for licensure.

To learn more about the MGCB or supplier licensing, please visit: www.michigan.gov/mgcb/.


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