7 Licenses to Be Auctioned
Thursday, May 23, 2019
MTA ALERT 7 Licenses Are Being Auctioned
by John Iverson, MTA Government Affairs Consultant
Prior to 2017 licenses issued into quota areas near their limit were issued via a lottery process. HB 2 of the 2017 Special Legislative Session converted the liquor license lottery to a liquor license auction sale. In the recent 2019 Regular Legislative Session HB 35 further clarified how these sales would work. While the Department of Revenue was working through the issues and adopting rules in 2018, licenses that would have previously been awarded via the lottery began to accumulate.
Now everything is in place and the Department is beginning to announce auctions. The Competitive Bidding Process lets people and businesses bid on the opportunity to apply for an available license. The highest bidder meeting all requirements is allowed to apply for the license.
Anyone who wishes to apply must submit their bid through My Revenue.
All bids must include:
- A $100 processing fee plus any possible payment processing fees, and
- An Irrevocable Letter of Credit (ILOC) from a financial institution:
- For the exact same name as the bidder on the electronic form;
- Equal to or greater than the bid amount; and
- Good for one year after the competitive bid deadline if bid is won.
The minimum bid is set at 75% of the market value of the license compared to licenses with the same type and privileges sold in the quota area or a similar area. There are 7 auctions that have just been announced, that will close on June 26th, take a look at them here.
One point that may be important to note, licenses issued via this process lose their gaming privilege; so they may not have any gaming machines and will not be allowed to offer sports betting.
I expect once this auction of these 7 licenses is complete, it won’t be too long before we see another auction announced.