85R12629 DMS-F
By: Kuempel H.B. No. 3926
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of horse racing and greyhound racing and
pari-mutuel wagering in connection with that racing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.03, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by amending Subdivisions
(2), (6), (18), (46), (50), (67), and (74) and adding Subdivisions
(82), (83), and (84) to read as follows:
(2) "Association" or "racetrack association" means a
person licensed under this Act to offer [conduct a horse race
meeting or a greyhound race meeting with] pari-mutuel wagering on
horse racing or greyhound racing.
(6) "Horse race meeting" means the conducting of live,
simulcast, or purpose-driven pari-mutuel wagering on horse races on
a day or during a period of consecutive or nonconsecutive days.
(18) "Pari-mutuel wagering" means the form of wagering
on the outcome of greyhound or horse races [racing] in which [those
who wager purchase tickets of various denominations on an animal or
animals and] all wagers [for each race] are pooled and held by the
racing association for distribution of the total amount, less the
deductions authorized by this Act, to winning wagers [holders of
tickets on the winning animals].
(46) "Multiple wagering" means wagering on two or more
entries [animals] in one race or on one or more entries [animals] in
more than one race. "Multiple two wagering" means wagering on two
entries [animals] in one or more races. "Multiple three wagering"
means wagering on three or more entries [animals] in one or more
races.
(50) "Greyhound racing days" means 24-hour periods
ending at 12 midnight [days] on which a permitted racetrack
association may conduct [conducts] greyhound racing. ["One racing
day" means a period commencing at noon and ending at 2 a.m. the next
calendar day, except in the case of days on which there are matinee
races.]
(67) "Racetrack facility" means a facility operated by
a racetrack [an] association within its enclosure for the purpose
of offering [presenting races for] pari-mutuel wagering on the
outcome of greyhound or horse races.
(74) "Race" includes previously run races, whether
digitally represented, simulated, or presented by video recording
and a live audio and visual signal of a race.
(82) "Purpose-driven pari-mutuel wagering" means
wagering on a greyhound race or horse race, whether running or
harness, that:
(A) was previously conducted at a facility
licensed to offer pari-mutuel wagering on the outcome of greyhound
or horse races;
(B) concluded with official results; and
(C) concluded without a scratch,
disqualification, or dead-heat finish.
(83) "Purpose-driven pari-mutuel pool" means the
total amount of money wagered by patrons within the enclosure of a
racetrack association on the results of a previously run race.
(84) "Purpose-driven pari-mutuel wagering system
provider" means a person, company, or association that contracts
with a racetrack association to provide the necessary systems and
hardware to conduct purpose-driven pari-mutuel wagering.
SECTION 2. Section 3.02(a), Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended to read as follows:
(a) The commission shall regulate and supervise every race
meeting in this state involving wagering on the result of live,
simulcast, or previously run greyhound or horse races [racing].
All persons and things relating to the operation of those meetings
are subject to regulation and supervision by the commission. The
commission shall adopt rules for conducting greyhound or horse
racing in this state involving wagering and shall adopt other rules
to administer this Act that are consistent with this Act. The
commission shall also make rules, issue licenses, and take any
other necessary action relating exclusively to horse racing or to
greyhound racing.
SECTION 3. Section 3.021(a), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(a) Any provision in this Act to the contrary
notwithstanding, the commission may license and regulate all
aspects of greyhound racing and horse racing offered in this state,
whether or not that racing involves pari-mutuel wagering.
SECTION 4. Section 3.09, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by adding Subsection (c)
to read as follows:
(c) A pari-mutuel pool may be funded with money allocated to
initiate the pool or a guaranteed amount.
SECTION 5. Section 6.01, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended to read as follows:
Sec. 6.01. LICENSE REQUIRED. A person may not conduct
wagering on a greyhound race or a horse race [meeting] without first
obtaining a racetrack license from the commission. A person who
violates this section commits an offense.
SECTION 6. Sections 6.03(a) and (b), Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), are amended to read
as follows:
(a) The commission shall require each applicant for an
original racetrack license to pay the required application fee and
to submit an application, on a form prescribed by the commission,
containing the following information:
(1) if the applicant is an individual, the full name of
the applicant, the applicant's date of birth, a physical
description of the applicant, the applicant's current address and
telephone number, and a statement by the applicant disclosing any
arrest or conviction for a felony or for a misdemeanor, except a
misdemeanor under Subtitle C, Title 7, Transportation Code, [the
Uniform Act Regulating Traffic on Highways (Article 6701d, Vernon's
Texas Civil Statutes)] or a similar misdemeanor traffic offense;
(2) if the applicant is a corporation:
(A) the state in which it is incorporated, the
names and addresses of the corporation's agents for service of
process in this state, the names and addresses of its officers and
directors, the names and addresses of its stockholders, and, for
each individual named under this subdivision, the individual's date
of birth, current address and telephone number, and physical
description, and a statement disclosing any arrest or conviction
for a felony or for a misdemeanor, except a misdemeanor under
Subtitle C, Title 7, Transportation Code, [the Uniform Act
Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil
Statutes)] or a similar misdemeanor traffic offense; and
(B) identification of any other beneficial owner
of shares in the applicant that bear voting rights, absolute or
contingent, any other person that directly or indirectly exercises
any participation in the applicant, and any other ownership
interest in the applicant that the applicant making its best effort
is able to identify;
(3) if the applicant is an unincorporated business
association:
(A) the names and addresses of each of its
members and, for each individual named under this subdivision, the
individual's date of birth, current address and telephone number,
and physical description, and a statement disclosing any arrest or
conviction for a felony or for a misdemeanor, except a misdemeanor
under Subtitle C, Title 7, Transportation Code, [the Uniform Act
Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil
Statutes)] or a similar misdemeanor traffic offense; and
(B) identification of any other person that
exercises voting rights in the applicant or that directly or
indirectly exercises any participation in the applicant and any
other ownership interest in the applicant that the applicant making
its best effort is able to identify;
(4) the exact location at which a race meeting is to be
conducted;
(5) if the racing facility is in existence, whether it
is owned by the applicant and, if leased to the applicant, the name
and address of the owner and, if the owner is a corporation or
unincorporated business association, the names and addresses of its
officers and directors, its stockholders and members, if any, and
its agents for service of process in this state;
(6) if construction of the racing facility has not
been initiated, whether it is to be owned by the applicant and, if
it is to be leased to the applicant, the name and address of the
prospective owner and, if the owner is a corporation or
unincorporated business association, the names and addresses of its
officers and directors, the names and addresses of its
stockholders, the names and addresses of its members, if any, and
the names and addresses of its agents for service of process in this
state;
(7) identification of any other beneficial owner of
shares that bear voting rights, absolute or contingent, in the
owner or prospective owner of the racing facility, or any other
person that directly or indirectly exercises any participation in
the owner or prospective owner and all other ownership interest in
the owner or prospective owner that the applicant making its best
effort is able to identify;
(8) a detailed statement of the assets and liabilities
of the applicant;
(9) the kind of racing to be conducted and the dates
requested;
(10) proof of residency as required by Section 6.06 of
this Act;
(11) a copy of each management, concession, [and]
totalisator contract, and purpose-driven pari-mutuel wagering
system provider contract dealing with the proposed license at the
proposed location in which the applicant has an interest for
inspection and review by the commission; the applicant or licensee
shall advise the commission of any change in any management,
concession, [or] totalisator contract, or purpose-driven
pari-mutuel wagering system provider contract; all management,
concession, [and] totalisator contracts, and purpose-driven
pari-mutuel wagering system provider contracts must have prior
approval of the commission; the same fingerprint, criminal records
history, and other information required of license applicants
pursuant to Sections 5.03 and 5.04 and Subdivisions (1) through (3)
of this subsection shall be required of proposed totalisator firms,
purpose-driven pari-mutuel wagering system providers,
concessionaires, and managers and management firms; and
(12) any other information required by the commission.
(b) When the commission receives a plan for the security of
a racetrack facility, or a copy of a management, concession, [or]
totalisator contract, or purpose-driven pari-mutuel wagering
system provider contract for review under Subdivision (11) of
Subsection (a) of this section, the commission shall review the
contract or security plan in an executive session. Documents
submitted to the commission under this section by an applicant are
subject to discovery in a suit brought under this Act but are not
public records and are not subject to Chapter 552, Government Code
[424, Acts of the 63rd Legislature, Regular Session, 1973 (Article
6252-17a, Vernon's Texas Civil Statutes)]. In reviewing and
approving contracts under this subsection, the commission shall
attempt to ensure the involvement of minority owned businesses
whenever possible.
SECTION 7. Section 6.04, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by adding Subsections
(e) and (f) to read as follows:
(e) A racetrack association licensed to offer pari-mutuel
wagering on horse races, whether live or simulcast, and granted
live or simulcast race dates may offer purpose-driven pari-mutuel
wagering on any day during the calendar year.
(f) A racetrack association licensed to offer pari-mutuel
wagering on greyhound races, whether live or simulcast, and granted
live or simulcast race dates may offer purpose-driven pari-mutuel
wagering on any day during the calendar year.
SECTION 8. Section 6.08(b)(3), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(3) The horse racetrack [racing] association shall
transfer the amount set aside for purses from any live,
purpose-driven, and simulcast pools and shall deposit the amounts
in purse accounts maintained by breed by the horsemen's
organization in one or more federally insured depositories. Legal
title to purse accounts is vested in the horsemen's organization.
The horsemen's organization may contract with a racetrack [an]
association to manage and control the purse accounts and to make
disbursements from the purse accounts:
(A) to an owner whose horse won a purse;
(B) to the horsemen's organization for its
expenses; or
(C) for other disbursements as provided by
contract between the horsemen's organization and the association.
SECTION 9. Section 6.08, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by amending Subsections
(i) and (j) and adding Subsections (o) and (p) to read as follows:
(i) Ten percent of the total breakage from a live
pari-mutuel pool, purpose-driven pari-mutuel pool, or a simulcast
pari-mutuel pool is to be paid to the commission for use by the
appropriate state horse breed registry, subject to rules
promulgated by the commission. The appropriate breed registry for
Thoroughbred horses is the Texas Thoroughbred [Breeders]
Association, for quarter horses is the Texas Quarter Horse
Association, for Appaloosa horses is the Texas Appaloosa Horse
Club, for Arabian horses is the Texas Arabian Breeders Association,
and for paint horses is the Texas Paint Horse Breeders Association.
(j) Ten percent of the total breakage from a live
pari-mutuel pool, purpose-driven pari-mutuel pool, or a simulcast
pari-mutuel pool is to be retained by the racetrack association to
be used in stakes races restricted to accredited Texas-bred horses.
The appropriate state horse breed registry shall pay out the
remaining 80 percent of the total breakage as follows:
(1) 40 percent of the remaining breakage is allocated
to the owners of the accredited Texas-bred horses that finish
first, second, or third;
(2) 40 percent is allocated to the breeders of the
accredited Texas-bred horses that finish first, second, or third;
and
(3) 20 percent is allocated to the owner of the
stallion standing in this state at the time of conception whose
Texas-bred get finish first, second, or third.
(o) A racetrack association may not begin offering
purpose-driven pari-mutuel wagering until the association
executes:
(1) a valid contract with the officially recognized
horsemen's organization to establish the portion of the
association's commission on purpose-driven pari-mutuel pools that
will be set aside for purses; and
(2) a valid contract with the official breed
registries to establish the portion of the association's commission
on purpose-driven pari-mutuel pools that will be set aside for
breeder incentives.
(p) The commission shall be the final arbiter of any
disagreements between a racetrack association and the horsemen's
organization, or between a racetrack association and the official
breed registries when reaching the terms of a valid contract.
SECTION 10. Section 6.09, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by amending Subsections
(a) and (d) and adding Subsections (g) and (h) to read as follows:
(a) Every racetrack association authorized under this Act
to conduct pari-mutuel wagering at a greyhound race meeting on
races run shall distribute all sums deposited in any live or
simulcast pari-mutuel pool to the holders of the winning tickets if
those tickets are presented for payment within 60 days after the
closing day of the race meeting at which the pool was formed, less
an amount paid as a commission of 18 percent of the total deposits
in pools resulting from regular win, place, and show wagering, and
an amount not to exceed 21 percent of the total deposits in pools
resulting from multiple two wagering and an amount not to exceed 25
percent of the total deposits in pools resulting from multiple
three wagering.
(d) Fifty percent of the breakage for live, previously run,
or simulcast races is to be paid to the appropriate state greyhound
breeding registry. Of that portion of the breakage 25 percent of
that breakage is to be used in stakes races and 25 percent of that
total breakage from a live pari-mutuel pool, purpose-driven
pari-mutuel pool, or a simulcast pari-mutuel pool is to be paid to
the commission for the use by the state greyhound breed registry,
subject to rules promulgated by the commission.
(g) A racetrack association may not begin offering
purpose-driven pari-mutuel wagering until the association executes
a valid contract with the Texas Greyhound Association that
establishes the portions of the association's commission on
purpose-driven pari-mutuel pools that will be set aside for purses
and breeder incentives.
(h) The commission shall be the final arbiter of any
disagreements between an association and the Texas Greyhound
Association when reaching the terms of a valid contract.
SECTION 11. Sections 6.092(a) and (c), Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), are amended to read
as follows:
(a) The commission shall adopt reporting, monitoring, and
auditing requirements or other appropriate performance measures
for any funds distributed to or used by or any function or service
provided by the expenditure of any funds distributed to or used by
any organization that receives funds generated by live,
purpose-driven, or simulcast pari-mutuel wagering [racing].
(c) An organization receiving funds generated by
pari-mutuel wagering on live, purpose-driven, or simulcast
[pari-mutuel] racing shall annually file with the commission a copy
of an audit report prepared by an independent certified public
accountant. The audit shall include a verification of any
performance report sent to or required by the commission.
SECTION 12. Article 6, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by adding Section 6.095
to read as follows:
Sec. 6.095. DEDUCTIONS FROM PURPOSE-DRIVEN PARI-MUTUEL
POOL. (a) For each dollar wagered in a purpose-driven pari-mutuel
pool, a racetrack association shall set aside for this state an
amount equal to one percent to be distributed in the following order
of priority:
(1) $20 million is allocated to pay the costs of body
armor for law enforcement officers in this state;
(2) $10 million is allocated as death benefits for
families of law enforcement officers killed in the line of duty; and
(3) any remainder is allocated for deposit to the
general revenue fund to be used at the discretion of this state.
(b) For each dollar wagered in a purpose-driven pari-mutuel
pool, a racetrack association shall set aside for nonprofit
corporations an amount equal to one percent.
(c) At any time purpose-driven pari-mutuel wagering is
offered, each racetrack association shall contract with 10
nonprofit corporations to provide contributions to the
corporations from purpose-driven pari-mutuel wagering. A contract
with a nonprofit corporation may be for a term of 30 days or more.
(d) Any nonprofit corporation registered under 26 U.S.C.
Section 501(c)(3) that has operations in this state and that filed
an Internal Revenue Service Form 990 in the previous calendar year
is eligible to participate. The commission shall adopt rules on the
application process and selection criteria under this section.
(e) Of the 10 nonprofit corporations contracted under
Subsection (c):
(1) at least one must benefit law enforcement
programs;
(2) at least one must benefit veterans of the armed
forces of this state or the United States; and
(3) not more than three may benefit the racing
industry.
SECTION 13. Section 6.11(a), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(a) In no event shall the purse in a greyhound race be less
than a minimum of 4.7 percent of the total deposited in each live or
simulcast pool.
SECTION 14. Section 6.14(a), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(a) A racetrack [An] association may not conduct greyhound
or horse racing or offer pari-mutuel wagering on greyhound or horse
races, whether live, simulcast, or purpose-driven, at any place
other than the place designated in the license except as provided by
this section or by Section 6.15 of this Act. However, if the
racetrack or enclosure designated in the license becomes unsuitable
for racing because of fire, flood, or other catastrophe, the
affected association, with the prior approval of the commission,
may conduct a race meeting or any remaining portion of a meeting
temporarily at any other racetrack licensed by the commission to
conduct the same type of racing as may be conducted by the affected
association if the licensee of the other racetrack also consents to
the usage.
SECTION 15. Section 11.01(a), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(a) Pari-mutuel wagering on the outcome of greyhound races
and horse races, whether live, simulcast, or previously run, is
authorized under this Act. The commission shall adopt rules to
regulate wagering on the outcome of greyhound races and horse
races, whether live, simulcast, or previously run, under the system
known as pari-mutuel wagering. Wagering may be conducted only by a
racetrack [an] association within its enclosure. A person may not
accept, in person, by telephone, or over the Internet, a wager for a
horse race or greyhound race conducted inside or outside this state
from a person in this state unless the wager is authorized under
this Act.
SECTION 16. Section 11.04(a), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is amended to read as
follows:
(a) Only a person inside the enclosure where [both] live or
[and] simulcast race meetings are authorized may wager on the
results [result] of [a] live, previously run, or simulcast races
[race] presented by the racetrack association in accordance with
commission rules. Except as provided by this section, a person may
not place, in person, by telephone, or over the Internet, a wager
for a horse race or greyhound race conducted inside or outside this
state. The commission shall adopt rules to prohibit wagering by
employees of the commission and to regulate wagering by persons
licensed under this Act.
SECTION 17. Section 6.09(e), Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes), is repealed.
SECTION 18. As soon as practicable after the effective date
of this Act, the Texas Racing Commission shall adopt the rules
necessary to implement the changes in law made by this Act.
SECTION 19. This Act takes effect September 1, 2017.