HomePublicationsNewsletter ArchiveNewslettersVolume 18Issue 30Michigan Gaming Control Board Issues New Supplier Policies

On August 14, 2012, the Michigan Gaming Control Board (“MGCB” or “Board”) issued Board Resolution 2012-01, which establishes new Board policies for the licensing and exemption processes for non-gaming companies.

Board Resolution 2012-01 reemphasizes several existing Board policies related to non-gaming supplier licensing that were previously established in 2009 through Board Resolution 2009-01. The new resolution, however, makes key changes in the following areas:

Automatic Non-Gaming Supplier Exemption Threshold Increased from $5,000 to $15,000

Under prior policies, the Board established an automatic exemption from the licensing process for non-gaming vendors that provided up to $5,000 worth of goods or services in any 12-month rolling period. Board Resolution 2012-01, however, raises this threshold from $5,000 to $15,000. As such, non-gaming vendors who supply up to $15,000 worth of goods or services to a casino licensee in any 12-month rolling period are now automatically exempt from the non-gaming supplier licensing requirements. The total dollar thresholds for the discretionary exemption from the non-gaming licensing provisions (for companies providing $15,000-$299,999) however, remains at $300,000 for sales to a single licensee and $600,000 for multiple licensees.

Publicly-Traded Exemption Expanded to Foreign Publicly-Traded Companies

Resolution 2012-01 contains a new provision that allows the Executive Director to grant exemptions for companies that are publicly-traded on another country’s exchange if that country’s regulations are “substantially similar” to those of the SEC and the applicant otherwise meets the requirements for domestic publicly-traded companies (i.e., sales to Detroit casinos are less than 5% of total revenue, and revenue documentation requirements). This was not included in Resolution 2009-01, which provided the exemption solely to domestic publicly-traded companies.

Casino Construction Exemptions Removed

Resolution 2009-01 contained an exemption for companies that provide construction-related services for the initial construction of the permanent casinos. This exemption has been removed in Resolution 2012-01 as the construction phases for the Detroit casinos have been completed.

Annual Report Regarding Transactions with Exempted Companies Removed

Resolution 2009-01 requires all casino licensees to submit both a monthly and an annual report that notifies the MGCB of all transactions with companies holding an exemption from the supplier licensing requirements. Resolution 2012-01, however, removes the language requiring an annual report. As such, operators will still be required to submit monthly reports but are no longer required to submit an annual report.

In addition to the above changes to the Board’s policies, Resolution 2012-01 rescinds several previous Board resolutions on the matter that are encompassed in the new resolution. For the full text of Board Resolution 2012-01, please visit the MGCB’s website at http://www.michigan.gov/mgcb

 

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