10 Del. Admin. Code § 204-4.0

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

Section 204-4.0 - Licensing of Technology Providers

4.1 As deemed necessary, the Director shall give public notice of the agency's intent to select technology providers of sports lottery systems that consist of sports wagering products, risk management (bookmaking), operations and support services through a request for proposal and qualifications by advertising in a newspaper of general circulation in Delaware and in a prominent trade publication requesting expressions of interest to serve as a technology provider. The licensing of a technology provider shall not serve as the basis of requiring the Director to select the technology provider under the procurement procedures set forth in Chapter 69 of Title 29 of the Delaware Code.

4.2 Each person desiring to obtain a license from the agency as a technology provider shall submit a license application on a form specified and supplied by the agency. Any person or entity who proposes to contract with a sports lottery agent or the agency for the provision of goods or services related to sports lottery operations must obtain a technology provider license pursuant to these Sports Lottery Regulations. The license application shall, among other things:

4.2.1 Give notice that the applicant will be required to submit to a background investigation, the cost of which must be borne by the applicant.

4.2.2 Require the applicant to supply specified information and documents related to the applicant's fitness and the background of its owners, partners, directors, officers, key employees, and sports lottery operations employees, including but not limited to copies of financial statements, tax returns, insurance policies, and lists of creditors.

4.2.3 Require the applicant to disclose the identity of all customers to whom it has furnished sports lottery systems within the three years immediately preceding the date of the application.

4.2.4 Require the applicant to disclose whether the applicant, or any of its present or former officers, directors, owners, partners, key employees, or sports lottery operations employees, is or has been the subject of an investigation in another jurisdiction, the nature of the investigation, and the outcome, if any, of such investigation.

4.2.5 Provide a description of the means by which the applicant exercises security and financial control over the activities of service technicians in order to insure the integrity of sports lottery operations.

4.2.6 Require the applicant to disclose its legal name, form or entity (e.g., general or limited partnership, corporation, etc.), and the names, addresses, social security numbers and dates of birth of its directors, officers, partners, owners, key employees and sports lottery operations employees.

4.2.7 Require the applicant to disclose the names and addresses of individuals who have been authorized by the applicant to engage in dealings with the agency for purposes of representing the interests of the applicant.

4.2.8 Require the applicant to enclose copies of its audited financial statements for the preceding three (3) fiscal years and a copy of internally prepared financial statements for the current fiscal year or at the close of the most recent fiscal quarter.

4.2.9 Require the applicant to provide a description of its risk management capabilities, engineering and software development resources, technical and maintenance support capabilities and ability to manufacture and deliver the sports lottery machines.

4.2.10 Require persons who are proposing to contract with the agency or a sports lottery agent to provide a copy of their contract proposal.

4.3 Upon request, the applicant shall supplement the information provided in the application form as deemed necessary by the Director.

4.4 To the extent, if any, that the information in the application or the supplemental information provided by the applicant 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 and shall at that time supply the information necessary to make the application or supplementary information accurate and complete.

4.5 The applicant shall cooperate fully with the agency and DGE in any background investigation of the applicant.

4.6 The applicant, upon request of the agency or DGE, shall make any and all of its books and records available for inspection by the agency or DGE: provided, however, that any information obtained pursuant to this subsection shall, to the extent provided by law, be held in confidence and not subject to the Delaware Freedom of Information Act.

4.7 As soon as the agency has determined that the application form is complete and that the applicant is otherwise qualified, it shall forward the same to DGE which shall conduct as soon as practicable a background investigation of the applicant, its officers, partners, owners, directors, key employees, and sports lottery operations employees, and report its findings to the agency.

4.8 Notwithstanding any other provision contained herein to the contrary, the Director may determine, upon review of the licensing standards of another state, that such standards are so comprehensive, thorough, and provide similar adequate safeguards, that the license of an applicant in such other state precludes the necessity of a full application and background check. In such case, the Director shall require a limited application and background check, as determined by the Director in his sole discretion, as are necessary to assure that the applicant is fit for the license and does not pose a threat to the public interest of the State or to the reputation of or effective regulation of the sports lottery.

4.9 In evaluating applications, the Director shall consider:

4.9.1 Whether the applicant has demonstrated that it has the resources, experience and ability needed to supply the necessary sports lottery systems as may be required under a contract with the agency.

4.9.2 Any past conduct of the applicant, or any of its present or former officers, directors, partners, owners, key employees, or sports lottery operations employees 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. No license shall be issued to any applicant if any of the persons identified in this subsection have been convicted, within ten years prior to the filing of the application, of any felony, a crime of moral turpitude or a crime involving gambling.

4.9.3 Any findings provided by DGE after completing its background investigation.

4.9.4 The extent, if any, to which the applicant has failed to comply with any applicable tax laws of the Federal, State or local governments.

4.9.5 The association of the applicant, or any of its officers, directors, owners, partners, key employees, or sports lottery operations employees, with persons of known criminal background or persons of disreputable character that may adversely affect the general credibility, security, integrity, honesty, fairness or reputation of sports lottery operations.

4.9.6 Any other information supplied in connection with the application, including substantially similar background investigations performed by other agencies or jurisdictions, which relates to the applicant's competence, financial capability, honesty, integrity, reputation, habits, or associations.

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

4.9.8 Whether the applicant is in compliance with 29 Del.C.§ 4829 (i) that states: "The risk manager of the sport lottery must be a bookmaker currently licensed to operate, and operating, sports books in the United States and the sports lottery technology system provider must be licensed to operate lotteries in the United States."

4.10 A license shall not be issued to a technology provider if the applicant technology provider has any direct or indirect financial interest in an agent licensee or in the real or personal property of an agent licensee.

4.11 A license shall be issued to the applicant if the Director is satisfied, upon consideration of the factors specified in subsection 4.9, that the applicant would be a fit technology provider and not pose a threat to the public interest, the reputation of the lottery or to the effective control of the lottery.

4.12 An applicant for a technology provider's license shall, prior to issuance of the license, post a bond or irrevocable letter of credit in a manner and in an amount established by the agency. Any such bond shall be issued by a surety company authorized to transact business in Delaware, and said company shall be approved by the State Insurance Commissioner as to solvency and responsibility.

4.13 The agency, with the assistance of DGE, may require licensed technology providers to annually update information submitted with their initial license application.

10 Del. Admin. Code § 204-4.0

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