2009 Rhode Island Code
Title 41 - Sports, Racing, and Athletics
CHAPTER 41-9.1 - The Rhode Island Gaming Control and Revenue Act
§ 41-9.1-22 - Standards for license, permit and registration issuance suitability qualifications.

SECTION 41-9.1-22

   § 41-9.1-22  Standards for license, permit and registration issuance suitability qualifications. – (a) No applicant shall be eligible to obtain a license to conduct gaming operations, a permit or registration unless the state lottery division: (i) has, with respect to a casino license applicant, received a filing made under oath that includes, without limitation, the information set forth below, and (ii) is satisfied that the applicant is suitable. In determining whether a casino license applicant is suitable, the state lottery division may consider, in addition to the information set forth below, whether the applicant has been found suitable and/or has been issued a license to conduct casino gaming in other jurisdictions.

   (1) The identity of every person in accordance with the provisions of this subdivision, who has or controls any ownership interest in the applicant with respect to which the license is sought. If the disclosed entity is a trust, the application shall disclose the names, addresses, birth dates and social security number of all such beneficiaries, if a corporation, the names, addresses, birth dates, and social security numbers of all such officers and directors; if a partnership, the names, addresses, birth dates, and social security numbers of all such partners, both general and limited, if a limited liability company, the names, addresses, birth dates, and social security numbers of all such members. The applicant shall also separately disclose in like manner any person or entity directly or indirectly owning or controlling a five percent (5%) or greater voting interest in such owners of the applicant. If any such person is an entity with one or more classes of securities registered pursuant to the Securities Exchange Act of 1934, as amended, the applicant shall disclose names, addresses, birth dates and social security numbers of all officers and directors and provide public filings with the U.S. Securities and Exchange Commission for the past year. If any such persons or entities are institutional investors or institutional lenders owning or controlling a five percent (5%) or greater voting interest in such owners of the applicant, the applicant shall not be required to provide detailed information on such institutional investors or institutional lenders other than their respective identities unless otherwise requested by the commission. The applicant will forward any request for additional information to the institutional investors or institutional lenders.

   (2) An identification of any business, including, if applicable, the state of incorporation or registration, in which an applicant or any other person or entity identified in subdivision (a)(1) has an equity interest of five percent (5%) or more. If an applicant is a corporation, partnership, or other business entity, the applicant shall identify any other corporation, partnership, or other business entity in which it has an equity interest of five percent (5%) or more; including, if applicable, the state of incorporation or registration. An applicant can comply with this subdivision by filing a copy of the applicant's registration with the securities exchange board if the registration contains the information required by this subsection.

   (3) Whether an applicant or any other person or entity identified in subdivision (a)(1) is known by applicant to have been indicted, charged, arrested, convicted, pleaded guilty or nolo contendere, forfeited bail concerning, or has had expunged any criminal offense under the laws of any jurisdiction, either felony or misdemeanor, not including traffic violations, regardless of whether the offense has been expunged, pardoned or reversed on appeal or otherwise, including the date, the name and location of the court, arresting agency and prosecuting agency, the case caption, the docket number, the offense, the disposition, and the location and length of incarceration.

   (4) Whether an applicant or any other person or entity identified in subdivision (a)(1) is known by applicant to have ever applied for or has been granted any gaming license or certificate issued by a licensing authority within this state or any other jurisdiction that has been denied, restricted, suspended, revoked, or not renewed, and a statement describing the facts and circumstances concerning the application, denial restriction, suspension, revocation or nonrenewal, including the licensing authority, the date each action was taken, and the reason for each action.

   (5) Such information, documentation and assurances as may be required to establish by clear and convincing evidence:

   a. the financial stability, integrity and responsibility of the applicant, including, but not limited to, bank references, financial statements, tax returns and other reports filed with governmental agencies;

   b. the adequacy of financial resources both as to the completion of the casino proposal and the operation of the casino; and

   c. that the applicant has sufficient business ability and casino experience as to establish the likelihood of creation and maintenance of a successful, efficient and competitive casino operation.

   (6) Such information, documentation and assurances to establish to the satisfaction of the state lottery division the applicant's good character, honesty and integrity, and the applicant's suitability qualification pursuant to this section.

   (7) A statement listing the names and titles of all Rhode Island public officials or officers of any unit of government, and the spouses, parents, and children of those public officials or officers who, directly or indirectly, own any financial interest in, have any beneficial interest in, are the creditors of or hold any debt instrument issued by, or hold or have any interest in any contractual or service relationship with an applicant. As used in this subsection, the terms "public official" and "officer" do not include a person who would have to be listed solely because of his or her state or federal military service. This subsection shall not apply to public officials or officers or the spouses, parents and children thereof, whose sole financial interest amounts to less than a one percent (1%) ownership interest in a publicly traded company.

   (8) The name and business telephone number of any attorney, counsel, lobbyist, agent, or any other person representing an applicant in matters before the state lottery division.

   (9) Whether an applicant or any other person or entity identified in subdivision (a)(1) has ever filed or had filed against it a civil or administrative action or proceeding in bankruptcy or has ever been involved in any formal process to adjust, defer, suspend, or otherwise work out the payment of any debt including the date of filing, the name and location of the court, the case caption, the docket number, and the disposition.

   (10) Whether an applicant or any other person or entity identified in subdivision (a)(1) has filed, or been served with, a complaint or other notice filed with any public body, regarding the delinquency in the payment of, or a dispute over the filings concerning the payment of any tax required under federal, state, or local law, including the amount, type of tax, the taxing agency, and the periods involved.

   (11) Financial and other information in the manner and form prescribed by the commission.

   (b) For purposes of this chapter, "suitable" means that the proposed casino licensee, or other applicant or permittee has demonstrated to the state lottery division by clear and convincing evidence that he or she:

   (1) Is a person of good character, honesty, and integrity or an entity whose reputation indicates it possesses honesty, integrity and sufficient knowledge of the gaming industry.

   (2) Is a person whose prior activities, criminal record, if any, reputation, habits, and associations do not pose a threat to the public interest of this state or to the effective regulation and control of gaming, or create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gaming or the carrying on of the business and financial arrangements incidental thereto.

   (3) Is capable of and likely to conduct the activities for which the applicant or casino gaming operator is licensed or approved in accordance with the provisions of this chapter and any rules of the state lottery division.

   (c) For purposes of a casino licensee, the applicant shall also demonstrate by clear and convincing evidence that:

   (1) He or she or the entity has adequate business competence and experience in the operation of gaming operations.

   (2) The proposed financing of the conducting of gaming operations is:

   (i) Adequate for the nature of the proposed operation; and

   (ii) From a suitable source, subject to provisions of § 41-9.1-23 hereof.

   (d) Information provided by the applicant shall be used as a basis for a thorough background investigation which the state lottery division shall conduct. A false or incomplete filing may be cause for denial of a license. The state lottery division in its sole discretion may provide the applicant a reasonable opportunity to correct any deficiency in the filing.

   (e) Applicants shall consent, in writing, to being subject to the inspections, searches, and seizures provided for in this chapter and to disclosure to the state lottery division and its agents of otherwise confidential records including tax records held by any federal, state, or local agency, or credit bureau or financial institution while applying for or holding a license under this chapter.

   (f) The state lottery division may contract for, at the expense of the applicants, any technical or investigative services that it shall require to conduct such research and/or investigation as it deems appropriate with respect to its evaluation of the filing. A nonrefundable application fee of fifty thousand dollars ($50,000) shall be paid at the time of filing to defray the costs associated with such research and investigation conducted by the state lottery division. If the costs of the research and investigation exceed fifty thousand dollars ($50,000), the applicant shall pay the additional amount.

   (g) All licensees, all permittees, and any other persons who have been found suitable or approved by the state lottery division shall maintain suitability throughout the term of the license, permit or approval. In the event of a current prosecution of an offense, the state lottery division shall have the discretion to defer a determination on a person's continuing suitability pending the outcome of the proceedings, provided that if a decision is deferred pending such outcome, the state lottery division, where applicable, may take such action as is necessary to protect the public trust, including the suspension of any license, permit or registration.

   (h) All holders of licenses, permits and registrations, and any other persons required to be found suitable, shall have a continuing duty to inform the state lottery division of any possible violation of this chapter and of any rules adopted by the state lottery division. No person who so informs the state lottery division or any law enforcement authority within the state of a violation or possible violation shall be discriminated against by the applicant, licensee, permittee, registrant or casino gaming operator because of supplying such information, and shall be afforded the protection of § 28-50-1 et al. "The Rhode Island Whistleblower's Protection Act", so called.

   (i) The state lottery division shall have the power to call forward for a finding of suitability any person that is affiliated with a licensee, permittee or registrant if necessary to protect the public interest. Subject to § 41-9.1-24, any person who has or controls directly or indirectly five percent (5%) or greater voting interest shall meet all suitability requirements and qualifications pursuant to the provisions of this chapter, unless otherwise determined by the state lottery division.

   (j) If the state lottery division finds that an individual owner or holder of a security of a licensee, permittee, or registrant, or of a holding or intermediary company of a licensee or permittee, or registrant, or any person or persons with an economic interest in a licensee, permittee, or registrant, or a director, partner, officer, or managerial employee is not suitable, and if as a result, the licensee, permittee, or registrant is no longer qualified to continue as a licensee, permittee, or registrant, the state lottery division shall propose action necessary to protect the public interest, including the suspension of the license, permit or registration. The state lottery division may also issue under penalty of revocation or suspension of a license, permit, or registration, impose a condition of disqualification naming the person or persons and declaring that such person or persons may not:

   (1) Receive dividends or interest on securities of a person, or a holding or intermediary company of a person, holding a license, permit, or other approval.

   (2) Exercise directly, or through a trustee or nominee, a right conferred by securities of a person, or a holding or intermediary company of a person, holding a license, permit, or other approval of the state lottery division issued pursuant to the provisions of this chapter.

   (3) Receive remuneration or other economic benefit from any person, or a holding or intermediary company of a person, holding a license, permit, or other approval issued pursuant to this chapter.

   (4) Exercise significant influence over activities of a person, or a holding or intermediary company of a person, holding a license, permit, or other approval issued pursuant to the provisions of this chapter.

   (5) Continue owning or holding a security of a person, or a holding or intermediary company of a person, holding a license, permit, or other approval of the state lottery division issued pursuant to the provisions of this chapter or remain as a manager, officer, director, or partner of a licensee or permittee.