Tenn. Comp. R. & Regs. 1350-01-.13 - [Effective until 12/28/2023] CHANGE OF CONTROL

(1) A License or Registration is not transferrable except as set forth in Rule 1350-01-.14(4) below.
(2) A Licensee or Registrant shall give Immediate Notice to the Council of any proposed change of control upon entering into an oral or written agreement regarding the proposed change of control. A change of control of a Licensee or Registrant occurs when a Licensee or Registrant:
(a) Sells, transfers, assigns, gifts or donates, or otherwise disposes of more than fifty percent (50%) of its ownership interests;
(b) Sells more than fifty percent (50%) of the voting stock of a corporation that controls the Licensee, or Registrant; or
(c) Sells, transfers, assigns, gifts or donates, or otherwise disposes of all or substantially all of the Licensee's, or Registrant's assets, other than those bought and sold in the ordinary course of business;
(3) If the entity assuming control intends to operate a Sports Gaming Operation or serve as a Vendor in Tennessee, it must submit a License or Registration application to the Council within thirty (30) days of entering into any agreement to effectuate the change of control, unless the provisions of Rule 1350-01-.14(4) apply. If the new entity is applying for a License, it must submit the $50,000 application fee to the Council contemporaneously with its application.
(a) Upon receipt of the License or Registration application and application fee from the new entity, the Council may approve the continuation of the original License or Registration until such time as the new entity's application for a License or Registration is approved or denied by the Council. Immediately upon approval or denial of the new entity's License or Registration, the original entity's License or Registration will become void.
(b) A new entity who receives a License under this Rule 1350-01-.14(3) must pay the License fee of $750,000 (less the $50,000 application fee) within ten (10) days of approval of the License.
(c) The new entity's License anniversary date for renewal purposes is one year from the date that the Council approves the new License. The new entity's Registration anniversary date for renewal purposes is three years from the date that the Council approves the new Registration.
(d) A new entity who receives a Registration under this Rule 1350-01-.14(3) must pay the Registration fee, in accordance with Rule 1350-01-.04(g) 2., within ten (10) days of approval of the Registration
(4) The Council may approve the transfer of a License or Registration involving the sale, transfer, assignment, gift, or donation of an interest in all or substantially all of a Licensee or Registrant's assets, to an individual, group of individuals, or entity which has previously been determined by the Council to have met the qualifications of a Licensee or Registrant during the preceding year and that is currently Licensed or Registered and in Good Standing. In the event that the Council approves a transfer of a License or Registration in accordance with this Rule, the following provisions will apply:
(a) The Licensee or Registrant who will hold the License or Registration after the transfer must complete a Change of Control Form, which will be provided on the Council's website, within thirty (30) days of entering into any agreement regarding the proposed change of control. The Council may seek any information or documents regarding the transaction that it deems necessary.
(b) The transferred License or Registration shall be valid for the period of time remaining under the original License or Registration. The License or Registration must thereafter be renewed by the timely filing of a renewal application and, for Licensees, the payment of the $50,000 renewal fee, sixty (60) days prior to the original License or Registration's anniversary date.
(c) A Licensee who assumes control under this provision must pay the License renewal fee (less the $50,000 application fee) on the original Licensee's anniversary renewal date. A Registrant who assumes control must pay the Registration fee applicable to a subsequent renewal term on the original Registrant's renewal date.
(5) Any change of control that is effectuated without the express approval of the Council in accordance with these Rules is prohibited and will result in the Licensee's License or Registrant's Registration being void.

Notes

Tenn. Comp. R. & Regs. 1350-01-.13
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-.14 but was renumbered 1350-01-.13 with the deletion of original rule 1350-01-.09 filed June 20, 2023 to become effective 7/1/2023; effective through 12/28/2023. Emergency rules filed June 20, 2023 to become effective 7/1/2023; effective through 12/28/2023 (EMERGENCY).

Authority: T.C.A. §§ 4-49-106, 4-49-117, 4-49-121, and 4-49-124 and 2023 Tenn. Pub. Acts, Ch. 450.

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