Offered April 23, 1997.

Senate Substitute adopted, April 23, 1997.

Taken up for Perfection April 23, 1997. Bill declared Perfected and Ordered Printed, as amended.

TERRY L. SPIELER, Secretary.

S0898.05P

To repeal sections 313.540 and 313.660, RSMo 1994, and sections 313.500 and 313.510, RSMo 1996, relating to off-track pari-mutuel wagering, and to enact in lieu thereof thirteen new sections relating to the same subject, with penalty provisions.

Be it enacted by the General Assembly of the State of Missouri, as follows:

     Section A. Sections 313.540 and 313.660, RSMo 1994, and sections 313.500 and 313.510, RSMo 1996, are repealed and thirteen new sections enacted in lieu thereof, to be known as sections 313.500, 313.510, 313.540, 313.656, 313.657, 313.658, 313.659, 313.660, 313.661, 313.662, 313.663, 313.664 and 536.028, to read as follows:

     313.500. As used in sections 313.500 to 313.710, unless the context clearly indicates that a different meaning is intended, the following terms mean:

     (1) "Breakage", the odd cents by which the amount payable on each dollar wagered exceeds a multiple of ten cents;

     (2) "Commission", the Missouri [gaming commission, created in section 313.004] horse racing commission, or its designate;

     (3) "County", any county in the state of Missouri or the city of St. Louis;

     (4) "Horse", any equine, ass, mule, pony, or hybrid thereof;

     (5) "Organization", any individual, political subdivision, state agency, partnership, unincorporated association, firm, or corporation licensed by the commission to conduct a horse racing meeting;

     (6) "Pari-mutuel wagering", a form of wagering on the outcome of horse races in which those who wager purchase tickets of various denominations on a horse or horses in one or more races, all wagers are pooled, and when the outcome of the race has been declared official, the total wagers comprising each pool, less such amounts provided herein or which are provided by law or rule, will be distributed to holders of winning tickets on the winning horse or horses;

     (7) "Public official", any elected member of the executive branch of state government and any director of a state department, any judge other than a judge of the municipal division of a circuit court, and any elected member of the legislative branch of state government;

     (8) "Race meet" or "race meeting", the whole period of time, whether consecutive dates or those instances where nonconsecutive dates are granted, for which a race track license to race has been granted to any one organization by the commission;

     (9) "Racing", any type of horse racing.

     313.510. There is hereby created the "Missouri Horse Racing Commission", which shall consist of five members appointed by the governor with the advice and consent of the senate. The commission shall oversee the development and administration of the pari-mutuel horse racing industry in Missouri. The commission shall be assigned to the Missouri gaming commission. The Missouri gaming commission shall provide all budgetary functions and staffing for the Missouri horse racing commission.

     313.540. 1. The commission shall have powers to prescribe and enforce rules and regulations governing horse races and race meetings, including licensed off-track pari-mutuel wagering regulated pursuant to sections 313.656 to 313.664. Such rules and regulations shall contain criteria to be used by the commission for decisions on approving and revoking race track licenses and setting racing dates. The commission may delegate to the stewards such of the commission's powers and duties as may be necessary to carry out and effectuate the purposes of sections 313.500 to 313.710 and the commission may designate persons employed by the commission to ensure that operations conducted by off-track pari-mutuel licensees are in compliance with sections 313.500 to 313.710. Any decision or action of such stewards may be appealed to the commission or may be reviewed by the commission on its own initiative. All pari-mutuel wagering of any kind or matter placed in the state of Missouri shall be transmitted through facilities licensed by the commission.

     2. No rule or portion of a rule promulgated pursuant to the authority of this section shall become effective unless it has been promulgated pursuant to the provisions of chapter 536, RSMo.

     313.656. As used in sections 313.656 to 313.664, the following terms mean:

     (1) "Applicant", any person applying for a license to accept off-track pari-mutuel wagers. If the applicant is a corporation, partnership or other person as that term is defined in section 351.015, RSMo, the term includes the officers and members of the board of directors of the corporation or the general partners of a partnership or persons performing similar functions of any business from applying for such a license;

     (2) "Breakage", the odd cents over a multiple of ten cents arising from the computation of odds and payouts on amounts wagered on a race which is part of an interstate common pari-mutuel pool;

     (3) "Commission", the horse racing commission or its successor agency;

     (4) "Commission on wagers", an amount retained and not returned to patrons by an off-track pari-mutuel licensee from the total amount of off-track pari-mutuel wagers;

     (5) "Interstate common pari-mutuel pool", a pari-mutuel pool consisting of the pari-mutuel wagers placed at a pari-mutuel facility, its intrastate betting locations, off-track pari-mutuel wagering locations in other jurisdictions and the off-track pari-mutuel wagers placed and accepted at an off-track pari-mutuel wagering licensee;

     (6) "Missouri bred horse", any equine which was foaled within this state or any equine foal, where the mare of such foal is domiciled in this state;

     (7) "Off-track pari-mutuel system", a computerized system or component of a system that is used to transmit wagering data to and from a race track which offers interstate common pari-mutuel pools;

     (8) "Off-track pari-mutuel wagering", any pari-mutuel system of wagering approved by the commission for the acceptance of off-track pari-mutuel wagers on races which take place outside of this state;

     (9) "Off-track pari-mutuel license", a license issued by the commission which authorizes the holder to operate up to five facilities at which it simulcasts races from other states and at which it accepts off-track pari-mutuel wagers for inclusion in an interstate common pari-mutuel pool;

     (10) "Simulcast", the audio and visual transmission of a race, or series of races, as it occurs at a track.

     313.657. 1. A person shall not accept off-track pari-mutuel wagers for inclusion in an interstate common pari-mutuel pool unless he has received a license from the commission to accept such wagers. Collation of such wagering need not take place within this state, and such collation process shall be approved by the commission.

     2. The commission shall not issue a license to accept off-track pari-mutuel wagering unless the applicant is licensed by the commission to own and operate a live race track which shall run at least forty-five days of live racing in Missouri each year the licensee holds an off-track pari-mutuel license and each day has an average of eight races, except as provided in section 313.658.

     3. Applications for a license to accept off-track pari-mutuel wagers shall be made, processed, and determined using such forms as the commission may require or approve. The application shall fully identify the applicant, include a showing of financial responsibility of the applicant, describe the names and identification of those who will supervise the manner of wagering and the controls and supervision by the licensee and describe the general physical layout of the off-track pari-mutuel wagering facility and its location. The applicant for such license shall file with the application a fee of fifty thousand dollars. The applicant shall be responsible for the total cost of the investigation. If the cost of the investigation exceeds the total amount of fees filed by the applicant in this subsection, the commission may assess additional fees as it deems appropriate; however, if the applicant is denied a license, the applicant shall be entitled to a refund of the difference between the application fee and the actual cost of the investigation. The license shall be valid until revoked for cause, sold or transferred.

     4. The commission shall not issue a license to accept off-track pari-mutuel wagers unless the applicant is a resident of Missouri, or in the case of a corporation, partnership or other business form, it is incorporated or formed in Missouri and unless the applicant is a member in good standing of the Thoroughbred Racing Association of America.

     5. The commission shall not issue a license to accept off-track pari-mutuel wagers unless the commission is satisfied that the applicant:

     (1) Is a person of good character, honesty and integrity;

     (2) Is a person whose prior activities, reputation, habits and associations do not pose a threat to the public interest of this state or to the effective regulation and control of off-track pari-mutuel wagering, or create or enhance the dangers of unsuitable, unfair or illegal practices, methods and activities in the conduct of off-track pari-mutuel wagering or the carrying on of the business and financial arrangements incidental thereto;

     (3) Has not been convicted of a felony under the laws of this state, any other state or the United States; and

     (4) Is in all other respects qualified to be licensed.

     6. The commission shall not issue a license to any applicant except upon the express condition that the licensee shall not, by any lease, contract, understanding or arrangement of whatever kind or nature, grant, assign or turn over to any person, corporation, partnership or business the operation or management of the off-track pari-mutuel wagering facility without the prior approval of the commission. Nothing contained in this section prohibits:

     (1) The licensee from paying a percentage of the amounts wagered at the off-track pari-mutuel wagering facility to a track for the right to be part of an interstate common pari-mutuel pool and for the right to receive a simulcast from the track; or

     (2) The licensee from paying a percentage of the amounts wagered at the off-track pari-mutuel wagering facility to an individual, corporation, partnership, or other entity as compensation for the services of an off-track pari-mutuel system.

     7. An application to receive a license constitutes a request for a determination of the applicant's general character, integrity, and ability to participate or engage in, or be associated with off-track pari-mutuel wagering.

     8. The commission shall not issue a license to any applicant except on the express condition that the licensee will agree to provide at the request of the commission one and one-half percent of all commissions on wagers collected by that licensee for the purpose of improving the horse racing industry in this state by augmenting purses for horses which are bred in Missouri, and one percent but not less than one hundred thousand dollars for augmenting purses at the live races operated by the licensee.

     9. The commission shall approve the licensee to accept off-track pari-mutual wagers only:

     (1) in a county or city that has adopted riverboat gaming or

     (2) within the enclosure and all associated buildings and permanent or temporary structures where live racing is conducted.

     313.658. 1. The Missouri horse racing commission shall announce when it is ready to accept applications for licensing horse racing and pari-mutuel operations. If no applications are received within six months of such announcement, the provisions of subsection 2 of this section shall apply. At the end of such six month period, and thereafter, if the commission finds that it will be compatible with any proposed operations, the commission may issue licenses under the provisions of subsection 2 of this section.

     2. The commission may issue a license to accept off-track pari-mutuel wagers if the applicant is licensed and does run twenty-one programs of live racing in Missouri during a forty-five day period each year they are licensed, and each day has an average of eight races. In the second and succeeding years if the licensee runs more than forty days of live racing in Missouri the commission may authorize the holder to operate up to four facilities at which it simulcasts races and accepts off-track pari-mutuel wagers for inclusion in an interstate common pari-mutuel.

     313.659. The commission shall have full jurisdiction over and shall supervise all off-track pari-mutuel wagering governed by sections 313.656 to 313.664 and shall have the following powers and duties:

     (1) To investigate the qualifications of each applicant pursuant to sections 313.656 to 313.664 before any license is issued and to continue to observe the conduct of all licensees and other persons having a material involvement directly or indirectly with a licensee or persons whose operations are conducted in an unsuitable manner or in unsuitable or prohibited places or locations;

     (2) To deny any application or limit, condition, restrict, revoke or suspend a license of any person for any cause deemed reasonable by the commission. Any person aggrieved by any action of the commission authorized in this subdivision may appeal such action to a court of competent jurisdiction;

     (3) To levy administrative penalties of up to two thousand dollars per day against a licensee who violates the provisions of sections 313.656 to 313.664;

     (4) To enter the premises of the off-track pari-mutuel wagering facility or other places of business of a licensee within this state to determine compliance with sections 313.656 to 313.664;

     (5) To investigate alleged violations of sections 313.656 to 313.664 or the commission's rules, orders or final decisions and to take appropriate disciplinary action against a licensee for a violation or institute appropriate legal action for enforcement or both;

     (6) To adopt standards for the facilities within which off-track pari-mutuel wagering will be conducted, except that the commission shall not issue a license to accept off-track pari-mutuel wagers unless the facility:

     (a) Is designed to seat patrons comfortably, with multiple screens to enable each patron to view simulcast races;

     (b) Is suitable for licensing by the division of liquor control; and

     (c) Has food and beverage services available at all hours the facility is open to the public;

     (7) To require a licensee to remove a person violating any provision of sections 313.656 to 313.664 or the commission rules from the off-track pari-mutuel wagering facility;

     (8) To require the removal from the premises of a licensee, or an employee of a licensee, for any violation of sections 313.656 to 313.664 or a commission rule or engaging in a fraudulent practice;

     (9) To require licensed off-track pari-mutuel licensees to file an annual balance sheet and profit and loss statement pertaining to the licensee's off-track pari-mutuel wagering in this state;

     (10) To issue subpoenas for the attendance of witnesses and subpoenas duces tecum for the production of books, records, and other pertinent documents, and to administer oaths and affirmations to the witnesses, when, in the judgment of the commission, it is necessary to enforce sections 313.656 to 313.664 or the commission rules;

     (11) To keep accurate and complete records of its proceedings and to certify the records as may be appropriate;

     (12) To ensure that off-track pari-mutuel wagering is conducted fairly; and

     (13) To take any other action as may be reasonable or appropriate to enforce sections 313.656 to 313.664 and the commission rules.

     313.660. 1. No individual shall for a fee, directly or indirectly, accept anything of value to be wagered or to be transmitted or delivered for wager in any pari-mutuel system of wagering on horse racing or for a fee deliver anything of value which has been received outside of the enclosure of a race track holding a horse race licensed [under] pursuant to sections 313.500 to 313.710, other than within the enclosure of an off-track pari-mutuel facility licensed pursuant to sections 313.656 to 313.664, to be placed as wagers in the pari-mutuel pool within such enclosure and no other forms of gambling, such as is authorized on riverboats, shall be authorized other than that specifically authorized in this act.

     2. Any individual violating the provisions of this section shall upon conviction be guilty of a class C felony.

     313.661. 1. An off-track pari-mutuel licensee shall not use an off-track pari-mutuel system unless the system has been approved for use by the commission. The physical location of the system may be in a state other than Missouri. An off-track pari-mutuel wagering system shall:

     (1) Include a fully redundant computer;

     (2) Receive, aggregate by pool, and report to a track at regular intervals to be approved by the commission, all off-track pari-mutuel wagering information received from the off-track pari-mutuel licensee;

     (3) Receive and report to the off-track pari-mutuel licensee at regular intervals to be approved by the commission, all wagering data received from the track to the system;

     (4) After each race on which pari-mutuel wagering is conducted is declared official, receive and report to the off-track pari-mutuel licensee the results and payoff prices reported by the track; and

     (5) Provide all accounting and reconciliation reports required by the commission.

     2. Operators of the off-track pari-mutuel system shall:

     (1) Currently be licensed by the commission, or similar authority in another state, as an off-track pari-mutuel system operator and have held such license for a period of not less than two consecutive years;

     (2) Provide an additional source of racing related information, in addition to the racing related information received through the licensee's simulcasts and the off-track pari-mutuel system, which produces hard copy reports on a day-to-day basis. Such additional information shall be provided to the licensee to ensure that the patrons engaged in wagering at the facility are provided with current and accurate racing related information and also to provide licensee's and the commission's auditing staffs information necessary to efficiently audit and monitor the operation of the facility. Such hard copy information will be retained by licensee for a period of not less than three years; and

     (3) Use communication equipment other than that used to transmit simulcasts or to facilitate the off-track pari-mutuel wagering system which is:

     (a) Able to contact each licensee immediately; and

     (b) Able at all times to respond immediately to licensee requests for confirmation of information included in the simulcasts or generated by the off-track pari-mutuel system.

     3. An off-track pari-mutuel licensee shall allow patrons to cash an outstanding off-track pari-mutuel ticket for thirty days from the date of purchase. Tickets which are not redeemed within such time become valueless, unless the time period is otherwise extended by the licensee, and the sum of money represented by them shall accrue to the licensee.

     4. A person under twenty-one years of age shall not be allowed to place an off-track pari-mutuel wager.

     313.662. 1. The total percentage of off-track pari-mutuel wagers that is to be deducted as a commission on wagers, excluding breakage, shall be the same percentage as deducted by the track, unless a different percentage is otherwise approved by the commission. The licensee shall quarterly distribute the amounts deducted as follows:

     (1) Two percent of all commissions on wagers shall be paid to the state of Missouri, with the costs of administering sections 313.656 to 313.664 borne by the commission to be paid from such funds; and

     (2) The remainder of the commissions on wagers and the breakage shall be retained by the licensee.

     2. In each week in which it has accepted off-track pari-mutuel wagers, the licensee shall file a report with the commission reporting the total amount of money wagered during the period. Such report shall be required of the licensee not more often than weekly.

     3. No other license tax, permit tax, occupation tax, or taxes or fees applicable solely to licensees licensed pursuant to the provisions of sections 313.656 to 313.664 shall be levied, assessed, or collected from a licensee by the state or by a political subdivision, except as provided in sections 313.656 to 313.664.

     313.663. 1. A person is guilty of a class A misdemeanor for any of the following:

     (1) Operating off-track pari-mutuel wagering without a license issued by the commission; or

     (2) Operating off-track pari-mutuel wagering where wagering is permitted other than in the manner specified by sections 313.656 to 313.664.

     2. A person knowingly permitting a person under twenty-one years of age to make a wager is guilty of a class B misdemeanor.

     313.664. The state of Missouri recognizes the Interstate Horse Racing Act of 1978, 15 U.S.C. Section 3001 et seq., and the remedies provided therein. Any organization licensed by the commission to conduct a horse racing meeting pursuant to sections 313.500 to 313.710, RSMo, is deemed to have consented to the acceptance of off-track pari-mutuel wagers by off-track pari-mutuel licenses.

     536.028. 1. The delegation of authority to any state agency to propose to the general assembly rules as provided under this section is contingent upon the agency complying with the provisions of this section and this delegation of legislative power to the agency to propose an order of rulemaking containing a rule or portion thereof that has the effect of substantive law, other than a rule relating to the agency's organization and internal management, is contingent and dependent upon the power of the general assembly to review such proposed order of rulemaking, to delay the effective date of such proposed order of rulemaking until the expiration of at least thirty legislative days of a regular session after such order is filed with the general assembly and the secretary of state, and to disapprove and annul any rule or portion thereof contained in such order of rulemaking.

     2. No rule or portion of a rule that has the effect of substantive law shall become effective until the order of rulemaking, in which such rule or portion thereof is contained, has been reviewed by the general assembly in accordance with the procedures provided herein and the agency's authority to propose an order of rulemaking is dependent upon the power of the general assembly to disapprove and annul any such proposed rule or portion thereof as provided herein.

     3. In order for the general assembly to have an effective opportunity to be advised of rules proposed by any state agency under the authority of this section, an agency may propose a rule by complying with the procedures provided in section 536.021, except that the notice of proposed rulemaking shall first be filed with the general assembly by providing a copy thereof to the joint committee on administrative rules which may hold hearings upon any proposed rule or portion thereof at any time. The agency shall cooperate with the joint committee on administrative rules by providing any witnesses, documents or information within the control of the agency as may be requested.

     4. In order to propose an order of rulemaking to the general assembly, the agency shall comply with the provisions of section 536.021, except that the agency may file a proposed order of rulemaking with the secretary of state only by first filing such proposed order with the general assembly by providing a copy thereof to the secretary of the senate and the clerk of the house of representatives. The president pro tem of the senate shall direct that a copy of the proposed order of rulemaking be delivered to the joint committee on administrative rules which may hold hearings thereon. The agency shall cooperate with the committee by providing any witnesses, documents or information within the control of the agency as may be requested.

     5. Such proposed order of rulemaking shall not become effective prior to the expiration of thirty legislative days of a regular session after such order is filed with the secretary of state and the general assembly.

     6. The committee may, by majority vote of its members, recommend that the general assembly disapprove and annul any rule or portion thereof contained in an order of rulemaking after hearings thereon and, upon a finding that such rule or portion thereof should be disapproved and annulled upon the following grounds:

     (1) Such rule is substantive in nature in that it creates rights or liabilities or provides for sanctions as to any person, corporation or other legal entity; and

     (2) Such rule or portion thereof is not in the public interest or is not authorized by the general assembly for one or more of the following grounds:

     (a) An absence of statutory authority for the proposed rule;

     (b) The proposed rule is in conflict with state law;

     (c) Such proposed rule is likely to substantially endanger the public health, safety or welfare;

     (d) The rule exceeds the purpose, or is more restrictive than is necessary to carry out the purpose, of the statute granting rulemaking authority;

     (e) A substantial change in circumstance has occurred since enactment of the law upon which the proposed rule is based as to result in a conflict between the purpose of the law and the proposed rule, or as to create a substantial danger to public health and welfare;

     (f) The proposed rule is so arbitrary and capricious as to create such substantial inequity as to be unreasonably burdensome on persons affected.

     7. Any recommendation or report issued by the committee pursuant to subsection 6 of this section shall be admissible as evidence in any judicial proceeding and entitled to judicial notice without further proof.

     8. The general assembly may adopt a concurrent resolution in accordance with the provisions of article IV, section 8 of the Missouri constitution to disapprove and annul any rule or portion thereof upon one or more of the grounds stated in subsection 6 of this section.

     9. Any rule or portion thereof not disapproved within thirty legislative days of a regular session pursuant to subsection 8 of this section shall be deemed approved by the general assembly and the secretary of state may publish such order of rulemaking as soon as practicable upon the expiration of thirty legislative days of a regular session after the order of rulemaking was filed with the secretary of state and the general assembly.

     10. Upon adoption of such concurrent resolution as provided in subsection 8 of this section, the secretary of state shall not publish the order of rulemaking until the expiration of time necessary for such resolution to be signed by the governor, or vetoed and subsequently acted upon by the general assembly pursuant to article III, section 32 of the Missouri Constitution. If such concurrent resolution is adopted and signed by the governor or reconsidered pursuant to article III, section 32, the secretary of state shall publish in the Missouri Register, as soon as practicable, the order of rulemaking along with notice of the proposed rules or portions thereof which are disapproved and annulled by the general assembly.

     11. Notwithstanding the provisions of section 1.140, RSMo, the provisions of this section are nonseverable and the delegation of legislative authority to an agency to propose orders of rulemaking is essentially dependent upon the powers vested with the general assembly as provided herein. If any of the powers vested with the general assembly to review, to delay the effective date or to disapprove and annul a rule or portion of a rule contained in an order of rulemaking, are held unconstitutional or invalid, the purported grant of rulemaking authority and any rule so proposed and contained in the order of rulemaking pursuant thereto shall be invalid and void.

     12. Nothing in this section shall prevent the general assembly from adopting by bill within thirty legislative days of a regular session the rules or portions thereof, or as the same may be amended, as contained in a proposed order of rulemaking. In that event, the proposed order of rulemaking shall have been superseded and any rule proposed therein shall be void and only such rules adopted by the general assembly and submitted to the governor may become effective. Rules so adopted shall be published by the secretary of state as soon as practicable. In that event, the secretary of state shall not publish the proposed order of rulemaking and such proposed order of rulemaking shall be invalid and void.

     13. Upon adoption of any rule now in effect or hereafter promulgated, any such rule or portion thereof may be revoked by the general assembly either by bill, or by concurrent resolution pursuant to article IV, section 8 of the constitution on recommendation of the committee on administrative rules upon the grounds listed in subsection 6 of this section. The secretary of state shall publish in the Missouri Register, as soon as practicable, notice of the revocation.