There is an inherent physical risk assumed when it comes to boxing, kickboxing, karate and other full-contact sports. The State of Missouri has passed new regulations ensuring the financial risk aspect of the industry is also being addressed. Effective as of August 2018, Missouri House Bill 1388 requires all promoters of such physical contact sports to post a $25,000 license bond or irrevocable letter of credit with the Missouri Division of Professional Registration’s Office of Athletics to guarantee the payment of all state athletic taxes and fees to the State of Missouri, as well as the contestants and officials’ expenses.
The Bill applies to all who have general charge and supervision of professional boxing, sparring, professional wrestling, professional kickboxing, amateur kickboxing, professional full-contact karate, professional mixed martial arts, and amateur mixed martial arts. Roles established by the new regulation include referees, judges, matchmakers, promoters, seconds, timekeepers, and physicians. Additionally, the House Bill prohibits those under the age of 18 from participating in the sports listed in the Bill.
What is a Commercial License Bond?
A commercial license bond, which is also known as a license and permit bond, refers to a type of surety bond. It is often required by a legal entity such as the state, for companies and individuals to follow all regulations associated with attaining or maintaining licenses or permits. There are many different types of commercial license bonds, dependent on the type of work completed by the individual or business.
Surety bonds for full-contact sports promoters guarantee payment of taxes and fees as stated by the terms of the bond. If the promoter doesn’t adhere to these terms, a claim may be filed with the surety. If the principal, or in this situation the promoter, fails to provide compensation for a claim then the surety company will step in and pay for the claim. However, the promoter will most likely have to sign an indemnity agreement guaranteeing they will reimburse the surety for any money paid out in a claim.
What is a Letter of Credit?
A letter of credit serves as a guaranteed payment method in which the issuing bank makes payments to the beneficiary. In this specific situation, House Bill 1388 mandates the issuing bank would make payments to the State of Missouri, as well as the contestants and officials, in the event the promoters of the sport failed to provide the necessary funds. Letters of credit are obtained by applying at a local bank.
There are two types of letters of credit— irrevocable or revocable. Revocable refers to the bank’s ability to change the guidelines specified with the customer, while irrevocable means it is a permanent agreement for the duration of a previously determined amount of time.
Surety bonds typically afford applicants more flexibility with their assets, compared to taking out a letter of credit. Letters of credit often have many hidden fees which can increase the cost and freeze the promoter’s assets, while a surety bond is an annual fee ensuring the surety can cover any claims filed.
Need a surety bond as a promoter of full-contact sports in Missouri?
The experts at SuretyBonds.com have years of experience issuing full-contact sports promoter bonds nationwide, meaning they know what it takes to get the bond you need quickly and easily. Visit SuretyBonds.com or call 1 (800) 308-4358 today for a free, no obligation quote on your surety bond!