Tenn. Comp. R. & Regs. 1350-01-.12 - RENEWAL OF LICENSE OR REGISTRATION

(1) A Sports Gaming Operator License shall be subject to renewal each year, no later than the anniversary date of the final approval of the License by the Council. Each renewal term of the License shall be for one (1) year. A Sports Gaming Vendor Registration shall be subject to renewal every three (3) years, no later than the third anniversary date of the final approval of the registration by the Council. Each renewal term of the Registrant shall be for three (3) years. Notwithstanding the foregoing, if the Licensee or Registrant has submitted a timely and complete application and the Council is unable to meet prior to the expiration of the License or Registration term of the Licensee or Registrant, the Licensee or Registrant will be deemed to be in lawful operation until such time as the Council can meet.

(2) At least ninety (90) days prior to the expiration of the License or Registration term, each Licensee and Registrant shall submit renewal application forms to the Council. A current version of the License and Registration application renewal forms will be made available on the Council's website.

(a) A Licensee shall pay a renewal application fee of fifty thousand dollars ($50,000). Prior to issuance of the renewal License, the Licensee shall pay in full its total License fee as set forth in T.C.A. § 4-49-117(b) and Rule 1350-01-.04(1)(b), to which the renewal application fee of fifty thousand dollars ($50,000) shall be credited.

(b) A Registrant shall pay a renewal fee as set forth in Rule 1350-01-.04(2)(g).

(3) Documents and Information Required. At least ninety (90) days prior to the expiration of the License or Registration term, each Licensee or Registrant shall submit, at a minimum, the following documents and information:

(a) Documents and information demonstrating any change to the documents and information that were previously submitted to the Council as part of the initial application, using forms provided by the Council and made available on its website.

(b) Financial Statements. Each Licensee and Registrant shall submit to the Council its most recent annual financial statements prepared in accordance with Rules 1350.07(3)(a)1. and (b)1.

(c) Federal Income Tax Return. Each Licensee and Registrant shall provide its most recent federal income tax return.

(d) Responsible Gaming Plan. A Licensee shall submit an annual report of its Responsible Gaming Plan activities, showing that the plan goals were met with its application.

(e) Sports Gaming System Operational Assessment. A Licensee shall submit its annual Sports Gaming Operational Assessment.

(f) Sports Gaming System Technology Integrity and Security Assessment. A Licensee shall submit its annual Sports Gaming Technology Integrity and Security Assessment.

(g) The Council may request any additional documents or information that are required by Rule 1350-01-.05 to determine whether renewal should be granted.

(4) Approval of Renewal License or Registration.

(a) In determining whether to approve or deny an application for renewal of a License or Registration the Council may consider the following factors:

1. Whether the Applicant has demonstrated that it is conducting an Interactive Sports Gaming operation or serving as a Vendor in a capacity that has had a positive impact through increased revenues to the State of Tennessee;

2. Whether the Applicant possesses adequate funds or has secured adequate financing to maintain an Interactive Sports Gaming operation or serve as a Vendor;

3. Whether the Applicant has the financial stability, integrity, and responsibility to continue to conduct Interactive Sports Gaming, or serve as a Vendor for Interactive Sports Gaming;

4. Whether the Sports Gaming Operator has proposed adequate measures for the security of any Sports Gaming System, server, or components thereof, and has demonstrated the adequacy of its security measures through its Sports Gaming System Technology Security and Integrity Assessment;

5. Whether the Sports Gaming Operator has demonstrated that its proposed Interactive Sports Gaming operation will be conducted in accordance with the Sports Gaming Act and all other applicable local, state, and federal laws, and has satisfied the requirements set forth in these Rules;

6. Whether, since the time of the initial Licensure or Registration, the Applicant or its Key Personnel have been:

(i) Convicted of a disqualifying offense, as established by the Sports Gaming Act;

(ii) Arrested, charged, indicted, or have received a target letter from the U.S. Department of Justice in connection with any investigation of offshore sports gaming activities that serviced the United States;

(iii) Arrested, charged, with, convicted of, pleaded guilty to, or forfeited bail concerning any criminal offense under the laws of any jurisdiction, other than for a minor traffic offense; or

(iv) Indicted of any felony, gambling-related offense, or any other offense(s) that the Council finds will threaten the integrity of sports wagering in Tennessee and the public interest;

7. The past and present compliance of the Applicant, its affiliates, or affiliated companies relating to gaming operations or activities in any other jurisdiction;

8. Whether the Applicant has knowingly made a false statement of a material fact in any application or other communication to the Council, or failed to disclose to the Council a violation of the Sports Gaming Act or any of these Rules;

9. Whether, since the initial time of Licensure or Registration, the Applicant has had a license to operate any gaming or sports wagering activity suspended or revoked, or been denied from operating any gaming or sports wagering activity by any governmental authority responsible for the regulation of gaming activities in any jurisdiction;

10. Whether a Licensee has timely remitted any privilege tax due the State of Tennessee, timely paid any fine assessed by the Council, or timely remitted the balance of any application, license, privilege tax, or other fees when due to the Council;

11. Whether the Applicant has filed, or had filed against it, a proceeding for bankruptcy, liquidation, or insolvency or has ever been involved in any formal process to adjust, defer, suspend, or otherwise work out the payment of any debt;

12. Whether the Applicant has been served with a complaint, lien, or other notice filed with any public body regarding a payment of any tax or obligation required under any law in any jurisdiction, where the Applicant has been in breach for one or more years;

13. Whether the Applicant is or has been a defendant in litigation involving its business practices that would call into question its suitability to be licensed or registered;

14. Whether the Sports Gaming Operator Applicant has submitted a report on its Responsible Gaming Plan that meets the Council's requirements;

15. Whether the Sports Gaming Operator Applicant has demonstrated that it has met the reserve requirements, including obtaining the required Bond set forth in these Rules;

16. Whether the License Applicant has met the insurance requirements set forth in these Rules;

17. Whether the License Applicant has submitted audited financial statements and any supplemental schedules or attestations in accordance with these Rules;

18. Whether the License Applicant has submitted a Sports Gaming System Operational Assessment by an independent testing laboratory in accordance with these Rules;

19. Whether the License Applicant has established the escrow account required by these Rules for the payment of privilege tax;

20. Whether the License Applicant has submitted House Rules in accordance with these Rules;

21. Whether the License Applicant has utilized internal controls in accordance with Rule Chapter 1350-03;

22. Whether renewing a License or Registration would undermine the public's confidence in the Interactive Sports Gaming industry in the State of Tennessee;

23. Whether the Sports Gaming Operator License Applicant is a member of an independent integrity monitoring association;

24. Whether the Applicant has complied with the provisions of the Sports Gaming Act, the TEL Rules and these Rules, as applicable to the period of time it has been in operation.

(b) Notwithstanding subparagraph (a), a Licensee or Registrant seeking renewal of the License or Registration, who has submitted all information and documents that are required by these Rules and the forms provided by the Council, may submit documentation demonstrating that one or more of the following items is not available due to circumstances that are, in the sole judgment of the Council, largely outside of the Licensee or Registrant's control and, despite the Licensee or Registrant's efforts, cannot be obtained prior to the date of renewal: Audited Financial Statements, Federal Income Tax Return, Sports Gaming Operational Assessment, or Sports Gaming System Technology Integrity and Security Assessment. Upon such a showing, the Council may approve a Renewal License or Registration and allow a Licensee or Registrant to continue operations on the condition that the outstanding external documents will be submitted to the Council within ninety (90) days of the date of approval. If, after the expiration of the ninety (90) day period, the Licensee or Registrant has not submitted all outstanding third-party documents, the Licensee or Registrant's License or Registration will be suspended or revoked pursuant to Rule 1350-01-.14.

(c) In all cases, the Council shall have sole authority to approve, condition, or deny an application for a License or Registration, or renewal thereof.

Notes

Tenn. Comp. R. & Regs. 1350-01-.12

Emergency rules filed December 22, 2021 to become effective January 1, 2022; effective through June 30, 2022. New rules filed March 22, 2022; effective June 20, 2022. Rule was previously numbered 1350-01-.13 but was renumbered 1350-01-.12 with the deletion of original rule 1350-01-.09 filed June 20, 2023 to become effective July 1, 2023; effective through December 28, 2023. Emergency rules filed June 20, 2023 to become effective July 1, 2023; effective through December 28, 2023. Rule was previously numbered 1350-01-.13 but was renumbered 1350-01-.12 with the deletion of original rule 1350-01-.09 filed September 15, 2023; effective 12/14/2023. Amendments filed September 15, 2023; effective 12/14/2023.

Authority: T.C.A. §§ 4-49-106, 4-49-110, 4-49-115, 4-49-115(f), 4-49-117, and 4-49-131 and 2023 Tenn. Pub. Acts, Ch. 450.