Expert: Timmy Chou - 11/1/2004

Question
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Followup To
Question -
Im not sure if this question should be directed to you but,im trying to get some information on the gereal laws in my state regarding this matter. ok,IM hoping to startup a business where i hold gaming tournaments locally and statewide for those who are interested. What besides for the business liscence would i need to get started? Should I apply for a tax ID number? How can I be completly legetimate in the eyes of the law while not having the irs or other members of the law breathing down my neck telling me that my businss doesnt have all liscenes and fees completed in order to run  withing the state guidelines? I am hoping to have this achieved in Maryland. Thanks in advance for any help or recommendations.
Answer -
Thank you for your question!

Mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to assist the parties in solving dilemmas.

I am not an attorney and can only respond to your question from my business consulting experience.  

Your question is very broad and there are a host of issues that you will need to address as you develop your business.  Gaming is one of the most heavily regulated and licensed industries out there and you will surely need to make sure you have complied with proper requirements--none of which I am acquainted with in Maryland.   You will likely need at minimum:

State registration (corporation, partnership, etc.)
Local (city, county) business license
Special state gaming license
Federal tax ID
State tax ID
State sales tax ID
Other employer's municipal IDs
Insurance
Bank accounts
Merchant accounts (if using V/MC)

You may wish to hire an attorney or consultant to advise you about business structure.  An accountant could help you set up an accounting system.  These structures will be important.  Most gaming operations also are required to follow strict accounting and recognition rules and report to a regulatory agency often--if not allow insopections or auditing of your records.  Do this right the first time and avoid getting on the "trouble" list.

These are some ideas.  Feel free to follow up with additional questions.

The pros and cons of the types of dispute resolution methods follows.

GOOD LUCK!

Arbitration, Mediation, and Litigation

Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system

Benefits of Arbitration:

    Confidential, no public record
    Limited exchange of documentation, information
    Quick, don't have to wait for a court date
    Arbitrators have expertise in the subject matter and are trained in conflict resolution
    Cheaper than litigation
    Preserves business relationships

Negatives of Arbitration

    It's a compromise, no %100 winner
    Complex arbitration can be costly
    If not satisfied, may litigate the arbitration procedure
    Poor results with an unskilled arbitrator
    Both parties must agree to cooperate in the process

Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.

Benefits of Mediation:

    Neutral mediator can objectively suggest alternatives not considered before
    Parties are directly engaged in negotiating the settlement
    Can be quicker than litigation
    Less costly than litigation
    Preserves business relationships
    85% of American Arbitration Association cases mediated find successful solutions

Negatives of Mediation

    may not reach a binding decision
    unskilled mediator

Litigation: using the judicial system to resolve disputes

Benefits of litigation:

    a clear winner and loser
    uses a prescribed set of procedures
    more predictable outcomes
    is final

Negatives of Litigation:

    waiting for court dates can do more harm
    usually more expensive than mediation and arbitration
    part of the public record





Thanks for the information. I know about mediation as I have had personal experience with one. However I sent this question out to a few experts on the site none of there descriptions meeting the questions requirements but I sent it out anyway expecting that Id get some response just as I did.
Im hopnig you can be a little more specific when you say this
"Most gaming operations also are required to follow strict accounting and recognition rules and report to a regulatory agency often--if not allow insopections or auditing of your records."
If you ned me to be more specific about the bnusiness i can be but local video game tournaments is basically the idea. Thanks again.

Answer
Typically any gaming activity, because it has such potential for abuse, will require very strict licensure and compliance oversight.  I have no experience with the specifics, but just like health care, law, banking, etc., gaming is highly regulated (and taxed).  Usually the license applicant must meet numerous tests in order to get a license: financial stability, background checks, adequate credit, experience or training, proper business registration, and others.  I have no understanding of Maryland regulatory code.  Sorry.