Chapter 03. Video Lottery Operation License
Regulation .01 General.LinkCopy Citation
A.
This chapter articulates the standards which the Commission shall use to:
(1)
Qualify an applicant for a video lottery facility operation license; and
(2)
Renew a video lottery facility operation license.
B.
After being awarded an operation license by the Location Commission, a facility operation license holder shall maintain compliance with State Government Article, Title 9, Subtitle 1A, Annotated Code of Maryland, and this subtitle.
Regulation .02 Definition.LinkCopy Citation
A.
In addition to the terms defined in COMAR 36.03.01.02, in this chapter, the following term has the meaning indicated.
B.
Term Defined. “Application” means a written request for an operation license, and includes a proposal submitted to the Location Commission in response to a solicitation from that Commission.
Regulation .03 Application.LinkCopy Citation
A.
An applicant for an operation license shall submit an application in the form and format established by the Location Commission.
B.
The Commission shall receive an application for an operation license from the Location Commission.
C.
The Commission shall review an application to determine whether the applicant is qualified to hold an operation license.
D.
Upon making a determination as to an applicant's qualifications to hold an operation license, the Commission shall notify the Location Commission.
Regulation .04 Qualification by the Commission.LinkCopy Citation
A.
In determining the qualifications of an applicant for an operation license, the Commission shall consider the information submitted by the applicant in response to the Location Commission's solicitation.
B.
An applicant for an operation license shall present in its application sufficient information, documentation, and assurances to establish the following qualification criteria by clear and convincing evidence:
(1)
The applicant's financial stability, integrity, and responsibility;
(2)
The integrity of any financial backers, investors, mortgagees, bondholders, and holders of other evidences of indebtedness that bears a relation to the application;
(3)
The applicant's good character, honesty, and integrity;
(4)
Sufficient business ability and experience of the applicant; and
(5)
The viability and appropriateness of the applicant's labor practices.
C.
The Commission shall disqualify an applicant for an operation license on the basis of any of the following criteria:
(1)
Failure of the applicant to prove by clear and convincing evidence that the applicant and each person who owns or controls the applicant are qualified;
(2)
Failure of the applicant or any person required to be qualified as a condition of a license to provide information, documentation, and assurances required by or requested by the Commission or the Location Commission;
(3)
Failure of the applicant or any person required to be qualified as a condition of a license to reveal any fact material to qualification;
(4)
Supplying, by the applicant or any person required to be qualified as a condition of a license, information that is untrue or misleading as to a material fact concerning the qualification criteria;
(5)
Conviction of the applicant, or of any person required to be qualified as a condition of a license, of an offense under the laws of any jurisdiction that is a criminal offense involving moral turpitude or a gambling offense;
(6)
Current prosecution of the applicant, or a person who is required to be qualified as a condition of a license, for an offense described under §C(5) of this regulation, provided that, at the request of the applicant, the Commission may defer its decision on the application during the pendency of the charge;
(7)
Pursuit by the applicant, or a person who is required to be qualified as a condition of a license, of economic gain in an occupational manner or context that is in violation of the laws of the State, if the pursuit creates a reasonable belief that participation of the applicant in video lottery operations would be inimical to the policies of State law and this chapter;
(8)
Identification of the applicant, or a person who is required to be qualified as a condition of a license, as a career offender, a member of a career offender cartel, or an associate of a career offender or career offender cartel, in a manner that creates a reasonable belief that the association is of a nature as to be inimical to the policies of State law and this chapter;
(9)
The commission of an act by the applicant, or a person who is required to be qualified as a condition of a license, within the prior 7 years, that would constitute an offense described under §C(5) of this regulation, even if the act was not prosecuted or may not be prosecuted under the criminal laws of any jurisdiction; or
(10)
Willful defiance by the applicant, or a person who is required to be qualified as a condition of a license, of a legislative investigatory body or other official investigatory body of the United States, or a jurisdiction within the United States, when the body is engaged in the investigation of crimes relating to gambling, official corruption, or organized crime activity.
D.
If the Commission identifies potential problems in the information submitted by the applicant with regard to a subject area that is not relevant to §B or C of this regulation, the Commission shall notify the Location Commission of these potential problems.
E.
The Commission shall notify the Location Commission upon making a determination that an applicant is or is not qualified to hold an operation license.
Regulation .05 Issuance of License; Term.LinkCopy Citation
A.
The Commission shall issue an operation license to the applicant selected for award by the Location Commission.
B.
For an original license for a location that was awarded by the Video Lottery Facility Location Commission and issued by the Commission, the term of a license is 15 years from the date issued.
C.
As described in Regulation .10 of this chapter, upon timely and proper application, the Commission shall renew the operation license of a qualified operator.
D.
A renewal term of a license is 15 years from expiration of the existing term.
Regulation .06 Continuing Obligations.LinkCopy Citation
A.
Upon issuance or renewal of an operation license, a license holder shall exercise all diligence in fulfilling the specific requirements set out in the Location Commission’s request for proposals and the specific details in its license application, including all of the details in the final proposal that the license holder submitted to, and was approved by, the Location Commission.
B.
As required under State Government Article, §9-1A-19(b), Annotated Code of Maryland, an operation licensee may not sell or otherwise transfer more than 5 percent of the legal or beneficial interests of the licensee unless the Commission approves the transfer in advance.
C.
Failure to comply with the specific details referred to in §A or B of this regulation shall be grounds for the Commission invoking against the licensee the sanctions described in COMAR 36.03.04.
Regulation .07 Automated Teller Machines.LinkCopy Citation
A.
Placement; Limitations.
(1)
Subject to surveillance requirements in COMAR 36.03.10.11 and 36.03.11.04, a facility operator may place automated teller machines on the gaming floor within the facility.
(2)
Gaming Floor. The proximity of an automated teller machine to a video lottery terminal or table game that is on a gaming floor is subject to the following limitations:
(a)
An automated teller machine may be placed no closer than 7 feet to a video lottery terminal or table game; and
(b)
There may be no more than one automated teller machine for every 75 video lottery terminals and table game seats.
B.
Withdrawal Limits. Exclusive of transaction fees or surcharges, the maximum amount that a player may withdraw from an account by using an automated teller machine located on the gaming floor is no more than $2,500 per gaming day.
C.
Negotiable Instruments Prohibited.
(1)
In this regulation, "negotiable instruments” means an electronic benefit card, debit card, or similar instrument issued by the Department of Human Services for the purpose of accessing temporary cash assistance.
(2)
An automated teller machine may not accept a negotiable instrument.
Regulation .08 Predatory Marketing.LinkCopy Citation
A.
Definition. In this regulation, the following term has the meaning indicated.
B.
Term Defined.
(1)
“Predatory marketing practice” means an advertisement or promotion of an activity, product, or service related to play of a video lottery terminal or table game that is:
(a)
False or deceptive;
(b)
Illegal; or
(c)
Knowingly directed to an individual:
(i)
Who is under the age of 21 years;
(ii)
Whose name is included on the voluntary exclusion list maintained by the Commission under COMAR 36.01.03;
(iii)
Whose name is included on the mandatory exclusion list maintained by the Commission under COMAR 36.03.07; or
(iv)
Who is otherwise prohibited by law or court order from being on the premises of any video lottery operation licensed by the State.
(2)
“Predatory marketing practice” includes an advertisement or promotion of an activity, product, or service related to play of a video lottery terminal or table game that:
(a)
Uses or depicts an individual who is, or appears to be, under the age of 21 years;
(b)
By font, color, placement, or any other means:
(i)
Obscures or fails to disclose any material condition or limiting factor associated with the activity, product, or service that is being marketed; or
(ii)
Obscures the gambling assistance message required under COMAR 36.03.06.
C.
A facility operator may not:
(1)
Engage in a predatory marketing practice; or
(2)
Contract with another person to engage in a predatory marketing practice.
Regulation .09 Noninterference.LinkCopy Citation
A.
Interference. Unless allowed by the First Amendment of the Constitution of the United States, a licensee may not knowingly, directly or indirectly, interfere with, hinder, obstruct, impede, or take any action to delay the implementation or establishment of a video lottery facility.
B.
Prohibition. The restrictions specified in §A of this regulation shall:
(1)
Prohibit, as unlawful indirect conduct, activity:
(a)
By an entity in which the licensee owns a beneficial or proprietary interest; or
(b)
By an entity in which an affiliate of the licensee owns a beneficial or propriety interest; and
(2)
Be deemed to prohibit as unlawful, activity:
(a)
By an entity in which the licensee owns a beneficial or proprietary interest; or
(b)
By an entity in which an affiliate of the licensee owns a beneficial or propriety interest.
C.
Civil Penalty or Sanction. A knowing violation of §A of this regulation may be used by the Commission to take enforcement action under COMAR 36.03.04.
Regulation .10 Renewal of Operation License.LinkCopy Citation
A.
General.
(1)
Unless otherwise specified, nothing in this chapter changes a requirement set forth in applicable law or regulation.
(2)
Unless the Commission finds that the licensee is not qualified to hold a license, the Commission shall renew an operation license.
B.
Notice of Intent to Apply for Renewal.
(1)
If a licensee seeks renewal of its operation license, the licensee shall submit to the Commission a timely and proper notice of intent to apply for renewal:
(a)
At least 2 years, but not more than 5 years, before the expiration of a license term; and
(b)
In a form and format required by the Commission.
(2)
The notice of intent shall include:
(a)
Name under which the licensee operates;
(b)
Identification of all persons that are legal or beneficial owners as defined in State Government Article, §9-1A-05(d), Annotated Code of Maryland, and COMAR 36.03.01;
(c)
An affidavit signed by an authorized representative affirming that the licensee:
(i)
Intends to apply for license renewal;
(ii)
Is currently in compliance with all applicable requirements in State Government Article, Title 9, Subtitle 1A, Annotated Code of Maryland, and this subtitle;
(iii)
Acknowledges that the Agency may begin investigating the licensee’s qualifications upon receiving the notice of intent;
(iv)
Acknowledges that the licensee is responsible for reimbursing the Agency for the cost of the investigation;
(v)
Attests to the truth and accuracy of the notice of intent; and
(vi)
Agrees to the release of information; and
(d)
Any other information the Commission requires.
C.
Application to Renew Video Lottery Operation License.
(1)
If a licensee submitted a timely and proper notice of intent to apply for renewal of the operation license, the licensee may submit an application to renew the license.
(2)
A licensee shall submit an application to renew:
(a)
At least 1 year, but not more than 5 years, before the expiration of a license term; and
(b)
In a form and format required by the Commission.
(3)
The application shall include:
(a)
Proof of the $1,000,000 performance bond;
(b)
Proof of the $2,000,000 payment bond;
(c)
Proof of the $100,000 fidelity bond; and
(d)
Any other information the Commission requires.
(4)
After completing the investigation of qualifications under §D of this regulation, the Agency shall provide the Commission with the investigation results and a recommendation about the licensee’s qualifications.
(5)
If the Agency recommends the Commission find the licensee qualified, the Commission shall issue a license renewal.
(6)
If the Agency recommends that the Commission find the licensee not qualified, the Commission shall notify the licensee of the recommendation and provide the licensee with due process required for denial of a license application in COMAR 36.03.02.16.B.
D.
Investigation of Qualifications.
(1)
The Commission may choose to commence its investigation no sooner than 2 years before expiration of the licensee’s current license.
(2)
If an application is submitted prior to 2 years before the expiration of the licensee’s existing license, the licensee shall:
(a)
Update its license application within 2 years of the expiration of the existing license; and
(b)
Provide any additional information required by the Commission.
(3)
The Agency shall:
(a)
Conduct the investigation of the licensee’s qualifications in the same manner as under COMAR 36.03.02; and
(b)
Apply the qualification criteria in Regulation .04B and C of this chapter.
(4)
A licensee shall pay a deposit and submit reimbursement to the Commission for the costs of the investigation.
E.
License Renewal Fee.
(1)
If the Commission renews a video lottery facility operation license, the licensee shall pay the license renewal fee in equal annual installments, as provided in State Government Article, §9-1A-13(d)(6), Annotated Code of Maryland.
(2)
For each 5-year period of the 15-year renewal term, the video lottery licensee shall pay an amount calculated as the most recent 3-year average of:
(a)
0.75 percent of the amounts wagered less the amounts paid as prizes for VLTs and banked table games; and
(b)
Plus 0.75 percent of the facility share of non-banked table game revenues.
(3)
On or before the date the Commission renews the license, the licensee shall pay the first installment of the license renewal fee, representing 20 percent of the total fee due.
(4)
Subsequent payments shall be paid on the anniversary of the license renewal.
(5)
At the conclusion of each 5-year period, a new 3-year average will be calculated as the basis for the renewal fee payments over the next 5 years.
Chapter annotations
Authority: State Government Article, §§9-1A-02, 9-1A-04, 9-1A-07, 9-1A-08, 9-1A-11, 9-1A-13, 9-1A-19, 9-1A-23, 9-1A-24, and 9-1A-36,
Annotated Code of Maryland
Annotated Code of Maryland
History: Effective date:
History: Regulations .01—.09 adopted as an emergency provision effective March 1, 2013 (40:6 Md. R. 470); emergency action expired effective July 20, 2013
History: Regulation .01A amended as an emergency provision effective December 12, 2023 (50:26 Md. R. 1130); amended permanently effective May 27, 2024 (51:10 Md. R 529)
History: Regulation .04C amended effective March 14, 2016 (43:5 Md. R. 388)
History: Regulation .04F amended as an emergency provision effective August 12, 2014 (41:18 Md. R. 1008); amended permanently effective October 27, 2014 (41:21 Md. R. 1262)
History: Regulation .04F repealed effective March 14, 2016 (43:5 Md. R. 388)
History: Regulation .05 amended as an emergency provision effective December 12, 2023 (50:26 Md. R. 1130); amended permanently effective May 27, 2024 (51:10 Md. R 529)
History: Regulation .06A amended as an emergency provision effective December 12, 2023 (50:26 Md. R. 1130); amended permanently effective May 27, 2024 (51:10 Md. R 529)
History: Regulation .07A amended effective October 23, 2017 (44:21 Md. R. 985); October 22, 2018 (45:21 Md. R. 976)
History: Regulation .07A amended as an emergency provision effective December 12, 2023 (50:26 Md. R. 1130); amended permanently effective May 27, 2024 (51:10 Md. R 529)
History: Regulation .07B amended effective March 30, 2015 (42:6 Md. R. 515)
History: Regulation .10 adopted as an emergency provision effective December 12, 2023 (50:26 Md. R. 1130); adopted permanently effective May 27, 2024 (51:10 Md. R 529)