16-633-52 Me. Code R. § 1

Current through 2024-51, December 18, 2024

Section 633-52-1 - Sports Wagering Operators, Management Services Providers, Suppliers and Key Personnel

1. A person or entity may not engage in any sports wagering activities in this State that require a license or any activities ancillary to activities for which a person or entity must hold a license under this chapter unless that person or entity has obtained all necessary licenses in accordance with Title 8, chapter 35 and these sports wagering rules.

2. An application for any type of license under these rules shall be submitted on forms issued by the Director and available on the Gambling Control Unit's website, in accordance with the requirements of Maine statute. The version of the application form on the Gambling Control Unit's website is the current form. Any applications submitted on any other version of the form will be deemed incomplete. The most current forms shall be used or returned as incomplete.

3. An eligible person or entity may submit an application provided by the Director for sports wagering activities. In addition to the information required by 8 M.R.S. §§1204 - 1210, all applicants must provide the following information:

A. The physical address of the applicant's principal place of business and the designated contact person for the applicant including an address, telephone number and email address for that contact;

B. Disclosure of ownership interests. A disclosure of the true ownership interests of the applicant as follows:

(1) The names, addresses, phone numbers, email addresses and dates of birth of the applicant's board of directors, corporate executives, directors, officers, key personnel and managers having the power to exercise influence over decisions concerning any part of the applicant's or operator's sports wagering or related business operations;

(2) The percentages of shares of stock, if any, held by each person named in subparagraph (1) above;

(3) For limited liability companies (hereinafter, "LLC"), including professional LLCs, provide the full name, address, date of birth and telephone number of each member of the LLC having an ownership interest of ten percent (10%) or more of the LLC. If the member is not a natural person, disclose the true ownership of the member (and successive levels of ownership, if necessary) until a natural person or another corporate entity is disclosed. If another corporate entity is disclosed, provide a complete disclosure of that corporate entity's ownership in accordance with the specific rules for that entity contained herein (and successive levels of ownership, if necessary);

(4) For general, limited, or limited liability partnerships, provide the full name, address, date of birth and telephone number of each partner having an ownership interest of ten percent (10%) or more of the partnership. If the partner is not a natural person, disclose the true ownership of the partner (and successive levels of ownership if necessary) until a natural person, or another corporate entity, is disclosed. If another corporate entity is disclosed, provide a complete disclosure of that corporate entity's ownership in accordance with the specific rules for that entity contained herein (and successive levels of ownership, if necessary);

(5) For a corporation, provide the full name, address, date of birth and telephone number of any natural person or entity having an ownership interest of ten percent (10%) or more of the outstanding shares of the corporation. If a corporate entity is disclosed, provide a complete disclosure of that corporate entity's ownership in accordance with the specific rules for that entity contained herein (and successive levels of ownership, if necessary);

(6) Any institutional investor having a (10%) or more ownership interest in the applicant shall provide to the Director a sworn-to affidavit executed by an institutional officer who can bind the entity that the institutional investor has no influence over the day-to-day sports wagering operations of the applicant; and

(7) The names, addresses, employer identification numbers, social security numbers, and dates of birth, as applicable, of each individual, group of individuals, trust or business entity associated with an applicant, including, but not limited to, a holding company, parent company, or subsidiary company of the applicant that has the ability to control the activities of the applicant or elect a majority of the board of directors or select the manager or general partner of the applicant.

C. A notarized affirmation and consent and authorization to release information about the applicant necessary to complete a background check;

D. Copies of the applicant's audited financial statements for the preceding three (3) fiscal years and a copy of internally prepared financial statements for the current fiscal year as of the close of the most recent fiscal quarter by a Certified Public Accountant in accordance with generally accepted accounting principles and applicable state and federal law. If an applicant has audited financial statements prepared at the parent company level, the applicant shall include with its audited consolidated financial statements a supplement I schedule (either audited or unaudited) of the operator applicant's sports wagering operations and an attestation from the operator applicant's Certified Public Accountant that the applicant has implemented procedures to accurately report its adjusted sports wagering receipts from sports wagering operations in Maine;

E. A copy of the Certificate of Authority to do business in the State of Maine, if the applicant is incorporated outside of Maine;

F. Copies of any trade name registrations filed by or under which the applicant conducts any business activities;

G. Copies of applicant's State and Federal returns for a period of three (3) fiscal years;

H. Copies of declaration pages of all insurance policies insuring the applicant and/or premises in Maine;

I. If the applicant is a corporation, annual reports and SEC filings, if any, for the past three (3) years;

J. A list of all jurisdictions where the applicant has:

(1) Applied for a sports wagering or any other gaming license;

(2) Been issued a sports wagering or any other gaming license;

(3) Been the subject of a law enforcement or government subpoena, cease and desist letter, attorney general or government legal opinion, or other correspondence regarding any non-routine law enforcement or government investigation concerning conduct related to gambling operations (including casino gaming, horse racing, dog racing, pari-mutuel pools, lottery, sports wagering, fantasy contests, esports, igaming, etc.);

(4) Had any sports wagering or gaming license denied, suspended, or revoked; and

(5) The current status of any such adverse actions and copies of such documents relating to (3) or (4);

K. A copy of the final order of all civil judgments rendered against the applicant, any person identified in (B) above, or others individually described by subparagraphs J (2), (3), or (4) above, including those judgments pertaining to antitrust or security regulation laws of the federal government, of the State of Maine or of any other state, jurisdiction, province, or country;

L. A full copy of the applicant's most recent SOC-2 Type II audit authenticated by the entity that performed the assessment; and verification that a SOC 2 Type II audit shall be completed on an annual basis and results shall be submitted to the Director within 10 days of completion. An assessment must be completed as part of the initial application;

M. The applicant's minimum internal controls as required under chapter 53 herein for approval by the Director;

N. An organizational chart listing all sports wagering employee positions and their job descriptions. Members of the board of directors are not required to be included on the organizational chart;

O. A completed Gambling Control Unit form MGCU-8100 with notarized affirmation and consent and authorization to release information to complete a criminal background check on: any officer or director of the applicant; and any partner or shareholder who has the ability to control the activities of the applicant in the sports wagering facility or mobile operator, management services provider or supplier;

P. Management services providers provide information, resumes, documentation, references, written testimony and other assurances required to establish that the applicant has sufficient business ability and sports wagering experience to create and maintain a successful and efficient sports wagering operation in Maine; and

Q. Any other information the Director requests that is necessary for their determination of the suitability, honesty and integrity of the applicant.

5. The application, and all other documents submitted to the Director 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. If any form or document is signed by an attorney for the applicant, the signature shall certify that the attorney has read the forms or documents and that, to the best of the attorney's knowledge, information and belief, based on diligent inquiry, the contents of the form or documents so supplied are true.

6. A management services provider may enter into a final contract with an operator only upon meeting the following requirements:

A. Be licensed by the Director as a management services provider;

B. Its proposed contract with the operator has been approved by the Director prior to the conduct of sports wagering;

C. If the management services provider contracts with more than one operator, its contracts with those operators must include a method approved by the Director for separately accounting for each sports wagering operator's gross receipts from sports wagering and adjusted gross sports wagering receipts; and

D. Its contract with an operator does not authorize the person providing management services to receive more than 30% of the operator's adjusted gross sports wagering receipts; except that the Director may approve a contract under the criteria of chapter 65 authorizing the management services provider to receive up to 40% of the operator's adjusted gross sports wagering receipts.

7. In addition to the requirements of 8 M.R.S. §1204(4), to the extent the applicant becomes aware that information of a material nature supplied in the application or otherwise supplied to the Director in support of its application by the applicant or on the applicant's behalf, becomes outdated, inaccurate or incomplete, the applicant shall so notify the Director in writing within 30 calendar days and shall at that time supply the information necessary to supplement or correct the inaccuracy or incompleteness of the information.

8. The applicant shall cooperate fully with the Director, the Department, the Gambling Control Unit and any 3^rd party contractor under contract with the Department to perform any investigation with respect to the background investigation of the applicant. Failure to cooperate or provide information necessary for licensure may result in denial of the applicant's license application.

9. Mobile operators shall provide the Director with certificates of insurance prior to approval of the license and with each renewal application. The company issuing the insurance shall be financially rated A or better by a nationally recognized rating entity and duly licensed, admitted, and authorized to transact business in the State of Maine. Subject to (1 and 2) below, Mobile operators shall maintain the following types and amounts of insurance while they are an approved operator to conduct sports wagering activities in Maine.

A. Mobile operators who anticipate, during the upcoming year of licensure, having less than 100,000 patron accounts and $15,000,000 in revenue shall maintain the following types and amounts of insurance:

1) Cyber liability insurance in the amount of five million dollars ($5,000,000); and

2) Errors and Omissions insurance in the amount of five million dollars ($5,000,000).

B. Mobile operators who anticipate, during the upcoming year of licensure, having more than 100,000 patron accounts and $15,000,000 in revenue, shall maintain the following types of insurance:

1) Cyber liability insurance in the amount of ten million dollars ($10,000,000); and

2) Errors and Omissions insurance in the amount of ten million dollars ($10,000,000).

10. Mobile operators that are unable to obtain the coverage amounts specified in 9. A or B above must maintain coverage in the maximum amounts allowable by the issuing insurance company. Such operators must provide a notarized statement or letter from their insurance agent or broker stating that the operator was unable to obtain required insurance coverage after a diligent effort and the reason for the deficiency. Such operator shall provide the Director with a detailed plan of how it intends to compensate for the deficiency in insurance coverage, which must be approved by the Director prior to licensure.

16-633 C.M.R. ch. 52, § 1