HF 1420

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:50am

A bill for an act
relating to horse racing; allowing racetracks outside of the seven-county
metropolitan area; allowing these racetracks to operate card clubs; amending
Minnesota Statutes 2008, sections 240.05, subdivision 1; 240.10; 240.13,
subdivisions 1, 5; 240.30, subdivisions 1, 5, 6, 10; proposing coding for new
law in Minnesota Statutes, chapter 240.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 240.05, subdivision 1, is amended to read:

Subdivision 1.

Classes.

The commission may issue deleted text begin four deleted text end new text begin five new text end classes of licenses:

(a) class A licenses, for the ownership and operation of a racetrack with horse racing
on which pari-mutuel betting is conducted;

(b) class B licenses, for the sponsorship and management of horse racing on which
pari-mutuel betting is conducted;

(c) class C licenses, for the privilege of engaging in certain occupations related
to horse racing; deleted text begin and
deleted text end

(d) class D licenses, for the conduct of pari-mutuel horse racing by county
agricultural societies or associations deleted text begin . deleted text end new text begin ; and
new text end

new text begin (e) class E licenses, for the conduct of pari-mutuel horse racing by organizations
outside of the seven-county metropolitan area.
new text end

No person may engage in any of the above activities without first having obtained
the appropriate license from the commission.

Sec. 2.

new text begin [240.095] NONMETRO LICENSEES.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin The commission may issue class E licenses to
applicants to operate a racetrack, including existing holders of a class D license who apply
for a class E license, to conduct and manage on a site of their choosing horse racing on
which pari-mutuel betting is conducted. An application for a class E license must be on a
form the commission prescribes and must be accompanied by detailed plans of the track,
buildings, fences and other improvements.
new text end

new text begin Subd. 2. new text end

new text begin Occupational licenses. new text end

new text begin A person who participates in the management
or conduct of horse racing or pari-mutuel betting for an organization holding a class E
license who is in an occupation listed in section 240.08, subdivision 1, or the rules of the
commission must have a class C license from the commission except for active members,
as defined in section 349.12, of nonprofit organizations who act without compensation as
concession workers.
new text end

new text begin Subd. 3. new text end

new text begin Hearing. new text end

new text begin Before granting an initial class E license, the commission must
hold at least one public hearing in the county where the license is to be issued, and if the
racetrack to be licensed is within a city, it must also request comments on the application
from the city council.
new text end

new text begin Subd. 4. new text end

new text begin Investigation. new text end

new text begin Before granting a class E license the director shall
conduct, or request the Division of Alcohol and Gambling Enforcement to conduct, a
comprehensive background and financial investigation of the applicant and the sources of
financing. The director may charge an applicant an investigation fee to cover the cost of
the investigation, and shall from this fee reimburse the Division of Alcohol and Gambling
Enforcement for its share of the cost of the investigation. The director has access to all
criminal history data compiled by the Division of Alcohol and Gambling Enforcement on
class A licensees and applicants.
new text end

new text begin Subd. 5. new text end

new text begin Issuance. new text end

new text begin If after considering the information received at the hearing or
hearings and considering the comments requested under subdivision 3, the commission
determines that the license will not adversely affect the public health, welfare, and safety
and that the racing to be licensed will be conducted in accordance with all applicable laws
and rules, it may issue a class E license to the applicant. The license is for a period of
one year.
new text end

new text begin Subd. 6. new text end

new text begin Renewal. new text end

new text begin On making the same determination as in subdivision 5, the
commission may renew a class E license without a hearing unless it determines a hearing
is necessary.
new text end

new text begin Subd. 7. new text end

new text begin Revocation and suspension. new text end

new text begin Revocation and suspension of class E
licenses, and refusals to renew class E licenses, are as provided in section 240.06,
subdivision 7. A license suspension or revocation or a refusal to renew a class E license is
a contested case under sections 14.57 to 14.69 of the Administrative Procedure Act and is
in addition to criminal penalties imposed for a violation of law or rule.
new text end

Sec. 3.

Minnesota Statutes 2008, section 240.10, is amended to read:

240.10 LICENSE FEES.

The fee for a class A license is $253,000 per year and must be remitted on July 1.
The fee for a class B license is $500 for each assigned racing day and $100 for each day
on which simulcasting is authorized and must be remitted on July 1. Included herein are
all days assigned to be conducted after January 1, 2003. The fee for deleted text begin a deleted text end class D deleted text begin license deleted text end new text begin and
class E licenses new text end is $50 for each assigned racing day on which racing is actually conducted.
Fees imposed on class D new text begin and class E new text end licenses must be paid to the commission at a time and
in a manner as provided by rule of the commission. new text begin An organization may hold both a class
D and class E license, and the commission shall adjust fees accordingly.
new text end

The commission shall by rule establish an annual license fee for each occupation it
licenses under section 240.08 but no annual fee for a class C license may exceed $100.

Sec. 4.

Minnesota Statutes 2008, section 240.13, subdivision 1, is amended to read:

Subdivision 1.

Authorized.

(a) Class B deleted text begin and deleted text end new text begin , new text end class D new text begin , and class E new text end licenses give the
licensees authority to conduct pari-mutuel betting on the results of races run at the licensed
racetrack, and on other races as authorized by the commission under this section.

(b) A class B deleted text begin or deleted text end new text begin , new text end class D new text begin , or class E new text end license gives the licensee the authority to
transmit and receive telecasts and conduct pari-mutuel betting on the results of horse races
run at its class A facility, and of other horse races run at other locations, as authorized
by the commission. The class B deleted text begin or class deleted text end new text begin , new text end D new text begin , or E new text end licensee may present racing programs
separately or concurrently.

(c) Subject to the approval of the commission the types of betting, takeout, and
distribution of winnings on pari-mutuel pools on simulcast races at a class B deleted text begin or class deleted text end new text begin , new text end
D new text begin , or E new text end facility are those in effect at the sending racetrack. Pari-mutuel pools may be
commingled with pools at the sending racetrack, for the purposes of determining odds and
payout prices, via the totalizator computer at the class A facility.

(d) The commission may not authorize a class B licensee to conduct simulcasting or
telerace simulcasting unless 125 days of live racing, consisting of not less than eight live
races on each racing day, have been conducted at the class A facility within the preceding
12 months. The number of live racing days required may be adjusted by agreement
between the licensee and the horsepersons' organization representing the majority of
horsepersons racing the breed racing the majority of races at the licensee's class A facility
during the preceding 12 months. The number of live racing days required must be reduced
by one day for each assigned racing day that the licensee is unable to conduct live racing
due to natural occurrences or catastrophes beyond its control.

(e) The commission may authorize no more than five class D licensees new text begin and ten
class E licensees new text end to conduct simulcasting in any year. Simulcasting may be conducted at
each class D new text begin or class E new text end licensee's facility:

(1) only on races conducted at another class D facility during a county fair day at
that facility new text begin or on races conducted at a class E facility new text end ; and

(2) new text begin for holders of a class D license, new text end only on standardbred races.

A class D new text begin or class E new text end licensee may not conduct simulcasting for wagering purposes
unless the licensee has a written contract, permitting the simulcasting, with a horseperson's
organization representing deleted text begin the standardbred industry deleted text end the breed being simulcast under
authority of the class D new text begin or E new text end license.

Sec. 5.

Minnesota Statutes 2008, section 240.13, subdivision 5, is amended to read:

Subd. 5.

Purses.

(a) From the amounts deducted from all pari-mutuel pools by a
licensee, an amount equal to not less than the following percentages of all money in all
pools must be set aside by the licensee and used for purses for races conducted by the
licensee, provided that a licensee may agree by contract with an organization representing
a majority of the horsepersons racing the breed involved to set aside amounts in addition
to the following percentages:

(1) for live races conducted at a class A facility, and for races that are part of full
racing card simulcasting that takes place within the time period of the live races, 8.4
percent;

(2) for simulcasts conducted during the racing season other than as provided for in
clause (1), 50 percent of the takeout remaining after deduction for taxes on pari-mutuel
pools, payment to the breeders fund, and payment to the sending out-of-state racetrack for
receipt of the signal; and

(3) for simulcasts conducted outside of the racing season, 25 percent of the takeout
remaining after deduction for the state pari-mutuel tax, payment to the breeders fund,
payment to the sending out-of-state racetrack for receipt of the signal and, before January
1, 2005, a further deduction of eight percent of all money in all pools. In the event
that wagering on simulcasts outside of the racing season exceeds $125 million in any
calendar year, the amount set aside for purses by this formula is increased to 30 percent
on amounts between $125,000,000 and $150,000,000 wagered; 40 percent on amounts
between $150,000,000 and $175,000,000 wagered; and 50 percent on amounts in excess
of $175,000,000 wagered. In lieu of the eight percent deduction, a deduction as agreed
to between the licensee and the horsepersons' organization representing the majority of
horsepersons racing at the licensee's class A facility during the preceding 12 months, is
allowed after December 31, 2004.

The commission may by rule provide for the administration and enforcement of
this subdivision. The deductions for payment to the sending out-of-state racetrack must
be actual, except that when there exists any overlap of ownership, control, or interest
between the sending out-of-state racetrack and the receiving licensee, the deduction
must not be greater than three percent unless agreed to between the licensee and the
horsepersons' organization representing the majority of horsepersons racing the breed
racing the majority of races during the existing racing meeting or, if outside of the racing
season, during the most recent racing meeting.

In lieu of the amount the licensee must pay to the commission for deposit in the
Minnesota breeders fund under section 240.15, subdivision 1, the licensee shall pay 5-1/2
percent of the takeout from all pari-mutuel pools generated by wagering at the licensee's
facility on full racing card simulcasts of races not conducted in this state.

(b) From the money set aside for purses, the licensee shall pay to the horseperson's
organization representing the majority of the horsepersons racing the breed involved and
contracting with the licensee with respect to purses and the conduct of the racing meetings
and providing representation, benevolent programs, benefits, and services for horsepersons
and their on-track employees, an amount, sufficient to perform these services, as may be
determined by agreement by the licensee and the horseperson's organization. The amount
paid may be deducted only from the money set aside for purses to be paid in races for
the breed represented by the horseperson's organization. With respect to racing meetings
where more than one breed is racing, the licensee may contract independently with the
horseperson's organization representing each breed racing.

(c) Notwithstanding sections 325D.49 to 325D.66, a horseperson's organization
representing the majority of the horsepersons racing a breed at a meeting, and the members
thereof, may agree to withhold horses during a meeting.

(d) Money set aside for purses from wagering, during the racing season, on
simulcasts must be used for purses for live races conducted at the licensee's class A facility
during the same racing season, over and above the 8.4 percent purse requirement or any
higher requirement to which the parties agree, for races conducted in this state. Money
set aside for purses from wagering, outside of the racing season, on simulcasts must be
for purses for live races conducted at the licensee's class A facility during the next racing
season, over and above the 8.4 percent purse requirement or any higher requirement to
which the parties agree, for races conducted in this state.

(e) Money set aside for purses from wagering on simulcasts must be used for purses
for live races involving the same breed involved in the simulcast except that money set
aside for purses and payments to the breeders fund from wagering on full racing card
simulcasts of races not conducted in this state, occurring during a live mixed meet, must
be allotted to the purses and breeders fund for each breed participating in the mixed meet
in the same proportion that the number of live races run by each breed bears to the total
number of live races conducted during the period of the mixed meet.

(f) The allocation of money set aside for purses to particular racing meets may be
adjusted, relative to overpayments and underpayments, by contract between the licensee
and the horsepersons' organization representing the majority of horsepersons racing the
breed involved at the licensee's facility.

(g) Subject to the provisions of this chapter, money set aside from pari-mutuel pools
for purses must be for the breed involved in the race that generated the pool, except that if
the breed involved in the race generating the pari-mutuel pool is not racing in the current
racing meeting, or has not raced within the preceding 12 months at the licensee's class A
facility, money set aside for purses may be distributed proportionately to those breeds that
have run during the preceding 12 months or paid to the commission and used for purses or
to promote racing for the breed involved in the race generating the pari-mutuel pool, or
both, in a manner prescribed by the commission.

(h) This subdivision does not apply to a class D new text begin or class E new text end licensee.

Sec. 6.

Minnesota Statutes 2008, section 240.30, subdivision 1, is amended to read:

Subdivision 1.

Card club operation.

A class B licensee conducting pari-mutuel
betting on horse racing at a class A racetrack new text begin or a class E licensee new text end may operate a card club
at the racetrack and offer card playing services to patrons only if the commission has
authorized the licensee to operate a card club operation under section 240.07, subdivision
3, paragraph (b), and the commission has approved the licensee's plan of operation under
subdivision 6. The commission may withdraw its authorization for operation of a card
club at any time for a violation of a law or rule governing card club operation.

Sec. 7.

Minnesota Statutes 2008, section 240.30, subdivision 5, is amended to read:

Subd. 5.

Limitation.

The commission shall not authorize a new text begin class B new text end licensee to
operate a card club unless the licensee has conducted at least 50 days of live racing at a
class A facility within the past 12 months or during the preceding calendar year. new text begin The
commission shall not authorize a class E licensee to operate a card club unless the licensee
has conducted at least ten days of live racing at the class E facility within the past 12
months, or during the preceding calendar year.
new text end

Sec. 8.

Minnesota Statutes 2008, section 240.30, subdivision 6, is amended to read:

Subd. 6.

Plan of operation.

(a) The commission shall not authorize a class B
new text begin or class E new text end licensee to operate a card club unless the licensee has submitted, and the
commission approved, a plan of operation for card playing activities. The plan must set
forth all necessary details for conducting card playing activities, including, among other
things:

(1) specifying and defining all card games to be played, including all governing
aspects of each game;

(2) time and location of card playing activities;

(3) amount and method by which participants will be charged for card playing
services;

(4) arrangements to ensure the security of card playing activities;

(5) designation of all licensed employees of the licensee who undertake supervisory
positions related to card playing activities;

(6) internal control systems for card playing activities; and

(7) a plan for the training of card club personnel in identification of problem
gamblers and appropriate action to prevent or control problem gambling.

(b) The licensee must prepare and make available to all customers a written manual
that covers all portions of the current plan of operation. The licensee must also publish,
in pamphlet form, a condensed and comprehensive version of the manual and make it
available to all customers.

Sec. 9.

Minnesota Statutes 2008, section 240.30, subdivision 10, is amended to read:

Subd. 10.

Reporting.

The class B new text begin and class E new text end licensee shall report all income
generated by the card club in an annual report to the Racing Commission. The report shall
also account for all costs of operation, taxes paid, amounts paid to the breeder's fund, and
net profits to the class B new text begin or class E new text end licensee.

Sec. 10. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 9 are effective the day following final enactment.
new text end