Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 238.510, 238.515, 238.530, 238.555, 238.560,
238.995
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515 and 238.560
authorize the Department of Charitable Gaming to take appropriate disciplinary
action against licensed charitable organizations, charitable gaming facilities,
manufacturers, distributors, or persons who do not operate in compliance with
KRS Chapter 238 and the administrative regulations promulgated thereunder. KRS 238.560 authorizes the department to classify offenses and recommended
administrative actions. This administrative regulation establishes the required
classifications and penalties.
Section
1. Department Enforcement Powers.
(1) The department may issue a letter of
warning, letter of reprimand, or a cease and desist order to any license holder
for any violation of KRS Chapter 238 or 820 KAR Chapter 1.
(2) The department may impose administrative
action pursuant to KRS 238.560 if the department determines that the action
will deter future violations and promote efforts to correct the violation
cited.
Section 2. Fines.
The department may assess fines against any license holder in accordance with
the following schedule:
(1) A violation of KRS
Chapter 238 or 820 KAR Chapter 1 relative to charitable gaming recordkeeping
and reporting requirements, except for failure to file quarterly reports, may
be subject to a fine not to exceed $500 for each offense. A second or
subsequent violation of the same statutory or regulatory provision during a
three (3) year period may be subject to a fine not to exceed $1,000 for each
offense.
(2) A violation of KRS
Chapter 238 or 820 KAR Chapter 1 relative to the conduct of charitable games,
may be subject to a fine not to exceed $500 for each offense. A second or
subsequent violation of the same statutory or regulatory provision during a
three (3) year period may be subject to a fine not to exceed $1,000 for each
offense.
(3) A violation of KRS
Chapter 238 or 820 KAR Chapter 1 relative to manufacture, packaging, and
distribution of charitable gaming supplies and equipment may be subject to a
fine not to exceed $500 for each offense. A second or subsequent violation of
the same statutory or regulatory provision during a three (3) year period may
be subject to a fine not to exceed $1,000 for each offense.
(4) A violation of the provisions of KRS 238.530(10) or 238.555(3) relative to conflicts of interest among types of
licensees may be subject to a fine not to exceed $750 for each offense. A
second or subsequent violation during a three (3) year period may be subject to
a fine not to exceed $1,000 for each offense.
(5) A violation for conducting any activity
without a license for which a license is required pursuant to KRS Chapter 238
and 820 KAR Chapter 1 may be subject to a fine not to exceed $1,000 for each
offense.
(6) A violation for making
false statements in any documents submitted to the department may be subject to
a fine not to exceed $1,000 for each offense.
(7) A violation of KRS Chapter 238 or 820 KAR
Chapter 1 relative to diversion of net receipts from authorized expenses or
charitable purposes, unlawful compensation to an individual involved in the
conduct of charitable gaming, or any other inurement of net receipts to the
private benefit or financial gain of an individual or person, may be subject to
a fine not to exceed $1,000 for each offense.
(8) A violation of KRS 238.510(5) relative to
gambling offenses committed on licensed charitable gaming premises or in
conjunction with charitable gaming may be subject to a fine not to exceed
$1,000 for each offense.
(9) Any
other violation of KRS Chapter 238 or 820 KAR Chapter 1 for which a fine is not
established in this section may be subject to a fine not to exceed $1,000 for
each offense.
Section 3.
Probation.
(1) The department may impose upon
any license holder a term of probation for any violation of KRS Chapter 238 or
820 KAR Chapter 1.
(2) The
department may impose this administrative action, pursuant to KRS 238.560(3),
if it determines that department oversight and monitoring of the license
holder's activities will promote efforts to correct the cited violation and
deter future violations.
Section
4. Revocation, Suspension, or Denial of License.
(1) The department shall revoke, suspend, or
deny a license or application for a license if:
(a) An applicant, license holder, license
holder seeking renewal, or individual associated with the applicant or license
holder in a capacity established in KRS 238.525(3) fails to meet the
requirements of KRS 238.525(4) or 820 KAR 1:005;
(b) A license holder fails to pay a fine,
correct a violation, or comply with any other requirement imposed by a final
order of the department within the previous five (5) years;;
(c) A license holder, upon notice of
delinquency, fails to remit to the department any charitable gaming fee
required pursuant to KRS 238.570(1);
(d) A licensed charitable organization fails
to maintain its federal tax-exempt status or status as a common school,
institute of higher learning, or public college or university, as required by
KRS 238.535(12)(a); or
(e) A
licensed charitable organization fails to maintain an office or place of
business in the Commonwealth of Kentucky, as required by KRS 238.535(12)(b) and (d).
(2) The department
may revoke, suspend, or deny the license or application of a licensed
charitable organization, manufacturer, distributor, or charitable gaming
facility for violations of KRS Chapter 238 or 820 KAR Chapter 1 if the nature,
frequency, and severity of the offenses charged or the license holder's or
applicant's history of previous violations demonstrate an unwillingness or
inability to operate in compliance with the law.
Section 5. Written Notice of Violation. The
department shall issue a written notice of violation to a license holder
determined to have violated any provision of KRS Chapter 238 or 820 KAR Chapter
1. Any notices of violation issued to a license holder shall be considered by
the department in evaluating the license holder's history of previous
violation. A notice of violation shall state the provisions alleged to have
been violated and shall notify the license holder that the department may take
administrative action against the license holder as a result of the
violations.
Section 6.
Investigations. A person may submit a request, in writing, to the department to
initiate an investigation of an alleged violation.
STATUTORY AUTHORITY: KRS 238.515,
238.560
