STATE OF MICHIGAN
MICHIGAN GAMING CONTROL BOARD

RESOLUTION NO. 2008-04

A Board Resolution Amending the Comp Program
Provisions of Resolution 2006-01, Section IV (5) (a-d)

WHEREAS, the Michigan Gaming Control Board ("Board") is empowered by the Michigan Gaming Control and Revenue Act, MCL 432.201 et seq., ("Act") to promulgate rules as may be necessary to implement, administer, and enforce the Act; and,

WHEREAS, the Board has adopted and promulgated administrative rules ("Rules") with respect to the licensing of persons providing goods and services to casinos licensed under the Act and Rules; and,

WHEREAS, Rule 432.1322(1) requires that a person shall not, on a regular and continuing basis, supply goods or services to a casino licensee unless that person holds a supplier license; and,

WHEREAS, Rule 432.1322(3) provides that a person shall be deemed to be transacting business with a casino licensee on a "regular and continuing basis" whenever the total dollar amount of the nongaming-related business transactions with 1 licensee will be equal to or greater than $200,000, or equal to or greater than $400,000 with 2 or more licensees in a twelve-month period; and,

WHEREAS, the Board has adopted and promulgated Rule 432.1322(4), which provides that the Board may exempt any person or field of commerce from the supplier-licensing requirements of its administrative rules if the Board determines that any of the following provisions apply to the person or field of commerce:

(a)      The person or field is an agency of state, local, or federal government.

(b)      The person or field is regulated by another regulatory agency in Michigan.

(c)    The person or field will provide goods or services of insubstantial or insignificant
 amounts or quantities.

(d)   Licensing of the person or field is not deemed necessary to protect the public interest
  or accomplish the policies and purposes of the act; and

WHEREAS, on June 29, 2006, the Board issued Resolution 2006-01, in which it addressed exemptions from the supplier-licensing requirements.  That resolution permits exemptions for, among other things:

5.  A person providing goods or services to a casino licensee as part of the distribution of complimentaries to casino patrons by that person, a person associated with the casino, or the casino itself. For purposes of this resolution, "complimentaries" are considered to be amenities provided to casino patrons to reward their patronage or to provide goodwill, and the process for the distribution of these amenities will be known as the casino's "Comp Program." An exemption granted on this basis is subject to the following conditions:  

a.                    the person must not accept comp cards or coupons, or their equivalent, as payment for alcohol or convert comp cards or coupons, or their equivalent, to cash or its equivalent;

b.                   the person must not charge a casino licensee for any portion of a comp card or coupon, or their equivalent, that is unused by the casino patron to whom it was distributed;

c.                    the person must permit Board inspection of its accounting records and business premises;

d.                   the person must properly account for all transactions in which it provides goods or services for a casino licensee's Comp Program and must retain itemized records documenting each good or service provided to casino patrons in exchange for comp cards or coupons, or their equivalent.

An exemption on this basis is available only to providers that make their services available to all licensed casinos on a non-exclusive basis under similar or reasonably comparable terms and conditions.

NOW THEREFORE, IT IS RESOLVED that the foregoing section of Resolution 2006-01 is revised to read as follows:

5.  A person providing goods or services to a casino licensee as part of the distribution of complimentaries to casino patrons by that person, a person associated with the casino, or the casino itself. For purposes of this resolution, "complimentaries" are considered to be amenities provided to casino patrons to reward their patronage or to provide goodwill, and the process for the distribution of these amenities will be known as the casino's "Comp Program." An exemption granted on this basis is subject to the following conditions:

a.       the person must not accept comp cards or coupons, or their equivalent, as payment for alcohol or convert comp cards or coupons, or their equivalent, to cash or its equivalent;

b.       the person must not charge a casino licensee for any portion of a comp card or coupon, or their equivalent, that is unused by the casino patron to whom it was distributed;

c.       the person must permit Board inspection of its accounting records and business premises;

d.       the person must properly account for all transactions in which it provides goods or services for a casino licensee's Comp Program and must retain itemized records documenting each good or service provided to casino patrons in exchange for comp cards or coupons, or their equivalent;

e.      the person must not exceed the thresholds described in Rule 432.1322(3).  An exemption on this basis is available only to providers that make their services available to all licensed casinos on a non-exclusive basis under similar or reasonably comparable terms and conditions.  A person must have a temporary supplier's license, a supplier's license, or an exemption in a different category before exceeding the thresholds described in Rule 432.1322(3).

IT IS FURTHER RESOLVED that the foregoing "Comp Program" exemption will now be granted under Rule 432.1322(4)(c), which permits exemptions when the person or field of commerce will provide goods or services of insubstantial or insignificant amounts or quantities, rather than Rule 432.1322(4)(d), which permits exemptions when the Board determines that licensing the person or field of commerce is not deemed necessary to protect the public interest or accomplish the policies and purposes of the Act.

IT IS FURTHER RESOLVED that all previously granted "Comp Program" exemptions are now subject to the thresholds described in Rule 432.1322(3).  If any person with a "Comp Program" exemption has exceeded this threshold in the immediately preceding 12-month period, the person must submit a completed supplier's license application to the Board within thirty days from today's date.  The person may continue operating under the previously granted exemption until it is issued a temporary supplier's license.  If the person is not issued a temporary supplier's license, the person must cease providing goods or services to casino licensees immediately upon receiving written notice that the temporary supplier's license will not be issued.

This Resolution merely amends the "Comp Program" provisions of Resolution 2006-01.  All provisions of Resolution 2006-01 not addressed in this Resolution remain in effect.
 

ADOPTED AND ISSUED THIS 17^TH DAY OF DECEMBER 2008.

STATE OF MICHIGAN
MICHIGAN GAMING CONTROL BOARD

_____________________________________                     
Damian Kassab, Chairman


______________________________

Attest:                                                

     

Received and Filed:   

_____________________________________
Kara A. Kabia, Board Secretary