Bill Text: TX SB1920 | 2021-2022 | 87th Legislature | Introduced

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Bill Title: Relating to the regulation of historical racing pari-mutuel wagering by licensed horse and greyhound racetracks and the distribution of certain live, simulcast, and historical pari-mutuel pools.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2021-04-01 - Referred to State Affairs [SB1920 Detail]

Download: Texas-2021-SB1920-Introduced.html

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87R5637 GCB-D
By: Lucio S.B. No. 1920

A BILL TO BE ENTITLED
AN ACT
relating to the regulation of historical racing pari-mutuel
wagering by licensed horse and greyhound racetracks and the
distribution of certain live, simulcast, and historical
pari-mutuel pools.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2021.003, Occupations Code, is amended
by adding Subdivisions (17-a), (17-b), (17-c), (17-d), (17-e), and
(17-f) and amending Subdivisions (32), (33), (40), (41), and (42)
to read as follows:
(17-a) "Historical pari-mutuel wagering" means
pari-mutuel wagering on the outcomes of historical racing.
(17-b) "Historical race" means a previously conducted
horse or greyhound race or groups of horse races or of greyhound
races that were:
(A) authorized by the commission or another
racing jurisdiction and conducted in this state or another racing
jurisdiction; and
(B) concluded with official results that did not
include any scratches, disqualifications, or dead-heat finishes.
(17-c) "Historical racing" means the display,
including by graphical representation, of historical races.
(17-d) "Historical racing machine" means a peripheral
electronic device used by a historical racing totalisator system to
offer historical pari-mutuel racing.
(17-e) "Historical racing totalisator system" means a
system for registering, computing, or displaying the wagering and
payment of winnings in historical pari-mutuel wagering.
(17-f) "Historical racing totalisator system company"
means a company selling, leasing, servicing, maintaining, or
operating a historical racing totalisator system.
(32) "Pari-mutuel pool" means the total amount of
money wagered by patrons on the result of a particular race or
combination of races, divided into separate mutuel pools for win,
place, show, or combinations. The term includes pari-mutuel pools
created by pari-mutuel wagering on live and simulcast races and
pools created by pari-mutuel wagering on historical races.
(33) "Pari-mutuel voucher" means a bearer instrument,
issued by a pari-mutuel wagering machine or a historical racing
machine, that represents money owned by a wagering patron and held
by a racetrack association, including winnings from a pari-mutuel
wager.
(40) "Race" includes a live audio and visual signal of
and a graphical representation of a race.
(41) "Racetrack" means a facility licensed under this
subtitle for the conduct of pari-mutuel wagering on horse racing or
greyhound racing, including historical racing.
(42) "Racetrack association" means a person licensed
under this subtitle to conduct the following with pari-mutuel
wagering:
(A) a horse race meeting;
(B) [or] a greyhound race meeting; or
(C) a historical race [with pari-mutuel
wagering].
SECTION 2. Section 2023.001(a), Occupations Code, is
amended to read as follows:
(a) Notwithstanding any contrary provision in this
subtitle, the commission may license and regulate all aspects of
horse racing and greyhound racing in this state, including
historical racing, regardless of whether that racing involves
pari-mutuel wagering.
SECTION 3. Section 2023.004(a), Occupations Code, is
amended to read as follows:
(a) The commission shall adopt:
(1) rules for conducting horse racing or greyhound
racing in this state, including historical racing, that involves
wagering; and
(2) rules for administering this subtitle in a manner
consistent with this subtitle.
SECTION 4. Section 2025.001(d), Occupations Code, is
amended to read as follows:
(d) The commission by rule shall set fees in amounts
reasonable and necessary to cover the commission's costs of
regulating, overseeing, and licensing live, [and] simulcast, and
historical racing at racetracks.
SECTION 5. Section 2025.051, Occupations Code, is amended
to read as follows:
Sec. 2025.051. RACETRACK LICENSE REQUIRED; CRIMINAL
PENALTY. A person may not conduct wagering on a live or simulcast
horse or greyhound race meeting or on a historical race without
first obtaining a racetrack license issued by the commission. A
person who violates this section commits an offense.
SECTION 6. Section 2025.054, Occupations Code, is amended
to read as follows:
Sec. 2025.054. MANAGEMENT, CONCESSION, HISTORICAL RACING
TOTALISATOR SYSTEM, AND TOTALISATOR CONTRACTS. (a) The commission
shall require each applicant for an original racetrack license to
submit with the application for inspection and review by the
commission a copy of each management, concession, historical racing
totalisator system, and totalisator contract associated with the
proposed license at the proposed location in which the applicant
has an interest.
(b) An applicant or license holder shall advise the
commission of any change in any management, concession, historical
racing totalisator system, or totalisator contract.
(c) The criminal history record information, fingerprint,
and other information required of a license applicant under
Sections 2023.057, 2025.003, and 2025.052(a)(1)-(3) are required
of proposed totalisator firms, historical racing totalisator
system companies, concessionaires, and managers and management
firms.
SECTION 7. Section 2025.056(a), Occupations Code, is
amended to read as follows:
(a) The commission shall require a complete personal,
financial, and business background check of the applicant or of any
person who owns an interest in or exercises control over an
applicant for a racetrack license, including the partners,
stockholders, concessionaires, management personnel, management
firms, historical racing totalisator system companies, and
creditors.
SECTION 8. Section 2025.103(a), Occupations Code, is
amended to read as follows:
(a) After a racetrack association has been granted a license
to operate a racetrack and before the completion of construction at
the designated place for which the license was issued, the
commission may, on application by the racetrack association, issue
a temporary license that authorizes the racetrack association to
conduct races or offer historical racing at a location in the same
county until the earlier of:
(1) the second anniversary of the date of issuance of
the temporary license; or
(2) the completion of the permanent facility.
SECTION 9. Sections 2025.104(b) and (c), Occupations Code,
are amended to read as follows:
(b) The commission shall designate a racetrack license as an
active license if the license holder:
(1) holds live racing events or offers historical
racing at the racetrack; or
(2) makes good faith efforts to conduct live racing or
offer historical racing.
(c) The commission by rule shall provide guidance on actions
that constitute, for purposes of this subtitle, good faith efforts
to conduct live racing or offer historical racing.
SECTION 10. Sections 2025.105(b) and (c), Occupations Code,
are amended to read as follows:
(b) In determining whether to renew an inactive license, the
commission shall consider:
(1) the inactive license holder's:
(A) financial stability;
(B) ability to conduct live racing or offer
historical racing;
(C) ability to construct and maintain a
racetrack; and
(D) other good faith efforts to conduct live
racing or offer historical racing; and
(2) other necessary factors considered in the issuance
of the original license.
(c) The commission may refuse to renew an inactive license
if, after notice and a hearing, the commission determines that:
(1) renewal of the license is not in the best interests
of the racing industry or the public; or
(2) the license holder has failed to make a good faith
effort to conduct live racing or offer historical racing.
SECTION 11. Section 2026.002, Occupations Code, is amended
to read as follows:
Sec. 2026.002. PREVENTION OF SUBTERFUGE IN RACETRACK
OWNERSHIP OR OPERATION. This subtitle shall be liberally construed
to prevent subterfuge in the ownership and operation of a racetrack
or in the offering of historical racing.
SECTION 12. Section 2026.151(a), Occupations Code, is
amended to read as follows:
(a) All concession, management, historical racing
totalisator system, and totalisator contracts submitted by an
applicant under Section 2025.054 must have the prior approval of
the commission.
SECTION 13. Section 2026.152(a), Occupations Code, is
amended to read as follows:
(a) On receipt of a plan for the security of a racetrack, or
a copy of a concession, management, historical racing totalisator
system, or totalisator contract for review under Section 2026.151,
the commission shall review the security plan or contract in an
executive session. Documents submitted by an applicant to the
commission under this section or Section 2025.052 or 2025.054 are
subject to discovery in a suit brought under this subtitle but are
not public records and are not subject to Chapter 552, Government
Code.
SECTION 14. Section 2027.001(a), Occupations Code, is
amended to read as follows:
(a) The commission shall adopt rules to regulate wagering on
horse races and greyhound races, including historical races, under
the system known as pari-mutuel wagering.
SECTION 15. Chapter 2027, Occupations Code, is amended by
adding Subchapter C-1 to read as follows:
SUBCHAPTER C-1. PARI-MUTUEL WAGERING ON HISTORICAL RACES
Sec. 2027.151. HISTORICAL PARI-MUTUEL WAGERING RULES. The
commission shall adopt rules to regulate pari-mutuel wagering on
historical races.
Sec. 2027.152. HISTORICAL RACING. A racetrack association
may offer historical racing, subject to the requirements of this
subchapter.
Sec. 2027.153. REQUIREMENTS AND LIMITATIONS ON HISTORICAL
RACING MACHINES. (a) The commission may not require the use of a
particular brand or model of historical racing machine.
(b) A historical racing machine may not display any
information that would allow a patron to identify the historical
race on which the patron is wagering, including the location of the
race, the date on which the race was run, the names of the animals in
the race, or the names of the jockeys that participated in the race
before the patron places a wager on the machine. This subsection
does not prohibit a historical racing machine from displaying
non-identifying race information in written or graphical form.
(c) After a patron finalizes the patron's wager selections
on a historical racing machine, the machine must display:
(1) the race, a portion of the race, or a graphical
representation of the race; and
(2) the official results and identity of the race.
(d) A racetrack association offering wagering on a
historical racing machine that has a complete malfunction during
use by a patron shall fully refund the balance of the patron's wager
on the machine at the time of the malfunction, as verified by the
historical racing totalisator system.
(e) To prevent fraud or liability for malfunction of a
significant portion of the historical racing machines at one
location, a racetrack association shall ensure that all historical
race information used by each historical racing machine at the
location is stored on the machine or a server located within the
association's enclosure.
(f) A racetrack association shall ensure that:
(1) a single historical racing totalisator system
controls not more than 40 percent of the historical racing machines
at the association's racetrack; and
(2) a person does not have a financial interest in or
exercise control over one or more historical racing totalisator
systems that control more than 40 percent of the historical racing
machines at the racetrack.
Sec. 2027.154. REQUIREMENTS AND LIMITATIONS ON HISTORICAL
RACING TOTALISATOR SYSTEMS. (a) The commission may not require the
use of a particular brand or model of historical racing totalisator
system.
(b) A historical racing totalisator system may be operated
only within a racetrack association's enclosure. Pari-mutuel
wagering on historical racing may not be offered on a historical
racing totalisator system that is connected to the Internet or
another offsite location.
(c) Pari-mutuel wagering on historical racing may be
offered only on historical racing machines controlled by a
historical racing totalisator system approved by the commission.
Sec. 2027.155. REQUEST FOR COMMISSION APPROVAL OF
HISTORICAL RACING TOTALISATOR SYSTEM. (a) A historical racing
totalisator company may request commission approval of a historical
racing totalisator system for use in offering historical racing at
a racetrack.
(b) A request for commission approval submitted under this
section must be accompanied by a certification and associated
report issued by an independent testing laboratory verifying that:
(1) the laboratory tested the historical racing
totalisator system to ensure its integrity and proper working
order; and
(2) the system and the proposed wagers to be offered
through the system meet all applicable state laws and commission
rules for use in offering historical racing at a racetrack.
Sec. 2027.156. CONSTRUCTION OF LAWS RELATED TO HISTORICAL
RACING. (a) No provision of this subtitle may be construed to
allow pari-mutuel wagering on historical racing, the offer of
historical racing, or the use of historical racing machines at any
location other than a racetrack licensed under this subtitle.
(b) No provision of this subtitle may be construed to
prohibit pari-mutuel wagering on:
(1) a historical horse race offered at a greyhound
racetrack licensed under this subtitle; or
(2) a historical greyhound race offered at a horse
racetrack licensed under this subtitle.
Sec. 2027.157. HISTORICAL RACING PARI-MUTUEL POOLS; SEED
POOLS. (a) Except as otherwise provided by Subsection (c), a
racetrack association shall pay patrons who win historical racing
wagers exclusively from the pari-mutuel pools created by wagers
placed on historical racing.
(b) A racetrack association may not:
(1) conduct historical racing in a manner that allows
patrons to wager against the racetrack association or that renders
the association's compensation dependent on the outcome of any
particular historical race or the success of any particular wager
on historical racing;
(2) pay a winning wager in an amount that exceeds the
amount available in the applicable historical racing pari-mutuel
pool; or
(3) pay a patron using any consideration other than
cash or a pari-mutuel voucher.
(c) A racetrack association shall maintain and fund seed
pools as necessary to ensure a sufficient amount of money is
available to pay a patron the minimum payment for a winning wager
specified by the historical racing machine through which the patron
places the wager. A historical racing totalisator system may
assign a percentage of each historical racing wager to fund seed
pools.
(d) A racetrack association may provide funding for the
initial seed pool for each type of wager and may be refunded an
amount equal to the amount of the initial funding after the
historical racing pari-mutuel pool is fully funded. Except for
amounts used to fund seed pools under Subsection (c), a racetrack
association may not receive any funding for the initial seed pool
from any person, including any historical racing totalisator system
company.
SECTION 16. Section 2028.001(a), Occupations Code, is
amended to read as follows:
(a) For any organization that receives funds generated by
live, [or] simulcast, or historical [pari-mutuel] racing with
pari-mutuel wagering, the commission shall adopt reporting,
monitoring, and auditing requirements or other appropriate
performance measures for:
(1) any funds distributed to or used by the
organization; and
(2) any function or service provided by the
expenditure of the funds described by Subdivision (1).
SECTION 17. Section 2028.002(a), Occupations Code, is
amended to read as follows:
(a) An organization that receives funds generated by live,
[or] simulcast, or historical [pari-mutuel] racing with
pari-mutuel wagering shall annually file with the commission a copy
of an audit report prepared by an independent certified public
accountant. The audit must include a verification of any
performance report sent to or required by the commission.
SECTION 18. Section 2028.101(b), Occupations Code, is
amended to read as follows:
(b) The total maximum deduction under Subsection (a) is:
(1) 18 percent from a regular wagering pool or
historical racing pari-mutuel pool;
(2) 21 percent from a multiple two wagering pool; and
(3) 25 percent from a multiple three wagering pool.
SECTION 19. Sections 2028.105(b) and (c), Occupations Code,
are amended to read as follows:
(b) A horse racetrack association shall pay to the
commission for use by the appropriate state horse breed registry,
subject to commission rules, 10 percent of the total breakage from a
live, [pari-mutuel pool or a] simulcast, or historical racing
pari-mutuel pool. The appropriate state horse breed registries are
as follows:
(1) the Texas Thoroughbred Breeders Association for
Thoroughbred horses;
(2) the Texas Quarter Horse Association for quarter
horses;
(3) the Texas Appaloosa Horse Club for Appaloosa
horses;
(4) the Texas Arabian Breeders Association for Arabian
horses; and
(5) the Texas Paint Horse Breeders Association for
paint horses.
(c) A horse racetrack association shall retain 10 percent of
the total breakage from a [live pari-mutuel pool or a simulcast]
pari-mutuel pool to be used in stakes races restricted to
accredited Texas-bred horses.
SECTION 20. Section 2028.151, Occupations Code, is amended
to read as follows:
Sec. 2028.151. APPLICATION OF SUBCHAPTER. The deductions
and allocations made under this subchapter apply to live,
simulcast, and historical racing pari-mutuel pools, except as
otherwise specifically provided by this subchapter.
SECTION 21. Section 2028.152, Occupations Code, is amended
to read as follows:
Sec. 2028.152. DISTRIBUTION OF LIVE OR SIMULCAST
PARI-MUTUEL POOL. Each greyhound racetrack association shall
distribute all money deposited in any live or simulcast pari-mutuel
pool to the winning ticket holders who present tickets for payment
not later than the 60th day after the closing day of the greyhound
race meeting at which the pool was formed less:
(1) an amount paid as a commission of 18 percent of the
total deposits in pools resulting from regular win, place, and show
wagering;
(2) an amount not to exceed 21 percent of the total
deposits in pools resulting from multiple two wagering; and
(3) an amount not to exceed 25 percent of the total
deposits in pools resulting from multiple three wagering.
SECTION 22. Section 2028.154, Occupations Code, is amended
by amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) A greyhound racetrack association shall pay 50 percent
of the breakage to the appropriate state greyhound breed registry.
Of that breakage percentage:
(1) 25 percent is to be used in stakes races; and
(2) 25 percent of that total breakage from a live
[pari-mutuel pool] or [a] simulcast pari-mutuel pool is to be paid
to the commission for deposit into the Texas-bred incentive fund
established under Section 2028.301.
(a-1) The commission shall distribute the money collected
under this section and deposited into the fund to the state
greyhound breed registry for use in accordance with this section
and commission rules.
SECTION 23. Section 2028.155(a), Occupations Code, is
amended to read as follows:
(a) The purse in a live or simulcast greyhound race may not
be less than 4.7 percent of the total deposited in each pari-mutuel
pool.
SECTION 24. Subchapter D, Chapter 2028, Occupations Code,
is amended by adding Section 2028.156 to read as follows:
Sec. 2028.156. DISTRIBUTION OF HISTORICAL RACING
PARI-MUTUEL POOL. A greyhound racetrack association may receive as
compensation an amount not to exceed 18 percent of the
association's historical racing pari-mutuel pools.
SECTION 25. Chapter 2028, Occupations Code, is amended by
adding Subchapter E-1 to read as follows:
SUBCHAPTER E-1. GENERAL DEDUCTIONS FROM HISTORICAL RACING
PARI-MUTUEL POOLS
Sec. 2028.231. SET-ASIDE FROM HISTORICAL RACING
PARI-MUTUEL POOL. A horse or greyhound racetrack association shall
set aside for this state from each pari-mutuel pool created by
historical racing offered at the racetrack an amount equal to 1.25
percent of that pool.
SECTION 26. As soon as practical after the effective date of
this Act, the Texas Racing Commission shall adopt the rules and
procedures necessary to implement the changes in law made by this
Act.
SECTION 27. This Act takes effect September 1, 2021.