Transcript Arizona Department of Gaming Our Mission Statement Protect the Public, Ensure Compliance with the Gaming Compacts, and Regulate the Gaming Industry. Gaming Vendor Certification Gaming Vendor Certification.

Arizona Department of
Gaming
Our Mission Statement
Protect the Public,
Ensure Compliance with the Gaming Compacts,
and Regulate the Gaming Industry.
Gaming Vendor Certification
Gaming Vendor Certification Mission Statement
We determine suitability of gaming vendors in order to protect
the public, ensure compliance with gaming compacts, and regulate
the gaming industry.
Topics Covered
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Who we certify
Who is the applicant
Process we use
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Background Investigation
Financial Investigation
Company
Key Personnel
International Investigations
Application review is basis for
what we do
Who We Certify
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Management Contractor
Financiers
Manufacturers of Gaming Devices
Distributors of Gaming Devices
Provider of Other Gaming Related Equipment
Other Key Suppliers who are ancillary to Gaming,
if exceeds $10,000/month
Providers of Goods or Services not mentioned
above and exceeds $10,000/month
Provider of Other Gaming Related
Equipment
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Poker & Blackjack Equipment and Gaming Supplies
Playing Cards
Gaming Chips
Keno Equipment
Card Shufflers
Intellectual Property
Ticket Redemption Kiosks – tap into slot accounting
Off Track Betting
Bill Validators, if selling directly to casino
Other Key Suppliers who are ancillary to
Gaming, if exceeds $10,000/month
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Surveillance & Security
Currency/Coin Counters
Architectural Services
Check Cashing
Independent Gaming Testing Lab
Money Carts
Providers of Goods or Services not
mentioned above and exceeds
$10,000/month
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Entertainment
Printing
Uniforms
Marketing
General Contractor
Computer Equipment
Office Supplies
Etc.
Who is the Applicant
“Follow the Money”
 “Off the Organizational Chart”
 Company Principles
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“Follow the Money”
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Hidden Ownership or Control
Equity Owners
Debt Owners
Creditors
Lenders
Parents
Interlocking Board of Directors
“Off the Organizational Chart”
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Key Personnel
Consultants and Others
Financial and Technical Expertise
Key Personnel
A key person is anyone who can control or substantially
influence the behavior of the applicant
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Owners
Directors
Officers
Major Stockholders
Lenders
Managers of critical operations
Key technical personnel
Critical consultants or suppliers
How We Do It
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Process begins once a completed
application and required fee are received
Scope
Background Investigation
Financial Investigation
Scope
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Management Contractors, Financiers,
Manufacturers/Distributors of Gaming
Devices, Providers of Gaming Related
Equipment
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Background Investigation / Extensive
Financial Investigation
Team of Peace Officer & Financial Investigator
Travel to Vendor site / Possibly Vendor’s
Accountants and/or Auditor
Scope
(Continued)
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Other Key Suppliers Who are ancillary to
Gaming, if exceeds $10,000/month
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Background Investigation / Financial
Investigation
Team of Peace Officer & Financial Investigator
Travel to Vendor site / Possibly Vendor’s
Accountants and/or Auditor
Scope
(Continued)
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Providers of Goods or Services not
Mentioned Prior and Exceed
$10,000/month
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Background Investigation / Financial Review
One Investigator does both background and
financial review
Entire investigation conducted from office –
over the phone
Travel to Vendor
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Face to Face interview
Immediate access to supporting
documents
Observe workplace
Tour operation or warehouse
Meet with independent auditors
Background Investigation
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Company
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Review of litigation for involvement with unsuitable
element
Inquires of jurisdictions where applicant is licensed
(including foreign)
Arizona Corporation Commission Check
Better Business Bureau inquiry
Johnson Act Compliance Verification
Independent gaming test laboratory approval
Background Investigation
Key Personnel
 Criminal History Check
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Inquiries of Jurisdictions where Key Person has
worked, lived and has been licensed
Accurint
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Compare to addresses listed on application – work and home
Review arrests or legal entries
Review affiliations or family connections
Review for aliases
Key Personnel
(Continued)
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Face to Face Interview
Submit Fingerprints to FBI
Submit Fingerprints to Arizona Department
of Public Safety
Financial Investigation
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Company
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Company Credit Check
Review Federal and State Tax Returns
Compare tax returns to Federal & Arizona
State tax transcripts
Review SEC Filings - EDGAR
Review list of Shareholders
Review Articles of Incorporation & By-laws
Financial Investigation
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Company – Continued
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Arizona Corporation Commission information
ties to application
Annual Reports / Financial Statements
Corporate Minutes – Board/Audit Committee
Minutes
Proxy Statements
Trial Balance
Financial Investigation
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Company – Continued
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Accounts Receivable & Accounts Payable – Review for
unusual terms
UCC Filings
Customer List – Unsuitable Entities
Lease / Sales Agreements - Review for unusual terms
Litigation for financial impact
Cash Flow Projection
Source of initial capitalization
Financial Investigation
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Company – Continued
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External Auditor Workpapers
Cash Review if no external auditor
External Auditor
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Management Representation Letter
Engagement Letter
Auditor’s Report on Internal Controls
Auditor Fees
Legal Representative Letters
Review sample of workpapers
Report to owners
Cash Review
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Obtain company bank statements
Select sample of cash receipts and
disbursements
For Receipts
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Confirm total of all checks matches deposit slip
Match check to invoice
For disbursements
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Vendor name on invoice agrees with check
Confirm item paid for is appropriate
Financial Investigation
Key Personnel
 Key Personnel Credit Check
 Review Federal & State Tax Returns
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Foreign Earnings
Securities – Selling & Buying
Business Investments
Compare tax returns to Federal & Arizona State
tax transcripts
Review personal balance sheet
Key Personnel
(Continued)
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Review Bank Statements
Face to Face Interview
Accurint
Accurint
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Property owned
Previous owner
 Market Value
 Purchase price
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Bankruptcies
UCC Filings
Tax Liens
Recreational Vehicles
International Investigations
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Make Contact with the U.S. Embassy
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To gain intelligence on the company
Advice on translators, consultants and
accountants
Set up appointment with detailed itinerary
of what we want to see
Meet with national and local constabulary
Contact Interpol
International Investigations
(Continued)
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Carry fingerprint kit – difficult to obtain
fingerprints in some countries
Contract with independent interpreter
Contract with independent accountant, tax
advisor, and lawyer familiar with national and
local customs
Contact where have applied for license
If possible coordinate visit with other
jurisdictions to share information
Questions or Comments?