Gaming Industry Matters

Do any of your officers or management employees have incidents in their background that, if undetected prior to your formal license application, could remove your company from consideration as a building contractor or supplier to the Detroit Casino Industry?

In many instances, you may not know. Engaging a private investigative firm, such as Research North, Inc., may provide you the thorough employee background information and the time you need to avoid disqualification and potential financial losses. For, if you fail to obtain this information prior to the submission of your formal application, the following scenario could occur:

In anticipation of participation in the lucrative Detroit Casino Industry you incur significant startup costs. Depending upon the nature of your business these costs might include new tools and equipment, vehicles, buildings, computer systems and the costs associated with locating, hiring and training new employees. You are confident that you will recoup these outlays because you are experienced and know your ability to compete in the Detroit market.

You are well acquainted with your officers, directors and most of your management employees as they have been with you long enough to become as familiar as family members. While you don't know your newer managers as well, they appear to have solid backgrounds and seemed to measure up to your high ethical standards when you hired them. Based on your confidence in your employees you move ahead with the Michigan Gaming Control Board applications required for your specialty.

The Michigan Gaming Control Board is predictably deluged with various kinds of applications and background questionnaires, resulting in lengthy delays in completing many of the required background investigations. After several months, and nearing your point of entry in the construction activity or other supply process, a State of Michigan investigator finds that one of your managers was convicted of a misdemeanor involving his mere presence in a place where gambling was being conducted illegally. Because the incident took place many years before and in another state, the employee chose not to disclose it, thinking it was too remote to be found and disclosure might result in loss of his job.

As a result of this finding by the Michigan Gaming Control Board, you and your company are disqualified as vendors to the Detroit Casino Industry. Because the starting point for your activity is at hand, you are simply replaced by a competing vendor and you are no longer a participant in the initial building and supply of the three Detroit Casinos. All of your startup costs are lost and, depending upon the extent of your diversification and financial health, you are headed for severe financial losses, perhaps even bankruptcy.

There are a number of prohibited acts that will automatically make your company ineligible to be a Detroit Casino Industry supplier. These include the following:

A felony conviction under federal law or the laws of any state. There is no limit on the age of such convictions.
A misdemeanor conviction involving gambling, theft, fraud or dishonesty in any state or pursuant to any local ordinance that corresponds to a misdemeanor in that state. Again, there is no limit on the age of such convictions.
The application submitted to the Michigan Gaming Control Board contains false information.
The applicant is judged to lack suitability as to integrity, moral character, and reputation; personal and business probity; financial ability and experience; and responsibility.

The following criteria are also to be considered in granting supplier's licenses:

Indictments and arrests not involving convictions and convictions that have been expunged, pardoned or reversed on appeal.
The filing of bankruptcy or other formal process to delay or work out the payment of debt.
Federal, state or local taxes delinquent for one or more years.
A history of noncompliance with regulatory requirements.
A history of noncompliance with casino licensing requirements in any jurisdiction.
A reputation that would undermine the public's confidence in the gaming industry if the license were awarded.

As you can see, the potential traps in the licensing process are numerous. In order to protect your right to participate in the Detroit Casino Industry and protect your additional investment in your company, you may elect to employ a private investigator to detect any problem areas prior to the submission of your formal application. If a management employee is determined to have a disqualifying problem, you and your legal counsel will have an opportunity to remove the employee from the covered position prior to submitting your application.

Research North, Inc. (RNI) a private investigative firm with 30 investigators in the States of Michigan, Wisconsin and Ohio was established in 1981. RNI is headed by Charles Rettstadt, a former Special Agent with the Organized Crime Division of the Michigan Attorney General's Office. Prior to forming RNI, Mr. Rettstadt worked extensively with gaming law violations. The gaming division of RNI is overseen by Craig Woodhouse, formerly Special Agent In Charge of the U.S. Department of Labor's Office of Labor Racketeering. In his former position, Woodhouse was a member of a Federal Task Force that assisted Michigan authorities in drafting the current gaming law and regulations. Both Mr. Rettstadt and Mr. Woodhouse are known and respected by State Government Officials.

For more information about gaming in Michigan and to review recent issues of The Michigan Gaming Laws Newsletter, go to the website of Regulatory Management Counselors, P.C. www.rmclegal.com