Enacted on June 29, 2018, House Bill 1388 established the requirement for combative sports promoters to have a $25,000 surety bond as part of the licensing process. The definition of a combative sports promoter is expanding so that it includes promoters of boxing, sparring, wrestling, kickboxing, full-contact karate, and mixed martial arts (MMA). As an alternative to posting a surety bond, applicants may submit an irrevocable letter of credit. The new law is effective on August 28, 2018, and the bond or letter of credit must be submitted to the Missouri Division of Professional Registration’s Office of Athletics.
Why do combative sports promoters need surety bonds?
Combative sports promoters must have a surety bond to guarantee they are paying all athletic taxes, license fees to the state, and expenses of contestants and officials. In Missouri, the bond requirement is established by Chapter 317 RSMo.
If a promoter fails to adhere to the terms of the surety bond, the bond entitles any harmed parties to make a claim against the bond as a means of receiving compensation for damages. If the promoter—also called the principal—does not repay the harmed parties, the surety company backing the bond will pay up to the full amount of the bond. However, sureties often times have principals sign indemnity agreements as a way of avoiding financial loss. In short, indemnity agreements are a way of transferring risk from one party to another. Once the claim is settled, the surety can look to the principal for reimbursement.
What is changing with the new law?
One of the most significant changes for Missouri combative sports promoters resulting from the enactment of HB 1388 is the inclusion of amateur kickboxing and amateur mixed martial arts (MMA) under contests regulated by the Division of Professional Regulation. The surety bond requirement for promoter licensing is also increasing substantially from $5,000 to $25,000.
Additional changes made by the new law include the requirement for participants of combative sports, aside from kickboxers, to be at least 18 years old and prohibiting MMA fighters from using knee strikes to the head for the first five bouts. After the fifth bout, both contestants are free to agree on whether to permit knee strikes to the head.
How much will a $25,000 combative sports promoter bond cost?
The cost of a $25,000 sports promoter bond varies based on the applicant because the bond is subject to underwriting, wherein an underwriter for the surety company reviews the individual application before providing a quote. For highly qualified applicants, many underwritten surety bonds are quoted at 1-3% of the total bond amount. So for a $25,000 combative sports promoter bond, an applicant in excellent financial standing would most likely be expected to pay between $250-$750 for their bond. Applicants the underwriter determines to be a higher risk are often quoted at a higher rate, and in some rare cases, the surety company may even choose not to write the bond. However, an outright denial can often be avoided by applying for a surety bond from a reputable surety provider with access to multiple markets, as they will be able to send the application to a variety of companies.
Have questions about surety bonds?
Contact the experts at SuretyBonds.com by calling 1 (800) 308-4358 or, if you’re ready to get bonded, submit a free, no-obligation quote request online.