September 17, 2008, Introduced by Rep. Meisner and referred to the Committee on Regulatory Reform.
A bill to amend 1995 PA 279, entitled
"Horse racing law of 1995,"
by amending the title and sections 2, 3, 7, 8, 17, 18, 19a, and 22
(MCL 431.302, 431.303, 431.307, 431.308, 431.317, 431.318,
431.319a, and 431.322), section 2 as amended by 2006 PA 445,
section 7 as amended by 2000 PA 164, and sections 17 and 18 as
amended and section 19a as added by 1998 PA 408; and to repeal acts
and parts of acts.
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 and other gambling games, and persons involved in horse
racing
and pari-mutuel gaming activities at such race meetings; to
create the office of racing commissioner; to prescribe 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; to provide for the promulgation of
rules; to provide for the imposition of taxes and fees and the
disposition 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 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) "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%.
(b) "Breaks" means the cents over any multiple of 10 otherwise
payable to a patron on a wager on the outcome of a horse race of
$1.00.
(c) "Certified horsemen's organization" means an organization
registered with the office of racing commissioner in a manner and
form required by the racing commissioner, 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.
(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.
(e) "Controlled substance" means that term as defined in
section 7104 of the public health code, 1978 PA 368, MCL 333.7104.
(f) "Day of operation" means a period of 24 hours beginning at
12 noon and ending at 11:59 a.m. the following day.
(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, condition, or any 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).
(h) "Fair" means any county, district, or community fair and
any state fair.
(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.
(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
simulcast from 1 or more racetracks located outside of
this state.
(k) "Interstate simulcast" means a simulcast from a racetrack
outside this state to a racetrack inside this state.
(l) "Intertrack simulcast" means a simulcast from 1 racetrack
in this state to another racetrack in this state.
(m) (k)
"Member of the immediate
family" means the spouse,
child, parent, or sibling.
(n) "Pari-mutuel gaming activities" means a game adopted by
rules promulgated by the racing commissioner under section 7 that
is played using the pari-mutuel system of wagering.
(o) "Pari-mutuel system of wagering" means a system of
wagering in which the winner takes or, if there are multiple
winners, the winners divide the total amount bet after a commission
and taxes imposed under this act are deducted.
(p) (l) "Person"
means an individual, firm, partnership,
corporation, association, or other legal entity.
(q) (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 this
act.
(r) "Simulcast" means the live transmission of video and audio
signals conveying a horse race held either inside or outside this
state to a licensed race meeting in this state.
(s) (n)
"Veterinarian" means a
person licensed to practice
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.
Sec. 3. The office of racing commissioner is created within
the department of agriculture. The racing commissioner has the
powers and duties prescribed in this act and shall administer the
provisions of this act relating to licensing, enforcement, and
regulation. The racing commissioner also has those additional
powers necessary and proper to implement and enforce this act and
to regulate and maintain jurisdiction over the conduct of each
licensed race meeting within this state where horse races or pari-
mutuel
wagering on the results of horse races is permitted for a
stake, purse, prize, share, or reward.
Sec. 7. (1) The racing commissioner may promulgate rules
pursuant to the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328, for conducting horse racing, pari-mutuel
wagering
on horse racing results at
race meetigs, and simulcasting.
The rules promulgated under this section shall be designed to
accomplish all of the following:
(a) The governing, restricting, approving, or regulating of
horse racing, pari-mutuel wagering on the results of horse races,
and simulcasting conducted at licensed race meetings within this
state.
(b) The promoting of the safety, security, growth, and
integrity
of all horse racing, pari-mutuel wagering, on the results
of
horse races, and simulcasting
conducted at licensed race
meetings within this state.
(c) The licensing and regulating of each person participating
in,
or having to do with, pari-mutuel horse racing, and
pari-mutuel
wagering, and simulcasting at licensed race meetings within this
state.
(d) The governing, restricting, approving, or regulating of
wagering and pari-mutuel gaming activities that are not played
using the pari-mutuel system of wagering conducted at licensed race
meetings in this state. The racing commissioner shall provide, for
each rule promulgated under this subdivision, that the rule is not
effective unless and until it is approved by the electors as
required by section 41 of article IV of the state constitution of
1963.
(2) Each race meeting licensee shall provide security at all
times so as to reasonably ensure the safety of all persons and
horses, on
the grounds, and to protect and preserve the integrity
of horse racing, pari-mutuel wagering, and simulcasting, at
licensed race meetings. If the racing commissioner determines that
additional security is necessary to ensure the safety and integrity
of racing, the racing commissioner shall provide supplemental
security at each race meeting in areas where occupational licenses
are required for admittance.
(3) The racing commissioner may issue sanctions including, but
not limited to, revocation or suspension of a license, exclusion
from racetrack grounds, or a fine of not more than $25,000.00 for
each violation of this act or a rule promulgated under this act
committed by a licensee or other person under this act. A sanction
issued under this section may be appealed to the racing
commissioner. The appeal shall be heard pursuant to the contested
case provisions of the administrative procedures act of 1969, 1969
PA 306, MCL 24.201 to 24.328.
(4) All proposed extensions, additions, modifications, or
improvements to the racecourse, roadways, parking lots, buildings,
stables, lighting and electrical service, plumbing, public
utilities, drainage, totalisator system and equipment, hardware and
software for all approved methods of conducting pari-mutuel
wagering, and security on the grounds of a licensed racetrack owned
or leased by a person licensed under this act are subject to the
approval of the racing commissioner.
(5) The racing commissioner may compel the production of
books, records, memoranda, electronically retrievable data, or
documents that relate to horse racing, simulcasting, and pari-
mutuel wagering conducted at a licensed race meeting.
(6) The racing commissioner at any time may require for cause
the removal of any employee or official involved in or having to do
with horse racing, simulcasting, or pari-mutuel wagering conducted
at a licensed race meeting.
(7) The racing commissioner may visit, investigate, and place
auditors and other persons as the racing commissioner considers
necessary in the offices, racetracks, or places of business of a
licensee under this act to ensure compliance with this act and the
rules promulgated under this act.
(8) The racing commissioner may summon witnesses and
administer oaths or affirmations to exercise and discharge his or
her powers and duties under this act. A person failing to appear
before the racing commissioner at the time and place specified in a
summons from the racing commissioner or refusing to testify,
without just cause, in answer to a summons from the racing
commissioner is guilty of a misdemeanor punishable by a fine of not
more than $1,000.00, or imprisonment for not more than 6 months, or
both, and may also be sanctioned by the racing commissioner. A
person testifying falsely to the racing commissioner or his or her
authorized representative while under oath is guilty of a felony
punishable by a fine of not more than $10,000.00 or imprisonment
for not more than 4 years, or both, and may also be sanctioned by
the racing commissioner.
Sec. 8. (1) The racing commissioner 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 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 this act.
(c) Track licenses issued to a person to maintain or operate a
racetrack at which 1 or more race meeting licensees may conduct
licensed race meetings in this state.
(2) The racing commissioner 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 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
gaming activities conducted at a licensed race meeting shall be
preapproved by the racing commissioner pursuant to rule or written
order of the commissioner.
(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 on the results of horse races 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 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 not more than 28% and with
the written permission of the racing commissioner 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 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) Each holder of a race meeting license shall retain as his
or her commission on pari-mutuel gaming activities other than pari-
mutuel wagers on horse races not more than 15% of the amount
wagered in any single game or activity.
(7) (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.
(8) (7)
Any 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 in 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.
(9) As used in this section:
(a) "Minus pool" means any win, place, or show pool in which
the payout would exceed the total value of the pool.
(b) "Multiple wagering" means wagering 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.
(c) "Straight wagering" means wagering on the finishing
position of a single specified horse in a single specified race.
Sec. 18. (1) Simulcasting by race meeting licensees may be
authorized by the racing commissioner subject to the limitations of
this
section. As used in this section, "simulcast" means the live
transmission
of video and audio signals conveying a horse race held
either
inside or outside this state to a licensed race meeting in
this
state. A simulcast from 1 racetrack in this state to another
racetrack
in this state shall be called an "intertrack simulcast".
A
simulcast from a racetrack outside this state to a racetrack
inside
this state shall be called an "interstate simulcast".
(2) The holder of a race meeting license may apply to the
racing commissioner, in the manner and form required by the
commissioner, for a permit to televise simulcasts of horse races to
viewing areas within the enclosure of the licensed racetrack at
which the applicant is licensed to conduct its race meeting. The
commissioner may issue a permit for individual race and full card
simulcasts televised during, between, before, or after programmed
live horse races on any day that live racing is conducted by the
applicant, and also on other days during the term of the
applicant's license when the applicant does not conduct live horse
racing, subject to the following conditions:
(a) The applicant shall have a current contract with a
certified horsemen's organization.
(b) The applicant shall have applied for and been allocated
the minimum number of live racing dates required by section 12(1)
to (5), subject to the availability of adequate horse supply as
determined by the racing commissioner.
(c) The applicant shall make a continuing good faith effort
throughout the duration of its race meeting to program and conduct
not less than 9 live horse races on each live racing date allocated
to the applicant.
(d) The certified horsemen's organization with which the
applicant has contracted shall have consented to the requested
simulcasts on any live racing day when the applicant is unable to
program and conduct not less than 9 live horse races, if required
by section 12(6).
(e) If the requested simulcasts are interstate, the applicant
shall waive in writing any right that the applicant may have under
the
interstate horse racing act of 1978, Public Law 95-515, 15
U.S.C.
USC 3001 to 3007, to restrict interstate simulcasts by
other
race meeting licensees in this state.
(f) If the applicant conducts its race meeting in a city area,
the applicant shall make the video and audio signals of its live
horse races available for intertrack simulcasting to all licensed
race meetings in this state located more than 12 miles from the
applicant's race meeting. The applicant shall charge each race
meeting licensee the same fee to receive its live signals for
intertrack simulcasting. The fee shall not exceed 3% of the total
amount wagered on the intertrack simulcast at each race meeting
that receives the simulcast.
(g) Except as otherwise agreed by the race meeting licensees
in a city area and the respective certified horsemen's
organizations with which they contract, a licensee in a city area
shall receive all available intertrack simulcasts from licensed
race meetings in the city area located more than 12 miles from the
licensee's race meeting.
(h) A licensed race meeting outside a city area shall not
conduct interstate simulcasts unless it also receives all
intertrack simulcasts from licensed race meetings in a city area
that are available.
(i) All applicants conducting licensed race meetings in a city
area shall authorize all other race meeting licensees in the state
to conduct simulcasts of the breed for which the applicant is
licensed to conduct live horse racing. An applicant may not conduct
interstate simulcasts unless authorization to do so is given by the
applicant, in accordance with subdivision (j), permitting all other
race meeting licensees to receive interstate simulcasts of a
different breed than they are licensed to race live.
(j) A race meeting licensee shall not conduct an interstate
simulcast of a different breed than it is licensed to race live at
its race meeting, unless the licensee has the written permission of
all race meeting licensees in a city area that are licensed to race
that breed live at their race meetings.
(k) All authorized simulcasts shall be conducted in compliance
with the written permit and related orders issued by the racing
commissioner and all other requirements and conditions of this act
and the rules of the racing commissioner promulgated under this
act.
(l) All authorized interstate simulcasts shall also comply with
the
interstate horse racing act of 1978, Public Law 95-15, 15
U.S.C.
USC 3001 to 3007.
(3) All forms of wagering by pari-mutuel methods provided for
under this act for live racing shall be allowed on simulcast horse
races authorized under this section. All money wagered on simulcast
horse races at a licensed race meeting shall be included in
computing the total amount of all money wagered on horse races at
the licensed race meeting for purposes of section 17. When the
simulcast is an interstate simulcast, the money wagered on that
simulcast shall form a separate pari-mutuel pool at the receiving
track unless 2 or more licensees receive the same interstate
simulcast signals or the racing commissioner permits the receiving
track to combine its interstate simulcast pool with the pool
created at the out-of-state sending track on the same race. If 2 or
more licensees receive the same interstate simulcast signals, the
money wagered on the simulcasts shall be combined in a common pool
and the licensees shall jointly agree and designate at which race
meeting the common pool will be located. However, if the law of the
jurisdiction in which the sending racetrack is located permits
interstate common pools at the sending racetrack, the racing
commissioner may permit pari-mutuel pools on interstate simulcast
races in this state to be combined with pari-mutuel pools on the
same races created at the out-of-state sending racetrack. If the
pari-mutuel pools on the interstate simulcast races in this state
are combined in a common pool at the out-of-state sending track,
then the commissions described in section 17 on the pool created in
this state shall be adjusted to equal the commissions in effect at
the sending track under the laws of its jurisdiction. If the
simulcast is an intertrack simulcast, the money wagered on that
simulcast at the receiving racetrack shall be added to the pari-
mutuel pool at the sending racetrack.
(4) Each race meeting licensee that receives an interstate
simulcast
shall pay to the horsemen's simulcast purse pool
established
under section 19 at the
racetrack where the licensee
conducts
its race meeting a sum equal to 40% 20% of
the licensee's
net commission from all money wagered on the interstate simulcast,
as determined by section 17(3) after first deducting from the
licensee's statutory commission the applicable state tax on
wagering due and payable under section 22 and the actual verified
fee paid by the licensee to the sending host track to receive the
interstate simulcast signal. The licensee shall retain the
remaining balance of its net commission and shall be responsible
for paying all other capital and operational expenses related to
receiving
interstate simulcasts at its race meeting. Any subsequent
rebate
of a fee paid by a licensee to receive interstate simulcast
signals
shall be shared equally by the licensee and the horsemen's
simulcast
purse pool established under section 19.
(5) A race meeting licensee licensed to conduct pari-mutuel
horse racing in a city area shall provide the necessary equipment
to send intertrack simulcasts of the live horse races conducted at
its race meeting to all other race meeting licensees in this state,
and shall send its intertrack simulcast signals to those licensees
upon request for an agreed fee, which shall not exceed 3% of the
total amount wagered on the race at the receiving track. Race
meeting licensees that send or receive intertrack simulcasts shall
make the following payments to the horsemen's purse pools:
(a) Each race meeting licensee that sends an intertrack
simulcast shall pay 50% of the simulcast fee that it receives for
sending the simulcast signal to the horsemen's purse pool at the
sending track.
(b) Each race meeting licensee that receives an intertrack
simulcast
shall pay to the horsemen's simulcast purse pool
established
pursuant to section 19 at the
racetrack where the
licensee
conducts its race meeting a sum equal
to 40% 20% of the
receiving track's net commission from wagering on the intertrack
simulcast under section 17(3) after first deducting from the
licensee's statutory commission the applicable state tax on
wagering due and owing under section 22 and the actual verified fee
paid by the receiving track to the sending host track to receive
the intertrack simulcast signal.
(6) The racing commissioner may authorize a race meeting
licensee to transmit simulcasts of live horse races conducted at
its racetrack to locations outside of this state in accordance with
the
interstate horse racing act of 1978, Public Law 95-515, 15
U.S.C.
15 USC 3001 to 3007, or any other applicable laws, and may
permit
pari-mutuel pools on such the
simulcast races created under
the laws of the jurisdiction in which the receiving track is
located to be combined in a common pool with pari-mutuel pools on
the same races created in this state. A race meeting licensee that
transmits simulcasts of its races to locations outside this state
shall pay 50% of the fee that it receives for sending the simulcast
signal to the horsemen's purse pool at the sending track after
first deducting the actual verified cost of sending the signal out
of state.
(7) Simulcasting of events other than horse races for purposes
of pari-mutuel wagering is prohibited.
Sec. 19a. If a thoroughbred track license is surrendered,
revoked,
or escrowed, or after January 1, 1998, a licensed
thoroughbred
track is closed, the racing
commissioner shall order
the
deposit of that money designated
by this act to be deposited
into
the horsemen's purse pool money
deposited and distributed
pursuant
to section 19 to at the
licensed thoroughbred track shall
instead be deposited into a depository designated by a race meeting
licensee upon written direction of the affected certified
horsemen's organization regardless of whether there was racing at
the race meeting licensee's location during the previous year.
Sec. 22. (1) Each licensed racetrack located in a city area
shall pay a license fee to the racing commissioner of $1,000.00
annually, and any other licensed racetrack shall pay a license fee
of $200.00 annually.
(2)
During calendar year 1996, each holder of a race meeting
license
shall pay to the state treasurer, from the holder's
commission,
a tax in the amount of 2.5% of all money wagered on
interstate
and intertrack simulcast races conducted at the holder's
licensed
race meetings in 1996 in a manner and time as the racing
commissioner
requires. For calendar year 1997 and each year
thereafter,
the tax rate shall increase to 3.5% of all money
wagered
on interstate and intertrack simulcast races conducted at
the
holder's licensed race meetings each calendar year. Not later
than
4 years after the effective date of this act, the racing
commissioner
shall report to the chairpersons of the senate and
house
committees responsible for legislation concerning horse
racing
as to the effect on the horse racing industry of the
reduction
in the tax pursuant to subsection (2).
(3)
By eliminating the pari-mutuel wagering tax on live racing
programs,
it is not the intent of the legislature to diminish the
funding
and appropriations for the Michigan agriculture equine
industry
fund and related programs described in section 20. The
pari-mutuel
tax reduction effected by this section is intended to
generally
allow for the improvement of the pari-mutuel horse racing
and
breeding industry in this state by increasing purses at
licensed
race meetings and making additional pari-mutuel revenues
available
for capital improvements at licensed racetracks in this
state.
(2) In addition to the license fee imposed by subsection (1),
a race meeting licensee shall pay to the state treasurer a tax
equal to the sum of both of the following:
(a) 1.5% of all money wagered on interstate and intertrack
simulcasts of pari-mutuel gaming activities conducted at race
meetings conducted by the race meeting licensee.
(b) 5% of the commissions withheld from money wagered on pari-
mutuel gaming activities conducted at race meetings conducted by
the race meeting licensee.
(3) A race meeting licensee shall pay the tax imposed by
subsection (2) in the manner and at the time required by the racing
commissioner.
Enacting section 1. Section 19 of the horse racing law of
1995, 1995 PA 279, MCL 431.319, is repealed.
Enacting section 2. This amendatory act does not take effect
unless Senate Joint Resolution ____ or House Joint Resolution MMM
(request no. 08143'08) of the 94th Legislature becomes a part of
the state constitution of 1963 as provided in section 1 of article
XII of the state constitution of 1963.