We are wrapping up our Ask an Investigator series with a look into Key Persons licensing, an important part of any gaming companies licensing requirements and one that’s critical to get right!
Bill Gavigan has probably seen more Key Persons licensing applications than anyone, and he’s offering up his insights into what he looks for in an application and what creates “red flags” while providing some great tips into how to make your Key Persons licensing a success!
So, let’s take a look at Key Persons Licensing from an investigator’s perspective.
Question: In the second blog post on business entity licensing, you mentioned that the legal and compliance team should do their own due diligence on the history of their company before starting the application process. Does this same recommendation apply for Key Persons as well? What in particular should they be looking for?
Bill Gavigan: Due diligence should definitely be performed on the Key Persons of the company before starting the licensing application process. As I mentioned in my first blog post, the last thing you would want to do is submit an application for someone who has red flag issues which could result in not only a personal application denial but potentially could affect the company’s entity license as well.
You’ll want to look for potential issues relating to criminal history, credit history and tax/government related liabilities. Most issues found during your due diligence can be resolved prior to the submission of the application which will save both you and the regulator/investigator a lot of time and energy. And if you should discover a serious issue (e.g. felony conviction), you have the ability to determine if it would result in an automatic disqualifier for licensure and plan accordingly.
Question: During the first pass of a Key Persons application, what is the investigator looking for?
Bill Gavigan: Similar to the Business Entity investigation and the due diligence performed by the company, the investigator will review the application to determine if there are any disclosures that may require immediate attention such as potential disqualifiers for licensure. The applicant’s credit report, criminal history report and federal/state tax filings will also be reviewed to determine the same.
Question: What types of things in an application will definitely raise a red flag for the investigator?
Bill Gavigan: Beyond the automatic disqualifiers, other red flag issues can pop up throughout the application review process. Ensuring that all questions are answered honestly and accurately is extremely important as the investigator will be comparing answers that were provided throughout the application to each other in order to paint an accurate picture of the applicant.
As part of the background process, the investigator will utilize database checks, court checks, online searches, tax transcript reviews, and she/he will conduct interviews of former employers and any other persons necessary to verify all of the information provided in the application. Any discrepancy discovered, like failing to disclose a criminal arrest or litigation, is a definite red flag.
As an investigator, I was amazed to find how often applicants would fail to include their complete criminal and/or litigation history in their applications. In the digital age it is near impossible to hide those types of issues.
Question: Many Key Persons will hold passports from outside the US, does this create any issues for an investigator or Key Person?
Bill Gavigan: Not at all. The submission and subsequent review of the passport to the investigator serves an important tool. First and foremost it is an excellent document used to properly identify the applicant and confirm citizenship. Secondly, it is also used by investigators to examine foreign travel history to determine if the applicant has potentially suspicious travel destinations/patterns, or if they are possibly living beyond the financial means disclosed in their application.
Question: What other advice could you give in terms of best practices or what to look out for when preparing a key person licensing application?
Bill Gavigan: As a Key Person, you will be required to prepare a net worth statement and at some point during the investigation you will be required to provide supporting documentation to support it. This can be a daunting task as gathering this amount of information can be difficult, expensive and time consuming.
It has become increasingly easier in the digital era as a lot of the information can be obtained online but storing it in an effective manner and keeping it up to date can be challenging. And remember, a gaming license is an ongoing process that will require renewal applications in the future. Maintaining all Key Person data in a safe, secure, and well organized place is essential to successfully managing licensing and compliance in the gaming industry.
Utilizing a compliance and licensing platform like OneComply can really help. If your company is looking at being licensed in multiple states, remember that 95% of the information required for Key Persons licensing (and Business Entity Licensing) will be the same (or very similar) between states. So having all that data centralized, along with the functionality to automatically generate the state specific applications, will not only save a lot of time but also ensure the integrity of the data across all the licensing applications. And using a platform like OneComply makes it much easier to revise and keep up to date information like net worth and bank balances.
To learn more about OneComply, schedule a demo or submit a question to our Ask an Investigator series, email us at firstname.lastname@example.org