Current through Register Vol. 41, No. 3, September 23, 2024
A. An applicant for
a license or permit shall submit to a personal and background investigation
conducted by the department.
B. A
person who is required to provide personal and background information under
this chapter shall provide a statement that irrevocably gives consent to the
director, department staff and its investigative contractors, and persons
authorized by the director to:
1. Verify all
information provided in the application; and
2. Conduct a background investigation of the
individual.
C. An
applicant shall authorize the director, department staff, and investigative
contractors to have access to any and all information the applicant has
provided to any other jurisdiction while seeking a gaming or similar license in
that other jurisdiction, as well as the information obtained by that other
jurisdiction during the course of any investigation it may have conducted
regarding the applicant.
D. The
background investigation shall include a criminal history records check and
fingerprinting for:
1. Every individual
applying for a license or permit pursuant to this chapter;
2. Every individual who is an officer,
director, or principal of a licensee or applicant for a license and every
employee of the licensee who conducts gaming operations;
3. All individual security personnel of any
licensee; and
4. All permit holders
and officers, directors, principals, and employees of permit holders whose
duties relate to gaming operations in Virginia.
E. In the form and format required by the
department, each individual required by subsection D of this section to undergo
a criminal history records check shall submit fingerprints and personal
descriptive information to the Central Criminal Records Exchange to be
forwarded to the Federal Bureau of Investigation for a national criminal
records search and to the Department of State Police for a Virginia criminal
history records check. The results of the background check and national and
state criminal records check shall be returned to the department.
F. Administrative costs of background
investigations.
1. An applicant is responsible
for the administrative costs to the department of conducting the personal and
background investigations required by this chapter.
2. The administrative costs of the personal
and background investigation are independent of and in addition to
fingerprinting fees and, except for a service permit, any license or permit
issuance fees.
3. The
administrative costs associated with performing the background investigation of
a particular facility operator or supplier permit applicant and any individual
required to be investigated will vary depending on the:
a. Complexity of the investigation;
b. Time necessary to properly conduct the
investigation;
c. Type of license
or permit sought; and
d. Types of
activities the license or permit will authorize the applicant to undertake if
the license or permit is granted.
4. When a preferred casino gaming operator
submits its application for the facility operator's license, it shall send by
wire transfer to the department a nonrefundable application and background
investigation fee of $50,000 per principal.
5. When an applicant for a supplier permit
submits its application to the department, it shall send by wire transfer:
a. A nonrefundable application fee of $5,000;
and
b. A background investigation
fee of $50,000 per principal.
6. When an applicant for a service permit
submits its application to the department, it shall send by wire transfer $500
as a nonrefundable fee to cover the administrative costs of conducting the
personal and background check and issuing the permit.
7. In addition to other fees set out in this
subsection, the forms submitted in compliance with this regulation shall be
accompanied by the:
a. Fee for access to
Virginia criminal history record information;
b. Mandatory processing fee required by the
Federal Bureau of Investigation for a national criminal history records check;
and
c. Mandatory processing fee
required by Interpol for an international criminal history records check for an
applicant who is a citizen of any country other than the United
States.
G. An
applicant for a facility operator license or supplier permit shall ensure that
all principals, key managers, and other required individuals have submitted
appropriate and complete applications.
H. The director may require initial and
additional deposits from an applicant for the administrative costs of
conducting the applicant's background investigation.
I. Promptly upon receipt of an invoice from
the department, an applicant for a license or permit shall reimburse the
department for:
1. The additional
administrative costs associated with performing background investigations of
the applicant and any individual required to provide information under this
chapter; and
2. Any payments made
by the director to a person approved by the director to conduct the background
investigation.
J. Failure
to reimburse the department shall be grounds for disqualification of the
applicant.
K. Unless otherwise
specified, the director shall refund to an applicant for a license or permit
any unused portion of an advance deposit required to offset the additional
costs of conducting the applicant's background investigation and submitted
under subsection H of this section.
L. Personal and background information.
1. Except as otherwise provided by the
department, application documents shall include the information under
subdivision 2 of this subsection, for an individual who is:
a. The applicant;
b. A director, officer, or key manager
employed by the applicant;
c. A
partner of the applicant;
d. An
owner of an interest of 5.0% or more in the applicant; or
e. A principal.
2. An individual listed under subdivision 1
of this subsection shall furnish the following:
a. Full name and any previous names or
aliases;
b. Date of
birth;
c. Physical
description;
d. Home and business
addresses and telephone numbers;
e.
Driver's license number and state of issuance;
f. Social Security number;
g. Passport or identification
photo;
h. Fingerprints for a
criminal records check:
(1) For a Virginia
resident, from an electronic fingerprinting service approved by the board;
or
(2) For a resident from outside
Virginia, one Federal Bureau of Investigation and one local fingerprint card,
taken within the previous 45 days before submission to the department;
and
i. Any other document
or information required by the department.
3. If the applicant is a corporation, the
application documents shall state the:
a.
State in which the applicant is incorporated; and
b. Name and address of the applicant's agent
for service of process in Virginia.
4. If an applicant is a nonprofit
corporation, only an individual who is a director or officer of the applicant
shall provide the information required under subdivision 2 of this
subsection.
5. The department may
require an applicant to furnish the information listed in subdivision 2 of this
subsection with regard to the applicant's family and associates.
6. Inadvertent, nonsubstantive errors that
might be made in furnishing the information required by this regulation may not
be used as a reason by the board for disqualifying the applicant.
M. Information for background
investigation. An individual required to provide information under this section
shall complete a background form supplied by the department that includes a
statement disclosing whether the individual has ever been:
1. Arrested;
2. Convicted of, pled nolo contendere to, or
received probation before judgment for a felony or misdemeanor, other than a
misdemeanor traffic offense;
3.
Sanctioned by a government agency related to gaming;
4. Found liable in connection with a civil
action related to gaming;
5. A
debtor in a bankruptcy proceeding; or
6. Denied a bond.
N. If the applicant for a facility operator's
license or a supplier permit is a corporation, the application shall include a:
1. Statement of when the corporation was
organized;
2. Copy of the articles
of incorporation and bylaws of the corporation;
3. Statement and documentation of whether the
corporation has been reorganized or reincorporated during the five-year period
preceding the date on which the application is submitted to the
director;
4. Statement and
documentation of whether the corporation has filed restated articles of
incorporation; and
5. List
identifying each person who:
a. Exercises
voting rights in the corporation; and
b. Directly or indirectly owns 5.0% or more
of the corporation.
O. If the applicant for a facility operator's
license or a supplier permit is an unincorporated business association, the
application shall include a:
1. Copy of each
organizational document of the applicant, including any partnership
agreement;
2. Description of any
oral agreements involving the organization of the applicant; and
3. List identifying each person who:
a. Exercises voting rights in the applicant;
or
b. Directly or indirectly owns
5.0% or more of the business association.
P. If the applicant for a facility operator's
license or a supplier permit is authorized to issue capital stock, the
applicant shall state, for each class of stock authorized, the:
1. Total number of shares;
2. Par value, if any;
3. Voting rights;
4. Current rate of dividend;
5. Number of shares outstanding and the
market value of each share on the date of the application; and
6. Existence of any voting trust or voting
agreement in which capital stock of the applicant is held, and the:
a. Name and address of each stockholder
participating in the trust or agreement;
b. Class of stock involved; and
c. Total number of shares held by the trust
or agreement.
Q. The application for a facility operator's
license or a supplier permit shall include a certified copy of each voting
trust or voting agreement in which capital stock is held.
R. The application for a facility operator's
license or a supplier permit shall describe the terms of any proxy by which any
capital stock may be voted and shall state the:
1. Name and address of the person holding the
proxy;
2. Name and address of the
stockholder who granted the proxy;
3. Class of stock for which the proxy may
vote; and
4. Total number of shares
voted by the proxy.
S.
The application for a facility operator's license or a supplier permit shall
state any provisions and the procedures by which these provisions may be
modified for the redemption, repurchase, retirement, conversion, or exchange of
an ownership interest.
T. The
application for a facility operator's license or a supplier permit shall state
whether the applicant's stock may be traded through options and whether the
corporation or a stockholder has executed an agreement or contract to convey
any of the corporation's or the stockholder's stock at a future date.
U. The application for a facility operator's
license or a supplier permit shall include a copy or a description of each
agreement or contract disclosed under subsection T of this section.
V. The application for a facility operator's
license or a supplier permit shall include a copy of each prospectus, pro
forma, or other promotional material given to potential investors about the
permit holder applicant's operation.
W. The application for a facility operator's
license or a supplier permit shall provide full disclosure for any stock
options that may exist or have been granted.
X. If the applicant is not an individual, the
application for a facility operator's license or a supplier permit shall
include a list of the individuals who are serving, or who are designated to
serve, during the first year after the date the application is submitted to the
Executive Director of the Virginia Lottery, as a director, officer, partner, or
principal as defined in this chapter and provide:
1. The individual's name and
address;
2. Each position or office
of the applicant held by the individual;
3. The individual's primary occupation during
the five-year period preceding the date on which the application is submitted
to the director; and
4. The nature
and extent of any ownership interest that the individual has in the
applicant.
Y. The
application for a facility operator's license or a supplier permit shall:
1. Disclose all individuals and entities that
have an ownership interest of 5.0% or more in the applicant, including any
beneficial ownership as defined in Article 1 (§ 13.1-1200 et seq.) of
Chapter 14 of Title 13.1 of the Code of Virginia;
2. Describe the:
a. Nature of the ownership, and
b. Extent of control exercised by the
owner;
3. Include
information and documents required by this chapter as to each owner;
and
4. If the applicant is the
subsidiary of another entity, include an explicit statement that the parent
organization will fully and absolutely guarantee the performance and regulatory
compliance of the subsidiary during the term of the subsidiary's license or
permit.
Z. Outside
interests.
1. The application documents for a
facility operator's license or a supplier permit shall state whether the
applicant, a director, an officer, a partner of the applicant, or an owner of
5.0% or more of an interest in the applicant:
(a) Has ever held an ownership interest
personally or in an entity holding a license or permit issued by the board or
the department; or
(b) Is currently
engaged in the business of gaming in another state, and the nature and extent
of that involvement.
2.
The applicant shall describe the nature of participation stated under
subdivision 1 of this subsection.
AA. Approval of institutional investors.
1. An institutional investor that holds or
proposes to hold an ownership interest in a facility or supplier that would
require a background investigation may request the director to waive the
requirement of conducting a full background investigation of the institutional
investor.
2. The board may approve
the institutional investor's request for a waiver if it satisfactorily
completes and submits an institutional investor waiver application as required
by the department.
3. An entity for
which the director has approved a waiver request is an approved institutional
investor.
4. An institutional
investor can maintain its approved status by:
a. Maintaining an ownership interest in an
applicant, licensee, or permit holder; and
b. Providing the department with the
statement of ownership percentage it reported to the Securities and Exchange
Commission or a foreign equivalent approved for such reporting by the
department:
(1) Annually, before the last day
of April; or
(2) As otherwise
directed by the department.
5. If an approved institutional investor
complies with subdivision 4 of this subsection, the department's approval is
valid for five years from the date of approval, and:
a. The waiver may apply to one or more
applicants, licensees, or permit holders in which the entity is an
institutional investor; and
b. The
institutional investor shall submit an institutional waiver application every
five years from the date of the department's last approval.
6. If an approved institutional
investor does not meet the requirements of subdivision 4 of this subsection
with respect to one or more applicants, licensees, or permit holders:
a. The approved institutional investor shall
notify the department in writing if the institutional investor's ownership
interest falls below 5.0%; and
b.
The department may require the institutional investor to submit a new waiver
application if the institutional investor acquires an ownership interest of
5.0% or greater in any applicant, licensee, or permit holder.
Statutory Authority: §§ 58.1-4101 and 58.1-4102
of the Code of Virginia.
