Chapter 04. Enforcement
Regulation .01 General.LinkCopy Citation
This chapter establishes a framework within which the Commission may take enforcement action against a licensee that results in a reprimand, fine, or condition placed on a licensee, or a suspension or revocation of a license.
Regulation .02 Definitions.LinkCopy Citation
A.
In addition to the terms defined in State Government Article, Title 9, Subtitle 1A, Annotated Code of Maryland, which have the same meanings in this chapter, in this chapter the following terms have the meaning indicated.
B.
Terms Defined.
(1)
“Penalty” means a per day fine, not exceeding $5,000 for each separate violation, that the Commission may impose on a licensee under State Government Article, §9-1A-25(b), Annotated Code of Maryland.
(2)
“Sanction” means non-monetary enforcement action that the Commission may take against a licensee for a violation specified in State Government Article, §9-1A-25(a), Annotated Code of Maryland, and includes suspension or revocation of a license, reprimand, or imposition of a condition on a licensee.
Regulation .03 Violations.LinkCopy Citation
A licensee may not:
A.
Violate:
(1)
A provision of State Government Article, Title 9, Subtitle 1A, Annotated Code of Maryland;
(2)
A regulation adopted under State Government Article, Title 9, Subtitle 1A, Annotated Code of Maryland; or
(3)
A directive of the Commission or the Director;
B.
Take, or attempt to take, any action that is intended to:
(1)
Change or influence the outcome of a video lottery terminal or table game;
(2)
Influence any person or unit of government that is involved in implementing or enforcing State Government Article, Title 9, Subtitle 1A, Annotated Code of Maryland; or
(3)
Interfere with the regular operation of:
(a)
The central monitor and control system;
(b)
A video lottery terminal;
(c)
Associated equipment or software; or
(d)
A table game; or
C.
Fail to:
(1)
Conform to the information contained in a license application;
(2)
Meet a licensing requirement;
(3)
Promptly submit to the Commission a change to the information contained in a license application;
(4)
Adequately remedy a deficiency of which the licensee has received notice under Regulation .04E of this chapter; or
(5)
Maintain a video lottery employee license in good standing.
Regulation .04 Notice of Violation.LinkCopy Citation
A.
After receiving a report of a licensee’s alleged violation of Regulation .03 of this chapter, the agency shall:
(1)
Notify the licensee of the alleged violation; and
(2)
Investigate the report.
B.
The Director may designate staff to serve on a review board that:
(1)
Reviews the investigation of an alleged violation conducted under §A of this regulation; and
(2)
Makes a recommendation to the Director for addressing the alleged violation.
C.
The review board’s recommendation to the Director may include:
(1)
Requiring the licensee to implement a corrective action plan;
(2)
Issuing the licensee a warning letter;
(3)
Entering into a settlement agreement with the licensee;
(4)
Recommending that the Director initiate Commission proceedings to impose a penalty or sanction on the licensee; or
(5)
Any other appropriate action.
D.
After reviewing the board’s recommendation, the Director may:
(1)
Initiate Commission proceedings to impose a penalty or sanction on the licensee; or
(2)
Direct staff to:
(a)
Implement the board’s recommendation; or
(b)
Take other appropriate action.
E.
A licensee shall be provided a notice of the violation that describes the statute, regulation, or directive allegedly violated, along with the Director’s recommendation for addressing the alleged violation.
F.
Nothing in this chapter shall be construed to require that:
(1)
The licensee receive an opportunity to meet with staff to discuss an informal settlement of a violation; or
(2)
The agency undertake a corrective action plan or attempt to reach a settlement with the licensee before the Director initiates Commission proceedings for imposition of a penalty or sanction against a licensee.
Regulation .05 Corrective Action Plan.LinkCopy Citation
A.
If the Director directs staff to implement a corrective action plan with a licensee, agency staff shall give written notice to a licensee that includes:
(1)
A description of the alleged violation;
(2)
A description of the possible sanctions; and
(3)
The requirement for the licensee to submit a corrective action plan to the Director.
B.
Contents of Corrective Action Plan. A corrective action plan shall include:
(1)
Periodic monitoring or progress reports;
(2)
Timelines for completing corrective action;
(3)
Implementation of measures to guard against recurrence of the alleged violation; and
(4)
Any other measures necessary to resolve the alleged violation.
C.
Time for Implementing a Corrective Action Plan.
(1)
Within 10 days of receipt of a notice under §A of this regulation, the licensee shall submit a corrective action plan to the Director, or the Director’s designee.
(2)
The Director, or the Director’s designee, shall review the corrective action plan and inform the licensee whether the corrective action plan is acceptable.
(a)
If the corrective action plan is acceptable, the licensee shall execute it immediately.
(b)
If the corrective action plan is not acceptable, the licensee shall submit a revised plan immediately.
(3)
If the licensee fails to submit an acceptable corrective action plan within the time described under §C(1) of this regulation, the Director may:
(a)
Provide the licensee with additional time within which to submit a revised corrective action plan; or
(b)
Initiate proceedings before the Commission for imposition of a penalty or sanction on the licensee.
(4)
If the Director, or the Director’s designee, provided a licensee with a notice under §A of this regulation and did not receive a timely written response, the Commission may adopt a recommendation by the Director for imposition of a penalty or sanction.
D.
Corrective Action Plan Outcome.
(1)
After a licensee has completed, to the satisfaction of the Director or the Director’s designee, a corrective action plan, the alleged violation is resolved, except that the alleged violation may be:
(a)
The basis of a subsequent corrective action plan, settlement, penalty, or sanction if a similar violation occurs; or
(b)
Raised during a Commission hearing as part of the agency’s enforcement record for the licensee.
(2)
If at any time during the corrective action period the Director, or the Director’s designee, determines that the licensee has made insufficient progress toward fulfilling a requirement of the corrective action plan, the Director may:
(a)
For good cause, extend the time for completion of a corrective action plan; or
(b)
Initiate proceedings before the Commission for imposition of a penalty or sanction on the licensee.
(3)
If at the end of the corrective action period the licensee has failed to satisfactorily complete the corrective action plan, the Director may initiate proceedings before the Commission for imposition of a penalty or sanction on the licensee.
Regulation .06 Settlement.LinkCopy Citation
A.
The Commission may provide a licensee with the opportunity to discuss with staff a means of entering into a settlement agreement between the licensee and the Commission by which the violation is settled without a penalty or sanction.
B.
A settlement agreement:
(1)
Shall be signed by an authorized representative of the licensee and the Director or the Director’s designee; and
(2)
May not be considered final and binding until approved by the Commission.
C.
If a licensee violates a term of a settlement agreement, nothing in this regulation shall be construed to prevent the Commission from imposing a penalty or sanction against the licensee for that, or the underlying, violation.
Regulation .07 Commission Action.LinkCopy Citation
A.
General. The Director may initiate Commission proceedings for imposition of a penalty or sanction against a licensee if a licensee:
(1)
Violates a provision of Regulation .03 of this chapter;
(2)
Fails to timely or satisfactorily complete a corrective action plan required by the Commission;
(3)
Violates a term of a settlement agreement; or
(4)
Engages in any conduct that exposes the State’s gaming program to a serious and imminent risk of harm to its integrity, security, or profitability.
B.
Initiation of Commission Proceedings. The Director shall initiate Commission proceedings for the imposition of a penalty or sanction on a licensee by scheduling a Commission hearing in accordance with COMAR 36.01.02.06 on the alleged violation and providing the licensee with written notice of the:
(1)
Recommendation for imposition of the penalty or sanction;
(2)
Basis for the recommendation for imposition of the penalty or sanction;
(3)
Consequences of a decision by the Commission to impose a penalty or sanction;
(4)
Date, time and location of the hearing; and
(5)
Applicable hearing rights.
Regulation .08 Emergency Suspension.LinkCopy Citation
A.
The Director may emergently suspend a license if the Director determines that suspension is necessary in order to protect the State’s gaming program against a serious and imminent risk of harm to its integrity, security, or profitability.
B.
Emergency Suspension—Process. If the Director emergently suspends a license, the Director shall promptly schedule a Commission hearing on the emergency suspension and provide the licensee with the written notice required under Regulation .07B of this chapter, along with notice directing the licensee that:
(1)
The licensee shall immediately cease performing under the license; and
(2)
Failure to comply with the Director’s directive to cease performing under the license constitutes a separate violation of Regulation .03 of this chapter for which an additional penalty or sanction may be imposed.
Regulation .09 Imposition of Penalties and Sanctions.LinkCopy Citation
A.
Consequences. For a violation of Regulation .03 of this chapter, the Commission may impose a:
(1)
Penalty not exceeding $5,000 for each day and each violation;
(2)
Sanction, including:
(a)
Revocation of a license;
(b)
Suspension of a license for a period of time;
(c)
Reprimand; or
(d)
Condition that must be met within a specified time as to:
(i)
Training;
(ii)
Staffing;
(iii)
Supervision;
(iv)
Compliance with internal controls;
(v)
Probationary periods; or
(vi)
Any other directive to address the violation.
B.
Penalty—Required Considerations. To determine the amount of a penalty to impose on a licensee, the Commission shall consider:
(1)
The seriousness of the violation;
(2)
The harm caused by the violation; and
(3)
Whether the person who committed the violation acted in good faith.
C.
Sanction—Considerations. To determine the appropriate sanction to impose on a licensee, the Commission may consider the factors in §B of this regulation, and:
(1)
Whether a violation was willful;
(2)
Whether the licensee had, or should have had, control of the situation;
(3)
Whether the violation may have occurred in connection with unclear or insufficient:
(a)
Information;
(b)
Training;
(c)
Communication; or
(d)
Requirements;
(4)
Any extraordinary circumstances;
(5)
Prior disciplinary history with the Commission;
(6)
Profit that resulted, or may have resulted, from the violation;
(7)
Harm that resulted, or may have resulted, from the violation;
(8)
How the violation was detected;
(9)
Tailoring the discipline to address the violation;
(10)
Action taken by the licensee to prevent recurrence of the violation;
(11)
Action taken by the Commission to address similar violations; and
(12)
Any other information that the Commission finds relevant.
D.
Ignorance No Defense. Because a licensee is presumed to be familiar with applicable statutes and regulations governing the State’s video lottery terminal program, a claim of ignorance of the law may not be used as a defense to a finding of a violation or to the imposition of a penalty or sanction.
E.
Imposition of penalty and sanction. A penalty and a sanction may be imposed for each violation.
Regulation .10 Commission Action.LinkCopy Citation
A.
Commission action against a licensee for a violation of Regulation .03 of this chapter shall be conducted as specified in COMAR 36.01.02.06, and the Commission shall:
(1)
Make a finding whether the licensee violated a provision of Regulation .03 of this chapter; and
(2)
If the licensee violated a provision of Regulation .03 of this chapter, decide whether, and to what extent, to impose a penalty or sanction.
B.
A licensee may seek judicial review of the Commission’s decision.
C.
A licensee against whom the Commission ordered the imposition of suspension or revocation of a license shall immediately comply with the Commission’s order.
D.
A licensee against whom the Commission imposed a penalty shall remit to the Commission payment in full of the penalty within 30 calendar days.
Chapter annotations
Authority: State Government Article, §§9-1A-04, 9-1A-24, and 9-1A-25, Annotated Code of Maryland
History: Effective date:
History: Regulations .01—.07 adopted as an emergency provision effective March 1, 2013 (40:6 Md. R. 470); emergency action expired effective July 20, 2013
History: Regulations .01—.10 adopted effective August 5, 2013 (40:15 Md. R. 1233)
History: Regulation .03C amended effective October 19, 2020 (47:21 Md. R. 905)
History: Regulation .07 amended effective September 26, 2016 (43:19 Md. R. 1073)