Current through Register Vol. 50, No. 3, March 20, 2024
A. Licensees or their operators shall comply
with the provisions of the Act, Part III of this Title, and these
regulations.
B. Annual financial
statements shall be provided to the division not later than May 1 each year or
120 days after the end of the fiscal year if not December 31.
C. A licensee or operator shall submit to the
division one copy of any report required to be filed with the Securities and
Exchange Commission or other domestic or foreign securities regulatory agency
by the licensee or operator, and their holding company, intermediate company,
or parent company. These reports shall be delivered to the division within 15
days of the time of filing with such commission or agency or within 15 days of
the due date prescribed by such commission or regulatory agency, whichever
comes first.
D. Each operator shall
submit to the division annual audited financial statements reflecting all
financial activities of the sports book operations subjected to an examination
conducted according to generally accepted auditing standards by an independent
certified public accountant (CPA).
1. All
audits and reports required by this Section shall be prepared at the sole
expense of the operator.
E. Annual Review of Operations
1. Each licensee or, as applicable, their
operator shall require the independent CPA, engaged for purposes of examining
the financial statements, to submit to the operator two signed copies of a
written report detailing the continuing effectiveness and adequacy of the
internal controls.
2. Using the
division's standard Minimum Internal Control questionnaire and guidelines, the
auditor shall include in this report any items discovered by the auditor or
brought to the auditor's attention where the operator does not act in
accordance with the internal controls and procedures provided to the division.
The report should also include notification and explanation for all occasions
when the operator denies a player's request to withdraw funds and all occasions
when the operator discovers the use of unauthorized scripts on its sports
wagering platform.
a. Denial of a withdrawal
means the operator or its agent issues the decision to deny a player's request
to withdraw. Issues not controlled by the operator, such as banking system
issues, incorrect deposit account numbers, or other issues not controlled by
the operator are not included.
b.
Reportable script items includes unauthorized scripts discovered on the sports
wagering platform whether used or not.
3. This report is due no later than 30 days
after the due date of the audited financial statements required in Subsection C
of this Section.
F. Each
licensee or operator shall engage an independent certified public accountant
(CPA). The CPA shall examine the statements in accordance with generally
accepted auditing standards. The CPA is prohibited from providing internal
audit services. Should the CPA previously engaged as the principal accountant
to audit the licensee's or operator's financial statements resign or be
dismissed as the principal accountant, or if another CPA is engaged as
principal accountant, the licensee or operator shall file a report with the
division within 10 days following the end of the month in which the event
occurs, setting forth the following:
1. the
date of the resignation, dismissal, or engagement;
2. any disagreements with a former
accountant, in connection with the audits of the two most recent years, on any
matter of accounting principles, or practices, financial statement disclosure,
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of the former accountant, would have caused him to make reference
in connection with his report to the subject matter of the disagreement;
including a description of each such disagreement; whether resolved or
unresolved;
3. whether the
principal accountant's report on the financial statements for any of the past
two years contained an adverse opinion or a disclaimer of opinion or was
qualified. The nature of such adverse opinion, disclaimer of opinion, or
qualification shall be described; and
4. a letter from the former accountant
furnished to the licensee or operator and addressed to the division stating
whether the CPA agrees with the statements made by the licensee or operator in
response to this Section.
G. Unless the division approves otherwise in
writing, the statements required must be presented on a comparative basis.
Consolidated financial statements may be filed by commonly owned or operated
operations, but the consolidated statements must include consolidating
financial information or consolidated schedules presenting separate financial
statements for each licensee or operator. The CPA shall express an opinion on
the consolidated financial statements as a whole and shall subject the
accompanying consolidating financial information to the auditing procedures
applied in the examination of the consolidated financial statements.
H. Each licensee or their operator shall
submit to the division two originally signed copies of its audited financial
statements and the applicable CPA's letter of engagement not later than May 1
or 120 days after the last day of the operator's business year if not December
31.
I. If a licensee or their
operator changes its fiscal year, the licensee or their operator shall prepare
and submit to the division audited financial statements covering the period
from the end of the previous business year to the beginning of the new business
year not later than 120 days after the end of the period.
J. Each operator shall provide a quarterly
report verifying of its net gaming proceeds and taxes paid. Quarters shall be
based on the licensee's fiscal year. The report shall be submitted to and
received by the division not later than 60 days after the last day of the
applicable quarter.
1. The audit for in-person
sports wagering operations shall be performed by an independent CPA and may be
incorporated into the work conducted during the quarterly audit of net gaming
proceeds, gross gaming revenue, or net slot machine proceeds performed in
accordance with §2711.I of Part III of this Title. The reports may be
submitted in a single submission, but the information shall be separated
between casino operations and sports wagering operations. The sports wagering
operations audit shall include wagers accepted, eligible promotional play
deducted from net proceeds, net gaming proceeds, and taxes paid. The auditor
shall incorporate guidelines established by the division into current
procedures for preparing the quarterly audit.
2. The required work for mobile sports
wagering may be performed by an independent CPA, the operator's internal audit
department, or other appropriate independent party approved by the division.
The report shall include a reconciliation of amounts wagered, eligible
promotional play deducted from revenue, net gaming proceeds, and taxes paid.
The party performing the work shall incorporate guidelines established by the
division into its procedures for preparing this quarterly report.
K. The division may request
additional information and documents from either the licensee, operator, or
their CPA, regarding the financial statements or the services performed by the
CPA. The division may review any and all work papers of the CPA at a time and
place determined by the division. These requirements shall be included in
agreements between the licensee, the operator, or its affiliates and the
CPA.
L. The licensee or operator
shall submit to the division, postmarked by the United States Postal Service or
deposited for delivery with a private or commercial interstate carrier, or in
another manner approved by the division, any audit report prepared by the
Internal Revenue Service (IRS) and issued to the licensee or operator. The
report is due within 30 days of receipt from the IRS.
M. Impairments to the independence of a CPA
to perform a financial audit include, but are not limited to:
1. during the period of professional
engagement to perform an audit, or at the time the opinion was issued, the
auditing person:
a. had or was committed to
acquire any direct or indirect financial interest in the licensee or
operator;
b. was a trustee of any
trust or executor or administrator of any estate if the trust or estate had or
was committed to acquire any direct or indirect financial interest in the
licensee or operator;
c. had any
joint closely held business investment with the licensee or operator or any key
person or owner thereof that was material in relation to the auditing person or
the auditing person's firm's net worth; or
d. had any loan to or from the licensee or
operator or any key person or owner thereof, when made under normal lending
procedures, terms, and requirements, except:
i. loans that are not material to the net
worth of the borrower;
ii. home
mortgages; or
iii. other secured
loans, except loans guaranteed by the auditing person's firm that are otherwise
unsecured;
2.
during the period covered by the licensee's or operator's financial statements,
during the period of the professional engagement to perform an audit, or at the
time the opinion is issued, the auditing person was:
a. connected with the licensee or operator as
a promoter, underwriter, voting trustee, key employee, or in any capacity
equivalent to that of a key employee; or
b. a trustee for any pension or
profit-sharing trust of the licensee or operator;
3. functioning as if a key employee of the
licensee or operator;
4. performing
an audit of the independent CPA or independent CPA's firm's own work;
5. advocacy for the licensee or operator;
or
6. having any other role with
the licensee or operator or its affiliates other than as independent
auditor.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
27:15 and 24.
