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<chapter num="05" heading="Unannounced Inspections" title_num="36" subtitle_num="03">
  <regulation prefix="Regulation" num=".01" heading="General.">
    <text>This chapter establishes the manner and method by which the Commission may conduct an unannounced inspection of the premises, records, and equipment of a licensee and related entities in order to evaluate and verify a licensee’s compliance with State Government Article, Title 9, Subtitle 1A, Annotated Code of Maryland, and the regulations promulgated by the Commission for the Video Lottery Terminal Program.</text>
  </regulation>
  <regulation prefix="Regulation" num=".02" heading="Inspections.">
    <paragraph num="A.">
      <text>A licensee is subject to unannounced inspections conducted by the Commission in order to evaluate and verify the licensee’s compliance with State Government Article, Title 9, Subtitle 1A, Annotated Code of Maryland and the regulations promulgated by the Commission for the Video Lottery Terminal Program.</text>
    </paragraph>
    <paragraph num="B.">
      <text>The Commission or a designee may conduct an unannounced inspection without a warrant and take any of the following actions:</text>
      <paragraph num="(1)">
        <text>Conduct an inspection of premises in which:</text>
        <paragraph num="(a)">
          <text>Video lottery or table game operations are conducted;</text>
        </paragraph>
        <paragraph num="(b)">
          <text>Authorized video lottery terminals, table game equipment, a central monitor and control system, or associated equipment and software are:</text>
          <paragraph num="(i)">
            <text>Designed;</text>
          </paragraph>
          <paragraph num="(ii)">
            <text>Built;</text>
          </paragraph>
          <paragraph num="(iii)">
            <text>Constructed;</text>
          </paragraph>
          <paragraph num="(iv)">
            <text>Assembled;</text>
          </paragraph>
          <paragraph num="(v)">
            <text>Manufactured;</text>
          </paragraph>
          <paragraph num="(vi)">
            <text>Sold;</text>
          </paragraph>
          <paragraph num="(vii)">
            <text>Distributed; or</text>
          </paragraph>
          <paragraph num="(viii)">
            <text>Serviced; or</text>
          </paragraph>
        </paragraph>
        <paragraph num="(c)">
          <text>Records are prepared or maintained for activities referenced in §B(1)(a) or (b) of this regulation;</text>
        </paragraph>
      </paragraph>
      <paragraph num="(2)">
        <text>Conduct an inspection of a video lottery terminal, table game equipment, a central monitor control system, or associated equipment and software in, about, on, or around the premises specified in §B(1) of this regulation;</text>
      </paragraph>
      <paragraph num="(3)">
        <text>From the premises specified in §B(1) of this regulation, summarily seize, remove, impound, or assume physical control of, for the purposes of examination and inspection:</text>
        <paragraph num="(a)">
          <text>A video lottery terminal;</text>
        </paragraph>
        <paragraph num="(b)">
          <text>Table game equipment;</text>
        </paragraph>
        <paragraph num="(c)">
          <text>A central monitor and control system; or</text>
        </paragraph>
        <paragraph num="(d)">
          <text>Associated equipment and software;</text>
        </paragraph>
      </paragraph>
      <paragraph num="(4)">
        <text>Inspect, examine, and audit books, records, and documents concerning a licensee’s video lottery or table game operations, including the financial records of a:</text>
        <paragraph num="(a)">
          <text>Parent corporation;</text>
        </paragraph>
        <paragraph num="(b)">
          <text>Subsidiary corporation; or</text>
        </paragraph>
        <paragraph num="(c)">
          <text>Similar business entity; or</text>
        </paragraph>
      </paragraph>
      <paragraph num="(5)">
        <text>Seize, impound, or assume physical control of:</text>
        <paragraph num="(a)">
          <text>Books;</text>
        </paragraph>
        <paragraph num="(b)">
          <text>Records;</text>
        </paragraph>
        <paragraph num="(c)">
          <text>Ledgers;</text>
        </paragraph>
        <paragraph num="(d)">
          <text>Cash boxes and their contents;</text>
        </paragraph>
        <paragraph num="(e)">
          <text>A counting room or its equipment;</text>
        </paragraph>
        <paragraph num="(f)">
          <text>Other physical objects relating to video lottery operations; or</text>
        </paragraph>
        <paragraph num="(g)">
          <text>Any record or object that a licensee is required by law or license terms to maintain.</text>
        </paragraph>
      </paragraph>
    </paragraph>
    <paragraph num="C.">
      <text>During an inspection, a licensee and its employees, agents, and representatives:</text>
      <paragraph num="(1)">
        <text>Shall:</text>
        <paragraph num="(a)">
          <text>Make available for inspection, copying, or physical control a record that a licensee is required to maintain;</text>
        </paragraph>
        <paragraph num="(b)">
          <text>Authorize any person having financial records relating to the licensee to provide those records to the Commission; and</text>
        </paragraph>
        <paragraph num="(c)">
          <text>Otherwise cooperate with the activities of the Commission described in this chapter; and</text>
        </paragraph>
      </paragraph>
      <paragraph num="(2)">
        <text>May not knowingly interfere with the authorized activity of the Commission during an unannounced inspection.</text>
      </paragraph>
    </paragraph>
    <paragraph num="D.">
      <text>An unannounced inspection may be conducted:</text>
      <paragraph num="(1)">
        <text>Any time during reasonable business hours; and</text>
      </paragraph>
      <paragraph num="(2)">
        <text>Periodically, as determined by the Commission.</text>
      </paragraph>
    </paragraph>
    <paragraph num="E.">
      <text>The refusal of a licensee or a licensee’s employees or agents to provide the Commission with the access necessary to perform an unannounced inspection may be the basis for enforcement action under COMAR 36.03.04.</text>
    </paragraph>
  </regulation>
  <regulation prefix="Regulation" num=".03" heading="Records and Reports.">
    <paragraph num="A.">
      <text>Within a reasonable time after the conclusion of the unannounced inspection, the Commission’s inspectors shall submit a written report of the inspection to:</text>
      <paragraph num="(1)">
        <text>The Commission;</text>
      </paragraph>
      <paragraph num="(2)">
        <text>The Director; and</text>
      </paragraph>
      <paragraph num="(3)">
        <text>The licensee who was the subject of the Commission’s unannounced inspection.</text>
      </paragraph>
    </paragraph>
    <paragraph num="B.">
      <text>A written report of an unannounced inspection shall be considered a public record to the extent allowable under State Government Article, Title 10, Subtitle 6, Annotated Code of Maryland.</text>
    </paragraph>
  </regulation>
  <annotations>
    <annotation type="Authority">State Government Article, §9-1A-04, Annotated Code of Maryland</annotation>
    <annotation type="History" subtype="Administrative History">Effective date:</annotation>
    <annotation type="History" subtype="Administrative History">Regulations .01—.03 adopted as an emergency provision effective March 1, 2013 (40:6 Md. R. 470); emergency action expired effective July 20, 2013</annotation>
    <annotation type="History" subtype="Administrative History">Regulations .01—.03 adopted effective adopted effective August 19, 2013 (40:16 Md. R. 1347)</annotation>
  </annotations>
</chapter>