In this subtitle, “beneficial ownership” includes: record ownership; stock or other ownership in an entity in a chain of parent and subsidiary or affiliated entities, any 1 of which participates in the capital or profits of a licensee, regardless of the percentage of ownership involved; an interest that entitles a person to benefits substantially equivalent to ownership by an agreement, relationship, or other arrangement even though the person is not an owner of record; and unless there are special circumstances, ownership of a security by a relative of an individual who lives in the home of the individual.

A person must have an appropriate license whenever the person holds a race meeting in the State where pari-mutuel betting is allowed or a purse, reward, or stake is offered.

An applicant for a license shall submit to the executive director of the Commission an application: in the form that the Commission requires; and on or before a day that the Commission sets. The application shall state: the dates of the race meetings desired; the maximum number of racing days desired; and any other information that the Commission requires.

The Commission shall issue a license to each applicant who: is awarded racing days in a race meeting; and pays the appropriate license fee. A license shall state: the dates of the race meeting awarded; the total number of racing days awarded; and the kind of racing to be held.

A licensee is subject to all rights, regulations, and conditions that the Commission sets for the calendar year in which a race meeting of the licensee is held.

An award of a racing day to a licensee gives the licensee a license for the racing day, but it does not give the licensee an ownership right in the racing day.

On request of a licensee, the Commission may return to the licensee a fee paid for racing on a day when the licensee fails to hold racing if: on that day, racing is impossible, impracticable, or inadvisable; the licensee is not in default; and the reason for the lack of racing is beyond the control of the licensee. The decision of the Commission is final. If a licensee does not hold racing on the full number of its authorized racing days because of bad weather conditions, the Commission may award to the licensee replacement races or racing days.

Subject to the hearing provisions of §§ 11-309 and 11-310 of this subtitle, the Commission may deny a license to an applicant or discipline a licensee in accordance with this section. The Commission may deny a license to any applicant for any reason that the Commission considers sufficient. The Commission may reprimand any licensee or suspend or revoke a license if the licensee violates: this title; a regulation adopted under this title; or a condition set by the Commission. The Commission shall suspend or revoke a license if the applicant or licensee fails to: keep records and make reports of ownership of stock that are required under § 11-314 of this subtitle; or make a reasonable effort to get affidavits required under § 11-314(b) and (c) of this subtitle. The Commission may impose a penalty not exceeding $5,000 for each racing day that the licensee is in violation of subsection (c) of this section: instead of suspending or revoking a license under subsection (c)(1) of this section; and in addition to suspending or revoking a license under subsection (c)(2) of this section. To determine the amount of the penalty imposed under paragraph (1) of this subsection, the Commission shall consider: the seriousness of the violation; the harm caused by the violation; and the good faith or lack of good faith of the licensee. A penalty imposed on a licensee shall be paid from the licensee’s share of the takeout.

Except as otherwise provided in § 10-226 of the State Government Article, before the Commission takes any final action under § 11-308 of this subtitle, it shall give the person against whom the action is contemplated an opportunity for a hearing before the Commission or, as provided under § 11-310 of this subtitle, a hearing committee. The Commission shall give notice and hold the hearing in accordance with Title 10, Subtitle 2 of the State Government Article. If, after due notice, the person against whom the action is contemplated does not appear, nevertheless the Commission may hear and determine the matter.

The Commission may delegate to a hearing committee of at least 3 of its members the power to hold adjudicatory proceedings under this title, including evidentiary hearings. A unanimous decision by the hearing committee is binding and is a final decision of the Commission. If the decision of the hearing committee is not unanimous, a de novo hearing shall be conducted by the Commission.

A party to a proceeding before the Commission who is aggrieved by a final decision of the Commission in a contested case, as defined in § 10-202 of the State Government Article, may take an appeal as allowed in §§ 10-222 and 10-223 of the State Government Article.

On request of the Commission, the following individuals shall give the Commission their fingerprints: each individual licensee; each individual member of an unincorporated association that is a licensee; each officer or director of a corporation that is a licensee; each employee of a licensee who actively participates in the racing action of the licensee; each individual who actively participates in the racing action of a licensee, including each agent, blacksmith, driver, apprentice jockey, jockey, manager, owner, trainer, stable employee, and veterinarian; each member of the Commission; the Executive Director of the Commission; each employee of the Commission under §§ 11-206 and 11-207 of this title; and each individual who is subject to § 11-316 of this subtitle. The Commission shall: apply to the Central Repository for a State and national criminal history records check for each individual listed in subsection (a) of this section; and as part of the application for a criminal history records check, submit to the Central Repository: a complete set of the individual’s legible fingerprints taken on a form approved by the Director of the Central Repository; and the fee authorized under § 10-221(b)(7) of the Criminal Procedure Article for access to Maryland criminal history records. In addition to a State criminal history records check under this section, the Commission may require an individual listed in subsection (a) of this section to obtain a criminal history records check from the Federal Bureau of Investigation, through the Central Repository. For each applicant who is required by the Commission to obtain a criminal history records check from the Federal Bureau of Investigation under paragraph (1) of this subsection, the Commission shall apply to the Central Repository for a national criminal history records check. As part of the application for a national criminal history records check, the Commission shall submit to the Central Repository: a complete set of the individual’s legible fingerprints taken on a form approved by the Director of the Federal Bureau of Investigation; and the mandatory processing fee required by the Federal Bureau of Investigation for a national criminal history records check. In accordance with §§ 10-201 through 10-234 of the Criminal Procedure Article, the Central Repository shall forward to the individual and the Commission the individual’s criminal history record information. Information obtained from the Central Repository under this section shall be: confidential and may not be disseminated; and used only for the purpose authorized by this section. The subject of a criminal history records check under this section may contest the contents of the printed statement issued by the Central Repository as provided in § 10-223 of the Criminal Procedure Article.

The Commission shall require a licensee, and each officer or stockholder of a licensee, to disclose to the Commission each financial interest that the person has in racing. On or before the 90th day following the end of a licensee’s fiscal year, the licensee shall submit to the Commission in the form that the Commission requires: an itemized statement under oath for the preceding fiscal year of receipts from all sources and of all expenses and disbursements, including salaries of officers, attorney fees, and lobbying expenses; and a certified audit by a certified public accountant of the financial records of the licensee for the preceding fiscal year. The audited statements of all licensees shall be sent to the Governor and, subject to § 2-1257 of the State Government Article, to the General Assembly.

The Commission shall require each licensee to keep records that show the beneficial ownership of the stock of the licensee, whether or not the beneficial ownership is registered or stated on the stock. The Commission shall require a licensee at least once each calendar year to get by written request an affidavit from each owner of record of the licensee. The affidavit shall state, to the best of the affiant’s knowledge, information, and belief: whether a person other than the affiant has a right of beneficial ownership in the stock held in the name of the affiant; the name and address of any other person who has a right of beneficial ownership; and the amount and nature of the beneficial ownership. If a licensee learns that a person, other than a record owner of stock in a licensee, has a beneficial ownership interest in stock of the licensee, the licensee promptly shall request in writing that the person submit an affidavit within 60 days to the licensee. The affidavit shall state to the best of the affiant’s knowledge, information, and belief: whether the affiant has a right of beneficial ownership in the stock of the licensee that is described in the notice; the amount and nature of the beneficial ownership; whether a person other than the affiant and the record owner has a right of ownership of any kind in that stock of the licensee; and the amount and nature of the ownership of that stock by a person other than the affiant and the record owner. Notwithstanding the affidavit requirements of this section, the Commission may excuse the reporting of beneficial ownership that is less than 2% of the licensee. A licensee shall submit the beneficial ownership records and affidavits required under this section to the Commission at least once each year and at any other time that the Commission requires. A licensee shall report promptly to the Commission each change in beneficial ownership.

A statement required to be submitted to the Commission under § 11-313 or § 11-314 of this subtitle shall be under oath and signed by each officer of the corporate licensee or by the owner or each partner of an unincorporated licensee.

Before a prospective buyer buys a majority controlling interest in a licensee, the Commission shall review the personal and financial background of the prospective buyer. The Commission shall adopt regulations to carry out this section. The regulations shall: require a personal and financial background check of the prospective buyer; specify a period of time to review the required personal and financial information before a purchase or transfer of racing days is made; and require that notice and an invitation to comment be given to the Legislative Policy Committee at least 15 days before final approval of a purchase or transfer of racing days resulting from a purchase. The background check shall include: a review by a certified public accountant of certified financial statements, including contingent or pledged liabilities, sufficient to determine the ability of the prospective buyer to buy and maintain the licensee; an income statement for the most recent year; a statement of financial and related records of any person in which the prospective buyer has at least a majority interest; a disclosure of each financial interest in racing; a disclosure of each person who will have beneficial ownership of the licensee as a result of the purchase; a criminal history records check under § 11-312 of this subtitle; and a character review.

Before a license or racing days may be transferred to a buyer or a lessee of a track: the Legislative Policy Committee shall have been notified at least 15 days before the transfer; the Legislative Policy Committee, if it has chosen to do so, shall have provided comment to the Commission about the transfer; and the transfer shall have been approved by the Commission. At least 30 days before the owner of a track enters into a contract to sell the track, the owner shall provide confidential notice of the contract to the governing body of the jurisdiction where the track is located.

The Commission may require a licensee to get its approval before the licensee: contracts to pay money; sets a salary, fee, or compensation to be paid; or builds, extends, or improves a track or structure on property that the licensee owns or leases.

The Maryland Backstretch Employees Pension Fund shall be administered by the organization that represents a majority of the owners and trainers who race thoroughbred horses in the State. The Maryland Race Track Employees Pension Fund shall be administered by representatives of: each mile thoroughbred racing licensee; the Maryland State Fair and Agricultural Society, Inc.; and the employees of the licensees and of the Maryland State Fair and Agricultural Society, Inc. The Maryland Harness Track Employees Pension Fund shall be administered by representatives of each harness racing licensee and its employees.