Conn. Agencies Regs. § 12-574-E4 - Affiliate, totalisator, concessionaire, and vendor licenses
(a)
Type of license.
(1) Association affiliate license. Any
affiliate , as that term is defined in these regulations, of an association must
obtain an association affiliate license from the board.
(2) Totalisator license. Any person or
business organization that will provide totalisator equipment or services to
any association licensee for the operation of a parimutuel system must obtain a
totalisator license from the executive director.
(3) Concessionaire license. Any
concessionaire , as such term is defined in these regulations, must obtain a
concessionaire license from the executive director.
(4) Vendor license. Any vendor , as such term
is defined in these regulations, must obtain a vendor license from the
executive director.
(5) Affiliate
of totalisator, concessionaire or vendor license. Any affiliate , as that term
is defined in these regulations, of a totalisator, concessionaire, or vendor
licensee must obtain the appropriate affiliate license from the
division.
(b)
Application.
(1) Application for
a license shall be made on forms supplied by the division and shall be filed
with the executive director of the division .
(2) Each applicant shall file such
information as may from time to time be required by the division and as is
hereinafter enumerated.
(3) In
granting a license to any applicant the licensing authority will consider the
applicant 's financial standing and credit; the character, reputation, and
criminal record of applicant or the persons identified with it, applicant 's
previous employment or business history, other gambling interests, business or
personal affiliations, ownership of assets, and such other information as it
deems pertinent to the issuance of such license in accordance with the
provisions of the act .
(c)
Hidden ownership.
(1) Notwithstanding anything in these
regulations which may indicate the contrary, hidden ownership of an affiliate
licensee is prohibited. All shareholders, bondholders, partners, associates, or
other owners of an affiliate (either board or executive director licensed) as
defined herein shall be individual persons, and no such ownership by business
organizations shall be permitted. For example, an arrangement which would
produce an affiliate of an affiliate is forbidden. Similarly no separation of
legal and beneficial or equitable ownership of an affiliate shall be allowed.
Ownership shall be held in the name of said shareholders, bondholders,
partners, associates, or other owners. Bearer instruments and nominees shall
not be used in holding such ownership interests. Any noncomplying ownership
must be divested from the affiliate licensee within sixty days after an order
to do so from the authority which granted its license. Affiliate licensees
shall adopt appropriate amendments to their organizational instruments to
permit compliance with this section.
(2) Subdivision (1) above of this subsection
shall not apply to publicly traded corporations which hold debt or equity
securities of an affiliate licensee.
(d)
Individual or sole
proprietor. An applicant who is an individual person may be required to
file as part of his application a class II occupational license
application.
(e)
Corporations.
(1) A corporate
applicant shall file as part of its application:
(A) A statement giving its name, trade name
(if any), address and physical location, nature of business, date and location
of incorporation, the name and address of an agent registered and authorized to
receive services of process in any proceedings against applicant, and listing
the other jurisdictions in which applicant does business and the nature of
business conducted in such jurisdictions.
(B) Certified copies of the certificate of
incorporation, bylaws, certificate of authorization (if a foreign corporation),
and any other instruments under which applicant is organized and doing
business.
(C) The name, legal
residence, mailing address, social security number, date and place of birth, a
ten-year employment history, and the office held by each officer of the
applicant , of each member of the board of directors of the applicant , and of
stockholders holding five percent or more of the applicant 's stock.
(D) A statement showing the classes and
numbers of shares of stock authorized, issued, and outstanding; designating the
market value and vote per share; and giving a current list of the names,
addresses, and numbers of shares held for all holders of outstanding
shares.
(E) Where the beneficial
owner of any stock is other than the owner or subscriber of record an
explanation of such beneficial ownership including the name of the owner or
subscriber, the name of the beneficial owner and the conditions under which the
owner or subscriber holds and votes or has subscribed for such stock.
(F) A statement explaining in full detail all
stock equivalents which are authorized, issued, and exercisable to include a
list of participant names, addresses, and amount of holdings.
(G) Copies of filings by the applicant with
the Securities and Exchange Commission and any state agency regulating
transactions of securities or business offerings as required and applicable for
the preceding twelve month period.
(H) An explanation of any suspensions from
trading or other action taken against any of applicant 's securities or business
offerings.
(2) Subject
to the provisions of subsection (c) above, where a shareholder of five percent
or more of the applicant 's stock is a corporation, other than a publicly traded
corporation, all of the information required of a corporate applicant under
this subsection (e) must be supplied for that shareholder. Where a shareholder
is a business organization other than a corporation, all of the information
required of a business organization applicant under subsection (f) below must
be supplied for that shareholder. Application for the relevant affiliate
license shall fulfill the requirements of this subdivision for shareholders
which qualify as affiliates.
(f)
Applicant other than an individual
or corporation.
(1) An applicant which
is neither an individual person nor a corporation must file as part of its
application:
(A) A statement giving its name,
trade name (if any), address and physical location, nature of business, date
and location of organization, the name and address of an agent registered and
authorized to receive services of process in any proceedings against applicant,
and listing the other jurisdictions in which applicant does business and the
nature of business conducted in such jurisdictions.
(B) Certified copies of all instruments under
which applicant is organized and doing business and of the certificate of
authorization, if applicable for a foreign business organization.
(C) The name, legal residence, mailing
address, social security number, date and place of birth, a ten-year employment
history, the office held within the business organization , the percentage of
ownership held, and a listing of three personal references for each business
organization participant who owns five percent or more of applicant 's
equity.
(D) Copies of filing by the
applicant with the Securities and Exchange Commission and any state agency
regulating transactions of securities or business offerings as required and
applicable for the preceding twelve month period.
(E) An explanation of any suspensions from
trading or other action taken against any of applicant 's securities or business
offerings.
(2) Subject
to the provisions of subsection (c) above, where a participant in the applicant
which owns five percent or more of applicant 's equity is a corporation other
than a publicly traded corporation all of the information required of a
corporate applicant under subsection (e) above must be supplied for that
participant. Where a participant is a business organization other than a
corporation, all of the information required of a business organization
applicant under this subsection (f) must be supplied for that participant.
Application for an association affiliate license shall fulfill the requirements
of this subdivision for participants which qualify as affiliates.
(g)
Requirements for all
applicant s. In addition to the information requested under subsections
(d), (e) and (f) of this section applicants must also supply the following in
their applications:
(1) Tax information.
Applicant 's Federal Identification Number, applicant 's Connecticut Tax
Registration Number, or a copy of applicant 's application for a Connecticut Tax
Registration Number, complete copies of applicant 's most recent federal and
state income tax returns, and any amendments thereto and a statement explaining
any outstanding tax delinquencies or unresolved disputes.
(2) Financial statements. A copy of the
applicant 's financial statements for the preceding fiscal year including, where
they exist, copies of the management representation and lawyer's contingency
letters provided to applicant 's certified public accountant for the most
recently completed financial audit. If certified financial statements are
unavailable, a copy of the preceding fiscal year's financial statements
attested to under oath.
(3) Major
contractual services .
(A) The names and
addresses of every person or business organization which provides (or will
provide) major contractual services, as defined in these regulations to
applicant for purposes of its licensed activity indicating the nature of such
services rendered or to be rendered and equipment or property provided or to be
provided.
(B) Relative to such
contractual services disclosed in subparagraph (A) immediately above, copies of
all pertinent written agreements or statements explaining the substance of oral
agreements or understandings including the names and addresses of the parties
with whom made and also stating whether such parties are related through
control , family, or business association with the applicant , its partners,
associates, officers, directors, and principal owners.
(4) Control . If applicant is directly or
indirectly controlled by another person or business organization, a statement
showing how such control is exercised and the extent of the control.
(5) Related party transactions.
(A) If any of the partners, associates,
officers, directors, or principal owners of the applicant are related through
control, family or business association to any other person or business
organization doing business with any legalized gambling entity by providing or
receiving goods or services, and if the annual value of such goods or services
supplied is at least $25,000 or represents at least 25 percent of such related
party's gross annual receipts, a statement containing the names and addresses
of the related parties, and a full description of the goods provided or
services rendered indicating the dollar value and, where known, the percentage
of business such represents. If a fee or other consideration was or is to be
paid or received for these transactions, the value and recipient of such must
be indicated in this statement.
(B)
If any of the partners, associates, officers, directors, or principal owners of
the applicant are related through control, family ownership, or business
association to any other person or business organization through which the
applicant provided or is to provide or received or is to receive mortgages,
loans, leases, realty, or equipment, and if the annual value of such items
provided or received is at least $25,000 or represents at least 25 percent of
such person's or business organization's gross annual receipts, a statement
containing the names and addresses of the persons or business organizations
providing or receiving the aforementioned items, the names and addresses of the
related parties, and a full description of the items provided or received
indicating the dollar value. If a fee or other consideration was or is to be
paid or received, the value and recipient of such must be indicated in this
statement.
(6) Interest
in other gambling activities. If applicant now has or has ever had any interest
in or connection with a legalized gambling entity, has ever applied for a
license relating to legalized gambling, has had a license application denied,
has held a license, or had a license suspended or revoked, whether within or
without the state of Connecticut, a statement fully disclosing:
(A) The names and addresses of the involved
persons or business organizations;
(B) The nature of the interest or connection
including the dates of such;
(C)
The name under which such legalized gambling activity was conducted;
(D) A complete description of the legalized
gambling activity and the licensing procedures; and
(E) Any administrative findings of violation
relating to gambling on the part of such legalized gambling entity.
(7) Bankruptcies. If voluntary
proceedings in bankruptcy have ever been instituted by or if involuntary
proceedings in bankruptcy have ever been brought against the applicant , a full
disclosure concerning the persons or business organizations involved,
identifying the court and the proceeding by dates and file number, and stating
the facts upon which the proceedings were based and the disposition of the
matter.
(8) Contingent liabilities.
A statement disclosing all current, material (more than $100,000) litigation,
unsatisfied judgments, decrees, orders, and other liabilities including but not
limited to tax assessment, surety or guarantorships; providing such details as
dates, principal parties thereto, factual and legal basis; and explaining the
impact such may have upon the applicant 's operations if the applicant is
rendered an unfavorable decision.
(9) Managers and supervisors. A statement
listing the names and positions or titles of the applicant 's managerial and
supervisory personnel for the operation of the licensed activity.
(h)
Applicant owner of
facility. If applicant owns or will own any of the land or buildings
which constitute the facility and provides such to the association, applicant
must provide as part of its application:
(1)
Cost and cost allocation. A statement giving the acquisition or construction
cost of said land or buildings including a detailed allocation of the cost to
include such items as buildings, land, equipment, contracts, inventory,
intangible items etc. Copies of all appraisal documents, maps, plans,
blueprints, deeds, detailed inventory listing, titles, guarantees, affidavits,
leases, agreements, etc. which form the basis for the cost must be included
with this statement.
(2) Sources
and amounts of funding.
(A) A statement
detailing the sources and amounts of funding of such cost including:
(i) Sales or offers to sell stocks, bonds, or
other securities.
(ii) Investment
by owners.
(iii) Loans, notes,
mortgages, installment sales.
(iv)
Sale and lease-back.
(v)
Other.
(B) Written
copies of all financing documents indicating the names and addresses of the
parties involved, the terms of financing/funding/capitalization, and the
conditions of applicable payment or repayment.
(3) Acquisition documents.
(A) An index to and copies of all proposed
acquisition documents and a certification by counsel that the division has been
provided with a copy of all such documents.
(B) Within seven (7) days after acquisition
is complete, an index to and copies of all fully executed acquisition documents
and a certification by counsel that the division has been provided with a copy
of all such executed documents.
(i)
Conditions of licensure.
(1) If a license is granted, the applicant
agrees to abide by and comply with the provisions of the act and any rules and
regulations as the division with the advice and consent of the board has
adopted or may hereafter adopt.
(2)
If a license is granted, it will become the duty of the applicant /licensee to
file with the board or the division such reports and financial data as may be
required by the act or by such rules and regulations as the division with the
advice and consent of the board has adopted or may hereafter adopt and to make
such payments as may be required by said act or rules and regulations. This
duty shall continue for the entire duration of the license.
(3) All exhibits, statements, reports,
papers, data, etc. submitted pursuant to an application for an association
license shall be current, accurate, and complete. Applicant shall immediately
provide the division with a full description of any significant operational
change in any of the information submitted as part of its
application.
(4) Any license which
may be granted to an applicant is predicated upon the information contained in
its application which applicant verifies under oath. For any material false or
misleading statement or answer in an application, said application may be
denied, or if a license has already been granted, the license may be fined or
such license may be suspended or revoked or any combination thereof.
(5) All partners, trustees, shareholders, and
other owners (including beneficial owners) of the applicant /licensee as
disclosed under this section must be qualified under the act and these rules
for appropriate licensure, either affiliate or occupational. Where such a party
fails to be or to remain so qualified, any ownership held by such party
(including beneficial ownership) must be divested by that party not later than
sixty days after an order from the board or the executive director. The
applicant/licensee shall include appropriate provisions in its organizational
instruments to effect such divestiture. Nothing in this subdivision shall be
deemed to limit the application of any other provision of these rules or of any
provision of the act .
(j)
Nontransferability. No
license shall be transferable or assignable in any manner or
particular.
(k)
Duration of
licensure and renewals.
(1) Any
license granted by the executive director shall be effective for not more than
one year. Totalisator , concessionaire , vendor, and their affiliate licenses
shall expire on the thirty-first day of August of each year. Previously
licensed applicants or applicants for renewal shall provide currently updated
application material but will not be required to resubmit historical data which
is already available to the division.
(2) Association affiliate licenses issued by
the board need not be renewed, however, holders of such licenses shall file
statements revising application information as material changes in such
information occur. If such information is to be disclosed pursuant to the
provisions of Section
12-584
of the Connecticut General Statutes and Section
12-584-1
of these rules it need not be resubmitted. Failure to provide timely updates
may result in penalty to such licensee or its allied association
licensee.
(l)
Certification . The license application shall be signed and
attested to under oath before a notary public or Commissioner of the Superior
Court by the applicant if applicant is an individual person, by all general
partners if applicant is a partnership, or by an officer duly authorized by the
board of directors if applicant is a corporation. A corporate applicant shall
attach to its application a certified copy of the minutes or resolution of the
board of directors specifically authorizing that officer to sign for the
corporation. Said minutes or resolution shall be signed by the secretary of the
corporation and the corporate seal shall be affixed thereto.
Notes
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