KRS 238.560: Investigations -- Complaints -- Administrative actions against violators.

(1) The corporation may investigate, visit, and have free access to the office or place of

business of a licensee or any location where licensed charitable gaming is offered or

conducted or any location or facility under the jurisdiction of the corporation. The

corporation may take other actions necessary to fulfill its enforcement obligations

pursuant to this chapter and KRS Chapter 230.

(2) The office may investigate allegations of wrongdoing upon complaint or upon its

own volition. The corporation by administrative regulation may establish

procedures for receiving and investigating complaints in an expeditious manner.

(3) In carrying out its enforcement responsibilities, the office may:

(a) Inspect and examine all premises in which or on which charitable gaming is

conducted or charitable gaming supplies or equipment are manufactured or

distributed;

(b) Seize and remove from premises and impound charitable gaming supplies and

equipment for the purposes of examination and inspection pursuant to an

appropriate court order;

(c) Demand access to, inspect, and audit books and records of licensees for the

purpose of determining compliance with laws and the corpora tion's

administrative regulations relative to charitable gaming; and

(d) Conduct in-depth audits and investigations, when warranted.

(4) (a) As used in this subsection, "willful" means that the conduct constituting the

violation was committed with intent, not accidentally or inadvertently.

(b) The office may take appropriate administrative action against any person

licensed or unlicensed under this chapter for any violation of the provisions of

this chapter or administrative regulations promulgated thereunder subject to

the conditions established by this subsection.

(c) The o ffice may deny a license, suspend or revoke a license, impose

probationary conditions on a license, issue a written reprimand or warning,

impose fines or penalties, issue a cease and desist order, or any combination

thereof with regard to any licensee or o ther person participating in charitable

gaming in Kentucky for a violation of any federal or state statute,

administrative regulation, or corporation's directive, ruling, or order. An

administrative fine shall not exceed five thousand dollars ($5,000) for each

offense. The office may deny the issuance of a license or a license renewal if

the applicant or licensee has failed to pay a fine levied by the office. The

corporation may by administrative regulation classify types of offenses and

the recommended adm inistrative action. The type of action to be taken shall

be based on the history of previous violations and the nature, severity, and

frequency of the offense. Administrative action authorized in this section shall

be in addition to any criminal penalties provided in this chapter or under other

provisions of law.

(d) 1. Notwithstanding any other provisions of this section, the office shall

review, within two (2) months of receipt, timely filed organization

quarterly reports that include payment of the fee d ue as reflected on the

organization quarterly report. If the office discovers reporting errors that

are not willful, the office shall, prior to taking any other administrative

action, issue a letter of warning to the licensee and allow the licensee

thirty (30) days from the issuance of the letter to correct the identified

violation. The purpose of this subparagraph is for the office to identify

correctable reporting errors in a timely manner, and to notify the

licensee of the errors prior to the due date of the next organization

quarterly report so that the errors are corrected and are not repeated in

subsequent organization quarterly reports.

2. A review conducted under subparagraph 1. of this paragraph shall not be

considered an audit or final review and a cceptance of an organization

quarterly report and payment. The office shall have four (4) years from

the date of filing to fully audit and review an organization quarterly

report, and may pursue administrative actions against the licensee

related to an organization quarterly report or the information reported on

an organization quarterly report within the four (4) year period if

violations or errors that are not willful are discovered. This

subparagraph shall not be construed to require records that are not

needed to audit or review an organization quarterly report to be kept

longer than is required elsewhere in this chapter or in any related

administrative regulations.

3. Notwithstanding the provisions of subparagraph 2. of this paragraph, for

a violation t hat is determined to be willful, the office may pursue the

administrative actions authorized by this section at any time.

4. A letter of warning issued under this section shall:

a. Identify the violation;

b. Describe the corrective action necessary;

c. Identify the administrative actions that can be taken if the violation

is not addressed; and

d. Provide that the person shall have thirty (30) days to correct the

action leading to the violation.

(5) The office may reinstate a license that has been revoked at any time after two (2)

years from the date of revocation. A license may be reinstated only upon a finding

that the violations for which the license was revoked have been corrected.

(6) All departments, divisions, boards, agencies, officers, and institutio ns of the

Commonwealth of Kentucky and all subdivisions thereof, in particular local law

enforcement entities, shall cooperate with the office in carrying out its enforcement

responsibilities.

(7) The office shall report any activity or action which would constitute a criminal

offense to the appropriate authorities in the county where the activity or action

occurred and to the Attorney General.

(8) All administrative actions taken under this section shall be subject to the final order

of the corporation.