NYBL 640May 10, 2011
Re: Money Transmitter License
Your inquiry to the New York State Banking Department ("the Department), requesting an opinion as to whether [---] ("GCA") is required to obtain a money transmitter license in New York State in order to provide cash access to patrons at gaming establishments on both tribal and non-tribal lands (each, a "Casino"), has been referred to me for response.
In your letter you explain the process by which the casino patron can conduct a transaction to access cash while at the casino using the patron's credit or debit card and GCA's system. The process, as you explain in "Confidential Exhibit A" attached to your letter, appears to be indistinguishable to the process described in an earlier opinion letter issued by the Department dated August 16, 2005. (see enclosed opinion). As explained in the August 16, 2005 opinion, Banking Law Section 641(1) provides that ".... no person shall engage in the business of selling or issuing (emphasis added) checks, or engage in the business of receiving money for transmission or transmitting the same, without a license therefor obtained from the superintendent....". As defined in Section 640 of the Banking Law, a "check" means any check, draft, travelers check, money order or other instrument for the transmission or payment of money. The actions, as you described, would require a license under Article 13-B of the Banking Law. It is the act of issuing the drafts that triggers the need to be licensed.
You also requested in your letter that, in the event the Department determines that a money transmitter license is required, the Department issue an opinion for an alternative process that you described in your letter whereby GCA has an arrangement with [---] ("PDNB") in which GCA acts as an independent contractor of PDNB and the negotiable instruments are issued by PDNB for GCA. It appears that, in this situation, GCA would still be required to be licensed as a money transmitter.
However, without more detail as to the relationship between GCA and PDNB, the contracts and agreements in place, description of the flow of funds and other information, I am unable to provide an opinion on this. If you wish to contact me to discuss this further, please call me.
Very truly yours,
John B. Sullivan