N.J. Admin. Code § 13:74C-2.1

Current through Register Vol. 56, No. 24, December 18, 2024

Section 13:74C-2.1 - Exchange wagering initial license application process

(a) The Authority shall make an application for an initial exchange wagering license, on a form prescribed by the Commission, accompanied by a non-refundable filing fee of $ 2,500. The initial exchange wagering license shall be issued for a term of one year, which in the Commission's discretion, may be extended until December 31st of the year within which the initial exchange wagering license expires. The Commission shall extend the initial license period where the Authority, by clear and convincing evidence, establishes to the Commission's satisfaction that to do so would not negatively impact the integrity of the exchange wagering system.

(b) An application for an initial exchange wagering license shall not be considered complete unless:

1. The Authority demonstrates, and the Commission investigation into the application confirms, that the requirements of the Act have been satisfied;

2. The Authority has completely answered each question within the application and complied with the requirements of this section;

3. The Authority sets forth information about the operation of the exchange, the Authority's participation therein, the participation of other persons or entities in the operation of the exchange, information to establish that wagers placed through the exchange wagering system will be accurately processed, and information to establish that there will be sufficient safeguards to maintain the integrity of the horse racing industry in this State;

4. The Authority sets forth information establishing that the Commission's grant of the exchange wagering license to the Authority will serve to promote the economic future of the horse racing industry in this State, foster the potential for increased commerce, the employment and recreational opportunities in this State, and to preserve the State's open spaces;

5. The Authority discloses whether it shall conduct or operate the exchange itself, or whether, pursuant to and as authorized pursuant to N.J.A.C. 13:74C-3.2, it intends to enter into a written agreement with an exchange management agent and/or exchange services agent;

6. The Authority discloses the physical location of all hardware and software, and administrative offices of the exchange wagering system, and whether or not the exchange wagering platform shall be stand-alone or shall integrate with a totalisator system;

7. The Authority discloses the number of jobs which the exchange wagering system is expected to generate, as well as employ in terms of pre-existing jobs, and whether the related job functions are proposed to occur in this State or outside the State;

8. The Authority attaches written internal control procedures of the Authority that set forth the procedures to be implemented: to effectively operate and manage the exchange wagering system; to ensure that wagers placed through the exchange wagering system will be accurately processed and that all aspects of wagering integrity and wagering recordkeeping will be maintained; to effectively ensure that the exchange wagering system operates with fiscal soundness and technological reliability; and to effectively ensure that there will be sufficient safeguards to maintain the integrity of the horse racing industry in this State. Where the Authority intends to enter into a written agreement with an exchange management agent and/or exchange services agent, the Authority may satisfy this requirement by including the internal control procedures of each such person or entity with its application. However, in such case, the Authority shall include with its application its own internal control procedures, which, at a minimum, include a certification that it has reviewed the internal control procedures of such exchange management agent, and/or exchange services agent, and finds them to be sufficient, and such internal control procedures of the Authority shall further include sufficient provisions to ensure that the Authority, as the exchange wagering licensee, maintains meaningful and adequate oversight controls with respect to both the exchange wagering system and its exchange wagering license; and

9. The initial application shall be accompanied by a certification, signed by a high managerial agent of the Authority, attesting that the disclosures within the application and within its attachments are true, accurate, and complete.

(c) Following a determination that the application for an initial exchange wagering license is complete, the Commission Executive Director shall within 14 days review the application in accordance with the Act to ensure that the application is in due form and meets the requirements of law in all respects. Upon the Commission Executive Director being satisfied that these requirements are met, the Commission shall within 60 days thereof consider the application at a public meeting, and no later than 30 days from the closing of the record of the public meeting where the Commission considers the application, the Commission shall make a final determination on the application. The Commission's final determination may prescribe such conditions or terms as the Commission deems appropriate.

(d) The Commission may refuse to issue a license if it shall find that the Authority has failed to demonstrate its suitability for a license by clear and convincing evidence. The Authority shall bear the burden of establishing to the Commission, by clear and convincing evidence, that:

1. It and its employees are qualified in all aspects to hold the appropriate license;

2. The issuance of an exchange wagering license to the Authority will not be inimical to the best interests of the public and the horse racing industry in this State;

3. Wagers placed through the exchange wagering system will be accurately processed and that there will be sufficient safeguards to maintain the integrity of the horse racing industry in this State; and

4. All of the requirements of the Act and this chapter have been met, including the approval of the Attorney General.

(e) The Commission's determination on the application shall be submitted to the Attorney General for review and approval, within 14 days following the Commission's determination. The determination of the Commission shall be deemed approved by the Attorney General if not affirmatively approved or disapproved by the Attorney General within 14 days of the date of submission. The Commission shall issue the license to the Authority, to establish the exchange, upon approval of the Attorney General. The Attorney General shall approve the Commission's determination where the Attorney General, in his or her discretion, finds that the Commission's determination was consistent with the Act and this chapter. The decision of the Attorney General shall be deemed a final decision, and the Attorney General may prescribe such conditions or terms as he or she deems appropriate.

N.J. Admin. Code § 13:74C-2.1

Adopted by 47 N.J.R. 807(b), effective 4/20/2015.

Adopted by 56 N.J.R. 413(a), effective 3/18/2024