Changing Ownership Structures: Corporate Investigations

A.G. Burnett, Esq.

Deputy Chief, Corporate Securities

Nevada Gaming Control Board

General Nevada Process

Public vs. Private Companies: Licensure of individuals / controllers, etc.

Investigations Division / Corporate Securities Division: Who does what Technology Issues in 2009

Orders of Registration for the PTC Compliance Plans

Private Equity Model

Private Equity: Limited Partnerships that invest the money of others (institutions, retirement funds, high net-worth investors); GPs are the fund managers, LPs are the investors. Funds typically have a set lifespan of over 3 years.

Licensing of all GPs and knowledge of, possible applications filed by, LPs at GCB’s selection

Why go Private? No More SEC requirements (for some companies) No More struggle to meet quarterly, yearly market

and shareholder demands Higher debt structure but possible higher returns on

investment for LPs

Private Equity, Continued

In Nevada, PE firms have to be “Form 10” PTCs; therefore, some form of independent auditing will still be required for firms

This model is now being proposed in instances where there is no PE Fund

How to investigate? Compliance Issues

Bankruptcies: Another Change

Current financial landscape is bleak, companies with heavy debt loads are facing difficult decisions

Chapter 11 Reorganizations: What goes in does not always come out (looking the same)

Chapter 7 issues Trustees, Receivors, etc.—Licensees?

Regulating the Worldwide Gaming Operator

Macau – A Good Example This jurisdiction sitting next to Mainland

China stands to be largest gaming market in the world

Junket Operators VIP rooms Compliance Programs for the foreign

gaming company

Japan Thinking of legalizing gaming This could revolutionize the pachinko /

pachislot market

Singapore Newly legalized and highly regulated

jurisdiction Sands is only entrant at this point

COMPLIANCE ISSUES

GCB still heavily relies on compliance committees and those who advise them, especially in foreign jurisdictions (in tandem with foreign gaming reporting requirements).

Compliance Committees will still be required for PE firms that own gaming companies