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Code of Conduct

I. INTRODUCTION

In the discharge of its powers, duties and responsibilities, the Maryland Lottery Gaming and Control Commission(Commission) must operate according to the highest professional and ethical standards. The Commission’s members and employees are expected to discharge their duties with loyalty and in a manner that promotes and preserves public trust and confidence in the Commission, its operations, and the State of Maryland.

Members serving on the Commission have a fiduciary responsibility to the State and are bound by the conflict of interest provisions of the Public Ethics Law (Md. Code Ann., State Gov’t Article (SG), Title 15).  All Commission employees, regardless of grade or years of service, are also bound by the conflict of interest provisions of the Public Ethics Law.  All Commission members and employees should read and become familiar with provisions of the Public Ethics Law and must avoid any situation that creates a conflict of interest, or even the appearance of a conflict of interest.  Members who fail to comply with the Public Ethics Law may be asked to resign their appointment, and employees who fail to comply with the Public Ethics Law may be the subject of disciplinary action up to and including termination of employment.

The Commission is legally responsible for regulating the operation of the State’s video lottery terminal (VLT) program.  It is critical that the VLT program operate to the highest legal, professional and ethical standards so that the public is assured that the impartiality and independent judgment of Commission members and employees will be maintained.  Therefore, it is essential that the Commission’s members and employees avoid situations where private interest in outside business activities and opportunity for financial or personal gain could influence the member or employee to give favored treatment to any individual or entity.  Members and employees must avoid involvement in any non-Commission relationship, activity, circumstance or conduct that may erode the public trust in the Commission’s operations or the VLT program, or that otherwise may appear questionable to the general public.

II. POLICY AND APPLICATION

A. The purpose of this Code of Conduct (Code) is to ensure that the Commission’s members and employees avoid situations, relationships and associations that may lead to or represent a conflict of interest for the Commission, or its members and employees, in the context of operating the VLT program.  The provisions in this Code are intended to highlight and augment statutory and regulatory provisions.  The list of prohibitions in this Code is not exclusive and does not substitute for any applicable law. All Commission members and employees should remain aware of their professional and ethical responsibilities under applicable law, including but not limited to:

1. Standards of conduct for executive branch employees, Executive Order 01.01.2007.01;

2. Conflict of interest, SG, §§ 15-501 through 15-509; and

3. Financial disclosure requirements (if applicable), SG §§ 15-601 through 15-611.

B. Each member of the Commission and each Commission employee must read and comply with this Code.  Upon accepting an appointment to the Commission or employment with the Commission, each Commission member or employee shall sign a statement acknowledging that he or she has read the Code, understands its terms and agrees to abide by its terms as currently adopted or as may be amended.  Should a member of the Commission or employee find himself or herself unable or unwilling to comply with the Code as adopted herein or as amended, the member or employee shall immediately inform the members of the Commission and the Director.  If a Commission employee has a question or concern as to the applicability of this Code to a current or prospective situation, relationship or association, they should present that question or concern to the Director for clarification or guidance.  Additionally, a member or employee should seek the review and approval of the Ethics Commission on all questions of compliance with Public Ethics Laws:  http://ethics.gov.state.md.us/.

C. No Commission member or employee shall use or attempt to use his or her official position to secure any privilege, advantage, favor or influence for himself, herself or others.

D. Certain of the prohibitions in this Code affect or extend to family members of Commission members or employees who live in the same principal residence as a member or employee.  For purposes of this Code, these represent the lineal relations of Commission members and employees, as well as biological and legally adopted children.  A member or employee should take reasonable measures to address any conduct of a family member that creates the appearance of a conflict of interest for the member or employee. However, it is recognized that in some cases, a Commission member or employee may have limited influence over the decisions or actions of a family member; that limited influence may be taken into consideration in evaluating the circumstances of an alleged failure to comply with this Code.

III. DEFINITIONS

In this Code, the following terms have the following meanings:

A.  “Agency” has the same meaning as in State Government Article (SG) § 9-101(b), which is the Maryland State Lottery Agency (MSLA).

B.  “Applicant” has the same meaning as in the VLT Law, which is an individual or entity who applies for any license required under the VLT program.

C.  “Close economic association” has the same general meaning as in SG § 15-511, which is:

1. An individual’s employer, employee, or partner in a business or professional enterprise;

2. A partnership, limited liability partnership, or limited liability company in which an individual has invested capital or owns an interest;

3. A corporation in which an individual owns the lesser of:

a. 10% or more of the outstanding capital stock; or

b. capital stock with a cumulative value of $25,000 or more; and

4. A corporation in which the individual is an officer, director, or agent.

“Close economic association” does not mean stock owned directly through a mutual fund, retirement plan, or other similar commingled investment vehicle the individual investments of which the individual does not control or manage.

D.  “Commission” means the Maryland State Lottery Commission.

E.  “Complimentary services” has the same meaning as in COMAR 14.01.14, which is any lodging or service item that:

1. Is offered by a facility operator directly or indirectly to a player at no cost or at a reduced cost;

2. Is not generally available to the public;

3. Does not include:

a. Cashable or noncashable credits issued to a player as part of a player incentive or reward program; and

b. Lodging available to the public through convention or government rates.

F.  “Conflict of interest” means a situation in which the private interest of a Commission member, employee, or family member of a member or employee, whether personal, financial or otherwise, influences, or creates the appearance that the private interest may impair the impartiality or independent judgment of the member or employee, or otherwise compromise the individual’s fair and impartial performance of his or her Commission-related duties and responsibilities.

G.  “Employee” includes all State employees, paid or unpaid, who are in the service of the Agency or Commission.

H.  “Ethics Commission” means the State Ethics Commission, which has authority under SG § 15-101, et seq. to enforce the State’s Public Ethics Laws.

I.  “Ex parte communication” means a direct or indirect communication between a Commission member and an individual who has a personal or financial interest in a matter  that is pending before the Commission.

J.  “Facility” has the same meaning as in COMAR 14.01.10, which is a video lottery facility.

K.  “Family member” means an individual who lives in the same principal address as a Commission member or employee and is the Commission member’s or employee’s spouse, domestic partner, child, sibling, parent, or parent-in-law.

L.  “Financial interest” has the same general meaning as in the Public Ethics Law, SG § 15-102, which is:

1. Ownership if an interest as the result of which the owner has received within the past 3 years, is currently receiving, or in the future is entitled to receive, more than $1,000 per year; or

2. Ownership of securities of any kind that represent, or are convertible into, ownership of more than 3% of a business entity by a Commission member or employee, or the member’s or employee’s spouse.

M.  “Gift” has the same meaning as in the Public Ethics Law, SG § 15-102, which is:

1. The transfer of anything of economic value, regardless of form, without adequate and lawful consideration.

2.  “Gift” does not include the solicitation, acceptance, receipt, or regulation of a political contribution that is regulated in accordance with:

a.  The Election Law Article of the Annotated Code of Maryland; or

b. Any other law regulating the conduct of elections or the receipt of political contributions.

N.  “License” has the same meaning as in the VLT Law, which is a license that is required under the VLT program.

O.  “Licensee” has the same meaning as in the VLT Law, which is an applicant who has been issued a license under the VLT program.

P.  “Non-Commission employment” collectively refers to any service, employment, office, position, business or occupation that is pursued or held by a Commission member or employee that is separate from Commission service or employment.

Q.  “Professional service agents of the Commission” include any individual, corporation or organization providing legal, accounting, financial, public relations, auditing, architectural, data processing, gaming regulatory or management consulting services under contract to the Commission.

R.  “Video lottery employee” has the same meaning as in COMAR 14.01.10, which is an individual who is, or is seeking to be, employed by a licensed facility operator, manufacturer or contractor as a gaming, non-gaming, or principal employee.

S.  “Video lottery terminal,” or “VLT,” has the same meaning in SG § 9-1A-01, which is a machine or device that plays or simulates a game of chance and pays out prizes to players, and can be operated only at a facility licensed by the Commission.

T.  “VLT Law” means SG, Title 9, Subtitle 1A of the Annotated Code of Maryland, which establishes the VLT program.

IV. DUTY TO AVOID CONFLICT OF INTEREST

A. Commission members and employees, and their family members, have a duty to avoid relationships or fraternization with an applicant for, or holder of, a license issued by the Commission that may cause or have the appearance of causing a conflict of interest.  A member or employee must take reasonable measures to address conduct of a family member that creates the appearance of a conflict of interest for the member or employee.

B. Commission members and employees may not solicit, suggest, request or recommend any applicant for, or holder of, a license issued by the Commission, or to any representative or agent of such applicant or holder the appointment of any individual to an office, place or position, or hiring of any individual for direct or indirect employment.

C. Commission members and employees may not intentionally use the prestige of the employee’s office for his or her own private gain or that of another.

V. RESTRICTIONS RELATED TO VIDEO LOTTERY TERMINAL PLAY

Except as may be required in the conduct or normal course of official duties, a Commission member, employee, or family member shall not:

A. Engage in the play of any VLT at any VLT facility that is licensed by the State of Maryland;

B. Engage in legalized gambling in any establishment identified by the Commission that, in the judgment of the Commission, could represent a potential for a conflict of interest;

C. Accept any complimentary service or gift of any kind from any individual or entity licensed by the Commission if such acceptance may create the appearance of a conflict of interest; or

D. Stay overnight in a guest room at any facility licensed by the Commission.

VI. NON-COMMISSION EMPLOYMENT

A. Commission members and employees must not hold or pursue any non-Commission employment that impairs the impartiality and independent judgment of the individual in discharge of his or her official duties.

B. Commission members and employees may engage in non-Commission employment that does not interfere or conflict with their duties.

C. Members and employees must disclose to the Director any non-Commission employment that exists at the time of appointment to, or employment with, the Commission. If the Director approves the non-Commission employment, the member or employee must then obtain the review and approval of the Ethics Commission.

D. Non-Commission employment that begins after a member’s appointment or employee’s hire must be disclosed, and approved as provided in § C, before the member or employee accepts the employment.

E. A Commission member whose non-Commission employment is not approved by both the Director and the Ethics Commission may be asked to recuse himself or herself from participation in Commission action, separate from that employment, or resign his or her appointment.

F. An employee whose non-Commission employment is not approved by both the Director and the Ethics Commission may be asked to refrain from participation in Commission action, separate from that employment, or he or she may be terminated from Commission employment.

VII. RESTRICTIONS ON RECEIVING GIFTS

Except for unsolicited items of a nominal value, Commission members, employees and their family members may not directly or indirectly accept any gift, gratuity, service, compensation, travel, lodging, complimentary service, or any thing of value, from:

A. A Commission licensee, applicant, or any licensee’s or applicant’s affiliate, principal employee, or representative;

B. An entity that does or seeks to do any business of any kind, regardless of amount, with the Commission;

C. An entity that engages in an activity related to the State’s VLT program that is regulated or controlled by the Commission;

D. An entity that has a financial interest that may be materially and substantially affected, in a manner distinguishable from the public generally, by the performance or nonperformance of the individual’s official duties;

E. A regulated lobbyist with respect to matters related to the gaming industry generally or the State’s VLT program specifically; or

F. Any other entity or individual that, in the judgment of the Commission, from whom the receipt of a gift could create the appearance of a conflict of interest.

VIII. PROHIBITION ON HOLDING OR ACQUIRING FINANCIAL INTEREST

A. Commission members and employees, and their family members, may not directly hold or acquire, or cause or encourage any other person to acquire, any legal or equitable financial interest in a Commission licensee, applicant, or the affiliate, principal employee or representative of an applicant or licensee.  Consistent with the requirements of RFP #2009-0101, Video Lottery Operation Licenses, the holding or acquisition of a financial interest in such entity through a direct means – such as by holding stocks, bonds, or other financial interest – is prohibited.  The same prohibition applies to a member’s or employee’s indirect acquisition of any such financial interest through any individual or entity who is acting at the direction or control of the member or employee.

B. The holding or acquisition of a financial interest in a Commission licensee, applicant, or the affiliate, principal employee or representative of an applicant or licensee, through a mutual fund or similar mechanism by which the holder does not exercise any control over the entity in which it owns a financial interest, is not prohibited.  However, the Commission may identify circumstances related to a specific financial interest that, in its judgment, are either so influenced by gaming holdings, or afford the holder of the financial interest control over gaming activities, as to present the potential for, or the appearance of, a conflict of interest.

IX. CLOSE ECONOMIC ASSOCIATION

A. A Commission member or employee who has, or whose family member has, a close economic association with an applicant, a licensee, an affiliate of a licensee or applicant, or a principal employee of a licensee or applicant, shall disclose that close economic association to the Director or the Commission.

B. A Commission member or employee who has, or whose family member has, a close economic association with an applicant, a licensee, an affiliate of a licensee or applicant, or a principal employee of a licensee or applicant, shall be presumed to have a conflict of interest that disqualifies the member or employee from participating in any VLT-related Commission action that would:

1.  Directly impact any interest of the entity with which the member or employee has a close economic association;

2. Cause the member, employee or family member to benefit financially from a close economic association; or

3. Cause the member, employee or family member to benefit financially from a close economic association with a person who is acting for the purpose of influencing Commission action.

C. The presumption of disqualification may be suspended if the:

1. Member or employee discloses to the Commission the disqualifying close economic association; and

2.  The Ethics Commission reviews the facts and finds no conflict of interest.

X. RESTRICTIONS ON PROFESSIONAL SERVICE AGENTS

Professional service agents of the Commission may be subject to terms and conditions relating to restrictions or prohibitions in representation, employment and contracting with any licensee or applicant, or an affiliate, principal personnel or representative.  Such restrictions and prohibitions shall be contained in the professional service contracts of the Commission.

XI. DISCLOSURE STATEMENTS

Commission members and employees who are required by law to submit a financial disclosure statement with the State Ethics Commission under SG §§ 15-602 through 15-611 shall complete and timely file such statements as required.

XII. RESTRICTIONS ON POST-COMMISSION ACTIVITY

A. A former Commission member or employee shall not, for a period of 365 days after their Commission membership or employment ends:

1. Be licensed as a video lottery employee in Maryland; or

2. Engage in any employment or contractual relations with, or have a financial interest in, a Maryland-licensed facility operator, manufacturer, contractor, principal employee, or their affiliates.

B. A former Commission member or employee is prohibited from assisting or representing in any way a party other than the State in a matter involving the State if the matter is one in which the individual participated significantly as a State employee.  There is no time limit on this prohibition.

C. A former Commission member or employee may apply to the Commission in writing for a waiver of the restrictions of this section.  If the Commission grants the waiver, the member or employee must then obtain the approval of the Ethics Commission.

XIII. VIOLATIONS

A. Violation of this Code by a present or former Commission member may result in notification to the Office of the Attorney General in accordance with Executive Order 01.01.2007.01, or other applicable legal action.

B. Violation of this Code by a present or former employee may result in notification described in §A, as well as disciplinary action up to and including termination of a present employee’s employment.

C. Violation of this Code by professional service agents of the Commission may result in action up to and including termination of the professional service contract with the Commission.

XV. EX PARTE COMMUNICATIONS

No member of the Commission shall knowingly have an ex parte communication relating to a matter pending before the Commission with any party, or representative or agent of a party, to the matter or with any person with a material interest in the outcome of the pending matter.  As ex parte communications, either oral, written, electronic or otherwise communicated, may occur inadvertently, any member of the Commission participating in such communication shall report the details about the communication to the Director and may be subject to recusal consistent with COMAR 14.01.02.

XVI. EFFECTIVE DATE

The provisions of this Code are effective and binding as of September 16, 2010, upon members and employees of the Maryland State Lottery Commission.  Future amendments to the Code shall be effective and binding on the date of adoption.