205 CMR, § 138.43

Current through Register 1536, December 6, 2024

Section 138.43 - Procedures for Establishing Patron Credit Accounts, and Recording Checks Exchanged, Redeemed or Consolidated

(1) A system of internal controls submitted by a gaming licensee in accordance with 205 CMR 138.02 shall include a description of its policies and procedures governing the issuance of credit to a patron to take part in gaming activity at its gaming establishment which policies and procedures shall prohibit the issuance of credit to a patron for Sports Wagering. A gaming licensee's policies and procedures governing the issuance of credit shall ensure at a minimum that:

(a) Prior to issuing credit to a patron the creditworthiness of the patron is established in a commercially reasonable manner in the context of their ability to repay the amount of credit requested or to be extended according to the terms of the credit extension agreement and any disclosures;

(b) Credit is not extended to an individual in an amount beyond that which the information reviewed demonstrates that they have a reasonable ability to repay;

(c) Credit will only be extended to patrons who the gaming licensee determines qualify for a minimum threshold of $ 10,000.00 and will not exceed the amount requested by the patron;

(d) Credit will not be offered to any individual who self-identifies as a problem gambler during the credit application process, places themselves on a voluntary credit suspension list in accordance with 205 CMR 138.44, or is on public assistance;

(e) Credit requests, including increases, will not be accepted from or granted to patrons who are visibly intoxicated or exhibiting behaviors suggestive of impaired mental competency;

(f) Credit applications require patrons to acknowledge that they have reviewed a problem gambling self-assessment and indicate a desire to proceed with the process; and

(g) Credit officers will obtain written or verbal verification from credit applicants that they are comfortable losing up to the amount of credit requested and granted.

(2) In addition to the provisions required in accordance with 205 CMR 138.43(1), the policies and procedures governing the issuance of credit shall contain provisions including, but not limited to, the following:

(a) The creation of a credit file for each patron shall be prepared by a general cage cashier or credit department representative with no incompatible functions prior to the gaming licensee's approval of a patron's credit limit. All patron credit limits and changes thereto shall be supported by the information contained in the credit file. Such file shall contain a credit application form upon which the following minimum information provided by the patron shall be recorded:

1. The patron's name;

2. The address of the patron's residence;

3. Patron's identification credential, credential number, place of issuance, and expiration date;

4. The patron's telephone number;

5. Banking information including:

a. The name and location of the patron's bank; and

b. The account number of the patron's personal checking account upon which the patron is individually authorized to draw and upon which all Counter Checks and and replacement checks will be drawn. Checking accounts of sole proprietorships shall be considered as personal checking accounts. Partnership or corporate checking accounts shall not be considered personal checking accounts even if a patron is individually authorized to draw on the account.

6. The credit limit requested by the patron;

7. The approximate amount of all other outstanding indebtedness including outstanding credit balances at other casinos or gaming establishments;

8. The amount and source of income and assets in support of the requested credit limit; and

9. The patron's signature indicating acknowledgement of the following statement, which shall be included at the bottom of every credit application form containing the information required to be submitted by the patron pursuant to 205 CMR 138.43(2)(a): "I certify that I have reviewed all of the information provided above and that it is true and accurate. I authorize (name of the gaming licensee) to conduct such investigations pertaining to the above information in accordance with applicable federal and state laws and regulations as it deems necessary for the approval of my credit limit. Such investigation may include verification of the information I have provided with a consumer credit bureau, a casino credit bureau, my bank, and/or a bank verification service. I am aware that this application is required to be prepared in accordance with Massachusetts Gaming Commission regulations and I may be subject to civil or criminal liability if any material information provided by me is willfully false."

10. Prior to processing a gaming patron's credit application, a gaming licensee shall clearly and conspicuously provide the patron with the following disclosures on a piece of paper separate and apart from the credit application and any related documents; provided that each statement shall be separately signed, dated, and acknowledged by said patron. Upon signing said disclosures, a copy shall be provided to the gaming patron.

a."You are applying for a credit extension from [name of gaming licensee], facilitated through a personal check or counter check (also known as a 'marker') on your bank account. If you fail to repay [name of gaming licensee] by [the date specified in this agreement], [name of gaming licensee] will attempt to recover the amount identified on the personal check or 'marker' from your bank account (by date marker will be deposited with the bank) or thereafter. If there are insufficient funds in your account, [name of gaming licensee] may initiate debt collection proceedings against you. Failure to timely repay your debt to [name of gaming licensee] may result in legal consequences, and will likely have a negative effect on your credit."

b."If you are concerned that you may have difficulty managing your gambling, or wish for any reason to exclude yourself from receiving credit from a gaming establishment in Massachusetts, you may add yourself to the gaming credit suspension list. Massachusetts gaming establishments are prohibited from providing credit to individuals appearing on this list. To sign up for the list, please visit www.massgaming.com or call 1-800-426-1234."

(b) Recording by a general cage cashier or credit department representative of the information required in accordance with 205 CMR 138.43 in the credit file prior to the gaming licensee's approval of a patron's credit limit.

(c) Prior to the gaming licensee's approval of the patron's credit limit, a general cage cashier or credit department representative with no ability to grant credit or credit limit increases shall perform the following in a commercially reasonable manner and document the patron's file accordingly:

1. Verify the address of the patron's residence;

2. Verify the patron's outstanding casino credit balances which shall include the following:

a. The date the patron's casino credit account(s) was established; and

b. The current balance and status of the patron's credit account at each casino and gaming establishment including checks deposited by a casino or gaming licensees that have not yet cleared the bank and derogatory information;

3. Verify the patron's outstanding indebtedness;

4. Verify the patron's personal checking account information which shall include, but not be limited to, the following:

a. Type of account (personal or sole proprietorship);

b. Account number;

c. Date the account was opened;

d. Average balance of the account for the last six months;

e. Current balance in the account;

f. Whether the patron can sign individually on the account; and

g. Name and title of the person supplying the information; and

5. Verify that the patron's name is not designated on the list of individuals who have voluntarily requested suspension of credit privileges pursuant to 205 CMR 138.44 or placed their name on the voluntary self-exclusion list pursuant to 205 CMR 133.00: Voluntary Self-exclusion.

(d) All verifications performed by a general cage cashier or the credit department in accordance with 205 CMR 138.43(2)(c) shall be recorded in the credit file and accompanied by the signature of the general cage cashier or credit department representative who performed the required verifications or filed the relevant information. If at any time the gaming license has reason to believe a patron's information has changed, it shall re-verify the information in accordance with the following. The date and time of the signature of the general cage cashier or credit department representative shall be recorded either mechanically or manually contemporaneously with the transaction. If the employee is unable to obtain certain information despite using commercially reasonable efforts, the credit file shall be documented accordingly. The general cage cashier or gaming licensee's credit department shall fulfill the requirements of 205 CMR 138.43(2)(c) as follows:

1. Verification of the address of the patron's residence, as required by 205 CMR 138.43(2)(c) l., shall be satisfied by confirming the patron's address with a credit bureau or bank. If neither of these sources has the patron's address on file or will not provide the information, the gaming licensee may use an alternative source which shall not include any identification credentials required in 205 CMR 138.43(2)(a) or other documentation presented by the patron at the gaming establishment. The gaming licensee shall record the source of verification and the method by which such verification was performed in the patron's credit file. Verification of the patron's address may be performed telephonically.

2. Verification of the patron's current casino credit limits and outstanding balances, as required by 205 CMR 138.43(2)(c)2., shall be performed through a casino credit bureau and, if appropriate, through direct contact with other casinos at which the patron indicated on the credit application that they have a credit limit or outstanding balance. The gaming licensee shall record the source of verification and the method by which such verification was performed in the patron's credit file. If no casino credit information relating to the patron is available from these sources, this shall be noted in the patron's credit file and shall be deemed to satisfy the verification requirement. The verification may be performed telephonically, via email, or any medium prior to the credit approval provided the gaming licensee requests written documentation of all such information as soon as possible and includes such written documentation in the patron's credit file. All requests for written documentation shall be maintained in the patron's credit file until such documentation is obtained.

3. Verification of the patron's outstanding indebtedness, as required by 205 CMR 138.43(2)(c)(3), shall be performed by contacting a consumer credit bureau or other similar organization which is reasonably likely to possess information concerning the patron, and a casino credit bureau to determine whether the applicant has any liabilities or if there is any derogatory information concerning the applicant's credit history. Such contact shall be considered a verification of the outstanding indebtedness provided by the patron. The gaming licensee shall record the source of verification and the method by which such verification was performed in the patron's credit file. If either one or both of these credit bureaus do not have information relating to a patron's outstanding indebtedness this shall be recorded in the patron's credit file and the verification requirement shall be deemed satisfied. The verification may be performed telephonically prior to the credit approval provided the gaming licensee requests written documentation of all information obtained as soon as possible and includes such written documentation in the patron's credit file. All requests for written documentation shall be maintained in the patron's credit file until such documentation is obtained.

4. Verification of the patron's personal checking account information, as required by 205 CMR 138.43(2)(c)4., shall be performed by the gaming licensee or a bank verification service directly with the patron's bank. A bank verification service utilized by a gaming licensee may make use of another bank verification service to make direct communication with the patron's bank. If a patron's bank is unwilling to provide information relative to an account, the gaming licensee may use an alternative source or note the unavailability of the information in the file in which case the verification requirement shall be deemed satisfied. The gaming licensee shall record the source of verification and the method by which such verification was performed, or attempted to be performed, in the patron's credit file. The verification may be performed telephonically via email, or any medium prior to the credit approval provided the gaming licensee or bank verification service requests written documentation of all information obtained as soon as possible and such written documentation is included in the patron's credit file. All requests for written documentation shall be maintained in the patron's credit file until such documentation is obtained.

(e) A gaming licensee may rely upon information compiled and verified by an affiliate in another jurisdiction relative to the credit application of a patron in satisfaction of a provision of 205 CMR 138.43(1) through (2)(d) if said verification was performed within 60 days of credit being extended to the same patron at a casino.

(f) The credit limit, and any changes thereto, must be approved by any one or more of the individuals holding the positions of credit manager, assistant credit manager, credit shift manager, credit executive, or a key gaming employee in a direct reporting line above the gaming manager or credit manager, or a credit committee composed of key gaming employees which may approve credit as a group, but whose members may not approve credit individually unless such person is included in the referenced job positions. The approval shall be recorded in the credit file and shall include:

1. Any other information used to support the credit limit and any changes thereto, including the source of the information, if such information is not otherwise recorded pursuant to 205 CMR 138.43(2);

2. A brief summary of the key factors relied upon in approving or reducing the requested credit limit and any changes thereto;

3. The reason credit was approved if derogatory information was obtained during the verification process;

4. The signature, on the manual credit file, of the employee approving the credit limit together with the date and time of such authorization, which signature, date and time shall be recorded before any actual extension of credit; and

5. If a computerized credit file is utilized, the authorization code of the employee approving the credit limit together with the date and time of the activation in the system, which authorization code, date and time shall be recorded by the system before any actual extension of credit.

(g) Prior to approving a credit limit increase, a representative of the gaming licensee's credit department shall:

1. Obtain a written request from the patron which shall include:

a. Date and time of the patron's request;

b. Amount of credit limit increase requested by the patron; and

c. Signature of the patron.

2. Verify the patron's current casino credit limits and outstanding balances, as required by 205 CMR 138.43(2)(c)2., unless such verification has performed earlier that same gaming day;

3. Verify the patron's outstanding indebtedness as required by 205 CMR 138.43(2)(c)3., unless such procedure has been performed within the previous 60 days;

4. Verify the patron's personal checking account information, as required by 205 CMR 138.43(2)(c)4., unless such procedure has been performed within the previous 60 days;

(h) Credit limit increases may be approved without performing the requirements of 205 CMR 138.43(2)(g)2. through 4. if the increases are temporary and are noted as being for this trip only in the credit file. Temporary increases shall be limited to one during any thirty day period provided that the increase is approved during a single trip to the gaming establishment consisting of consecutive gaming days and the amount of the temporary increase does not exceed 25% of the currently approved credit limit.

(i) The gaming licensee's credit department shall verify the patron's address, current casino credit limits and outstanding balances, outstanding indebtedness, checking account information, confirm that the patron is not on the list of patrons who have requested suspension of their credit privileges, and confirm that the patron is not on the list of patrons who have placed themselves on the voluntary self-exclusion list, as required by 205 CMR 138.43(2)(c)1. through 5. prior to the issuance of a counter check to a patron whose credit file has been inactive for a six month period.

(j) All derogatory information received by a gaming licensee concerning a patron's credit account shall be reported by the gaming licensee on a daily basis to a casino credit bureau used by all Massachusetts gaming licensees. Each gaming licensee shall request written documentation of any derogatory information pertaining to its patrons to be reported to that gaming licensee on a daily basis by a casino credit bureau used by all Massachusetts gaming licensees. All documentation obtained from the casino credit bureau relative to a patron account shall be maintained in the patron's credit file. Any gaming licensee desiring to continue the patron's credit privileges on the basis of a satisfactory explanation having been obtained for the derogatory information may do so if the gaming licensee records the explanation for its decision in the credit file before issuing any further counter checks to the patron along with the signature of the credit department supervisor accepting the explanation. Provided, the gaming licensee shall comply with the requirements of either 205 CMR 138.43(2)(g)2. or 3. whenever any derogatory information is received by a gaming licensee's credit department relating to the patron's continued creditworthiness.

(k) All transactions affecting a patron's outstanding indebtedness to the gaming licensee shall be recorded in chronological order in the patron's credit file and credit transactions shall be segregated from the patron deposit account transactions. The following information shall be included:

1. The date, amount and check number of each Counter Check initially accepted from the patron;

2. The date, amount and check number of each consolidation check and the check numbers of the checks returned to the patron;

3. The date, method, amount and check number of each redemption transaction and the check number of the check returned to the patron;

4. The date, amount and check number of each substitution transaction and the check number of the check returned to the patron;

5. The date, amount and check number of each check deposited;

6. The date, amount and check number of each check returned to the gaming licensee by the patron's bank and the reason for its return;

7. The outstanding balance after each transaction; and

8. The date, amount and check number of any checks which have been partially or completely written off by the gaming licensee and a brief explanation of the reason for such write off.

(l) A log of all Counter Checks issued and of all checks received for redemption, consolidation or substitution shall be prepared, manually or by computer, on a daily basis, by check cashiers and such log shall include, at a minimum, the following:

1. The balance of the checks on hand in the cashiers cage at the beginning of each shift;

2. For checks initially accepted and for checks received for consolidation, redemption, or substitution:

a. The date of the check;

b. The name of the drawer of the check;

c. The amount of the check;

d. The Counter Check serial number(s) for Counter Check(s) received; and

e. An indication as to whether the check was initially accepted or received in a redemption, consolidation or substitution.

3. For checks deposited, redeemed by patrons for cash, cash equivalents, complimentary cash gifts, gaming chips and plaques, or any combination thereof, consolidated or replaced:

a. The date on which the check was deposited, redeemed, consolidated or replaced;

b. The name of the drawer of the check;

c. The amount of the check;

d. The Counter Check serial number(s) for Counter Check(s) and Slot Counter Check(s) deposited, redeemed, consolidated or replaced; and

e. An indication as to whether the check was deposited, redeemed, consolidated or replaced.

4. The balance of the checks on hand in the cashiers' cage at the end of each shift.

(m) A list of all Counter Checks on hand, and of all checks received for redemption, consolidation or substitution shall be prepared, manually or by computer, on a monthly basis, at a minimum, and shall include the following:

1. The date of the check;

2. The name of the drawer of the check;

3. The amount of the check; and

4. The Counter Check serial number(s) for Counter Check(s) and received.

(n) At the end of each gaming day, at a minimum, the following procedures shall be performed:

1. The daily total of the amounts of checks initially recorded as described in 205 CMR 138.43(2)(l) shall be agreed to the daily total of Counter Checks issued;

2. The daily total of the checks indicated as deposited on a log required by 205 CMR 138.43(2)(l) shall be agreed by employees with no incompatible functions to the bank deposit slips corresponding to such check; and

3. The balance required by 205 CMR 138.43(2)(l) shall be agreed to the total of the checks on hand in the cashiers' cage.

(o) A patron may not be issued a Counter Check until the operator has established a signature file for the patron.

(3) A system of internal controls submitted by a gaming licensee in accordance with 205 CMR 138.02 shall include provisions for the maintenance of a patron identification file and the methodology the gaming licensee will utilize for verifying a patron's identity or signature for purposes of establishing a credit account which shall include, at a minimum, the following:

(a) The patron's name;

(b) The patron's address;

(c) The patron's signature;

(d) The type of identification credentials examined;

(e) The date and time that the patron identification file was established; and

(f) The name and signature of the gaming establishment employee who examined the identification credentials of the patron and established the patron identification file.

(4) The gaming licensee shall establish procedures for the organization and maintenance of data relative to the extension of credit, issuance of counter checks, and repayment of counter check for review upon request by the commission or its designee, and the Massachusetts Attorney General's Office. Such data shall include the following aggregated by month:

(a) Total credit applications filed;

(b) Total credit applications approved;

(c) Total credit applications denied;

(d) The amount of credit extended for each approved credit application;

(e) The mean amount of credit extended;

(f) Total credit increases approved;

(g) Total temporary credit increases approved;

(h) Total number of counter checks presented to banks;

(i) The amount of each counter check presented to a bank;

(j) Total number of uncollectable counter checks including amounts in accordance with 205 CMR 138.46(11); and

(k) Number of debt collection proceedings commenced, the state and county where the proceedings were commenced, and the zip codes of the patron's residences.