Section 69.5-01-11-03 - Licensing service providers and totalizator companies1. Service providers and totalizator companies must be licensed by the commission and approved by the attorney general.2. Before the commission may grant such license, it shall review and approve the services to be provided by the applicant. The applicant shall submit such information as required by the commission which must include, but not be limited to: a. The services and equipment to be provided.b. Projected revenue and costs associated with the operations of the applicant.c. A complete financial statement demonstrating adequate capitalization to maintain the intended services.d. A description of the management or management groups responsible for the operation of the service provider or totalizator company, including a list of all officers, directors, partners, and shareholders with a five percent or greater share of ownership or beneficial interest in the service provider or totalizator company.e. A complete description of the transmission, totalizator, and data processing equipment to be used.f. A history of the company demonstrating the experience and technical knowledge necessary to supply the intended services.g. Written agreements between the applicant and all parties assisting in providing services.h. A description of the security measures to be used to protect the propriety of the signal and the integrity of the wagering process.i. The system of accounts to be utilized in the collection and distribution of revenues directly or indirectly related to the operation and the combined pari-mutuel pool.j. A detailed statement demonstrating individual and corporate conduct, ability, and reputation of the applicant and supervisory personnel.k. A complete list of licenses held by the applicant, the thoroughbred racing association codes associated with such licenses where applicable and the websites to which the licenses and thoroughbred racing association codes apply.l. A description of the processes and procedures implemented in conjunction with tracks and other industry stakeholders to address possible odds manipulation through placing large bets on small pools, the cancellation of wagers, and other methods.m. The commission may require an audit of the applicant at the expense of the applicant.n. The commission may require totalizator companies to provide documentation of third-party compliance and testing within two years of application.o. The commission may require a background investigation of the applicant to be conducted by the thoroughbred racing protective bureau or another entity approved by the commission, the scope of which is at the sole discretion of the commission. The applicant is responsible for all costs associated with conducting the background check.3. The commission may license one or more service providers or totalizator companies concurrently to provide services, as defined by this chapter, to one or more licensed site operators within the state. Fees for such license shall be as prescribed by the commission. Licenses will be for a term of one calendar year. The commission may establish license fees separately for first-time applicants and for renewal of existing licenses in order to recognize additional costs of investigation and analysis required for first-time licenses.4. Each applicant for a service provider license shall give a bond or letter of credit payable to this state with good security as approved by the commission. The bond or letter of credit must be in the amount the commission determines will adequately protect the amount normally due and owing to this state in a regular payment period or, in the case of new or altered conditions, based on the projected revenues.N.D. Admin Code 69.5-01-11-03
Effective March 1, 1990; amended effective August 1, 2007; July 1, 2011.Amended by Administrative Rules Supplement 2016-360, April 2016, effective 4/1/2016.General Authority: NDCC 53-06.2-05
Law Implemented: NDCC 53-06.2-05, 53-06.2-08, 53-06.2-10.1, 53-06.2-14