11 Va. Admin. Code § 5-90-90

Current through Register Vol. 40, No. 22, June 17, 2024

Section 11VAC5-90-90 - Enforcement

A. Inspections.

1. A licensee or permit holder is subject to unannounced inspections conducted by the department to evaluate and verify the entity's compliance with the casino gaming law, this chapter, and any other law, regulation, or condition of the department related to casino gaming.

2. The department may conduct an unannounced inspection without a warrant and take any of the following actions:

a. Conduct an inspection of premises in which:

(1) Casino gaming is conducted;

(2) Authorized casino games, table game equipment, a central monitor and control system, or associated equipment and software are:

(a) Designed;

(b) Built;

(c) Constructed;

(d) Assembled;

(e) Manufactured;

(f) Sold;

(g) Distributed; or

(h) Serviced; or

(3) Records are prepared or maintained for activities referenced in subdivisions 2 a (1) and 2 a (2) of this subsection;

b. Conduct an inspection of a casino game, table game equipment, a central monitor control system, or associated equipment and software in, about, on, or around the premises specified in subdivision 2 a of this subsection;

c. From the premises specified in subdivision 2 a of this subsection, summarily seize, remove, impound, or assume physical control of, for the purposes of examination and inspection:

(1) A casino game;

(2) Table game equipment;

(3) A central monitor and control system; or

(4) Associated equipment and software;

d. Inspect, examine, and audit books, records, and documents concerning a licensee's or permit holder's casino gaming operations, including the financial records of a:

(1) Parent corporation;

(2) Subsidiary corporation; or

(3) Similar business entity; or

e. Seize, impound, or assume physical control of:

(1) Books;

(2) Records;

(3) Ledgers;

(4) Cash boxes and their contents;

(5) A counting room or its equipment;

(6) Other physical objects relating to casino gaming operations; or

(7) Any record or object that a licensee or permit holder is required by law or license and permit terms to maintain.

3. During an inspection, a licensee or permit holder and their employees, agents, and representatives:

a. Shall:

(1) Make available for inspection, copying, or physical control a record that a licensee or permit holder is required to maintain;

(2) Authorize any person having financial records relating to the licensee or permit holder to provide those records to the department; and

(3) Otherwise cooperate with the activities of the department described in this chapter; and

b. May not knowingly interfere with the authorized activity of the department during an unannounced inspection.

4. An unannounced inspection may be conducted:

a. Any time during reasonable business hours; and

b. Periodically, as determined by the department.

5. The refusal of a licensee or permit holder or their employees or agents to provide the department with the access necessary to perform an unannounced inspection may be the basis for enforcement action under this section.

6. In addition to subdivisions 1 through 5 of this subsection, department staff, along with agents of the Department of State Police and local law-enforcement or fire departments, may enter any casino gaming facility at any time to determine compliance with the casino gaming law, this chapter, and applicable fire prevention and safety laws.

B. Records and reports.

1. Within a reasonable time after the conclusion of the unannounced inspection, the department's inspectors shall submit a written report of the inspection to the director and the licensee or permit holder that was the subject of the unannounced inspection.

2. A written report of an unannounced inspection shall be considered a public record to the extent allowable under the Virginia Freedom of Information Act (§ 2.2-3700 et seq. of the Code of Virginia).

C. A licensee or permit holder may not:

1. Violate a provision of the casino gaming law, this chapter, or any other law, regulation, or condition of the department related to casino gaming;

2. Take, or attempt to take, any action that is intended to:

a. Change or influence the outcome of a casino game;

b. Influence any person or unit of government that is involved in implementing or enforcing the casino gaming law;

c. Interfere with the regular operation of:

(1) The central monitor and control system;

(2) A slot machine;

(3) Associated equipment or software; or

(4) A casino game;

3. Fail to:

a. Conform to the information contained in a license or permit application;

b. Meet a licensing or permit requirement;

c. Promptly submit to the department any change in the information contained in a license or permit application, including a subsequent conviction of a felony under the laws of Virginia, any other state, or the United States; or

d. Adequately remedy a deficiency of which the licensee or permit holder has received notice under this chapter.

D. Notice of violation.

1. After receiving a report of an alleged violation of subsection C of this section by a licensee or permit holder, the director shall notify the licensee or permit holder of the alleged violation and investigate the report.

2. The director may designate staff to serve on a review committee that:

a. Reviews the investigation into the alleged violation conducted under subdivision 1 of this subsection; and

b. Makes a recommendation to the director for addressing the alleged violation.

3. The review committee's recommendation to the director may include:

a. Requiring the licensee or permit holder to implement a corrective action plan;

b. Issuing the licensee or permit holder a warning letter;

c. Entering into a settlement agreement with the licensee or permit holder;

d. Recommending that the director initiate proceedings to impose a sanction or civil penalty on the licensee or permit holder; or

e. Any other appropriate action.

4. After considering the review committee's recommendation, the director may:

a. Initiate proceedings to impose a sanction or civil penalty on the licensee or permit holder;

b. Direct staff to:

(1) Implement the review committee's recommendation; or

(2) Take other appropriate action.

5. Department staff shall provide a licensee or permit holder with notice of the violations that describes the statute, regulation, or directive allegedly violated, along with investigative findings and the director's recommendation for addressing the alleged violation.

6. Nothing in this subsection shall be construed to require that:

a. The licensee or permit holder receive an opportunity to meet with staff or the director to discuss an informal settlement of a violation; or

b. The department undertake development of a corrective action plan or attempt to reach a settlement with the licensee or permit holder before the director initiates proceeding for imposition of a sanction or civil penalty against the licensee or permit holder.

7. If the report received under this subsection contains a credible complaint of an alleged criminal violation of the casino gaming law, the director shall immediately forward the report to the Office of the Attorney General and the Department of State Police for appropriate action.

E. Corrective action plan.

1. If the director instructs staff to initiate a corrective action plan with a licensee or permit holder, department staff shall give written notice to the licensee or permit holder that includes:

a. A description of the alleged violation;

b. A description of the sanctions and civil penalties that are possible because of the alleged violation; and

c. The requirement that the licensee or permit holder submit a corrective action plan to the department.

2. A corrective action plan shall include:

a. Periodic monitoring or progress reports;

b. Timelines for completing corrective action;

c. Implementation of measures to guard against recurrence of the alleged violation; and

d. Any other measures necessary to resolve the alleged violation.

3. Timeframe for implementing a corrective action plan.

a. Within 10 days of receipt of a notice under subdivision 1 of this subsection, the licensee or permit holder shall submit a corrective action plan to the director or the director's designee.

b. The director or the director's designee shall review the corrective action plan and inform the licensee or permit holder whether the corrective action plan is acceptable.

c. If the corrective action plan is acceptable, the licensee or permit holder shall implement it immediately.

d. If the corrective action plan is not acceptable, the licensee or permit holder shall submit a revised plan immediately.

4. If a licensee or permit holder fails to submit an acceptable corrective action plan within the timeframe described in this subsection, the director may:

a. Provide the licensee or permit holder additional time within which to submit an acceptable corrective action plan within five days; or

b. Initiate proceedings for imposition of a sanction or civil penalty.

5. Corrective plan outcome.

a. After a licensee or permit holder 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:

(1) The basis of a subsequent corrective action plan, settlement, sanction, or civil penalty if a similar violation occurs; or

(2) Raised during a board hearing as part of the department's enforcement record for the licensee or permit holder.

b. If, at any time during the corrective action period, the director or the director's designee determines that the licensee or permit holder has made insufficient progress toward fulfilling a requirement of the corrective action plan, the director may:

(1) For good cause, extend the time for completion of a correction action plan; or

(2) Initiate proceedings for imposition of a sanction or civil penalty.

c. If, at the end of the corrective action period, the licensee or permit holder has failed to satisfactorily complete the corrective action plan, the director may initiate proceedings for imposition of a sanction or civil penalty.

F. Settlement.

1. The director may provide a licensee or permit holder with the opportunity to discuss with staff a means of entering into a voluntary settlement agreement between the licensee or permit holder and the department by which the violation is settled without a sanction or civil penalty.

2. A settlement may involve elements of corrective action and may also include a remittance of funds to the department from the licensee or permit holder.

3. A settlement agreement shall be signed by an authorized representative of the licensee or permit holder and the director or director's designee.

4. If a licensee or permit holder violates a term of a settlement agreement, nothing in this subsection shall be construed to prevent the director or board from imposing a sanction or civil penalty against the licensee or permit holder for that, or the underlying violation.

G. Emergency suspension.

1. The director may emergently suspend a license or permit if the director determines that suspension is necessary to protect the Commonwealth's casino gaming program against a serious and imminent risk of harm to its integrity, security, or profitability.

2. If the director emergently suspends a license or permit, the director shall:

a. Promptly schedule a board hearing on the emergency suspension;

b. Provide the licensee or permit holder the written notice required under subsection E of this section,

c. Order the licensee or permit holder to immediately cease performing the functions otherwise authorized by the license or permit; and

d. Inform the licensee or permit holder that failure to comply with the director's order constitutes a separate violation for which an additional sanction or civil penalty may be imposed.

3. An emergency suspension may be resolved through a voluntary settlement agreement pursuant to subsection F of this section.

H. Imposition of sanctions and civil penalties.

1. For a violation of subsection C of this section, the director may impose:

a. A civil penalty:

(1) For a facility operator or a supplier, in an amount not to exceed $100,000; and

(2) For a holder of service permit, in an amount not to exceed $10,000; or

b. A sanction, including:

(1) Revocation of a license or permit;

(2) Suspension of a license or permit for a period of time;

(3) Reprimand; or

(4) Condition that must be met within a specified time as to:

(a) Training;

(b) Staffing;

(c) Supervision;

(d) Compliance with internal controls;

(e) Probationary periods; or

(f) Any other directive to address the violation.

2. The imposition of a civil penalty or a sanction may be appealed to the board for a hearing under 11VAC5-20-180.

3. To determine the amount of a civil penalty to impose on a licensee or permit holder, the board shall consider:

a. The seriousness of the violation;

b. The harm caused by the violation; and

c. Whether the person who committed the violation acted in good faith.

4. To determine the appropriate sanction to impose on a licensee or permit holder, the board may consider the factors in subdivision 2 of this subsection, and:

a. Whether a violation was willful;

b. Whether the licensee or permit holder had, or should have had, control of the situation;

c. Whether the violation may have occurred in connection with unclear or insufficient:

(1) Information;

(2) Training;

(3) Communication; or

(4) Requirements;

d. Any extraordinary circumstances;

e. Prior disciplinary history with the board;

f. Profit that resulted, or may have resulted, from the violation;

g. Harm that resulted, or may have resulted, from the violation;

h. How the violation was detected;

i. Tailoring the discipline to address the violation;

j. Action taken by the licensee or permit holder to prevent recurrence of the violation;

k. Action taken by the department to address similar violations; and

l. Any other information that the board finds relevant.

5. Because a licensee and a permit holder is presumed to be familiar with applicable statutes and regulations governing Virginia's casino gaming program, a claim of ignorance of the law or this chapter may not be used as a defense to a finding of a violation or to the imposition of a sanction or civil penalty.

6. A sanction and a civil penalty may be imposed for each violation.

I. Board action.

1. Board action against a licensee or permit holder for a violation of subsection C of this section shall be conducted in accordance with 11VAC5-90-180, and the board shall:

a. Make a finding whether the licensee or permit holder violated a provision of subsection C of this section; and

b. If the licensee or permit holder violated a provision of subsection C of this section, decide whether, and to what extent, to impose a sanction or civil penalty.

2. A licensee or permit holder may seek judicial review of the board's decision.

3. A licensee or permit holder against whom the board ordered the imposition of suspension or revocation of a license or permit shall immediately comply with the board's order.

4. A licensee or permit against whom the board imposed a civil penalty shall remit to the board payment in full of the civil penalty within 30 calendar days.

11 Va. Admin. Code § 5-90-90

Derived from Virginia Register Volume 37, Issue 16, eff. 3/11/2021; Amended, Virginia Register Volume 38, Issue 13, eff. 3/16/2022; Errata, 39:26 VA.R. 2895 August 14, 2023.

Statutory Authority: §§ 58.1-4101 and 58.1-4102 of the Code of Virginia.