Michigan Gaming Control Board
STATE OF MICHIGAN
THE MICHIGAN GAMING CONTROL BOARD
RESOLUTION NO. 2015-01
A Board Resolution Regarding Vendor Exemptions and Waivers From Supplier-Licensing Requirements Pursuant to Rule 432.1322(4) and Rule 432.1223 and Delegation of Authority to the Executive Director to Grant Vendor Exemptions and Waivers
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. The Board has adopted and promulgated administrative rules (Rules) regarding licensing persons providing goods and services to casinos licensed under the Act and Rules.
Rule 432.1322(1) prohibits a person from supplying goods or services to a casino licensee on a regular and continuing basis unless that person holds a supplier license. Rule 432.1322(3) provides that a person shall be deemed to be providing goods or services to a casino licensee on a "regular and continuing basis" whenever the total dollar amount of the nongaming-related business transactions with one licensee will be equal to or greater than $200,000 or equal to or greater than $400,000 with two or more licensees, in a twelve-month period.
Rule 432.1322(4) 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 specific criteria are met. Prospective providers of goods and services have asked for or inquired about exemption from the supplier-licensing requirements under Rule 432.1322(4), and it is necessary to articulate certain circumstances under which a provision of Rule 432.1322(4) generally applies to a person requesting exemption from the supplier-licensing requirements.
MCL 432.204(8) provides for the Executive Director to perform any and all duties that the Board shall assign to him or her. Rule 432.1214 delegates to the Executive Director all power and authority to act in the name of the Board with respect to all reasonable, necessary, and appropriate actions to administer and carry out the administrative and executive functions of the Board. Additionally, Rule 432.1214(j) provides that the Executive Director has the power to "[g]rant requests and waivers, answer inquiries, issue interpretations, and otherwise take any action that is reasonably requested by applicants, licensees, and holders of certificates of suitability in furtherance of, and consistent with, the efficient administration and enforcement of the provisions of the act and these rules, as determined to be necessary or appropriate by the executive director."
It is necessary and appropriate for purposes of administrative efficiency for the Board to expressly delegate its power and authority to the Executive Director to waive the supplier-licensing requirements in certain circumstances described herein and to exempt persons providing goods or services to a casino licensee from the supplier-licensing requirements where the persons meet the criteria for exemption set forth in Rule 432.1322(4) and this resolution.
IT IS RESOLVED that the provisions of R 432.1322(4) generally apply to people described below and that the Executive Director may grant exemptions from the supplier-licensing requirements to nongaming-related suppliers described in each of the following sections.
I. Rule 432.1322(4)(a): The person or field is an agency of state, local, or federal government.
The Board automatically grants an exemption to governmental agencies and the United States Postal Service to the extent that the entity provides services related to its governmental agency function to a casino licensee.
II. Rule 432.1322(4)(b): The person or field is regulated by another regulatory agency in Michigan.
The Board automatically grants an exemption to (a) public utilities regulated by the Michigan Public Service Commission to the extent that they provide regulated utility-related services to a casino licensee and (b) Michigan public institutions of higher education to the extent that they provide education-related services to a casino licensee.
The Executive Director may grant an exemption on this basis if the applicant is:
III. Rule 432.1322(4)(c): The person or field will provide goods or services of insubstantial or insignificant amounts or quantities.
a. the applicant is providing more than $50,000 worth of nongaming-related goods or services to any casino licensee; and
b. the applicant provides less than $400,000 worth of nongaming-related goods and services to each casino licensee.
The applicant must certify in its application that, in the reasonable exercise of commercial business judgment, the person will not exceed the $400,000 threshold described in this section.
If circumstances change and it appears that the person will provide a casino licensee with nongaming-related goods or services in excess of $400,000 in the rolling twelve-month period, the person must apply for an exemption in a different category or a supplier’s license. A person must have a temporary supplier's license, a supplier's license, or an exemption in a different category before exceeding the $400,000 threshold.
3. The Executive Director may also grant an exemption on this basis to 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 $400,000 threshold described in paragraph (III)(2) above. 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 paragraph (III)(2).
IV. Rule 432.1322(4)(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.
The Executive Director may grant an exemption on this basis if the applicant is:
The Executive Director may also grant an exemption on this basis to a publicly traded foreign corporation, or its wholly owned subsidiary, if the Executive Director determines that the applicant is bound by regulations substantially similar to those imposed by the Securities and Exchange Commission and that the applicant’s annual overall gross revenues from doing business with casino licensees constitute less than 5% of its annual gross revenues.
A professional entertainer, sports figure, or other celebrity engaged by a licensed casino to appear at a casino-sponsored special entertainment or promotional event, or an agent or subcontractor of a professional entertainer, sports figure, or celebrity who does not otherwise provide services to casino licensees on a regular and continuing basis. This exemption is not available to promoters or agents who provide their services to a casino licensee on a regular and continuing basis.
4. A person who provides facilities, promotion, or advertising to a casino licensee and is one of the following:
a. a media outlet (defined as a newspaper, a magazine, an outdoor advertising business, a radio or television outlet, or any internet-based form of those entities) thatderives less than 5% of the person's annual overall gross revenues from advertising by casino licensees.
b. a provider of a facility or a host or sponsor of an event that presents advertising on behalf of or promotes a casino licensee, including but not limited to theatres, ballrooms, halls, arenas, parks, stadiums, golf courses, and other entertainment, recreational, and sports facilities located in the State of Michigan.
c. a provider of a facility that provides entertainment, recreational, or hospitality services to a casino licensee and is a theatre, ballroom, hall, arena, park, stadium, golf course, or special-event venue located in the State of Michigan.
5. A Michigan or federally chartered depository financial institution to the extent that it provides financial-related services to a casino licensee. This provision does not extend to providing services related to a debt transaction.
6. A person or entity that provides professional legal services to a casino licensee.
The Board automatically grants an exemption to the following persons:
IT IS FURTHER RESOLVED:
a. termination of the person's contractual or business relationship with the casino licensee(s) or the person's subcontractor relationship;
b. making material misrepresentations to the Board;
c. failing to timely disclose information upon request of the Board or Executive Director;
d. failing to comply with Board resolutions or applicable provisions of the Act or Rules;
e. discovery of evidence that demonstrates that licensing of the person is necessary to protect the public interest or accomplish the policies and purposes of the Act.
If the circumstances that caused the summary suspension are corrected or ameliorated to the satisfaction of the Executive Director, he or she may reinstate the exemption from the supplier-licensing requirements.
ADOPTED AND ISSUED THIS 13th DAY OF JANUARY 2015.
STATE OF MICHIGAN
MICHIGAN GAMING CONTROL BOARD
Robert Anthony, Chairperson
Received and Filed: