New Jersey § 5:12-82

§ 5:12-82.

a. No casino shall operate unless all necessary licenses and approvals therefor have

been obtained in accordance with law. b. Only the following persons shall be eligible to hold a casino license; and, unless

otherwise determined by the commission with the concurrence of the Attorney General

which may not be unreasonably withheld in accordance with subsection c. of this section,

each of the following persons shall be required to hold a casino license prior to

the operation of a casino in the casino hotel with respect to which the casino license

has been applied for: (1) Any person who either owns an approved casino hotel or owns or has a contract

to purchase or construct a casino hotel which in the judgment of the commission can

become an approved casino hotel within 30 months or within such additional time period

as the commission may, upon a showing of good cause therefor, establish; (2) Any person who, whether as lessor or lessee, either leases an approved casino

hotel or leases or has an agreement to lease a casino hotel which in the judgment

of the commission can become an approved casino hotel within 30 months or within such

additional time period as the commission may, upon a showing of good cause therefor,

establish; (3) Any person who has a written agreement with a casino licensee or with an eligible

applicant for a casino license for the complete management of a casino and, if applicable,

any authorized games in a casino simulcasting facility; (4) Any other person who has control over either an approved casino hotel or the land

thereunder or the operation of a casino ; and (5) Any person who is an Internet gaming affiliate of an owner or operator of a licensed

casino, and such person is to own or operate an Internet gaming system for such licensed

casino . c. Prior to the operation of a casino and, if applicable, a casino simulcasting facility,

every agreement to lease an approved casino hotel or the land thereunder and every

agreement for the management of the casino and, if applicable, any authorized games

in a casino simulcasting facility, shall be in writing and filed with the commission

and the division. No such agreement shall be effective unless expressly approved by the commission. The commission may require that any such agreement include within its terms any

provision reasonably necessary to best accomplish the policies of this act. Consistent with the policies of this act: (1) The commission, with the concurrence of the Attorney General which may not be

unreasonably withheld, may determine that any person who does not have the ability

to exercise any significant control over either the approved casino hotel or the operation

of the casino contained therein shall not be eligible to hold or required to hold

a casino license; (2) The commission, with the concurrence of the Attorney General which may not be

unreasonably withheld, may determine that any owner, lessor or lessee of an approved

casino hotel or the land thereunder who does not own or lease a significant portion

of an approved casino hotel shall not be eligible to hold or required to hold a casino

license; (3) The commission shall require that any person or persons eligible to apply for

a casino license organize itself or themselves into such form or forms of business

association as the commission shall deem necessary or desirable in the circumstances

to carry out the policies of this act; (4) The commission may issue separate casino licenses to any persons eligible to apply

therefor; (5) As to agreements to lease an approved casino hotel or the land thereunder, unless

it expressly and by formal vote for good cause determines otherwise, the commission

shall require that each party thereto hold either a casino license or casino service

industry enterprise license and that such an agreement shall include within its terms

a buy-out provision conferring upon the casino licensee-lessee who controls the operation

of the approved casino hotel the absolute right to purchase for an expressly set forth

fixed sum the entire interest of the lessor or any person associated with the lessor

in the approved casino hotel or the land thereunder in the event that said lessor

or said person associated with the lessor is found by the commission or director,

as the case may be, to be unsuitable to be associated with a casino enterprise; (6) The commission shall not permit an agreement for the leasing of an approved casino

hotel or the land thereunder to provide for the payment of an interest, percentage

or share of money gambled at the casino or derived from casino gaming activity or

of revenues or profits of the casino unless the party receiving payment of such interest,

percentage or share is a party to the approved lease agreement; unless each party

to the lease agreement holds either a casino license or casino service industry enterprise

license, and includes within its terms a buy-out provision conforming to that described

in paragraph (5) above; (7) As to agreements for the management of a casino and, if applicable, the authorized

games in a casino simulcasting facility, the commission shall require that each party

thereto hold a casino license or a casino service industry enterprise license pursuant

to subsection a. of section 92 of P.L.1977, c. 110 ( C.5:12-92 ), that the party thereto who is to manage the casino gaming operations own at least

10% of all outstanding equity securities of any casino licensee or of any eligible

applicant for a casino license if the said licensee or applicant is a corporation

and the ownership of an equivalent interest in any casino licensee or in any eligible

applicant for a casino license if same is not a corporation, and that such an agreement

be for the complete management of all casino space in the casino hotel and, if applicable,

all authorized games in a casino simulcasting facility, provide for the sole and unrestricted

power to direct the casino gaming operations of the casino hotel which is the subject

of the agreement, and be for such a durational term as to assure reasonable continuity,

stability and independence in the management of the casino gaming operations, provided

that the provisions of this paragraph shall not apply to a slot system agreement between

a group of casino licensees and a casino service industry enterprise licensed pursuant

to subsection a. of section 92 of P.L.1977, c. 110 ( C.5:12-92 ), or an eligible applicant for such license, and that, with regard to such agreements,

the casino service industry enterprise licensee or applicant may operate and administer

the multi-casino progressive slot machine system, including, but not limited to, the

operation of a monitor room or the payment of progressive, including annuity, jackpots,

or both, and further provided that the obligation to pay a progressive jackpot or

establish an annuity jackpot guarantee shall be the sole responsibility of the casino

licensee or casino service industry enterprise licensee or applicant designated in

the slot system agreement and that no other party shall be jointly or severally liable

for the payment or funding of such jackpots or guarantees unless such liability is

specifically established in the slot system agreement; (8) The commission may permit an agreement for the management of a casino and, if

applicable, the authorized games in a casino simulcasting facility to provide for

the payment to the managing party of an interest, percentage or share of money gambled

at all authorized games or derived from casino gaming activity or of revenues or profits

of casino gaming operations; (9) Notwithstanding any other provision of P.L.1977, c. 110 ( C.5:12-1 et seq. ) to the contrary, the commission may permit an agreement between a casino licensee

and a casino service industry enterprise licensed pursuant to the provisions of subsection

a. of section 92 of P.L.1977, c. 110 ( C.5:12-92 ) for the conduct of casino simulcasting in a simulcasting facility or for the operation

of a multi-casino progressive slot machine system, to provide for the payment to the

casino service industry enterprise of an interest, percentage or share of the money

derived from the casino licensee's share of proceeds from simulcast wagering activity

or the operation of a multi-casino progressive slot machine system; and (10) As to agreements to lease an approved casino hotel or the land thereunder, agreements

to jointly own an approved casino hotel or the land thereunder and agreements for

the management of casino gaming operations or for the conduct of casino simulcasting

in a simulcasting facility, the commission shall require that each party thereto,

except for a banking or other chartered or licensed lending institution or any subsidiary

thereof, or any chartered or licensed life insurance company or property and casualty

insurance company, or the State of New Jersey or any political subdivision thereof

or any agency or instrumentality of the State or any political subdivision thereof,

shall be jointly and severally liable for all acts, omissions and violations of this

act by any party thereto regardless of actual knowledge of such act, omission or violation

and notwithstanding any provision in such agreement to the contrary. Notwithstanding the foregoing, nothing in this paragraph shall require a casino

licensee to be jointly and severally liable for any acts, omissions or violations

of this act, P.L.1977, c. 110 ( C.5:12-1 et seq. ), committed by any casino service industry enterprise licensee or applicant performing

as a slot system operator pursuant to a slot system agreement. d. No corporation shall be eligible to apply for a casino license unless: (1) The corporation shall be incorporated in the State of New Jersey, although such

corporation may be a wholly or partially owned subsidiary of a corporation which is

organized pursuant to the laws of another state of the United States or of a foreign

country; (2) The corporation shall maintain an office of the corporation in the casino hotel

licensed or to be licensed; (3) The corporation shall comply with all the requirements of the laws of the State

of New Jersey pertaining to corporations; (4) The corporation shall maintain a ledger in the principal office of the corporation

in New Jersey which shall at all times reflect the current ownership of every class

of security issued by the corporation and shall be available for inspection by the

commission or the division and authorized agents of the commission and the division

at all reasonable times without notice; (5) The corporation shall maintain all operating accounts required by the commission

in a bank in New Jersey, except that a casino licensee may establish deposit-only

accounts in any jurisdiction in order to obtain payment of any check described in

section 101 of P.L.1977, c. 110 ( C.5:12-101 ); (6) The corporation shall include among the purposes stated in its certificate of

incorporation the conduct of casino gaming and provide that the certificate of incorporation

includes all provisions required by this act; (7) The corporation, if it is not a publicly traded corporation, shall file with the

division and the commission such adopted corporate charter provisions as may be necessary

to establish the right of the commission pursuant to subsection a. of section 105

of P.L.1977, c. 110 ( C.5:12-105 ) to disapprove transfers of securities, shares, and other interests in the applicant

corporation; and, if it is a publicly traded corporation, provide in its corporate

charter that any securities of such corporation are held subject to the condition

that if a holder thereof is found to be disqualified pursuant to the provisions of

this act, such holder shall dispose of his interest in the corporation; provided,

however, that, notwithstanding the provisions of N.J.S.14A:7-12 and N.J.S.12A:8-101 et seq. , nothing herein shall be deemed to require that any security of such corporation

bear any legend to this effect; (8) The corporation, if it is not a publicly traded corporation, shall establish to

the satisfaction of the division that appropriate charter provisions create the absolute

right of such non-publicly traded corporations and companies to repurchase at the

market price or the purchase price, whichever is the lesser, any security, share or

other interest in the corporation in the event that the commission disapproves a transfer

in accordance with the provisions of this act; (9) Any publicly traded holding, intermediary, or subsidiary company of the corporation,

whether the corporation is publicly traded or not, shall contain in its corporate

charter the same provisions required under paragraph (7) for a publicly traded corporation

to be eligible to apply for a casino license; and (10) Any non-publicly traded holding, intermediary or subsidiary company of the corporation,

whether the corporation is publicly traded or not, shall establish to the satisfaction

of the commission that its charter provisions are the same as those required under

paragraphs (7) and (8) for a non-publicly traded corporation to be eligible to apply

for a casino license. The provisions of this subsection shall apply with the same force and effect with

regard to casino license applicants and casino licensees which have a legal existence

that is other than corporate to the extent which is appropriate. e. No person shall be issued or be the holder of a casino license if the issuance

or the holding results in undue economic concentration in Atlantic City casino operations

by that person. For the purpose of this subsection, “ undue economic concentration ” means that a person would have such actual or potential domination of the casino

gaming market in Atlantic City as to substantially impede or suppress competition

among casino licensees or adversely impact the economic stability of the casino industry

in Atlantic City. In determining whether the issuance or holding of a casino license by a person will

result in undue economic concentration, the commission shall consider the following

criteria: (1) The percentage share of the market presently controlled by the person in each

of the following categories: The total number of licensed casinos in this State; Total casino and casino simulcasting facility square footage; Number of guest rooms; Number of slot machines; Number of table games; Net revenue; Table game win; Slot machine win; Table game drop; Slot machine drop; and Number of persons employed by the casino hotel; (2) The estimated increase in the market shares in the categories in (1) above if

the person is issued or permitted to hold the casino license; (3) The relative position of other persons who hold casino licenses, as evidenced

by the market shares of each such person in the categories in (1) above; (4) The current and projected financial condition of the casino industry; (5) Current market conditions, including level of competition, consumer demand, market

concentration, any consolidation trends in the industry and any other relevant characteristics

of the market; (6) Whether the licensed casinos held or to be held by the person have separate organizational

structures or other independent obligations; (7) The potential impact of licensure on the projected future growth and development

of the casino industry and Atlantic City; (8) The barriers to entry into the casino industry, including the licensure requirements

of this act, P.L.1977, c. 110 ( C.5:12-1 et seq. ), and whether the issuance or holding of a casino license by the person will operate

as a barrier to new companies and individuals desiring to enter the market; (9) Whether the issuance or holding of the license by the person will adversely impact

on consumer interests, or whether such issuance or holding is likely to result in

enhancing the quality and customer appeal of products and services offered by casino

licensees in order to maintain or increase their respective market shares; (10) Whether a restriction on the issuance or holding of an additional license by

the person is necessary in order to encourage and preserve competition and to prevent

undue economic concentration in casino operations; and (11) Any other evidence deemed relevant by the commission. The commission shall, after conducting public hearings thereon, promulgate rules and

regulations in accordance with the “Administrative Procedure Act,” P.L.1968, c. 410

( C.52:14B-1 et seq. ) defining any additional criteria the commission will use in determining what constitutes

undue economic concentration. For the purpose of this subsection a person shall be considered the holder of a casino

license if such license is issued to such person or if such license is held by any

holding, intermediary or subsidiary company thereof, or by any person required to

be qualified in conjunction with such casino license.