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