.10 Sanctions and Agency Actions on a License.
A. The Director may impose sanctions on a retailer or take action on a license for:
(1) Violating or failing to fulfill the retailer’s responsibilities or a condition of a license under this subtitle;
(2) Violating:
(a) A provision of the lottery law or other applicable law;
(b) A regulation adopted under the lottery law; or
(c) An order or directive of the Agency;
(3) Providing the Agency with false or misleading information;
(4) Failing to cooperate with the Agency;
(5) Failing to remit, or failing to make timely remittance of, funds owed to the Agency;
(6) Failing to meet the retailers sales requirements as set by the Agency;
(7) Failing to display lottery point of sale material and equipment as directed by the Agency;
(8) Failing to make tickets available for sale as directed by the Agency;
(9) Taking tickets, vouchers, or coupons intended for players;
(10) Failing to provide a player their voucher, coupon, cash or other item of value;
(11) Discounting lottery prizes;
(12) Selling lottery tickets by phone or other electronic means;
(13) Selling lottery tickets over the Internet;
(14) Selling lottery tickets at a price higher than the price established by the Director;
(15) Extending credit for the purchase of lottery tickets;
(16) Facilitating a person other than the owner of the lottery ticket under COMAR 36.02.06.02 to claim a prize;
(17) Conducting or permitting any illegal activity on the premises;
(18) Allowing an individual who is not a retailer employee to operate lottery equipment;
(19) Improperly managing customer data;
(20) Damaging or altering, or allowing another person to damage or alter, materials or equipment provided to the retailer by the Agency or a contractor of the Agency;
(21) Interfering with a lottery game;
(22) Failing to prepare, submit, or implement an adequate corrective plan under Regulation .09 of this chapter;
(23) Changing ownership of the retailer’s business without prior notice to the Agency;
(24) Closing the retailer’s operations without prior notice to the Agency;
(25) Engaging in conduct, or permitting an employee to engage in conduct, that impairs the reputation of the lottery, or would otherwise bring the State into disrepute;
(26) Being the subject of administrative or judicial charges related to the conduct of:
(a) Illegal gaming;
(b) Failing to pay taxes;
(c) Defrauding the government, a government program, or government services; or
(d) Any other fraudulent activity;
(27) Possessing an illegal gaming device;
(28) Possessing materials or equipment indicating involvement by the retailer or the retailer’s employees in the conduct of illegal gaming;
(29) Having a history of thefts or other forms of losses of Lottery tickets or revenue; or
(30) Other activities or actions deemed by the Director to require the imposition of a sanction.
B. Types of Sanctions and Agency Actions.
(1) Sanctions or Agency actions may include:
(a) The Agency temporarily disabling a retailer’s terminal;
(b) The Agency disabling specific game sales on a retailer’s terminal;
(c) Emergency suspension of a retailer’s license;
(d) Suspension of a retailer’s license;
(e) Termination of a retailer’s probationary or special license;
(f) Revocation of a retailer’s license; or
(g) Placing a limitation of the license of a retailer.
(2) Limitations on a license may include:
(a) Ineligibility for or removal from the Expanded Cashing Authority Program under COMAR 36.02.03.08; and
(b) Placement of conditions on the retailer’s operations.
C. Disabling a Retailer’s Terminal.
(1) If a retailer fails to timely remit funds or if the required funds are not available for withdrawal, the Agency shall disable the retailer’s terminal.
(2) If the retailer pays the Agency for any outstanding amount owed, including bank charges, the Agency may re-enable the retailer’s terminal.
D. Suspension, Revocation, and Limitation.
(1) Except as set forth in §E of this regulation, the Director shall give the retailer notice of the intended suspension or revocation at least 15 days before the imposition of the intended sanction.
(2) A retailer may appeal the Directors imposition of a sanction before the date the sanction is imposed by submitting a request for a hearing before the Commission.
(3) The Commissions final action on a sanction is subject to judicial review as provided in State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland.
E. Emergency Suspension.
(1) Notwithstanding any other requirement of this chapter, if the Director determines that immediate action is necessary to protect against an imminent, serious threat by a retailer to the security, financial stability, reputation, or integrity of the lottery, the Director may suspend the license of a retailer without prior notice.
(2) If the Director emergently suspends a retailer’s license, the Director shall provide the retailer with written notice that includes:
(a) A statement of the authority upon which the suspension is based;
(b) The nature of the violation;
(c) The duration of suspension;
(d) Information about the retailer’s obligation to submit to the Agency a corrective plan; and
(e) A statement of the retailers right to request a Commission hearing.
(3) A hearing on an emergency suspension of a retailer license shall be conducted in accordance with the hearing requirements in COMAR 36.01.02.06.
(4) If after a license is emergently suspended, the retailer does not submit a timely written request for a Commission hearing, the Director may move to revoke the retailers license by giving the retailer notice under §C(1) of this regulation.
F. Agency Action. After the Director terminates a probationary or special license or imposes an emergency suspension or sanction on a retailer with a regular license, the Agency may:
(1) Disable the retailer’s terminal;
(2) Require the retailer to surrender, or direct the Lottery Central System contractor to remove, any materials or equipment that were provided to the retailer by the Agency or the Lottery Central System contractor;
(3) Direct the retailer to immediately:
(a) Cease selling or displaying lottery products;
(b) Render a final accounting to the Agency in a manner specified by the Director; and
(c) Pay all funds owed the Agency;
(d) Return all unsold lottery tickets;
(e) Remove or cover any signage advertising lottery products or services; and
(4) Take any other action necessary to protect the security, financial stability, reputation, or integrity of the Agency.
G. Reapplication. A person may not reapply to be a retailer or be included in the application of another person for 1 year after the later of:
(1) The final action on a sanction; or
(2) If judicial review of the final action on a sanction is taken, the date an adverse decision is entered against the retailer by the highest court to which an appeal is taken.
