Iowa Admin. Code r. 491-11.13 - Licensing of manufacturers and distributors of gambling games or implements of gambling

Current through Register Vol. 44, No. 20, April 6, 2022

(1) Impact on gambling. In considering whether a manufacturer or distributor applicant will be licensed or a specific product will be distributed, the administrator shall give due consideration to the economic impact of the applicant's product, the willingness of a licensed facility to offer the product to the public, and whether its revenue potential warrants the investigative time and effort required to maintain effective control over the product.
(2) Licensing standards. Standards which shall be considered when determining the qualifications of an applicant shall include, but are not limited to, financial stability; business ability and experience; good character and reputation of the applicant as well as all directors, officers, partners, and employees; integrity of financial backers; and any effect on the Iowa economy.
(3) Application procedure. Application for a manufacturer's or a distributor's license shall be made to the commission for approval by the administrator. In addition to the application, the following must be completed and presented when the application is filed:
a. Disclosure of ownership interest, directors, or officers of licensees.
(1) An applicant or licensee shall notify the administrator of the identity of each director, corporate officer, owner, partner, joint venture participant, trustee, or any other person who has any beneficial interest of 5 percent or more, direct or indirect, in the business entity. For any of the above, as required by the administrator, the applicant or licensee shall submit background information on forms supplied by the division of criminal investigation and any other information the administrator may require.

For purposes of this rule, beneficial interest includes all direct and indirect forms of ownership or control, voting power, or investment power held through any contract, lien, lease, partnership, stockholding, syndication, joint venture, understanding, relationship (including family relationship), present or reversionary right, title or interest, or otherwise.

(2) For ownership interests of less than 5 percent, the administrator may request a list of these interests. The list shall include names, percentages owned, addresses, social security numbers, and dates of birth. The administrator may request the same information required of those individuals in subparagraph (1) above.
b. Investigative fees.
(1) Advance payment. The department of public safety may request payment of the investigative fee in advance as a condition to beginning investigation.
(2) Payment required. The administrator may withhold final action with respect to any application until all investigative fees have been paid in full.
c. A bank or cashier's check made payable to the Iowa Racing and Gaming Commission for the annual license fee as follows:
(1) A manufacturer's license shall be $250.
(2) A distributor's license shall be $1,000.
d. A copy of each of the following:
(1) Articles of incorporation and certificate of incorporation, if the business entity is a corporation.
(2) Partnership agreement, if the business entity is a partnership.
(3) Trust agreement, if the business entity is a trust
(4) Joint venture agreement, if the business entity is a joint venture.
(5) List of employees of the aforementioned who may have contact with persons within the state of Iowa.
e. A copy of each of the following types of proposed distribution agreements, where applicable:
(1) Purchase agreement(s).
(2) Lease agreement(s).
(3) Bill(s) of sale.
(4) Participation agreement(s).
f.Supplementary information. Each applicant shall promptly furnish the administrator with all additional information pertaining to the application or the applicant which the administrator may require. Failure to supply the information requested within five days after the request has been received by the applicant shall constitute grounds for delaying consideration of the application.
g. Any and all changes in the applicant's legal structure, directors, officers, or the respective ownership interests must be promptly filed with the administrator
h. The administrator may deny, suspend, or revoke the license of an applicant or licensee in which a director, corporate officer, or holder of a beneficial interest includes or involves any person or entity which would be, or is, ineligible in any respect, such as through want of character, moral fitness, financial responsibility, professional qualifications, or due to failure to meet other criteria employed by the administrator, to participate in gaming regardless of the percentage of ownership interest involved. The administrator may order the ineligible person or entity to terminate all relationships with the licensee or applicant, including divestiture of any ownership interest or beneficial interest at acquisition cost.
i. Disclosure. Disclosure of the full nature and extent of all beneficial interests may be requested by the administrator and shall include the names of individuals and entities, the nature of their relationships, and the exact nature of their beneficial interest.
j. Public disclosure. Disclosure is made for the benefit of the public, and all documents pertaining to the ownership filed with the administrator shall be available for public inspection.
(4) Temporary license certificates.
a. A temporary license certificate may be issued at the discretion of the administrator
b. Temporary licenses-period valid. Any certificate issued at the discretion of the administrator shall be valid for a maximum of 120 calendar days from the date of issue.

Failure to obtain a permanent license within the designated time may result in revocation of the license eligibility, fine, or suspension.

(5) Withdrawal of application. A written notice of withdrawal of application may be filed by an applicant at any time prior to final action. No application shall be permitted to be withdrawn unless the administrator determines the withdrawal to be in the public interest. No fee or other payment relating to any application shall become refundable by reason of withdrawal of the application.
(6) Record keeping.
a. Record storage required. Distributors and manufacturers shall maintain adequate records of business operations, which shall be made available to the administrator upon request. These records shall include:
(1) All correspondence with the administrator and other governmental agencies on the local, state, and federal level.
(2) All correspondence between the licensee and any of its customers who are applicants or licensees under Iowa Code chapter 99F.
(3) A personnel file on each employee of the licensee, including sales representatives.
(4) Financial records of all transactions with facilities and all other licensees under these regulations.
b. Record retention. The records listed in 11.13(6) "a" shall be retained as required by 491-subrule 5.4(14).
(7) Violation of laws or regulations. Violation of any provision of any laws of the state or of the United States of America or of any rules of the commission may constitute an unsuitable method of operation, subjecting the licensee to limiting, conditioning, restricting, revoking or suspending the license, or fining the licensee, or any combination of the above.
(8) Consent to inspections, searches, and seizures. Each manufacturer or distributor licensed under this chapter shall consent to inspections, searches, and seizures deemed necessary by the administrator and authorized by law in order to enforce licensing requirements.


Iowa Admin. Code r. 491-11.13

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