Ask an Investigator #2: Business Entity Licensing – understanding the investigative process

Thank you to everyone for your positive feedback on our first “Ask an Investigator” blog post and keep those questions coming! In Post #2, we’re taking a deep dive into business entity licensing and again, are tapping Bill Gavigan’s 15 years experience as a senior investigator with the Pennsylvania Gaming Control Board to answer some burning questions regarding the process and red flags to watch out for!  

So, let’s take a look at Business Entity Licensing from an investigator’s perspective.

Question: In the first blog post, you mentioned that before you start the licensing process, the legal and compliance team should do their own due diligence on the history of their company, to make sure that there aren’t any past issues that might become a “red flag” to a regulator or investigator.  Can you go into a little more detail about what they should be looking for?

Bill Gavigan: First and foremost, you want to research the potential criminal history of the entity and Key Persons. For example, in most if not all jurisdictions, felony and gambling convictions are automatic disqualifiers. As we discussed in the first post, I recommend you personally contact the appropriate state regulators to discuss potential disqualifiers with each of the applicable jurisdictions for confirmation of their regulations.

Since you will be applying for a gaming license with a government agency, they are keen on applicants being up to date with all government related liabilities. For example, it’s easy for a company to potentially lose track of tax liability when doing business in multiple jurisdictions. It’s best to discover and resolve these types of liability issues prior to your license application submission to avoid disruption.  

Entity financial fitness is an extremely important part of the licensing process. Remember, the jurisdictions are seeking to protect the state’s assets and provide a reputable and secure product to the gaming industry and its consumers. It is important that the entity is financially viable and fit to provide the agreed upon services. Financial issues are not typically automatic disqualifiers but can slow down the process if additional documents and/or remedies are required.  

Question: Can you explain the process that happens with the regulator, when they receive an entity licensing application. Who reviews it first and at what point is it accepted and moves through to the process of investigation?

Bill Gavigan: Once you have submitted your gaming application, it is forwarded to the licensing unit where an analyst will review the application to ensure the proper application has been submitted, all questions have been answered, all pages have been initialed and signed, and all required supporting documents have been provided. If there are any deficiencies, the process will be delayed until they are remedied.  

Additionally, the licensing unit may contact the applicant to further inquire about the purpose of the applicant’s business in the gaming industry and to fully understand the organizational and management structure. Do not be surprised if additional applications are requested.

Once the license applications have been curated, they are forwarded to the investigations unit which will begin the process of conducting a thorough background investigation of all entities and individuals.

Question: As an investigator, what are some things that you’re looking for during that first pass of the application?

Bill Gavigan: They say that first impressions are lasting impressions. This is definitely true with the investigator’s first impression of your company via the application submission. You may be surprised how a neat and complete submission can impress an investigator. A lot of time will be spent analyzing every entry in the submission and if it’s difficult to read or understand, it can quickly become frustrating.  

The investigator will conduct a quick review of the application to rule out the possibility of immediate license disqualifiers. Then the process of the full investigation begins. Since some issues can take a long time to properly address, the investigator will focus on obtaining and reviewing supporting documentation in regard to criminal, civil, bankruptcy, corporate structure, and the financial disclosures. Additionally, the laborious process of verifying all other gaming licenses will begin. 

Be prepared to interact with the investigator throughout the process as she/he will often need additional information or explanations regarding the corporate structure and ownership, especially if there are numerous entities involved in the ownership structure.

One of the first things I always looked for in the application was the location of the business entity. Though Covid may have changed things for a lot of regulatory agencies, the investigators prefer to do all interviews in person and the logistics of planning a trip can be very time consuming. I always enjoyed the travel associated with the job. Getting to meet new people and visiting a new city were always a benefit of the job for me.  

Question: Can you explain the process that an investigator typically goes through when reviewing an entity licensing application?

Bill Gavigan: Most gaming entity applications will request a contact person for the agency to reach out to for any questions or concerns. It is important to select someone who understands the workings of the applicant entity and its key employees. I always called this person to introduce myself, explain the investigative process, and determine the best way to contact each of the key employees. 

Every company is different and not all key employees are the best person to speak with during the early stages of the investigation. More often than not, an executive assistant, outside counsel, or even a licensing service company is the initial contact person to answer early questions and assist with the coordination of the interview scheduling process.

Question: When you find something that raises a “red flag” with you, what is the process to inform the applying company? 

Bill Gavigan: That’s a complicated question as each red flag issue may have different investigative steps and processes. Generally speaking, I would reach out to the contact person if I found items of interest in the application. Other times, it was better to fully investigate the red flag issue and address it directly with the applicant in the interview. 

If it appeared the applicant was less than truthful in the application, I would gather the evidence and supporting documents to present to the applicant during the interview. Often, failure to disclose information becomes a more serious issue than the initial issue itself.

Question: How does an investigator expect the company to respond to an inquiry about a red-flag, etc.? Will the investigator help the company in how they deal with a red-flag?

Bill Gavigan: The investigator plays an impartial role in the investigation where he/she is tasked with reporting the facts. This is why it is of utmost importance to disclose everything in the application and during the personal interview.  With most jurisdictions, the resolution of red-flag discoveries are handled by the regulatory agency’s attorneys. This could ultimately lead to having a hearing before the agency’s board or in the civil court system. 

Question: What other advice could you give a legal/compliance team in terms of best practices or what to look out for when preparing an entity licensing application?

Bill Gavigan: Accuracy, neatness, completeness, and full disclosure will lead to a smooth background investigation process. And again, if you’re not yet using OneComply for your Entity Licensing, I suggest you do. It’ll help out both the regulatory staff and the investigator! 

In our next post, we’ll look at Key Person licensing. What is an investigator looking for in an application, what will cause red flags, and how can you make sure the process goes smoothly? To learn more about OneComply, schedule a demo or submit a question to our Ask an Investigator series, email us at