1. Arizona Department of Gaming Our Mission Statement Protect the Public, Ensure Compliance with the Gaming Compacts, and Regulate the Gaming Industry.

2. Gaming Vendor Certification Gaming Vendor Certification Mission Statement We determine suitability of gaming vendors in order to protect the public, ensure compliance with gaming compacts, and regulate the gaming industry.

3. Topics Covered Who we certify Who we certify Who is the applicant Who is the applicant Process we use Process we use Background Investigation Background Investigation Financial Investigation Financial Investigation Company Company Key Personnel Key Personnel International Investigations International Investigations

4. Application review is basis for what we do

5. Who We Certify Management Contractor Financiers Manufacturers of Gaming Devices Distributors of Gaming Devices Provider of Other Gaming Related Equipment Other Key Suppliers who are ancillary to Gaming, if exceeds $10,000/month Providers of Goods or Services not mentioned above and exceeds $10,000/month

6. Provider of Other Gaming Related Equipment Poker & Blackjack Equipment and Gaming Supplies Poker & Blackjack Equipment and Gaming Supplies Playing Cards Playing Cards Gaming Chips Gaming Chips Keno Equipment Keno Equipment Card Shufflers Card Shufflers Intellectual Property Intellectual Property Ticket Redemption Kiosks – tap into slot accounting Ticket Redemption Kiosks – tap into slot accounting Off Track Betting Off Track Betting Bill Validators, if selling directly to casino Bill Validators, if selling directly to casino

7. Other Key Suppliers who are ancillary to Gaming, if exceeds $10,000/month Surveillance & Security Surveillance & Security Currency/Coin Counters Currency/Coin Counters Architectural Services Architectural Services Check Cashing Check Cashing Independent Gaming Testing Lab Independent Gaming Testing Lab Money Carts Money Carts

8. Providers of Goods or Services not mentioned above and exceeds $10,000/month Entertainment Entertainment Printing Printing Uniforms Uniforms Marketing Marketing General Contractor General Contractor Computer Equipment Computer Equipment Office Supplies Office Supplies Etc. Etc.

9. Who is the Applicant “Follow the Money” “Follow the Money” “Off the Organizational Chart” “Off the Organizational Chart” Company Principles Company Principles

10. “Follow the Money” Hidden Ownership or Control Hidden Ownership or Control Equity Owners Equity Owners Debt Owners Debt Owners Creditors Creditors Lenders Lenders Parents Parents Interlocking Board of Directors Interlocking Board of Directors

11. “Off the Organizational Chart” Key Personnel Key Personnel Consultants and Others Consultants and Others Financial and Technical Expertise Financial and Technical Expertise

12. Key Personnel A key person is anyone who can control or substantially influence the behavior of the applicant Owners Owners Directors Directors Officers Officers Major Stockholders Major Stockholders Lenders Lenders Managers of critical operations Managers of critical operations Key technical personnel Key technical personnel Critical consultants or suppliers Critical consultants or suppliers

13. How We Do It Process begins once a completed application and required fee are received Process begins once a completed application and required fee are received Scope Scope Background Investigation Background Investigation Financial Investigation Financial Investigation

14. Scope Management Contractors, Financiers, Manufacturers/Distributors of Gaming Devices, Providers of Gaming Related Equipment Management Contractors, Financiers, Manufacturers/Distributors of Gaming Devices, Providers of Gaming Related Equipment Background Investigation / Extensive Financial Investigation Background Investigation / Extensive Financial Investigation Team of Peace Officer & Financial Investigator Team of Peace Officer & Financial Investigator Travel to Vendor site / Possibly Vendor’s Accountants and/or Auditor Travel to Vendor site / Possibly Vendor’s Accountants and/or Auditor

15. Scope (Continued) Other Key Suppliers Who are ancillary to Gaming, if exceeds $10,000/month Other Key Suppliers Who are ancillary to Gaming, if exceeds $10,000/month Background Investigation / Financial Investigation Background Investigation / Financial Investigation Team of Peace Officer & Financial Investigator Team of Peace Officer & Financial Investigator Travel to Vendor site / Possibly Vendor’s Accountants and/or Auditor Travel to Vendor site / Possibly Vendor’s Accountants and/or Auditor

16. Scope (Continued) Providers of Goods or Services not Mentioned Prior and Exceed $10,000/month Providers of Goods or Services not Mentioned Prior and Exceed $10,000/month Background Investigation / Financial Review Background Investigation / Financial Review One Investigator does both background and financial review One Investigator does both background and financial review Entire investigation conducted from office – over the phone Entire investigation conducted from office – over the phone

17. Travel to Vendor Face to Face interview Face to Face interview Immediate access to supporting documents Immediate access to supporting documents Observe workplace Observe workplace Tour operation or warehouse Tour operation or warehouse Meet with independent auditors Meet with independent auditors

18. Background Investigation Company Company Review of litigation for involvement with unsuitable element Review of litigation for involvement with unsuitable element Inquires of jurisdictions where applicant is licensed (including foreign) Inquires of jurisdictions where applicant is licensed (including foreign) Arizona Corporation Commission Check Arizona Corporation Commission Check Better Business Bureau inquiry Better Business Bureau inquiry Johnson Act Compliance Verification Johnson Act Compliance Verification Independent gaming test laboratory approval Independent gaming test laboratory approval

19. Background Investigation Key Personnel Criminal History Check Criminal History Check Inquiries of Jurisdictions where Key Person has worked, lived and has been licensed Inquiries of Jurisdictions where Key Person has worked, lived and has been licensed Accurint Accurint Compare to addresses listed on application – work and home Compare to addresses listed on application – work and home Review arrests or legal entries Review arrests or legal entries Review affiliations or family connections Review affiliations or family connections Review for aliases Review for aliases

20. Key Personnel (Continued) Face to Face Interview Face to Face Interview Submit Fingerprints to FBI Submit Fingerprints to FBI Submit Fingerprints to Arizona Department of Public Safety Submit Fingerprints to Arizona Department of Public Safety

21. Financial Investigation Company Company Company Credit Check Company Credit Check Review Federal and State Tax Returns Review Federal and State Tax Returns Compare tax returns to Federal & Arizona State tax transcripts Compare tax returns to Federal & Arizona State tax transcripts Review SEC Filings - EDGAR Review SEC Filings - EDGAR Review list of Shareholders Review list of Shareholders Review Articles of Incorporation & By-laws Review Articles of Incorporation & By-laws

22. Financial Investigation (Continued) Company – Continued Company – Continued Arizona Corporation Commission information ties to application Arizona Corporation Commission information ties to application Annual Reports / Financial Statements Annual Reports / Financial Statements Corporate Minutes – Board/Audit Committee Minutes Corporate Minutes – Board/Audit Committee Minutes Proxy Statements Proxy Statements Trial Balance Trial Balance

23. Financial Investigation (Continued) Company – Continued Company – Continued Accounts Receivable & Accounts Payable – Review for unusual terms Accounts Receivable & Accounts Payable – Review for unusual terms UCC Filings UCC Filings Customer List – Unsuitable Entities Customer List – Unsuitable Entities Lease / Sales Agreements - Review for unusual terms Lease / Sales Agreements - Review for unusual terms Litigation for financial impact Litigation for financial impact Cash Flow Projection Cash Flow Projection Source of initial capitalization Source of initial capitalization

24. Financial Investigation (Continued) Company – Continued Company – Continued External Auditor Workpapers External Auditor Workpapers Cash Review if no external auditor Cash Review if no external auditor

25. External Auditor Management Representation Letter Management Representation Letter Engagement Letter Engagement Letter Auditor’s Report on Internal Controls Auditor’s Report on Internal Controls Auditor Fees Auditor Fees Legal Representative Letters Legal Representative Letters Review sample of workpapers Review sample of workpapers Report to owners Report to owners

26. Cash Review Obtain company bank statements Obtain company bank statements Select sample of cash receipts and disbursements Select sample of cash receipts and disbursements For Receipts For Receipts Confirm total of all checks matches deposit slip Confirm total of all checks matches deposit slip Match check to invoice Match check to invoice For disbursements For disbursements Vendor name on invoice agrees with check Vendor name on invoice agrees with check Confirm item paid for is appropriate Confirm item paid for is appropriate

27. Financial Investigation Key Personnel Key Personnel Credit Check Key Personnel Credit Check Review Federal & State Tax Returns Review Federal & State Tax Returns Foreign Earnings Foreign Earnings Securities – Selling & Buying Securities – Selling & Buying Business Investments Business Investments Compare tax returns to Federal & Arizona State tax transcripts Compare tax returns to Federal & Arizona State tax transcripts Review personal balance sheet Review personal balance sheet

28. Key Personnel (Continued) Review Bank Statements Review Bank Statements Face to Face Interview Face to Face Interview Accurint Accurint

29. Accurint Property owned Property owned Previous owner Previous owner Market Value Market Value Purchase price Purchase price Bankruptcies Bankruptcies UCC Filings UCC Filings Tax Liens Tax Liens Recreational Vehicles Recreational Vehicles

30. International Investigations Make Contact with the U.S. Embassy Make Contact with the U.S. Embassy To gain intelligence on the company To gain intelligence on the company Advice on translators, consultants and accountants Advice on translators, consultants and accountants Set up appointment with detailed itinerary of what we want to see Set up appointment with detailed itinerary of what we want to see Meet with national and local constabulary Meet with national and local constabulary Contact Interpol Contact Interpol

31. International Investigations (Continued) Carry fingerprint kit – difficult to obtain fingerprints in some countries Carry fingerprint kit – difficult to obtain fingerprints in some countries Contract with independent interpreter Contract with independent interpreter Contract with independent accountant, tax advisor, and lawyer familiar with national and local customs Contract with independent accountant, tax advisor, and lawyer familiar with national and local customs Contact where have applied for license Contact where have applied for license If possible coordinate visit with other jurisdictions to share information If possible coordinate visit with other jurisdictions to share information

32. Questions or Comments?