2102

CLASS B SPORTS WAGERING OPERATOR LICENSE REQUIREMENTS

2102.1 An individual, group of individuals or entity may apply to the Office for a Class B Operator License, the application for which shall be on a form or platform provided by the Office. Applications shall be made under oath in the prescribed form prescribed by the Office.

2102.2 The Office shall not issue a Class B Operator License to an Applicant whose Sports Wagering Facility will be located within a Class A Sports Wagering Facility or within two (2) blocks of any of the designated Class A Sports Wagering Facilities or within any area prohibited by federal or District law. The Office shall publish or cause to be published a map showing the Class A two (2) block zones on a website that is available to the public.

2102.3 The Office may require the following information in conjunction with an application for a Class B Operator License:

(a) The Applicant's legal name and form of business entity.

(b) The mailing address of the Applicant and, if a corporation, the name of the state in which it is incorporated and the location of its principal place of business.

(c) The names, addresses, employer identification or Social Security numbers and dates of birth of its directors, officers, partners, owners and key personnel.

(d) The names, addresses, employer identification or Social Security numbers and dates of birth, as applicable, of each individual, group of individuals or entity associated with a corporate Applicant, including a corporate holding company, parent company, or subsidiary company of the Applicant that has the ability to control the activities of the corporate Applicant or elect a majority of the board of directors of that corporation, excluding any bank or other licensed lending institution that holds a mortgage or other lien acquired in the ordinary course of business.

(e) The names, addresses, employer identification or Social Security numbers and dates of birth, as applicable, of each individual, group of individuals or entity associated with a non-corporate Applicant that directly or indirectly holds a five percent (5%) or greater beneficial or proprietary interest in the Applicant's business

operation, or that the Office otherwise determines has the ability to control the Applicant.

1. (f) Information regarding the Applicant or any persons identified in subsections (c) through (e) are eligible to hold a Sports Wagering Operator's License, including disclosure of the following information:
2. (1) Whether the Applicant or any persons identified in subsections (c) through (e) have been convicted of an offense other than a traffic violation;
3. (2) Whether the Applicant or any persons identified in subsections (c) through (e) have been subject to any disciplinary action, past or pending, by any administrative, governmental, or regulatory body;
4. (3) Whether the Applicant or any persons identified in subsections (c) through (e) have been charged with a violation of any statute, rule, regulation, or ordinance of any administrative, regulatory, or other governmental body; or
5. (4) Whether the Applicant or any persons identified in subsections (c) through (e) have been in default of paying any taxes, fees, or other obligations owed to the District of Columbia, any local governmental entity, or the federal government;
6. (g) A report of the Applicant's or any person identified in subsections (c) through (e)'s financial activities, including evidence of financial stability, such as bank statements, business and personal income and disbursement schedules, tax returns, or other documentation satisfactory to the Office that demonstrates that the Applicant has sufficient business ability and experience to establish and maintain a successful sports wagering business;
7. (h) A certification indicating whether the Applicant or any persons identified in subsections (c) through (e) have been directly employed by an illegal or offshore Sports Wagering Operator that serviced the United States or otherwise accepted black market wagers from individuals located in the United States;
8. (i) A description of the proposed information security program to

protect the confidentiality, integrity, and availability of personal information of individuals who place sports wagers;

1. (j) A description of the proposed internal controls and security systems to be used in conducting sports wagering or processing sports wagering transactions;
2. (k) The number of employees expected to be employed at the proposed Sports Wagering Facility;
3. (l) The estimated tax revenue to be generated by the Sports Wagering Facility;
4. (m) The location of the proposed Sports Wagering Facility;
5. (n) Proof that the Applicant has obtained a Basic Business License in the District of Columbia;
6. (o) Proof of good standing pursuant to D.C. Official Code § 29-102.08 and a certification that the Citywide Clean Hands Database indicates that the proposed Licensee is current with its District taxes;
7. (p) A list of jurisdictions where the Applicant has applied for a sports wagering or gambling license;
8. (q) A list of jurisdictions where the Applicant has been issued a sports wagering or gambling license;
9. (r) A list of jurisdictions where the Applicant has had any sports wagering or gambling license suspended or revoked;
10. (s) Criminal history and background information of the Applicant or any person identified in subsections (c) through (e) as required by the Office;
11. (t) Information demonstrating whether the Applicant is a Small Business Enterprise;
12. (u) The estimated economic benefit to the District of Columbia of the proposed Class B Sports Wagering Facility. The estimate shall include, but not be limited to the following:
13. (1) Projected gross revenue on an annual basis;

(2) Estimated new capital investment for the project; and

(3) Scientific or market research performed by the Applicant or its contractors; and

(v) Any other information the Executive Director considers necessary and appropriate to determine the competency, honesty, quality, economic impact and integrity of the proposed operation.

2102.4 The Applicant shall notify the Office of any changes to their application within ten (10) business days of the change.

2102.5 As a condition of licensure, a Class B Operator shall be bonded, in such amounts and in such manner as determined by the Office, and agree, in writing, to indemnify and to save harmless the District of Columbia against any and all actions, claims, and demands of whatever kind or nature that the District of Columbia may incur by reason of or in consequence of issuing an Operator License to the Licensee. The initial bond amount shall be equal to fifty percent (50%) of the amount the Applicant is required to disclose in accordance with D.C. Official Code § 36-621.06(a)(1)(F). The required bond amount may be adjusted, on a semi-annual basis, by the Executive Director, based on actual tax revenue generated by the Sports Wagering Facility.

2102.6 Upon a showing of good cause, the Executive Director may grant a waiver of information that must be provided in conjunction with the application for a Class B Operator License.

2102.7 A Class B Operator License shall be issued for five (5) years and require a non-refundable application fee of one hundred thousand dollars ($100,000), which shall be submitted with the application; provided, that when an Applicant for a Class B Operator License partners with a joint venture with a Certified Business Enterprise majority interest, it shall submit a non-refundable application fee of twenty-five thousand dollars ($25,000) at the time of the initial application.

2102.8 A Class B Operator License may be renewed for five (5)-year periods; provided, that the Licensee has continued to comply with all statutory and regulatory requirements and pays upon submission of a renewal application a fifty thousand dollar ($50,000) renewal fee. The application for renewal shall include a report of Certified Business Enterprise participation, including Certified Business Enterprise joint ventures, which the Office shall assess and consider verified Certified

Business Enterprise participation in the decision to approve the renewal.

2102.9 Each Class B Operator License is limited to a single Sports Wagering Facility.2102.10 A Class B Operator may provide Sports Wagering Equipment, software, systems, data or services for the location which it has obtained a license without having to obtain a separate Suppliers License. If a Class B Operator purchases, leases or otherwise obtains Sports Wagering Equipment from a third party, it must do so from a licensed Supplier.2102.11 A Class B Operator License is non-transferable.2102.12 A Class B Operator License shall be issued to any person to engage in business solely as a Sports Wagering Operator.2102.13 The Office shall not issue a Class B Operator License unless it is satisfied that the Applicant meets the requirements for a Class B Operator License and is a suitable and qualified individual, group of individuals or entity to be licensed to conduct or participate in conducting all aspects of Class B Sports Wagering.2102.14 An Applicant for a Class B Operator License shall establish their suitability for a license by clear and convincing evidence.2102.15 In determining whether an Applicant is suitable and to approve an application for a Class B Operator License, the Executive Director shall consider the following factors relating to the Applicant:- (a) Whether the Applicant is proposing a sports wagering operation that will have a positive impact on the District and its residents through increased revenues and improving the quality and marketability of sports wagering entertainment within the District;

- (b) Whether the Applicant possesses adequate funds or has secured adequate financing to commence and maintain a sports wagering operation;

- (c) Whether the Applicant has the financial stability, integrity, and responsibility to conduct a sports wagering operation;

- (d) Whether the Applicant has sufficient business ability and experience to create and maintain a successful sports wagering operation;

1. (e) Whether the Applicant has proposed adequate measures for internal and external security, including a surveillance system or protocol;
2. (f) Whether the Applicant has proposed an adequate information security program to protect the confidentiality, integrity, and availability of personal information of individuals who place sports wagers;
3. (g) Whether the Applicant has satisfied the sports wagering license requirements;
4. (h) Whether the Applicant has demonstrated that its proposed sports wagering operation will be conducted in accordance with this title and all other applicable District and federal laws;
5. (i) Whether the Applicant has been convicted of a disqualifying offense, as established by this chapter;
6. (j) Whether the Applicant is a Small Business Enterprise;
7. (k) The past and present compliance of the Applicant and its affiliates or affiliated companies with gaming-related licensing requirements in the District or any other jurisdiction, including whether the Applicant has a history of non-compliance with the gaming licensing requirements of any jurisdiction;
8. (l) If the Applicant has been charged with, convicted, pleaded guilty, or forfeited bail concerning any criminal offense under the laws of any jurisdiction, not including a traffic offense;
9. (m) If the Applicant has filed, or had filed against it a proceeding for bankruptcy or has ever been involved in any formal process to adjust, defer, suspend, or otherwise work out the payment of any debt;
10. (n) If the Applicant has been served with a complaint or other notice filed with any public body regarding a payment of any tax required under any law in any jurisdiction, where the Applicant has been in breach for one or more years;
11. (o) If the Applicant is or has been a defendant in litigation involving its business practices that would call into question its suitability to

be licensed;

(p) If awarding a license would undermine the public's confidence in the gaming industry in the District; and

(q) If the Applicant meets other prescribed standards for the issuance of a license.

2102.16

An Applicant may apply for up to but no more than two (2) sports wagering licenses unless the Applicant agrees to subcontract with a joint venture or subcontract with a Certified Business Enterprise for any additional licenses.

SOURCE Final Rulemaking published at 36 DCR 6681 (September 22, 1989); as amended by Final Rulemaking published at 66 DCR 11598 (August 30, 2019).