09.10.04.03

.03 Commission.

A. Granting a License to Hold a Race Meeting.

(1) An association may file a brief with the Commission, setting forth reasons for desiring the dates contained in the association's application.

(2) The allotment of racing dates by the Commission pursuant to an application by an association for racing dates does not commit the Commission to the granting of a license to conduct a race meeting upon the dates so allotted.

(3) The Commission may grant a license to hold a race meeting to an association in accordance with the provisions of Business Regulation Article, Title 11, Annotated Code of Maryland, subject to an application for racing dates having been filed with the Executive Director of the Commission, over the signature of an executive officer of the association desiring to hold racing.

(4) The application to hold a race meeting shall include the:

(a) Days on which live racing is to be held;

(b) Days on which simulcasting is to be held;

(c) Location at which racing is to take place; and

(d) Breed of horse to be raced.

B. The Commission may suspend or revoke the license of an association if it disapproves of a change in the ownership of the association.

C. Personal and Financial Background Investigation.

(1) The Commission shall conduct a personal and financial background investigation of any interested party negotiating for the purchase of:

(a) An entity which conducts racing in Maryland under the jurisdiction of the Maryland Racing Commission or operates a thoroughbred training facility under Business Regulation Article, §11-519, Annotated Code of Maryland;

(b) A majority controlling interest in the entity described under §C(1)(a) of this regulation; or

(c) Those assets without which the entity described under §C(1)(a) of this regulation would not be able to continue racing or stabling.

(2) If the interested party is an entity other than a real person, the personal and financial background investigation shall be conducted as to the negotiating entity and each real person with a controlling interest in the entity.

(3) An entity or real person who is the subject of the personal and financial background investigation shall fully cooperate with the Commission and provide any information requested by the Commission to conduct its investigation.

(4) The personal and financial background investigation shall include, but is not limited to, all of the following:

(a) A review by a certified public accountant of the certified financial statements of the negotiating party, including a review of any contingent liabilities and pledged assets, which review shall be sufficient to determine the financial ability of the negotiating party to purchase and maintain the racetrack being negotiated;

(b) Income statements, for at least a 2-year period preceding the proposed purchase, of the interested party negotiating for the purchase;

(c) A statement of financial condition and the related records of any corporation, association, partnership, proprietorship, or limited partnership in which the interested party negotiating for the purchase has at least a majority interest;

(d) The disclosure of all financial interests in horse racing;

(e) The disclosure of all persons, including corporations, trusts, estates, and partnerships, who are to be the new beneficial owners of the entity;

(f) A criminal background review; and

(g) A character review.

(5) The personal and financial background investigation required under §C(4) of this regulation shall be completed at least 30 days before the settlement date for the purchase and at least 30 days before any transfer of racing dates that may result directly from the purchase.

(6) Upon the completion of the personal and financial background investigation under §C(4) of this regulation, the Commission shall notify the Legislative Policy Committee of the proposed purchase, and, if applicable, the proposed transfer of racing dates, at least 15 days before the consideration of final approval by the Commission of the purchase or transfer.

(7) The cost of the personal and financial background investigation shall be borne by the owners of the entity to be sold.

D. Denials of Licenses and Sanctions.

(1) The Commission may refuse to issue or renew a license, or may suspend or revoke a license issued by it, if it finds that the applicant or licensee:

(a) Has engaged in unethical or criminal conduct;

(b) Is associating or consorting with an individual who has been convicted of a crime in any jurisdiction;

(c) Is consorting or associating with, or has consorted with, a bookmaker, tout, or individual of similar pursuits;

(d) Is, or has been, operating as a bookmaker, tout, or a similar pursuit;

(e) Is not financially responsible;

(f) Has been engaged in, or attempted to engage in, any fraud or misrepresentation in connection with the racing or breeding of a horse;

(g) Assaults, or threatens to do bodily injury to, a member of the Commission or any of its employees or representatives or a member or employee of an association;

(h) Has engaged in conduct detrimental to racing; or

(i) Has violated, or attempted to violate:

(i) A law or regulation in any jurisdiction, including this State, or

(ii) A condition imposed by the Commission.

(2) Instead of, or in addition to, suspending a license, the Commission may impose a fine not exceeding $5,000.

(3) In determining the penalty to be imposed, the Commission shall consider the:

(a) Seriousness of the violation;

(b) Harm caused by the violation;

(c) Good faith or lack of good faith of the licensee; and

(d) Licensing history of the licensee.

E. The Commission may require an association to submit periodic reports, reviewed by a certified public accountant, as to the:

(1) Amount bet at each location in Maryland;

(2) Takeout calculation, and the allocation of the takeout, on the amount bet under §E(1) of this regulation;

(3) Amount bet on Maryland races in other jurisdictions; and

(4) Amount, and the allocation of the amount, received from the bets on Maryland races in other jurisdictions.