10 Del. Admin. Code § 204-3.0

Current through Reigster Vol. 28, No. 6, December 1, 2024

Section 204-3.0 - Licensing of Agents

3.1 Video Lottery Agents. Any potential sports lottery agent who is already licensed as a Delaware State Video Lottery Agent is not required to apply for a separate sports lottery license. Any such Agent must, however, file with the agency the names, addresses, employer identification or social security numbers (if applicable) and dates of birth (if applicable) of its directors, officers, partners, owners, key employees and sports lottery operations employees not already provided under the Agent's Video Lottery license application. The Agent must also submit an amendment to its video lottery business plan.

3.2 Retail Lottery Agents. Any potential sports lottery agent who has already obtained from the Director a license to sell lottery tickets and provide lottery-related services under 10 DE Admin. Code 202 is not required to apply to the agency for a separate sports lottery license.

3.3 Application Process for Licensing as a Sports Lottery Agent

3.3.1 Any applicant desiring to obtain a license to act as an agent shall apply to the agency on forms specified by the Director from time to time. Application forms shall require the applicant to provide the following, without limitation:

3.3.1.1 The applicant's legal name, form of business entity (e.g., general or limited partnership, corporation, etc.);

3.3.1.2 The names, addresses, employer identification or social security numbers (if applicable) and dates of birth (if applicable) of its directors, officers, partners, or owners, as applicable;

3.3.1.3 A form regarding the applicant's "Statement of Eligibility" to hold a license as a sports lottery agent, including disclosure regarding the applicant or any persons identified in subsection 3.3 .1.2 who have:

3.3.1.3.1 Been convicted of an offense other than a traffic violation;

3.3.1.3.2 Been subject to any disciplinary action, past or pending, by any administrative, governmental, or regulatory body;

3.3.1.3.3 Been charged with a violation of any statute, rule, regulation, or ordinance of any administrative, regulatory, or other governmental body; or

3.3.1.3.4 Been in default of paying any taxes, fees, or other obligations owed to the State of Delaware, any local governmental entity, or the federal government.

3.4 Applicant Submissions. Any applicant desiring to obtain a license to act as an agent shall submit, without limitation, the following documentation in conjunction with application forms as required by the Director:

3.4.1 A copy of a license to conduct business in the State of Delaware as issued by the Delaware Division of Revenue;

3.4.2 A personal financial statement of and for the applicant, or any persons identified in subsection 3.3 .1.2, or, at the Director's discretion, copies of the applicant's audited financial statements for the previous three (3) years;

3.4.3 Copies of the State and Federal income tax returns for the most recently completed income tax year for the applicant or any persons identified in subsection 3.3 .1.2;

3.4.4 A personal guaranty (for corporations only);

3.4.5 A "Notarized Criminal History Affidavit" form signed by the applicant and all persons identified in subsection 3.3 .1.2;

3.4.6 A Delaware criminal history record for the applicant and any persons identified in subsection 3.3 .1.2;

3.4.7 A federal criminal history record for the applicant and any persons identified in subsection 3.3 .1.2;

3.4.8 A statement of compliance and an inspection report as required under 10 DE Admin. Code 202, Section 29.0 regarding non-discrimination on the basis of disability in Delaware lottery programs; and

3.4.9 Any and all other information as the Director may require to determine the competence, honesty and integrity of the applicant as required by Title 29, Ch. 48 of the Delaware Code.

3.5 Certification of Application Documents. The application, as well as other documents submitted to the agency by or on behalf of the applicant for purposes of determining the qualifications of the applicant, shall be sworn to or affirmed before a notary public.

3.6 Agency Requests for Supplemental Information. Upon request of the agency, the applicant shall supplement the information provided in the application form as deemed necessary by the agency. The applicant shall furnish all information, including financial data and documents, certifications, consents, waivers, individual history forms, tax returns, cancelled checks, or other materials required or requested by the agency for purposes of determining the qualifications of the applicant.

3.7 Incomplete or Inaccurate Information. To the extent, if any, that the information supplied in the application or otherwise supplied by the applicant or on the applicant's behalf becomes inaccurate or incomplete, the applicant shall so notify the agency in writing as soon as it is aware that the information is inaccurate or incomplete. The applicant shall at that time supply the information necessary to correct the inaccuracy or incompleteness of the information.

3.8 Application Evaluation Criteria. The Director shall weigh the following factors in evaluating the application:

3.8.1 The criminal background, if any, of the applicant, or any of its officers, directors, partners, owners, key employees, and sports lottery operations employees. No license shall be issued to any applicant if any of the persons identified in this subsection have been convicted, within 10 years prior to the filing of the application, of any felony, a crime of moral turpitude, or a crime involving gambling.

3.8.2 The extent to which, if any, the applicant would be subject to the control or influence of its activities by any person having a financial interest pertaining to the applicant, including a mortgage or other lien against property of the applicant or, who in the opinion of the agency, might otherwise influence its activities. In such case the Director shall consider the character, honesty and integrity of whoever has the ability to control or influence the activities of the applicant.

3.8.3 The degree to which the applicant has supplied accurate and complete information pursuant to the requirements of these regulations.

3.8.4 Whether the applicant has demonstrated the business ability and experience necessary to satisfactorily conduct the sports lottery operations.

3.8.5 Whether the person, or any of its officers, directors, partners, or owners, are known to associate with persons of nefarious backgrounds or disreputable character such that the association could adversely affect the general credibility, security, integrity, honesty, fairness or reputation of the lottery.

3.8.6 With respect to any past conduct which may adversely reflect upon the applicant, the nature of the conduct, the time that has passed since the conduct, the frequency of the conduct, and any extenuating circumstances that affect or reduce the impact of the conduct or otherwise reflect upon the applicant's fitness for the license.

3.8.7 The extent, if any, to which the applicant has failed to comply with any applicable tax laws of the federal, state or local governments.

3.8.8 Any other information before the Director, including substantially similar background investigations performed by other agencies or jurisdictions, which relates to the applicant's competency, financial capability, honesty, integrity, reputation, habits, or associations.

3.9 Site Evaluation Criteria. The Director shall weigh the following factors, as well as other objective business site evaluation criteria, to determine the suitability of the applicant's business site locations as licensed retailer locations for sports lottery games:

3.9.1 Customer traffic count;

3.9.2 Business hours;

3.9.3 Available parking;

3.9.4 Trade style (i.e., products sold);

3.9.5 Product exposure within the location;

3.9.6 Security of sports lottery machines and systems;

3.9.7 Nearest licensed retailer of similar trade style; and

3.9.8 Convenience of accessibility to Lottery products and services within a community or commercial cluster.

3.10 Issuance of Sports Lottery License. A license shall be issued to the applicant if the Director is satisfied, upon evaluation of a sports lottery application as defined in subsection 3.4, and upon further consideration of site evaluation as criteria specified subsection 3.9, and upon further determining that the applicant would be a fit agent and not pose a threat to the public interest, the reputation of the lottery, or the effective control of the lottery. At the discretion of the Director, a license may be issued as "conditional" or "probationary" based upon information received or determinations reached during the sports lottery application process.

3.11 Ongoing Requirements of Agents

3.11.1 Operation pursuant to a license issued under these regulations shall signify agreement by the agent to abide by all provisions of the regulations, including those contained in this section.

3.11.2 The agent shall at all times make its premises available for inspection by authorized representatives of the agency.

3.11.3 The agent and any entity owned by the agent in which the agent has a controlling ownership interest shall consent in writing to the examination of all accounts, bank accounts, and records under the control of the agent or the owned entity and, upon request of the agency, shall authorize all third parties in possession or control of the said documents to allow the agency to examine such documents.

3.11.4 An agent shall immediately notify the agency of any proposed or effective change regarding the makeup of the owners, directors, officers, partners, or key employees of the agent.

3.11.5 An agent has a continuing duty to maintain suitability for licensure. A license does not create a property right, but is a revocable privilege contingent upon continuing suitability for licensure.

3.11.6 Any license granted may not be transferred, assigned or pledged as collateral. A change of ownership which occurs after the Director has issued a license shall automatically terminate the license.

3.11.7 If the Director proposes to deny a license application, the Director shall follow the procedures set forth in 10 DE Admin. Code 202, Section 5.0.

3.12 Delaware Freedom of Information Act. To the extent provided by law, any information obtained pursuant to this Section 3.0 shall be held in confidence and not subject to the Delaware Freedom of Information Act, 29 Del.C. Ch. 100.

10 Del. Admin. Code § 204-3.0

16 DE Reg. 291 (09/01/12)
21 DE Reg. 974 (6/1/2018) (Final)