Code of Massachusetts Regulations › 205 CMR - MASSACHUSETTS GAMING COMMISSION › Title 205 CMR 239.00 - Continuing Disclosure and Reporting Obligations of Sports Wagering Licensees › Section 239.06 - Annual Audit and Other Reports

Current through Register 1525, July 5, 2024
(1) On an annual
			 basis an Operator shall, at its own expense, cause an audit to be prepared by
			 an independent certified public accountant of its financial statements relevant
			 to the operation of its Massachusetts Sports Wagering Operations. The Operator
			 may satisfy this requirement by submission of the audit of the consolidated
			 financial statement, including applicable notes, of the Operator's holding
			 company or intermediary company provided that such audit is accompanied by a
			 supplemental information, appendix, or other financial information section
			 specific to the Operator which includes an audited financial statement
			 containing, at a minimum, a balance sheet, income statement, and a statement of
			 cash flows for the Operator. In either event, the independent certified public
			 accountant shall attest to the financial condition of the Operator, disclose
			 whether the accounts, records and control procedures examined are maintained by
			 the Operator as required by M.G.L. c. 23N and 205 CMR, and opine as to whether
			 there are material weaknesses in the Operator's system of internal
			 controls.
(2) In the event that the
			 audit makes recommendations to improve the system of internal controls, or to
			 increase the Operator's level of compliance, the Operator's Chief Financial
			 Officer shall respond, in writing, to the recommendations of the independent
			 certified public accountant and provide the Commission with a copy of its
			 response.
(3) To ensure the
			 independence of the annual audit, at least every five years an Operator, whose
			 holding company or intermediary company is not publicly traded, shall rotate
			 the lead (or coordinating) audit partner having primary responsibility for the
			 audit, and the audit partner responsible for reviewing the audit. For an
			 Operator, whose holding company or intermediary company is publicly traded,
			 lead (or coordinating) audit partner rotation shall comply with the
			 requirements of federal law, including the requirements of the United States
			 Securities and Exchange Commission and/or the Public Company Accounting
			 Oversight Board.
(3) In the event
			 the annual audited financial statements differ from financial statements
			 maintained by the Operator throughout the year, the Operator shall provide a
			 summary of these differences as part of the annual audit.
(4) The annual audit and associated
			 statements required in accordance with
			 205
			 CMR 239.06(1)  shall be
			 filed with the Commission within three months following the end of the quarter
			 following the end of the Operator's fiscal year.
(5) In cases where an Operator's parent or
			 holding company is not publicly traded, in the event the Operator's independent
			 certified public accountant shall resign or be removed as the Operator's
			 principal accountant or auditor, the Operator shall submit a written report to
			 the Commission within 20 days of such resignation or removal, signed by its
			 Chief Financial Officer and Chair of its Audit Committee, outlining the cause
			 or nature of the resignation or removal, stating whether the resignation or
			 removal was related to material differences between the parties as to financial
			 statement presentation issues, disclosures, or the adequacy of the Operator's
			 system of internal accounting control and, if so, a complete and detailed
			 description of the differences for consideration by the Commission. The
			 Operator shall submit as an exhibit to this report a letter from the former
			 independent certified public accountant stating whether they agree with the
			 statements made by the Operator in the report submitted to the
			 Commission.
(6) In cases where an
			 Operator's parent or holding company is publicly traded, the Operator shall
			 file with the Commission copies of such information and documents as are
			 required to be filed with the United States Securities and Exchange Commission
			 and/or the Public Company Accounting Oversight Board upon the resignation or
			 removal of the publicly traded holding company's independent certified public
			 accountant.
(7) To the extent
			 possible, any adjustments resulting from the annual audit required in
			 accordance with
			 205
			 CMR 239.06 shall be recorded in the
			 accounting records of the year to which the adjustment relates. In the event
			 the adjustments were not reflected in the Operator's quarterly report for the
			 fourth quarter and the Commission concludes the adjustments are significant, a
			 revised quarterly report for the fourth quarter may be required from the
			 Operator. The revised filing shall be due within 30 calendar days after
			 notification to the Operator, unless an extension is granted by the
			 Commission.