November 8, 2012, Introduced by Senators KAHN and NOFS and referred to the Committee on Agriculture.
A bill to amend 1995 PA 279, entitled
"Horse racing law of 1995,"
by amending the title and sections 2, 8, and 17 (MCL 431.302,
431.308, and 431.317), section 2 as amended by 2006 PA 445 and
section 17 as amended by 1998 PA 408, and by adding section 17a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An
act to license and regulate the conducting of horse race
meetings
in this state, with pari-mutuel wagering on the results of
horse races, including advance deposit account wagering, and
persons involved in horse racing and pari-mutuel gaming activities;
at
such race meetings; to create the office of racing commissioner;
to
prescribe provide for the powers and duties of the racing
commissioner;
to prescribe certain powers and duties of the
department
of agriculture and the director of the department of
agriculture
certain state governmental
officers and entities; to
provide
for the promulgation of rules; to provide for the
imposition
of impose taxes and fees and the disposition dispose of
revenues;
to impose certain taxes; to create funds; to legalize and
permit the pari-mutuel method of wagering on the results of live
and simulcast races at licensed race meetings in this state; to
appropriate
the funds money derived from pari-mutuel wagering on
the results of horse races at licensed race meetings in this state;
to prescribe remedies and penalties; and to repeal acts and parts
of acts.
Sec. 2. As used in this act:
(a) "Advance deposit account wagering" means a method of pari-
mutuel wagering conducted in this state that is permissible under
the interstate horseracing act of 1978, 15 USC 3001 to 3007, in
which an individual may establish an account with a person,
licensed by the racing commissioner, to place pari-mutuel wagers in
person, via telephone, or electronically.
(b) (a)
"Affiliate" means a
person who, directly or
indirectly, controls, is controlled by, or is under common control
with; is in a partnership or joint venture relationship with; or is
a co-shareholder of a corporation, co-member of a limited liability
company, or co-partner in a limited liability partnership with a
person who holds or applies for a race meeting or track license
under this act. For purposes of this subdivision, a controlling
interest is a pecuniary interest of more than 15%.
(c) "Board" means the Michigan gaming control board created by
section 4 of the Michigan gaming control and revenue act, 1996 IL
1, MCL 432.204, to which certain powers and duties under this act
were transferred by Executive Reorganization Order No. 2009-31, MCL
324.99919.
(d)
(b) "Breaks" means the cents over any multiple
of 10
otherwise payable to a patron on a wager of $1.00.
(e) (c)
"Certified horsemen's
organization" means an
organization
that is registered with the office of racing
commissioner
board in a manner and form required by the racing
commissioner,
director and that can demonstrate all of the
following:
(i) The organization's capacity to supply horses.
(ii) The organization's ability to assist a race meeting
licensee in conducting the licensee's racing program.
(iii) The organization's ability to monitor and improve physical
conditions and controls for individuals and horses participating at
licensed race meetings.
(iv) The organization's ability to protect the financial
interests of the individuals participating at licensed race
meetings.
(f) (d)
"City area" means a city
with a population of 750,000
or more and every county located wholly or partly within 30 miles
of the city limits of the city.
(g) (e)
"Controlled substance"
means that term as defined in
section 7104 of the public health code, 1978 PA 368, MCL 333.7104.
(h) (f)
"Day of operation" means
a period of 24 hours
beginning at 12 noon and ending at 11:59 a.m. the following day.
(i) "Director" means the executive director of the Michigan
gaming control board appointed under section 4 of the Michigan
gaming control and revenue act, 1996 IL 1, MCL 432.204, to whom
duties of the racing commissioner were transferred under Executive
Reorganization Order No. 2009-31, MCL 324.99919.
(j) (g)
"Drug" means any of the
following:
(i) A substance intended for use in the diagnosis, cure,
mitigation, treatment, or prevention of disease in humans or other
animals.
(ii) A substance, other than food, intended to affect the
structure , or condition , or any a function of the body of
humans
or other animals.
(iii) A substance intended for use as a component of a substance
specified in subparagraph (i) or (ii).
(k) (h)
"Fair" means any a county,
district, or community fair
and
any or a state fair.
(l) (i)
"Foreign substance" means
a substance, or its
metabolites, that does not exist naturally in an untreated horse
or, if natural to an untreated horse, exists at an unnaturally high
physiological concentration as a result of having been administered
to the horse.
(m) (j)
"Full card simulcast"
means an entire simulcast racing
program of 1 or more race meeting licensees located in this state,
or an entire simulcast racing program of 1 or more races
simulcasted from 1 or more racetracks located outside of this
state.
(n) (k)
"Member of the immediate
family" means the spouse,
child, parent, or sibling.
(o) (l) "Person"
means an individual, firm, partnership,
corporation, association, or other legal entity.
(p) (m)
"Purse pool" means an
amount of money allocated or
apportioned to pay prizes for horse races and from which payments
may
be made to certified horsemen's organizations pursuant to under
this act.
(q) (n)
"Veterinarian" means a
person an individual licensed
or otherwise authorized to engage in the practice of veterinary
medicine under part 188 of the public health code, 1978 PA 368, MCL
333.16101
333.18801 to 333.18838, or under a state or federal law
applicable
to that person individual.
Sec.
8. (1) The racing commissioner director
may issue the
following general classes of licenses:
(a) Occupational licenses issued to individuals participating
in, involved in, or otherwise having to do with horse racing, pari-
mutuel wagering, or simulcasting at a licensed race meeting in this
state.
(b) Race meeting licenses issued annually for the succeeding
year
to a person persons to conduct live horse racing,
simulcasting, and pari-mutuel wagering on the results of live and
simulcast horse races at a licensed race meeting in this state
pursuant
to and in accordance with the provisions of under this
act.
(c)
Track licenses issued to a person persons to maintain or
operate a racetrack at which 1 or more race meeting licensees may
conduct licensed race meetings in this state.
(d) Advance deposit account wagering licenses issued to
persons to provide advance deposit account wagering services in
this state.
(2)
The racing commissioner director
shall not issue a race
meeting license to a person if the person is licensed to conduct a
licensed race meeting at another licensed racetrack within a city
area and the person has a controlling interest in or co-ownership
of
the other licensed racetrack. within the city area.
Sec.
17. (1) The pari-mutuel system of wagering upon on the
results of horse races as permitted by this act shall not be held
or construed to be unlawful. All forms of pari-mutuel wagering
conducted at a licensed race meeting shall be preapproved by the
racing
commissioner director pursuant to rule or written order of
the
commissioner director.
(2) A holder of a race meeting license may provide a place in
the race meeting grounds or enclosure at which he or she may
conduct and supervise the pari-mutuel system of wagering on the
results of horse races as permitted by this act. If the pari-mutuel
system of wagering is used at a race meeting, a totalisator or
other device that is equal in accuracy and clearness to a
totalisator
and approved by the racing commissioner director shall
be used. The odds display of the totalisator or other device shall
be placed in full view of the patrons.
(3) Subject to section 18(3), each holder of a race meeting
license shall retain as his or her commission on all forms of
straight wagering 17% of all money wagered involving straight
wagers on the results of live and simulcast horse races conducted
at the licensee's race meetings. Subject to section 18(3), each
holder of a race meeting license shall retain as his or her
commission
on all forms of multiple wagering
, without the written
permission
of the racing commissioner director
not more than 28%
and
or with the written permission of the racing
commissioner
director not more than 35% of all money wagered involving any form
of multiple wager on the results of live and simulcast horse races
conducted at the licensee's race meeting. Except as otherwise
provided by contract, 50% of all commissions from wagering on the
results of live racing at the racetrack where the live racing was
conducted shall be paid to the horsemen's purse pool at the
racetrack where the live racing was conducted. As used in this
subsection:
(a) "Straight wagering" means a wager made on the finishing
position of a single specified horse in a single specified race.
(b) "Multiple wagering" means a wager made on the finishing
positions of more than 1 horse in a specified race or the finishing
positions of 1 or more horses in more than 1 specified race.
(4) All breaks shall be retained by the race meeting licensee
and paid directly to the city or township in which the racetrack is
located
as a fee for services provided pursuant to under section
21.
(5) Payoff prices of tickets of a higher denomination shall be
calculated as even multiples of the payoff price for a $1.00 wager.
Each holder of a race meeting license shall distribute to the
persons holding winning tickets, as a minimum, a sum not less than
$1.10 calculated on the basis of each $1.00 deposited in a pool,
except that each race meeting licensee may distribute a sum of not
less than $1.05 to persons holding winning tickets for each $1.00
deposited in a minus pool. As used in this subsection, "minus pool"
means any win, place, or show pool in which the payout would exceed
the total value of the pool.
(6) A holder of a race meeting license shall not knowingly
permit a person less than 18 years of age to be a patron of the
pari-mutuel wagering conducted or supervised by the holder.
(7)
Any Except as otherwise
authorized by this act, an act or
transaction relative to pari-mutuel wagering on the results of live
or simulcast horse races shall only occur or be permitted to occur
within the enclosure of a licensed race meeting. A person shall not
participate or be a party to any act or transaction relative to
placing a wager or carrying a wager for placement outside of a race
meeting ground. A person shall not provide messenger service for
the placing of a bet for another person who is not a patron.
However,
this subsection does not prevent simulcasting or
intertrack
or interstate common pool wagering inside or outside
this
state as permitted by this act or the rules promulgated under
this
act.
Sec. 17a. (1) Notwithstanding any other provision in this act,
a person licensed to conduct advance deposit account wagering under
section 8 may provide advance deposit account wagering services in
this state.
(2) A person that wishes to provide advance deposit account
wagering services in this state shall apply to the director for a
license on forms provided by the director. The applicant shall
provide all of the following:
(a) A signed agreement with the appropriate certified
horsemen's organizations that identifies the accounts into which
fees are to be deposited.
(b) A detailed plan that describes procedures that will be
implemented to address the requirements of subsection (9).
(c) Any other information required by the director.
(3) An advance deposit account wagering license is valid for 1
year and may be renewed annually.
(4) The initial fee for an advance deposit account wagering
license is $5,000.00. The annual renewal fee is $1,000.00.
(5) The director shall issue a license to provide advance
deposit account wagering services in this state to any person who
meets the requirements of this act.
(6) A person that holds an advance deposit account wagering
license is subject to all pertinent provisions of this act
regarding pari-mutuel wagering.
(7) The director may promulgate rules under the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to
regulate advance deposit account wagering and to implement this
section, including rules to establish all of the following:
(a) Standards, qualifications, and procedures for issuance of
an advance deposit account wagering license.
(b) Provisions regarding access to books, records, and other
pertinent documents.
(c) Provisions for inspections, audits, and submission of
reports.
(d) Provisions for collection of all fees and revenues due to
this state and certified horsemen's organizations from advance
deposit account wagers.
(8) The director may issue a temporary license to any person
that desires to provide advanced deposit account wagering services
in this state before rules are promulgated under subsection (7).
(9) A person licensed to conduct advance deposit account
wagering in this state shall take all reasonable steps to do both
of the following:
(a) Prevent minors from conducting advance deposit account
wagering.
(b) Identify and limit the ability of compulsive gamblers to
place advance deposit account wagers.
(10) A person that conducts advance deposit account wagering
in this state without a license is subject to a fine of up to
$25,000.00 per day of violation and may be ordered to pay
restitution to this state and the certified horsemen's organization
for all unpaid fees and revenue.
(11) A person that provides account wagering services in this
state to a minor is subject to a fine of up to $25,000.00 per
violation. Each wager made by a minor is a violation of this
section.
(12) The following fees shall be paid by an advance deposit
account wagering licensee by the tenth of each month for the
previous month:
(a) To the director, an amount equal to 1/2% of the total
gross amount of all wagers made in this state placed through the
licensee. The director shall use a sufficient portion of the money
paid under this subdivision to retain an investigator to enforce
this section and use the balance for the regulation and oversight
of horse racing.
(b) To the state treasurer for deposit into the general fund,
an amount equal to 3-1/2% of the total gross amount of all wagers
made in this state for all breeds placed through the licensee.
(c) To the certified horsemen's organizations, an amount equal
to 10% of the total gross amount of all wagers made in this state
through the licensee. Money paid under this subdivision shall be
deposited into an account specifically designated to receive the
money as identified by the certified horsemen's organizations.
(13) The standardbred and thoroughbred certified horsemen's
organizations in this state shall each establish and administer an
account to be known as the standardbred or thoroughbred, as
applicable, horsemen's advance deposit account wagering pool. Money
deposited under subsection (12)(c) shall be distributed by the
escrow agent named by the certified horsemen's organizations to the
standardbred horsemen's advance deposit account wagering pool and
the thoroughbred horsemen's advance deposit account wagering pool,
for the first calendar year or remaining portion of the first
calendar year after the effective date of the amendatory act that
added this section on a pro rata basis based on the percentage of
the total simulcast handle for each breed for the previous calendar
year, and for each subsequent calendar year on a pro rata basis
based on the percentage of the total advance deposit account
wagering handle for each breed for the previous calendar year.
Money in the standardbred and thoroughbred advance deposit account
wagering pools shall be distributed as follows:
(a) Forty-four percent to the licensed tracks in this state.
If there is more than 1 licensed track conducting races for a
breed, the amount paid to each licensed track shall be determined
on a pro rata basis based upon the percentage of total handle, from
all sources, for the previous calendar year for each track.
(b) Forty-four percent to purses and administration of
certified horsemen's organizations.
(c) Ten percent for breed incentives.
(d) One half of one percent for horse retirement.
(e) One half of one percent for support of youth equine
programs in this state.
(f) One half of one percent for equine premiums at county
fairs.
(g) One half of one percent to the local unit of government in
which the track is located.
(14) The money distributed under subsection (13)(b) and (c)
shall be divided between the thoroughbred certified horsemen's
association and the quarter horse certified horsemen's association
for the first calendar year or portion of the first calendar year
after the effective date of the amendatory act that added this
section on a pro rata basis based on the percentage of the total
simulcast handle for each breed for the previous calendar year, and
for each subsequent calendar year on a pro rata basis based on the
percentage of the total advance deposit account wagering handle for
each breed for the previous calendar year.
(15) A certified horsemen's organization that receives money
under subsection (12)(c) shall have an independent auditor conduct
an annual audit of the money.
(16) This section does not limit any authority of the director
under this act.
(17) A person that conducted advance deposit account wagering
in this state by accepting a wager from a resident of this state
before the effective date of the amendatory act that added this
section is entitled to an amnesty period of 1 year from the
effective date of the amendatory act that added this section. The
person shall not be prosecuted during the amnesty period for
conducting the wagering if the person enters into a settlement
agreement with the director, obtains an advance deposit account
wagering license before accepting any additional advance deposit
account wager from a resident of this state, and pays the following
fees:
(a) To the state treasurer, an amount equal to 1% of the total
gross amount of all wagers made through the person in this state
before the effective date of the amendatory act that added this
section.
(b) To the account described in subsection (12)(c), an amount
equal to 2% of the total gross amount of all wagers made through
the person in this state before the effective date of the
amendatory act that added this section. Money paid under this
subdivision shall be divided between the standard breed and
thoroughbred horseman's advance deposit account wagering pools as
provided in subsection (13) and then divided equally between the
licensed tracks and purses and certified horsemen's organizations
as if the money were to be distributed under subsection (13)(a) and
(b).
(18) If live thoroughbred race meetings are not conducted at
any licensed track in this state in a fiscal year, all of the
following apply:
(a) Money paid during the fiscal year to the thoroughbred
horsemen's advance deposit account wagering pool to be expended as
provided in subsection (13)(a) and (b) shall be used for
thoroughbred breed incentives with the total amount being divided
equally between breeders' awards and owners' awards.
(b) Breeders' awards and owners' awards shall be paid for
Michigan-bred thoroughbred horses that race at any racetrack in
North America. The awards shall be calculated by dividing the total
amount of money available for each award category by the gross
amount of purse money earned by Michigan-bred thoroughbred horses
in the fiscal year, and then multiplying the result by the total
amount earned by all thoroughbred horses of each owner or breeder.
(c) Money for breeders' awards and owners' awards under this
subsection may also be used to pay for purses for restricted stakes
races for Michigan-bred thoroughbred horses at any racetrack in
North America. Any amounts paid for purses for stakes races shall
be deducted equally from the amounts available for breeders' awards
and owners' awards.
(d) A reasonable amount from the thoroughbred horsemen's
advance deposit account wagering pool may be used to administer
this subsection.