CHAPTER 5. GAMBLING GAME LICENSE
IC 4-35-5
Chapter 5. Gambling Game License
IC 4-35-5-1
Maximum number of licenses
Sec. 1. The commission may issue a license to a permit holder toconduct gambling games under this article at the permit holder'sracetrack. The number of licenses issued under this chapter may notexceed two (2).
As added by P.L.233-2007, SEC.21.
IC 4-35-5-2
Background investigation; approval of proposed slot machinefacilities
Sec. 2. (a) Before issuing a license to a person under this chapter,the commission shall subject the person to a backgroundinvestigation similar to a background investigation required for anapplicant for a riverboat owner's license under IC 4-33-6.
(b) Before the commission may issue a license to a person underthis chapter, the person must submit to the commission for thecommission's approval the physical layout of the person's proposedslot machines and the facilities that will contain the proposed slotmachines. The facilities that will contain the slot machines must beconnected to the licensee's racetrack facilities.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-2.4
Factors considered in granting licenses
Sec. 2.4. In determining whether to grant a license under thischapter to an applicant, the commission shall consider the following:
(1) The character, reputation, experience, and financial integrityof the following:
(A) The applicant.
(B) A person that:
(i) directly or indirectly controls the applicant; or
(ii) is directly or indirectly controlled by the applicant orby a person that directly or indirectly controls theapplicant.
(2) The facilities or proposed facilities for the conduct ofgambling games. The facilities or proposed facilities mustinclude capital expenditures of at least one hundred milliondollars ($100,000,000).
(3) The prospective total revenue to be collected by the statefrom the conduct of gambling games.
(4) The good faith affirmative action plan of each applicant torecruit, train, and upgrade minorities in all employmentclassifications.
(5) The financial ability of the applicant to purchase andmaintain adequate liability and casualty insurance.
(6) If the applicant has adequate capitalization to provide and
maintain facilities for gambling games for the duration of thelicense.
(7) The extent to which the applicant exceeds or meets otherstandards adopted by the commission.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-2.5
Restrictions on issuance
Sec. 2.5. The commission may not issue a license under thischapter to a person if:
(1) the person has been convicted of a felony under Indiana law,the laws of any other state, or the laws of the United States;
(2) the person has knowingly or intentionally submitted anapplication for a license under this chapter that contains falseinformation;
(3) the person is a member of the commission;
(4) the person is an officer, a director, or a managerial employeeof a person described in subdivision (1) or (2);
(5) the person employs an individual who:
(A) is described in subdivision (1), (2), or (3); and
(B) participates in the management or operation of gamblinggames authorized under this article; or
(6) a license issued to the person:
(A) under this article; or
(B) to own or operate gambling facilities in anotherjurisdiction;
has been revoked.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-2.6
Bond
Sec. 2.6. (a) A licensee under this chapter must post a bond withthe commission at least sixty (60) days before the commencement ofgambling games at the licensee's racetrack.
(b) The bond shall be furnished in:
(1) cash or negotiable securities;
(2) a surety bond:
(A) with a surety company approved by the commission; and
(B) guaranteed by a satisfactory guarantor; or
(3) an irrevocable letter of credit issued by a banking institutionof Indiana acceptable to the commission.
(c) If a bond is furnished in cash or negotiable securities, theprincipal shall be placed without restriction at the disposal of thecommission, but income inures to the benefit of the licensee.
(d) The bond:
(1) is subject to the approval of the commission;
(2) must be in an amount that the commission determines willadequately reflect the amount that a local community willexpend for infrastructure and other facilities associated withgambling games at the racetrack; and (3) must be payable to the commission as obligee for use inpayment of the licensee's financial obligations to the localcommunity, the state, and other aggrieved parties, as determinedby the rules of the commission.
(e) If after a hearing (after at least five (5) days written notice) thecommission determines that the amount of a licensee's bond isinsufficient, the licensee shall upon written demand of thecommission file a new bond.
(f) The commission may require a licensee to file a new bond witha satisfactory surety in the same form and amount if:
(1) liability on the old bond is discharged or reduced byjudgment rendered, by payment made, or otherwise; or
(2) in the opinion of the commission any surety on the old bondbecomes unsatisfactory.
(g) If a new bond obtained under subsection (e) or (f) isunsatisfactory, the commission shall cancel the licensee's license. Ifthe new bond is satisfactorily furnished, the commission shall releasein writing the surety on the old bond from any liability accruing afterthe effective date of the new bond.
(h) The proceeds of a bond that is in default under this subsectionare paid to the commission for the benefit of the local unit in whichthe racetrack is located.
(i) The total and aggregate liability of the surety on a bond islimited to the amount specified in the bond, and the continuousnature of the bond may in no event be construed as allowing theliability of the surety under a bond to accumulate for each successiveapproval period during which the bond is in force.
(j) The commission may adopt rules authorizing the release of abond under this section.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-2.7
Revocation of license
Sec. 2.7. The commission may revoke a license under this chapterif:
(1) the licensee begins regular gambling game operations morethan twelve (12) months after receiving the commission'sapproval of the application for the license; and
(2) the commission determines that the revocation of the licenseis in the best interests of Indiana.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-2.8
License is not a property right
Sec. 2.8. A license to conduct gambling games:
(1) is a revocable privilege granted by the state; and
(2) is not a property right.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-3
Initial license fee
Sec. 3. (a) A permit holder that is issued a gambling game licenseunder this article must pay to the commission an initial licensing feeof two hundred fifty million dollars ($250,000,000) as follows:
(1) One hundred fifty million dollars ($150,000,000) payablebefore November 1, 2007.
(2) One hundred million dollars ($100,000,000) payable beforeNovember 1, 2008.
(b) The commission shall deposit any initial licensing feescollected under this section into the state general fund.
As added by P.L.233-2007, SEC.21. Amended by P.L.146-2008,SEC.19.
IC 4-35-5-4
Expiration of license; renewal
Sec. 4. (a) An initial gambling game license expires five (5) yearsafter the effective date of the license. Unless the gambling gamelicense is terminated or revoked, the gambling game license may berenewed annually thereafter upon:
(1) the payment of an annual renewal fee of one hundred dollars($100) per slot machine operated by the licensee; and
(2) a determination by the commission that the licensee satisfiesthe conditions of this chapter.
Renewal fees paid under this section shall be deposited in the stategeneral fund.
(b) Except as provided in subsection (c), an initial gaming licensemay not be transferred by the initial licensee for at least five (5)years after the effective date of the license.
(c) A gambling game license may be transferred for any of thefollowing reasons:
(1) As a result of a bankruptcy, a receivership, or a debtadjustment initiated by or against the initial licensee or thesubstantial owners of the initial licensee.
(2) Because:
(A) the licensee's license has been cancelled, terminated, orrevoked by the commission; or
(B) the commission determines that transferring the licenseis in the best interests of Indiana.
(3) Because of the death of a substantial owner of the initiallicensee.
A transfer permitted under this subsection is subject to section 7 ofthis chapter.
As added by P.L.233-2007, SEC.21. Amended by P.L.146-2008,SEC.20.
IC 4-35-5-4.5
Horse racing required of licensee
Sec. 4.5. A license issued under this article is null and void if thelicensee fails to: (1) obtain or maintain a permit issued under IC 4-31-5 toconduct a pari-mutuel wagering horse racing meeting inIndiana; or
(2) satisfy the requirements of IC 4-31 concerning the amountof live horse racing that the licensee must conduct at thelicensee's racetrack.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-5
Investigations
Sec. 5. (a) The commission shall conduct a complete investigationof each licensee every three (3) years to determine whether thelicensee remains in compliance with this article.
(b) Notwithstanding subsection (a), the commission mayinvestigate a licensee at any time the commission determines it isnecessary to ensure that the licensee remains in compliance with thisarticle.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-6
Costs of investigations
Sec. 6. A permit holder or other person investigated under thischapter shall bear the cost of the investigation.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-7
Transfer of license; commission approval; fees
Sec. 7. (a) A licensee or any other person must apply for andreceive the commission's approval before:
(1) a gambling game license is:
(A) transferred;
(B) sold; or
(C) purchased; or
(2) a voting trust agreement or other similar agreement isestablished with respect to the gambling game license.
(b) The commission shall adopt rules governing the procedure alicensee or other person must follow to take an action undersubsection (a). The rules must specify that a person who obtains anownership interest in a gambling game license must meet the criteriaof this article and comply with the rules adopted by the commission.A licensee may transfer a gambling game license only in accordancewith this article and the rules adopted by the commission.
(c) A person may not:
(1) lease;
(2) hypothecate; or
(3) borrow or loan money against;
a gambling game license.
(d) Except as provided in subsection (e), a transfer fee is imposedon an initial licensee who sells or otherwise relinquishes acontrolling interest, as determined under the rules of the commission,
in a gambling game license. The amount of the fee is fifty milliondollars ($50,000,000).
(e) The fee imposed by subsection (d) does not apply if:
(1) the gambling game license is transferred as a result of anevent described in section 4(c) of this chapter; or
(2) the controlling interest in the gambling game license istransferred in a transaction in which no gain or loss isrecognized as a result of the transaction in accordance withSection 351 of the Internal Revenue Code.
(f) The transfer of a gambling game license by a person other thanthe initial licensee to receive the gambling game license is notsubject to a transfer fee.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-8
Deposit of fees and recovered investigation costs
Sec. 8. Except as otherwise provided in this chapter, thecommission shall transfer:
(1) fees collected under this chapter; and
(2) all investigation costs recovered under this chapter;
to the treasurer of state for deposit in the state general fund.
As added by P.L.233-2007, SEC.21.
IC 4-35-5-9
Submission of proposed power of attorney
Sec. 9. (a) A permit holder or an applicant for a gambling gamelicense shall submit for the approval of the commission a writtenpower of attorney identifying the person who, if approved by thecommission, would serve as the permit holder's or applicant's trusteeto conduct gambling games at a racetrack. The power of attorneysubmitted under this subsection must:
(1) be executed in the manner required by IC 30-5;
(2) describe the powers that may be delegated to the proposedtrustee; and
(3) conform with the requirements established by thecommission under IC 4-35-4-2(a)(8).
(b) The proposed power of attorney required by this section mustbe submitted as follows:
(1) Before November 1, 2009, in the case of a permit holderwho holds a gambling game license as of July 1, 2009.
(2) Before the deadline established by the commission, in thecase of a person who applies for a gambling game license afterDecember 31, 2008.
(c) A permit holder must petition the commission for its approvalof any changes to a power of attorney approved by the commission.
As added by P.L.142-2009, SEC.22.