N.Y. Comp. Codes R. & Regs. tit. 9 § 5104.1

Current through Register Vol. 46, No. 45, November 2, 2024

Section 5104.1 - Financial stability criteria

(a) Criteria . Each video lottery gaming agent, and each of such agent's principals, shall establish and maintain during the pendency of such video gaming agent license the financial stability of such licensee to the satisfaction of commission. The commission may consider any relevant evidence of financial stability. A video lottery gaming agent shall be considered to be financially stable if such agent establishes by clear and convincing evidence that such agent meets each of the following standards:

(1) Each video lottery gaming agent must assure the financial integrity of video lottery gaming operations by the maintenance of a video lottery gaming bankroll, or equivalent provision(s), adequate to pay prizes to video lottery gaming patrons when due. A video lottery gaming agent shall be found to have established this standard if it maintains, on a daily basis, a video lottery gaming bankroll, or equivalent provisions, in an amount at least equal to the facility's immediate cash requirement exposure for player prizes. Prior to receiving a certificate of operation for the video lottery gaming facility, each video lottery gaming agent must submit to the commission a calculation of their video lottery gaming bankroll to be maintained at the commencement of each gaming day. Such calculation shall be based upon prize valuation levels. The bankroll will be reviewed by the commission, and shall guarantee that the vault funding by weekday is at least equal to 200 percent of the projected average daily prize claims at the video lottery gaming facility. Each video lottery gaming agent must continually review and evaluate daily bankroll requirements and notify the commission in writing if it requests to change the amount of the minimum bankroll. Such notification must be provided to the commission at least 10 days prior to the implementation of the new funding level. Maintenance of a minimum bankroll is subject to audit or review by the commission. Failure to maintain adequate funding levels consistent with this requirement will be a violation of the video lottery gaming agent's license.

(2) Each video lottery gaming agent must be able to pay, as and when due, all local, State and Federal taxes, including the tax on gross revenues imposed by the video lottery gaming law, and any costs associated with the licensing process.

(3) A video lottery gaming agent shall maintain the video lottery gaming facility and related amenities in good repair. Each video lottery gaming agent shall submit annually to the commission for review, any changes or updates to the capital investment plan for the video lottery gaming facility together with the then-effective capital investment plan. The commission shall review such changes and updates to ensure that each video lottery gaming agent is investing portions of the vendor fee permitted by the act in the facility's infrastructure as is necessary to support viable and successful video lottery gaming in this State . Each capital investment plan submitted shall be in such form as required by the commission and shall discuss the improvements made to the facility since the submission of the last investment plan. Each video lottery gaming agent shall budget for repair and replacement reserves to maintain the facility unless otherwise prohibited by law. The commission reserves the right to require video lottery gaming agents to create and fund replacement reserves at such amounts determined by the commission consistent with the requirements of the act.

(4) Each video lottery gaming agent must be able to pay, exchange, refinance or extend debts, including long-term and short-term principal and interest and capital lease obligations, that will mature or otherwise come due and payable during the license term, or to otherwise manage such debts and any default with respect to such debts. Each video lottery gaming agent shall advise the commission of such agent's plans to meet this standard with respect to any material debt(s) coming due and payable within 12 months after the end of the license term.

(5) No video lottery gaming agent shall consummate a material debt transaction without the prior written approval of the commission.

(6) No video lottery gaming agent shall guarantee the debt of any person or business entity, whether by co-signature or otherwise, or assume the debt of any person or business entity; or enter into any agreement to place any encumbrance on of its video lottery gaming facility to secure the debts of such video gaming agent, any person or business entity, without the prior written approval of the commission.

(b) In reviewing any transaction in connection with the financial stability of the video lottery gaming agent or any of such agent's principals, the commission shall consider whether the transaction deprives the agent or person of financial stability, taking into account the current or projected financial condition of the video lottery gaming agent and such agent's affiliate, and the potential impact of any default on the agent or person.

(c) Any subsequent use of the proceeds of a financial transaction previously approved by the commission pursuant to these regulations, including subsequent drawings under previously approved transactions, shall not require further commission approval unless such use is inconsistent with the use approved by the commission.

(d) The commission may restrict or prohibit the transfer of cash to, or the assumption of liabilities on behalf of, an affiliate of the video gaming agent if, in the judgment of the commission, such transfer or assumption would deprive the video lottery gaming agent of financial stability.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 5104.1

Amended New York State Register November 24, 2021/Volume XLIII, Issue 47, eff. 11/24/2021