Bill Text: MI SB0634 | 2013-2014 | 97th Legislature | Introduced

---

Bill Title: Gaming; horse racing; advance deposit account wagering on horse races; allow. Amends title & secs 2, 8 & 17 of 1995 PA 279 (MCL 431.302 et seq.) & adds secs. 15a, 15b, 17a & 17b.

Spectrum: Moderate Partisan Bill (Republican 9-2)

Status: (Introduced - Dead) 2013-10-22 - Referred To Committee On Agriculture [SB0634 Detail]

Download: Michigan-2013-SB0634-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 634

 

 

October 22, 2013, Introduced by Senators KAHN, KOWALL, PAPPAGEORGE, BRANDENBURG, NOFS, JONES, EMMONS, HUNE, GREGORY, ANANICH and MARLEAU and referred to the Committee on Agriculture.

 

 

 

     A bill to amend 1995 PA 279, entitled

 

"Horse racing law of 1995,"

 

by amending the title and sections 2, 8, and 17 (MCL 431.302,

 

431.308, and 431.317), section 2 as amended by 2006 PA 445 and

 

section 17 as amended by 1998 PA 408, and by adding sections 15a,

 

15b, 17a, and 17b.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act to license and regulate the conducting of horse race

 

meetings in this state, with pari-mutuel wagering on the results of

 

horse races, including advance deposit account wagering, and

 

persons involved in horse racing and pari-mutuel gaming activities;

 

at such race meetings; to create the office of racing commissioner;

 

to prescribe provide for the powers and duties of the racing

 

commissioner; to prescribe certain powers and duties of the

 

department of agriculture and the director of the department of

 

agriculture; certain state governmental officers and entities; to

 

provide for the promulgation of rules; to provide for the

 

imposition of impose taxes and fees and the disposition dispose of

 

revenues; to impose certain taxes; to create funds; to legalize and

 

permit the pari-mutuel method of wagering on the results of live

 

and simulcast races at licensed race meetings in this state; to

 

appropriate the funds money derived from pari-mutuel wagering on

 

the results of horse races at licensed race meetings in this state;

 

to prescribe remedies and penalties; and to repeal acts and parts

 

of acts.

 

     Sec. 2. As used in this act:

 

     (a) "Advance deposit account wagering" means a method of pari-

 

mutuel wagering conducted in this state that is permissible under

 

the interstate horseracing act of 1978, 15 USC 3001 to 3007, in

 

which a resident of this state may establish an account with a

 

person, licensed by the director, to place pari-mutuel wagers in

 

person, via telephone, or electronically.

 

     (b) "Advance deposit account wagering services" means services

 

provided by a person located in or outside of this state that allow

 

residents of this state to establish an account and that accept

 

pari-mutuel wagers from residents of this state in person, via

 

telephone, or electronically. Advance deposit account wagering

 

services do not include pari-mutuel wagers placed on live or

 

simulcast horse races at licensed racetracks in this state under

 

section 17 or 18.

 

     (c) (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%.

 

     (d) "Board" means the Michigan gaming control board created by

 

section 4 of the Michigan gaming control and revenue act, 1996 IL

 

1, MCL 432.204, to which certain powers and duties under this act

 

were transferred by Executive Reorganization Order No. 2009-31, MCL

 

324.99919.

 

     (e) (b) "Breaks" means the cents over any multiple of 10

 

otherwise payable to a patron on a wager of $1.00.

 

     (f) (c) "Certified horsemen's organization" means an

 

organization that is registered with the office of racing

 

commissioner board in a manner and form required by the racing

 

commissioner, director and that can demonstrate all of the

 

following:

 

     (i) The organization's capacity to supply horses.

 

     (ii) The organization's ability to assist a race meeting

 

licensee in conducting the licensee's racing program.

 

     (iii) The organization's ability to monitor and improve physical

 

conditions and controls for individuals and horses participating at

 

licensed race meetings.

 

     (iv) The organization's ability to protect the financial

 

interests of the individuals participating at licensed race

 

meetings.

 

     (g) (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.

 

     (h) (e) "Controlled substance" means that term as defined in

 

section 7104 of the public health code, 1978 PA 368, MCL 333.7104.

 

     (i) (f) "Day of operation" means a period of 24 hours

 

beginning at 12 noon and ending at 11:59 a.m. the following day.

 

     (j) "Director" means the executive director of the Michigan

 

gaming control board appointed under section 4 of the Michigan

 

gaming control and revenue act, 1996 IL 1, MCL 432.204, to whom

 

duties of the racing commissioner were transferred under Executive

 

Reorganization Order No. 2009-31, MCL 324.99919.

 

     (k) (g) "Drug" means any of the following:

 

     (i) A substance intended for use in the diagnosis, cure,

 

mitigation, treatment, or prevention of disease in humans or other

 

animals.

 

     (ii) A substance, other than food, intended to affect the

 

structure , or condition , or any a function of the body of humans

 

or other animals.

 

     (iii) A substance intended for use as a component of a substance

 

specified in subparagraph (i) or (ii).

 

     (l) (h) "Fair" means any a county, district, or community fair

 

and any or a state fair.

 

     (m) (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.

 

     (n) (j) "Full card simulcast" means an entire simulcast racing

 

program of 1 or more race meeting licensees located in this state,

 

or an entire simulcast racing program of 1 or more races

 

simulcasted from 1 or more racetracks located outside of this

 

state.

 

     (o) (k) "Member of the immediate family" means the spouse,

 

child, parent, or sibling.

 

     (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 under

 

this act.

 

     (r) (n) "Veterinarian" means a person an individual licensed

 

or otherwise authorized to engage in the practice of veterinary

 

medicine under part 188 of the public health code, 1978 PA 368, MCL

 

333.16101 333.18801 to 333.18838, or under a state or federal law

 

applicable to that person.individual.

 

     Sec. 8. (1) The racing commissioner director may issue the

 

following general classes of licenses:

 

     (a) Occupational licenses issued to individuals participating

 

in, involved in, or otherwise having to do with horse racing, pari-

 

mutuel wagering, or simulcasting at a licensed race meeting in this

 

state.

 

     (b) Race meeting licenses issued annually for the succeeding

 

year to a person persons to conduct live horse racing,

 

simulcasting, and pari-mutuel wagering on the results of live and

 

simulcast horse races at a licensed race meeting in this state

 

pursuant to and in accordance with the provisions of under this

 

act.

 

     (c) Track licenses issued to a person persons to maintain or

 

operate a racetrack at which 1 or more race meeting licensees may

 

conduct licensed race meetings in this state.

 

     (d) Advance deposit account wagering licenses issued to

 

persons to provide advance deposit account wagering services in

 

this state.

 

     (2) The racing commissioner director shall not issue a race

 

meeting license to a person if the person is licensed to conduct a

 

licensed race meeting at another licensed racetrack within a city

 

area and the person has a controlling interest in or co-ownership

 

of the other licensed racetrack. within the city area.

 

     Sec. 15a. (1) A person may apply to the board for an advance

 

deposit account wagering license to conduct advance deposit account

 

wagering as provided in this act. The application must be made

 

under oath on forms provided by the director and must contain

 

information as prescribed by the director, including, but not

 

limited to, all of the following:

 

     (a) The name, business address, business telephone number,

 

social security number, and, if applicable, the federal tax

 

identification number of the applicant and any person described in

 

subsection (2).

 

     (b) The identity of every person who has a greater than 1%

 

direct or indirect pecuniary interest in the applicant. If the

 

person disclosed is a trust, the application must disclose the

 

names and addresses of the beneficiaries; if a corporation, the

 

names and addresses of all stockholders and directors; if a

 

partnership, the names and addresses of all partners, both general

 

and limited; and if a limited liability company, the names and

 

addresses of all members.

 

     (c) An identification of any business, including, if

 

applicable, the state of incorporation or registration, in which

 

the applicant, any person described in subsection (2), or the

 

spouse, parent, or child of the applicant or any person described

 

in subsection (2) has an equity interest of more than 5%. If the

 

applicant or person described in subsection (2) is a corporation,

 

partnership, or other business entity, the applicant shall identify

 

any other corporation, partnership, or business entity in which it

 

or the person described in subsection (2) has an equity interest of

 

5% or more, including, if applicable, the state of incorporation or

 

registration. In the alternative, if the applicant or person

 

described in subsection (2) has filed a registration with the

 

United States securities and exchange commission that contains the

 

information required by this subdivision, the applicant or person

 

may file a copy of the registration to comply with this

 

subdivision.

 

     (d) Whether the applicant or any person described in

 

subsection (2) has been indicted for, charged with, arrested for,

 

convicted of, pled guilty or nolo contendere to, forfeited bail

 

concerning, or had expunged a criminal offense under the laws of

 

any jurisdiction, either felony or misdemeanor, not including

 

traffic violations, regardless of whether the offense has been

 

expunged, pardoned, or reversed on appeal or otherwise, including

 

the date of the offense, the name and location of the court, the

 

arresting agency and prosecuting agency, the case caption, the

 

docket number, the name of the offense, the disposition of the

 

case, and the location and length of any incarceration.

 

     (e) Whether the applicant or any person described in

 

subsection (2) has ever applied for or been granted a license or

 

certificate issued by a licensing authority in this state or any

 

other jurisdiction that has been denied, restricted, suspended,

 

revoked, or not renewed and a statement describing the facts and

 

circumstances concerning the application, denial, restriction,

 

suspension, revocation, or nonrenewal, including the licensing

 

authority, the date each action was taken, and the reason for each

 

action.

 

     (f) Whether the applicant or any person described in

 

subsection (2) has ever filed or had filed against it a civil or

 

administrative action or proceeding in bankruptcy or has ever been

 

involved in a formal process to adjust, defer, suspend, or

 

otherwise work out the payment of a debt, including the date of

 

filing, the name and location of the court, the case caption, the

 

docket number, and the disposition of the action or proceeding.

 

     (g) Whether the applicant or any person described in

 

subsection (2) has filed or been served with a complaint or other

 

notice filed with a public body regarding a delinquency in the

 

payment of, or a dispute over filings concerning the payment of, a

 

tax required under federal, state, or local law, including the

 

amount involved, the type of tax, the taxing agency, and the time

 

periods involved.

 

     (h) A statement listing the names and titles of all public

 

officials or officers of any unit of government and the spouses,

 

parents, and children of the public officials or officers who,

 

directly or indirectly, own a financial interest in, have a

 

beneficial interest in, are the creditors of or hold a debt

 

instrument issued by, or hold or have an interest in a contractual

 

or service relationship with the applicant or any person described

 

in subsection (2). As used in this subdivision, public official or

 

officer does not include a person who would have to be listed

 

solely because of his or her state or federal military service.

 

     (i) A description of the proposed advance deposit account

 

wagering operation, including the economic benefit to the horse

 

racing industry in this state, the anticipated or actual number of

 

employees, any statement from the applicant or a person described

 

in subsection (2) regarding compliance with federal and state

 

affirmative action guidelines, projected admissions, projected

 

gross receipts, and scientific market research.

 

     (j) Financial information in the manner and form prescribed by

 

the director.

 

     (2) In addition to the applicant, if so indicated, the

 

requirements of this section apply to an affiliate, affiliated

 

company, officer, director, or managerial employee of the applicant

 

and any person who holds greater than 1% direct or indirect

 

interest in the applicant. For purposes of this subsection,

 

affiliate and affiliated company do not include a partnership,

 

joint venture, shareholder, member, or partner that has less than a

 

1% direct interest in the applicant and is not involved in the

 

advance deposit account wagering application as defined in rules

 

promulgated by the director.

 

     (3) An applicant under this section shall provide all of the

 

following with the application:

 

     (a) A signed agreement with the appropriate certified

 

horsemen's organizations that identifies the accounts into which

 

fees are to be deposited.

 

     (b) A detailed plan that describes procedures that will be

 

implemented to address the requirements of section 17a.

 

     (c) A signed agreement with the thoroughbred certified

 

horsemen's association that has a contract with a thoroughbred race

 

meeting licensee that has been allocated a minimum of 40 live race

 

days in this state.

 

     (d) Any other information required by the director.

 

     (4) The initial fee for an advance deposit account wagering

 

license is $5,000.00. The annual renewal fee is $1,000.00.

 

     (5) The director shall use information provided in an

 

application submitted under this section as a basis for a thorough

 

background investigation of the applicant and each person described

 

in subsection (2). A false or incomplete application is cause for

 

denial of a license by the director.

 

     (6) An applicant under this section shall consent in writing

 

to being subject to inspections, searches, and seizures as provided

 

in this subsection and to disclosure to the director and the

 

director's agents of otherwise confidential records, including tax

 

records held by any federal, state, or local agency, or credit

 

bureau or financial institution, while applying for or holding a

 

license under this act. The applicant shall consent to allow the

 

director or the director's investigators, agents, auditors, and the

 

department of state police to enter at any time, without a warrant

 

and without notice to the applicant, the premises, offices,

 

facilities, or other places of business of the applicant where

 

evidence of the compliance or noncompliance with this act or rules

 

promulgated by the director is likely to be found, for the

 

following purposes:

 

     (a) To inspect and examine all premises where advance deposit

 

account wagering is conducted, or where any records of advance

 

deposit account wagering are prepared.

 

     (b) To inspect, examine, audit, impound, seize, or assume

 

physical control of, or summarily remove from the premises, all

 

books, ledgers, documents, writings, photocopies, correspondence,

 

records, videotapes, including electronically stored records, money

 

receptacles, other containers and their contents, equipment in

 

which the records are stored, or other advance deposit account

 

wagering related equipment and supplies on or around the premises.

 

     (c) To inspect the person, and inspect, examine, and seize

 

personal effects present in a facility where advance deposit

 

account wagering is conducted under this act.

 

     (d) To investigate and deter alleged violations of this act or

 

the rules promulgated by the director.

 

     (7) An applicant under this section shall pay a nonrefundable

 

application fee of $5,000.00 at the time the application is filed

 

to defray the costs associated with the background investigation

 

conducted by the director. If the costs of the investigation exceed

 

$5,000.00, the applicant shall pay the additional amount to the

 

board.

 

     (8) The director and the director's agents shall only disclose

 

information, records, interviews, reports, statements, memoranda,

 

or other data supplied to or used by the director in the course of

 

the review or investigation of an application under this section as

 

allowed under subsection (7). The information, records, interviews,

 

reports, statements, memoranda, or other data are not admissible as

 

evidence or discoverable in a court action or before a tribunal,

 

board, agency, or person, except for an action considered necessary

 

by the director.

 

     (9) The director shall, on written request from any person,

 

provide the following information concerning an applicant under

 

this section, the applicant's advance deposit account wagering

 

services, or the applicant's business holdings if the director has

 

the information:

 

     (a) The applicant's name, business address, and business

 

telephone number.

 

     (b) An identification of the applicant and any person

 

described in subsection (2), including, if the applicant or person

 

described in subsection (2) is not an individual, its state of

 

incorporation or registration, its corporate officers, and the

 

identity of its shareholders. If the applicant or person described

 

in subsection (2) has a registration statement or a pending

 

registration statement filed with the United States securities and

 

exchange commission, the director shall only provide the names of

 

those persons who hold an interest of 5% or more.

 

     (c) An identification of any business, including, if

 

applicable, the state of incorporation or registration, in which

 

the applicant, any person described in subsection (2), or a spouse,

 

parent, or child of the applicant or person described in subsection

 

(2) has an equity interest of more than 5%.

 

     (d) Whether the applicant or individual described in

 

subsection (2) has been indicted for, convicted of, pled guilty or

 

nolo contendere to, or forfeited bail concerning a criminal offense

 

under the laws of any jurisdiction, either felony or misdemeanor,

 

not including traffic violations, including the name and location

 

of the court, the date of the offense, and the disposition of the

 

case.

 

     (e) Whether the applicant or any person described in

 

subsection (2) has had any license or certification issued by a

 

licensing authority in this state or any other jurisdiction denied,

 

restricted, suspended, revoked, or not renewed and, if known by the

 

director, a statement describing the facts and circumstances

 

concerning the denial, restriction, suspension, revocation, or

 

nonrenewal, including the name of the licensing authority, the date

 

each action was taken, and the reason for each action.

 

     (f) Whether the applicant or any person described in

 

subsection (2) has ever filed, or had filed against it, a

 

proceeding for bankruptcy or has ever been involved in a formal

 

process to adjust, defer, suspend, or otherwise work out the

 

payment of a debt, including the date the proceeding was filed, the

 

name and location of the court, the case number, and the

 

disposition of the proceeding.

 

     (g) Whether the applicant or any person described in

 

subsection (2) has filed or been served with a complaint or other

 

notice filed with a public body regarding the delinquent payment of

 

a tax required under federal, state, or local law, including the

 

amount of the tax, the type of tax, the taxing agency, and the time

 

periods involved.

 

     (h) A statement listing the names and titles of all public

 

officials or officers of a city, state, or federal body, agency, or

 

entity and relatives of the officials or officers who, directly or

 

indirectly, own a financial interest in, have a beneficial interest

 

in, are the creditors of, or hold or have any other interest in or

 

contractual or service relationship with the applicant or any

 

person described in subsection (2).

 

     (i) Whether the applicant, any person identified in subsection

 

(2), or the spouse, parent, child, or spouse of a child of the

 

applicant or any person identified in subsection (2) has made,

 

directly or indirectly, a political contribution, loan, gift, or

 

other payment to a candidate as that term is defined in section 3

 

of the Michigan campaign finance act, 1976 PA 388, MCL 169.203, to

 

the holder of a state, legislative, or local elective office in

 

this state, or to a committee established under the Michigan

 

campaign finance act, 1976 PA 388, MCL 169.201 to 169.282, within 5

 

years before the date the application was filed, including the

 

amount and the method of payment.

 

     (j) The name and business telephone number of any attorney,

 

counsel, lobbyist agent as that term is defined in section 5 of

 

1978 PA 472, MCL 4.415, or other person representing the applicant

 

in matters before the director.

 

     (k) A summary of the applicant's proposed advance deposit

 

account wagering operation, including the applicant's proposed

 

location, the square footage, the type of additional facilities,

 

restaurants, or hotels proposed by the applicant, the expected

 

economic benefit to the locality, the anticipated number of

 

employees, any statement from the applicant regarding compliance

 

with federal and state affirmative action guidelines, projected

 

admissions, and projected adjusted gross receipts.

 

     Sec. 15b. (1) The director shall issue a license to provide

 

advance deposit account wagering services in this state to any

 

person who meets the requirements of this act.

 

     (2) An applicant is ineligible to receive an advanced deposit

 

account wagering license if any of the following circumstances

 

exist:

 

     (a) The applicant has been convicted of a felony under the

 

laws of this state, any other state, or the United States.

 

     (b) The applicant has been convicted of a misdemeanor

 

involving gambling, theft, dishonesty, or fraud in any state or of

 

a violation of a local ordinance in any state involving gambling,

 

dishonesty, theft, or fraud that substantially corresponds to a

 

misdemeanor in that state.

 

     (c) The applicant has submitted an application for a license

 

under this act that contains false information.

 

     (d) The applicant is a member of the board.

 

     (e) The applicant holds an elective office of a governmental

 

unit of this state, another state, or the federal government, or is

 

a member of or employed by a gaming regulatory body of a

 

governmental unit in this state, another state, or the federal

 

government, or is employed by a governmental unit of this state.

 

This section does not apply to an elected officer of or employee of

 

a federally recognized Indian tribe or to an elected precinct

 

delegate.

 

     (f) The director concludes that the applicant lacks the

 

requisite suitability as to integrity, moral character, and

 

reputation; personal and business probity; financial ability and

 

experience; responsibility; or means to develop, construct,

 

operate, or maintain the advanced deposit account wagering proposed

 

in the application.

 

     (g) The applicant fails to meet other criteria considered

 

appropriate by the director. The criteria considered by the

 

director must not be arbitrary, capricious, or contradictory to the

 

expressed provisions of this act and must promote and advance the

 

interests of horse racing in this state.

 

     (3) An advance deposit account wagering license is valid for 1

 

year and may be renewed annually.

 

     (4) The director may promulgate rules under the administrative

 

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to

 

implement and regulate advance deposit account wagering and to

 

implement this section, including rules to establish all of the

 

following:

 

     (a) Standards, qualifications, and procedures for issuance of

 

an advance deposit account wagering license.

 

     (b) Provisions regarding access to books, records, and other

 

pertinent documents.

 

     (c) Provisions for inspections, audits, and submission of

 

reports.

 

     (d) Provisions for collection of all fees and revenues due to

 

this state and certified horsemen's organizations from advance

 

deposit account wagers.

 

     (5) The director may issue a temporary license to any person

 

that desires to provide advance deposit account wagering services

 

in this state before rules are promulgated under subsection (4).

 

     Sec. 17. (1) The pari-mutuel system of wagering upon on the

 

results of horse races as permitted by this act shall not be held

 

or construed to be unlawful. All forms of pari-mutuel wagering

 

conducted at a licensed race meeting shall must be preapproved by

 

the racing commissioner director pursuant to rule or written order

 

of the commissioner.director.

 

     (2) A holder of a race meeting license may provide a place in

 

the race meeting grounds or enclosure at which he or she may

 

conduct and supervise the pari-mutuel system of wagering on the

 

results of horse races as permitted by this act. If the pari-mutuel

 

system of wagering is used at a race meeting, the race meeting

 

licensee shall use a totalisator or other device that is equal in

 

accuracy and clearness to a totalisator and approved by the racing

 

commissioner shall be used. director. The odds display of the

 

totalisator or other device shall must be placed in full view of

 

the patrons.

 

     (3) Subject to section 18(3), each a 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 a

 

holder of a race meeting license shall retain as his or her

 

commission on all forms of multiple wagering , without the written

 

permission of the racing commissioner director not more than 28%

 

and or with the written permission of the racing commissioner

 

director not more than 35% of all money wagered involving any form

 

of multiple wager on the results of live and simulcast horse races

 

conducted at the licensee's race meeting. Except as otherwise

 

provided by contract, 50% of all commissions from wagering on the

 

results of live racing at the racetrack where the live racing was

 

conducted shall be paid to the horsemen's purse pool at the

 

racetrack where the live racing was conducted. As used in this

 

subsection:

 

     (a) "Straight wagering" means a wager made on the finishing

 

position of a single specified horse in a single specified race.

 

     (b) "Multiple wagering" means a wager made on the finishing

 

positions of more than 1 horse in a specified race or the finishing

 

positions of 1 or more horses in more than 1 specified race.

 

     (4) All breaks shall be retained by the race meeting licensee

 

and paid directly to the city or township in which the racetrack is

 

located as a fee for services provided pursuant to under section

 

21.

 

     (5) Payoff prices of tickets of a higher denomination shall be

 

calculated as even multiples of the payoff price for a $1.00 wager.

 

Each A holder of a race meeting license shall distribute to the

 

persons holding winning tickets, as a minimum, a sum not less than

 

$1.10 calculated on the basis of each $1.00 deposited in a pool,

 

except that each race meeting licensee may distribute a sum of not

 

less than $1.05 to persons holding winning tickets for each $1.00

 

deposited in a minus pool. As used in this subsection, "minus pool"

 

means any win, place, or show pool in which the payout would exceed

 

the total value of the pool.

 

     (6) A holder of a race meeting license shall not knowingly

 

permit a person less than 18 years of age to be a patron of the

 

pari-mutuel wagering conducted or supervised by the holder.

 

     (7) Any Except as otherwise authorized by this act, an act or

 

transaction relative to pari-mutuel wagering on the results of live

 

or simulcast horse races shall only occur or be permitted to occur

 

within the enclosure of a licensed race meeting. A person shall not

 

participate or be a party to any act or transaction relative to

 

placing a wager or carrying a wager for placement outside of a race

 

meeting ground. A person shall not provide messenger service for

 

the placing of a bet for another person who is not a patron.

 

However, this subsection does not prevent simulcasting or

 

intertrack or interstate common pool wagering inside or outside

 

this state as permitted by this act or the rules promulgated under

 

this act.

 

     Sec. 17a. (1) Notwithstanding any other provision in this act,

 

an advance deposit account wagering licensee may provide advance

 

deposit account wagering services in this state.

 

     (2) An advance deposit account wagering licensee is subject to

 

all pertinent provisions of this act regarding pari-mutuel

 

wagering.

 

     (3) A person shall not place an account wager in this state

 

except in accordance with this act through an advance deposit

 

account wagering licensee and a person other than an advance

 

deposit account wagering licensee shall not accept an account wager

 

from a person in this state. A person shall not place an account

 

wager unless the person has established an account with an advance

 

deposit account wagering licensee. To establish an advance deposit

 

account wagering account, a person must be a resident of this state

 

who is 18 years of age or older.

 

     (4) An advance deposit account wagering account must be in the

 

name of an individual and not in the name of a beneficiary,

 

custodian, joint trust, corporation, partnership, or other

 

organization.

 

     (5) An individual may establish an advance deposit account

 

wagering account by completing an application form approved by the

 

director and submitting it with a certification or other proof of

 

age and residency. The application form must include the address of

 

the principal residence of the applicant and a statement that a

 

false statement made in regard to the application may subject the

 

applicant to prosecution.

 

     (6) An applicant under subsection (5) shall submit the

 

completed application to an advance deposit account wagering

 

licensee. The advance deposit account wagering licensee may accept

 

or reject the application after reviewing it and the accompanying

 

certification or other proof of age and residency for compliance

 

with this act.

 

     (7) An applicant under subsection (5) who provides false or

 

misleading information on the application is subject to rejection

 

of the application or cancellation of the account by the advance

 

deposit account wagering licensee without notice.

 

     (8) An advance deposit account wagering licensee may suspend

 

or close any advance deposit account wagering account at its

 

discretion.

 

     (9) An advance deposit account wagering licensee shall not

 

establish an advance deposit account for an individual whose name

 

is on the list of disassociated persons created under section 25 of

 

the Michigan gaming control and revenue act, 1996 IL 1, MCL

 

432.225.

 

     (10) The address provided in an application by an applicant

 

under subsection (5) is considered the proper address of the

 

applicant after he or she becomes an account holder for mailing

 

checks, account withdrawals, notices, and other materials.

 

     (11) An advance deposit account wagering account is not

 

assignable or otherwise transferable.

 

     (12) Except as otherwise provided in this act or in rules

 

promulgated under this act, all account wagers are final and the

 

account holder shall not cancel a wager at any time after the wager

 

has been accepted by an advance deposit account wagering licensee.

 

     (13) An advance deposit account wagering licensee shall take

 

all reasonable steps to do both of the following:

 

     (a) Prevent minors from conducting advance deposit account

 

wagering.

 

     (b) Identify and limit the ability of compulsive gamblers to

 

place advance deposit account wagers.

 

     (14) A person that provides advance deposit account wagering

 

services to a resident of this state without a license is subject

 

to a fine of up to $25,000.00 per day of violation and may be

 

ordered to pay restitution to this state and the certified

 

horsemen's organization for all unpaid fees and revenue.

 

     (15) A person that provides advance deposit account wagering

 

services in this state to a minor is subject to a fine of up to

 

$25,000.00 per violation. Each wager made by a minor is a violation

 

of this section.

 

     Sec. 17b. (1) The following fees shall be paid by an advance

 

deposit account wagering licensee by the tenth of each month for

 

the previous month:

 

     (a) To the director, an amount equal to 1/2% of the total

 

gross amount of all wagers made in this state placed through the

 

licensee. The director shall use a sufficient portion of the money

 

paid under this subdivision to retain an investigator to enforce

 

this section and section 17a and use the balance for the regulation

 

and oversight of horse racing.

 

     (b) To the state treasurer for deposit into the Michigan

 

agriculture equine industry development fund created in section 20,

 

an amount equal to 2% of the total gross amount of all wagers made

 

in this state for all breeds placed through the licensee.

 

     (c) To the certified horsemen's organizations, an amount equal

 

to 9% of the total gross amount of all wagers made in this state

 

through the licensee. Money paid under this subdivision shall be

 

deposited into an account specifically designated to receive the

 

money as identified by the certified horsemen's organizations.

 

     (2) The quarterhorse, standardbred, and thoroughbred certified

 

horsemen's organizations in this state shall each establish and

 

administer an account to be known as the quarterhorse,

 

standardbred, or thoroughbred, as applicable, horsemen's advance

 

deposit account wagering pool. Money deposited under subsection

 

(1)(c) shall be distributed by the escrow agent named by the

 

certified horsemen's organizations to the quarterhorse horseman's

 

advance deposit account wagering pool, the standardbred horsemen's

 

advance deposit account wagering pool, and the thoroughbred

 

horsemen's advance deposit account wagering pool, for the first

 

calendar year or remaining portion of the first calendar year after

 

the effective date of the amendatory act that added this section on

 

a pro rata basis based on the percentage of the total simulcast

 

handle for each breed for the previous calendar year, and for each

 

subsequent calendar year on a pro rata basis based on the

 

percentage of the total advance deposit account wagering handle for

 

each breed for the previous calendar year. Money in the

 

quarterhorse, standardbred, and thoroughbred advance deposit

 

account wagering pools shall be distributed on a breed-specific

 

basis as follows:

 

     (a) Forty-three percent to the licensed track or tracks in

 

this state where race meetings for the specific breed are

 

conducted. If there is more than 1 licensed track where races for a

 

breed are conducted, the amount paid to each licensed track shall

 

be determined on a pro rata basis based upon the percentage of

 

total handle, from all sources, for the previous calendar year for

 

each track.

 

     (b) Forty-three percent to purses and administration of

 

certified horsemen's organizations for the specific breed. A

 

certified horsemen's organization shall not use more than 3% of the

 

money received under this subdivision for administration.

 

     (c) Ten percent for breed incentives.

 

     (d) One percent for horse retirement.

 

     (e) Two percent for support of youth equine programs in this

 

state.

 

     (f) One percent for equine premiums at county fairs.

 

     (3) A certified horsemen's organization that receives money

 

under subsection (1)(c) shall have an independent auditor conduct

 

an annual audit of the money received.

 

     (4) An advance deposit account wagering licensee shall

 

distribute money remaining in an advance deposit account wagering

 

account that has been inactive or dormant for a period and under

 

conditions established in a rule promulgated by the director under

 

this act as follows:

 

     (a) Fifty percent to the advance deposit account wagering

 

licensee.

 

     (b) Twenty-five percent for programs dedicated to the

 

compulsive gaming prevention fund created by section 3 of the

 

compulsive gaming prevention act, 1997 PA 70, MCL 432.253.

 

     (c) Twenty-five percent to the Michigan agriculture equine

 

industry development fund created in section 20.

 

     (5) A person that provided advance deposit account wagering

 

services in this state by accepting a wager from a resident of this

 

state before the effective date of the amendatory act that added

 

this section is entitled to an amnesty period of 1 year from the

 

effective date of the amendatory act that added this section. The

 

person shall not be prosecuted during the amnesty period for

 

conducting the wagering if the person enters into a settlement

 

agreement with the director, obtains an advance deposit account

 

wagering license before accepting any additional advance deposit

 

account wager from a resident of this state, and pays the following

 

fees:

 

     (a) To the state treasurer for deposit into the Michigan

 

agriculture equine industry development fund created in section 20,

 

an amount equal to 1% of the total gross amount of all wagers made

 

through the person in this state before the effective date of the

 

amendatory act that added this section.

 

     (b) To the account described in subsection (1)(c), an amount

 

equal to 2% of the total gross amount of all wagers made through

 

the person in this state before the effective date of the

 

amendatory act that added this section. Money paid under this

 

subdivision shall be divided between the quarterhorse,

 

standardbred, and thoroughbred horseman's advance deposit account

 

wagering pools as provided in subsection (2) and then divided

 

equally between the licensed tracks and purses and certified

 

horsemen's organizations as if the money were to be distributed

 

under subsection (2)(a) and (b).

 

     (6) If live thoroughbred race meetings are not conducted at

 

any licensed track in this state in a fiscal year, all of the

 

following apply:

 

     (a) Money paid during the fiscal year to the thoroughbred

 

horsemen's advance deposit account wagering pool to be expended as

 

provided in subsection (2)(a) and (b) shall be used for

 

thoroughbred breed incentives with the total amount being divided

 

equally between breeders' awards and owners' awards.

 

     (b) Breeders' awards and owners' awards shall be paid for

 

Michigan-bred thoroughbred horses that race at any racetrack in

 

North America. The awards shall be calculated by dividing the total

 

amount of money available for each award category by the gross

 

amount of purse money earned by Michigan-bred thoroughbred horses

 

in the fiscal year, and then multiplying the result by the total

 

amount earned by all thoroughbred horses of each owner or breeder.

 

     (c) Money for breeders' awards and owners' awards under this

 

subsection may also be used to pay for purses for restricted stakes

 

races for Michigan-bred thoroughbred horses at any racetrack in

 

North America. Any amounts paid for purses for stakes races shall

 

be deducted equally from the amounts available for breeders' awards

 

and owners' awards.

 

     (d) A reasonable amount from the thoroughbred horsemen's

 

advance deposit account wagering pool may be used to administer

 

this subsection.

 

     (7) As used in this section:

 

     (a) "Quarterhorse" means a horse registered with the American

 

quarterhorse association.

 

     (b) "Quarterhorse certified horsemen's organization" means the

 

Great Lakes quarterhorse association.

 

     (c) "Standardbred" means a horse registered with the United

 

States trotting association.

 

     (d) "Standardbred certified horsemen's organization" means the

 

Michigan harness horsemen's association.

 

     (e) "Thoroughbred" means a horse registered with the jockey

 

club, incorporated.

 

     (f) "Thoroughbred certified horsemen's organization" means the

 

Michigan horsemen's benevolent and protective association,

 

incorporated.