New Jersey-2010-A1225-Introduced

An Act concerning off-track wagering and amending and supplementing P.L.2001, c.199 (C.5:5-127 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 2 of P.L.2001, c.199 (C.5:5-128) is amended to read as follows:

2. The Legislature finds and declares that:

a. The horse racing industry is economically important to this State, and the general welfare of the people of the State will be promoted by the advancement of horse racing [and related projects and facilities] in the State.

b. It is the intent of the Legislature, by authorizing off-track wagering and account wagering in this State, to promote the economic future of the horse racing industry in this State, to foster the potential for increased commerce, employment and recreational opportunities in this State and to preserve the State's open spaces.

c. It is the further intent of the Legislature that facilities offering off-track wagering opportunities to the public also offer other amenities such as quality dining and handicapping facilities.

d. The Legislature has determined that the New Jersey Racing Commission is best suited to oversee, license and regulate off-track wagering and account wagering in the State, and that the New Jersey Sports and Exposition Authority, by virtue of its experience in the operation of parimutuel wagering facilities and other entertainment-related projects in this State, is particularly well-suited to [coordinate with other parties to promote the uniformity and success of off-track wagering throughout the State and to] ensure the fiscal soundness and technical reliability of an account wagering system, pursuant to the terms of this act. The Legislature has also determined that the issuance of off-track wagering licenses should be subject to competition to increase the likelihood of a revival in horse racing in this State.

e. It is possible that the New Jersey Sports and Exposition Authority could apply for and be awarded one or more off-track wagering licenses. In establishing off-track wagering facilities, the authority [will] would not be performing an essential government function but rather an essentially private business function. Numerous municipalities, residents and businesses will be impacted by the establishment of off-track wagering facilities throughout the State. A municipality may oppose the placement of an off-track wagering facility within its boundaries at the discretion of the authority and the commission. A municipality may want an off-track wagering facility sited within its boundaries, but only if the municipality receives an appropriate level of property tax for municipal services. Therefore, fundamental fairness dictates that any municipality be empowered to refuse the siting of a facility within its boundaries. Fundamental fairness also dictates that an off-track wagering facility, even if owned and not leased by the authority, be subject to local property tax requirements.

f. By regulation of the Division of Alcoholic Beverage Control, there exist special licenses that permit the sale of alcoholic beverages on public property. These special licenses, typically available to the authority, are inexpensive and circumvent the traditional method for obtaining a license to sell alcoholic beverages. Because the establishment of off-track wagering facilities is, in reality, essentially a private business function and not an essential government function, the authority is not permitted to receive a special license. Under this act, only a private holder of a Class C plenary retail consumption license is permitted to provide alcoholic beverages at an off-track wagering facility.

(cf: P.L.2004, c.116, s.3)

2. Section 3 of P.L.2001, c.199 (C.5:5-129) is amended to read as follows:

3. As used in this act:

"Account holder" means a resident of this State over age 18 who establishes an account pursuant to this act through which account wagers are placed.

"Account wagering" means a form of parimutuel wagering in which an account holder may deposit money in an account with the account wagering licensee and then use the account balance to pay for parimutuel wagers by the account holder.

"Account wagering licensee" means the New Jersey Sports and Exposition Authority or its assignee, provided that the commission has granted its approval for the authority to establish an account wagering system as provided for in this act.

"Account wagering system" means the system through which account wagers are processed by the account wagering licensee pursuant to this act.

"Authority" means the New Jersey Sports and Exposition Authority created by section 4 of P.L.1971, c.137 (C.5:10-4).

"Backstretch Benevolency" means the Backstretch Benevolency Programs Fund established pursuant to section 1 of P.L.1993, c.15 (C.5:5-44.8).

"Breeders and Stallions" means the distribution from the special trust account created pursuant to section 46 a. (2) of P.L.1940, c.17 (C.5:5-66) for the purposes of subparagraph (c) of that citation.

"Breeding and Development" means the New Jersey Horse Breeding and Development Account established pursuant to section 5 of P.L.1967, c.40 (C.5:5-88).

"Commission" means the New Jersey Racing Commission created by section 1 of P.L.1940, c.17 (C.5:5-22).

"Executive Director" means the Executive Director of the commission.

"Health and Welfare" means moneys distributed to the Standardbred Breeders' and Owners' Association for the administration of a health benefits program pursuant to section 46 a. (5) of P.L.1940, c.17 (C.5:5-66).

"In-State host track" means a racetrack within this State which is operated by a permit holder which conducts a horse race upon which account wagers are placed pursuant to this act.

"In-State sending track" means a racetrack within this State which is operated by a permit holder and is equipped to conduct off-track simulcasting.

"In-State track" means an in-State host track or an in-State sending track.

"Interstate common pool" means the parimutuel pool established within this State or in another state or foreign nation within which is combined parimutuel pools of one or more receiving tracks located in one or more states or foreign nations upon a race at an out-of-State sending track or out-of-State host track for the purpose of establishing payoff prices in the various jurisdictions.

"Jockey's Health and Welfare" means a health and welfare trust established by the organization certified by the New Jersey Racing Commission as representing a majority of the active licensed thoroughbred jockeys in New Jersey for the purpose of providing health and welfare benefits to active, disabled and retired New Jersey jockeys and their dependents based upon reasonable criteria established by that organization.

"New Jersey Racing Industry Special Fund" means the fund established pursuant to section 27 of this act.

"New Jersey Thoroughbred Horsemen's Association" means the association representing the majority of New Jersey thoroughbred owners and trainers responsible for receiving and distributing funds for programs designed to aid thoroughbred horsemen.

"Off-track simulcasting" means the simultaneous audio or visual transmission of horse races conducted at in-State and out-of-State racetracks to off-track wagering facilities and parimutuel wagering at those off-track wagering facilities on the results of those races.

"Off-track wagering" means parimutuel wagering at an off-track wagering facility as authorized under this act.

"Off-track wagering facility" means a licensed facility, other than a racetrack or casino simulcasting facility, at which parimutuel wagering is conducted pursuant to this act.

"Off-track wagering licensee" means [the New Jersey Sports and Exposition Authority or its assignee, provided that the commission has granted its approval for the authority to conduct an off-track wagering facility as provided for in this act] an individual or entity granted approval by the commission pursuant to this act to establish an off-track wagering facility.

"Out-of-State host track" means a racetrack in a jurisdiction other than the State of New Jersey, the operator of which is lawfully permitted to conduct a horse race meeting and which conducts horse races upon which account wagers may be placed pursuant to this act.

"Out-of-State sending track" means a racetrack in a jurisdiction other than the State of New Jersey which is equipped to conduct off-track simulcasting and the operator of which is lawfully permitted to conduct a horse race meeting and to provide simulcast horse races to off-track wagering facilities in this State.

"Out-of-State track" means an out-of-State host track or an out-of-State sending track.

"Outstanding parimutuel ticket" means a winning parimutuel ticket which is not claimed within six months of sale.

"Parimutuel" means any system whereby wagers with respect to the outcome of a horse race are placed with, or in, a wagering pool conducted by an authorized person, and in which the participants are wagering with each other and not against the person conducting the wagering pool.

"Participation agreement" means the written contract that provides for the establishment or implementation of [either (a) an off-track wagering facility or facilities or (b)] an account wagering system. Each such contract shall set forth the manner in which [the off-track wagering facility or facilities or] the account wagering system shall be managed, operated and capitalized, as well as how expenses and revenues shall be allocated and distributed by and among the authority and the other eligible participants.

"Permit holder" means the holder of an annual permit to conduct a horse race meeting issued by the commission.

"Racetrack" means the physical facility where a permit holder conducts a horse race meeting with parimutuel wagering.

"Racing costs" means the prospective and actual costs for all licensing, investigation, operation, regulation, supervision and enforcement activities and functions performed by the commission.

"Simulcast horse races" means horse races conducted at an in-State sending track or an out-of-State sending track, as the case may be, and transmitted simultaneously by picture to a receiving track or an off-track wagering facility.

"Sire Stakes" means the Sire Stakes Program established pursuant to section 1 of P.L.1971, c.85 (C.5:5-91).

"Standardbred Drivers' Health and Welfare" means a health and welfare trust established by the Standardbred Breeders' and Owners' Association of New Jersey for the purpose of providing health and welfare benefits to active, disabled and retired New Jersey standardbred drivers and their dependents based upon reasonable criteria by that organization.

"Takeout" means that portion of a wager which is deducted from or not included in the parimutuel pool, and which is distributed other than to persons placing wagers.

"Thoroughbred Breeders and Stallions" means the special trust account created pursuant to section 46 b.(1)(e) of P.L.1940, c.17 (C.5:5-66).

(cf: P.L.2004, c.116, s.4)

3. Section 4 of P.L.2001, c.199 (C.5:5-130) is amended to read as follows:

4. [a. The commission is authorized to issue a license to the authority to permit off-track wagering at a specified facility, upon application of the authority and in accordance with the provisions of this act. A license issued pursuant to this act shall be valid for a period of one year. The commission shall issue a license only if the permit holder at Monmouth Park and the thoroughbred permit holder at Meadowlands Racetrack schedule at least the minimum number of race dates required in section 30 of this act, P.L.2001, c.199 (C.5:5-156), and it is satisfied that the authority has entered into a participation agreement with each and every other person, partnership, association, corporation, or authority or the successor in interest to such person, partnership, association, corporation or authority that:

(1) held a valid permit to hold or conduct a race horse meeting within this State in the calendar year 2000;

(2) has complied with the terms of such permit; and

(3) is in good standing with the commission and the State of New Jersey.

An off-track wagering license may not be transferred or assigned to a successor in interest without the approval of the commission and the Attorney General, which approval may not be unreasonably withheld.

b. As part of the license application process, any participation agreement entered into for the purposes of this section, or any modification to the agreement made thereafter, shall be reviewed by the commission and the Attorney General to determine whether the agreement meets the requirements of this act and shall be subject to the approval of the commission and the Attorney General.]

The commission shall promulgate rules and regulations in consultation with the State Treasurer prescribing the conditions under which an off-track wagering license shall be issued, renewed, suspended, or revoked. The commission shall also implement the off-track wagering provisions of this act. With respect to off-track wagering, the commission's responsibilities shall include, but may not be limited to:

a. Hearing and deciding promptly and in reasonable order all off-track wagering license applications and causes affecting the granting, renewal, suspension, or revocation thereof;

b. Promulgating such rules and regulations as in the commission's judgment may be necessary to fulfill the purposes of this act;

c. Collecting all off-track wagering license fees imposed by this act and regulations promulgated hereunder;

d. Levying and collecting penalties for the violation of the provisions of this act and the regulations promulgated hereunder;

e. Being present through inspectors and agents at any or all times during the operation of an off-track wagering facility for the purpose of certifying the revenue of the off-track wagering facilities, receiving complaints from the public relating to the conduct of wagering operations, and conducting periodic reviews of operations and facilities for the purpose of evaluating compliance with the provisions of this act and the regulations promulgated hereunder;

f. Conducting audits of off-track wagering facilities, including reviews of accounting, administrative, and financial records, and management control systems, procedures, and records utilized by an off-track wagering licensee; and

g. Investigating and prosecuting evidence of a violation of this act or the regulations promulgated hereunder.

(cf: P.L.2004, c.116, s.5)

4. (New section) The commission shall, without limitation on the powers conferred to it by this act, include within its off-track wagering rules and regulations the following specific provisions in accordance with the provisions of this act:

a. prescribing the methods, procedures and forms of application which an applicant for an off-track wagering license shall follow and complete prior to consideration of the application by the commission;

b. prescribing the methods, procedures and forms for delivery of information concerning any person's family, habits, character, associates, criminal record, business activities, and financial affairs, required to be provided for off-track wagering licensure under this act;

c. prescribing procedures for the fingerprinting of an applicant or employee of a licensee, or other methods of identification which may be necessary in the judgment of the commission to accomplish effective enforcement of restrictions on access to restricted areas of an off-track wagering facility;

d. prescribing the manner and procedure of all hearings conducted by the commission regarding off-track wagering pursuant to this act;

e. prescribing the manner and method of collection of payments of fees and penalties;

f. defining and limiting the areas where parimutuel wagering is permitted within an off-track facility, including the placement of automated devices for the placement of a parimutuel wager;

g. regulating the practice and procedures for negotiable transactions involving bettors, including limitations on the circumstances and amounts of such transactions, and the establishment of forms and procedures for negotiable instrument transactions, redemptions, and consolidations;

h. prescribing procedures for the remittance of off-track wagering revenue to the commission pursuant to this act;

i. prescribing grounds and procedures for the revocation or suspension of off-track wagering licenses;

j. governing the manufacture, distribution, sale, and servicing of wagering devices and equipment;

k. prescribing for a licensee the procedures, forms and methods of management controls, including employee and supervisory tables of organization and responsibility, and minimum security standards; l. prescribing minimum procedures for the exercise of effective control over the internal fiscal affairs of a licensee, including provisions for the safeguarding of assets and revenues, the recording of cash and evidence of indebtedness, and the maintenance of reliable records, accounts, and reports of transactions, operations and events, including reports to the commission;

m. providing for a minimum uniform standard of accountancy methods, procedures and forms; a uniform code of accounts and accounting classifications; and such other standard operating procedures, as may be necessary to assure consistency, comparability, and effective disclosure of all financial information; and

n. requiring quarterly financial reports and the form thereof, and an annual audit prepared by a certified public accountant licensed to do business in this State, attesting to the financial condition of a licensee and disclosing whether the accounts, records and control procedures examined are maintained by the licensee as required by this act and the regulations promulgated hereunder.

5. Section 5 of P.L.2001, c.199 (C.5:5-131) is amended to read as follows:

5. a. The commission may issue a license to a person or entity to conduct off-track wagering at a specified facility, upon proper application and in accordance with the provisions of this act. An off-track wagering license shall be valid for one year, and may be renewed for one year periods without limits subject to the provisions of this act.

b. At the time of filing an application for an off-track wagering license, [the authority] an applicant shall submit to the commission a non-refundable filing fee in an amount established by regulation by the commission, and a certification in a form prescribed by the commission which [specifies] includes, but is not limited to, the following information:

(1) a plan depicting the proposed facility [and improvements thereon], including information about the size, seating capacity, parking and services to be provided at the facility;

(2) the location of the proposed facility, and relevant demographic or other information concerning the municipality and surrounding area where the proposed facility is to be located;

(3) the number of permanent and part-time jobs expected to be created at the proposed facility, and gross revenues expected to be generated by the facility;

(4) the fire evacuation plan for the proposed facility;

(5) the type of food and beverages available; [and]

(6) financial records and other information that clearly and convincingly show that the applicant has sufficient financial resources for the establishment and sustained operation of an off-track wagering facility;

(7) the portion of off-track wagering revenue proposed to be retained by the applicant if approved for licensure, subject to negotiation with the commission pursuant to section 7 of P.L.2001, c.199 (C.5:5-133);

(8) whether the bidder intends to enter into a contract with a third party to conduct or operate any or all components of the off-track wagering facility; and

(9) such other information as the commission may require.

[b. The authority shall file a] c. A separate application and certification shall be filed for each proposed off-track wagering facility.

[c. The commission shall establish by regulation procedures and conditions for renewal of licenses issued under this act.

d. The commission shall by regulation establish the maximum hours of operation of off-track wagering facilities.

e. Notwithstanding R.S.33:1-42, alcoholic beverages may be offered for on-premise consumption at an off-track wagering facility only if provided by a Class C plenary retail consumption licensee, by an agreement or contract with the authority, pursuant to the provisions of R.S.33:1-1 et seq. in accordance with such procedures as established by statute and by regulation of the Division of Alcoholic Beverage Control. The authority shall not hold a license to provide alcoholic beverages at an off-track wagering facility.

f. Persons under the age of 18 years shall not be permitted in any off-track wagering facility, except in dining areas if accompanied by a parent or guardian.

g. The commission shall by regulation establish minimum standards for off-track wagering facilities, including, but not limited to, standards for size, seating capacity, parking and services to be provided.

h. The authority, in lieu of obtaining municipal zoning and planning approvals that may otherwise be required in connection with the off-track wagering facility, shall submit a written notice of its intention to site an off-track wagering facility to the governing body of the municipality within which the facility would be sited. The notice shall identify the proposed site of the facility by street address, if any, or by reference to lot and block numbers as shown on the current tax duplicate in the municipal tax assessor's offices. Within 45 days of its receipt of the authority's notice of intention, the municipal governing body may disapprove of the proposed site of an off-track wagering facility by adopting a resolution which shall be valid and binding upon the authority and the commission upon delivery of a duly certified copy of the resolution to the authority and the commission. Whenever a municipality determines to consider a resolution disapproving a proposed off-track wagering facility, the authority shall be given an opportunity to offer a public presentation of the proposed facility prior to consideration of the resolution. A resolution disapproving a proposed off-track wagering facility shall state the reasons for disapproval.

In the event the governing body shall not adopt such a resolution, the authority may seek a license for an off-track wagering facility in that municipality and the commission may grant the authority the license provided that:

(1) the proposed off-track wagering facility site is not in an area zoned residential;

(2) the authority has submitted its plans to the municipal planning board, and complied with the provisions of section 22 of P.L.1975, c.291 (C.40:55D-31); and

(3) the authority has made reasonable efforts to address the reasonable concerns expressed by the municipal planning board.]

(cf: P.L.2004, c.116, s.6)

6. (New section) In the event the authority is an applicant for an off-track wagering license:

a. Notwithstanding R.S.33:1-42, alcoholic beverages may be offered for on-premise consumption at the off-track wagering facility for which the authority holds a license only if provided by a Class C plenary retail consumption licensee, by an agreement or contract with the authority, pursuant to the provisions of R.S.33:1-1 et seq. in accordance with such procedures as established by statute and by regulation of the Division of Alcoholic Beverage Control. The authority shall not hold a license to provide alcoholic beverages at an off-track wagering facility.

b. The authority, in lieu of obtaining municipal zoning and planning approvals that may otherwise be required in connection with the off-track wagering facility for which the authority holds a license, shall submit a written notice of its intention to site an off-track wagering facility to the governing body of the municipality within which the facility would be sited. The notice shall identify the proposed site of the facility by street address, if any, or by reference to lot and block numbers as shown on the current tax duplicate in the municipal tax assessor's offices. Within 45 days of its receipt of the authority's notice of intention, the municipal governing body may disapprove of the proposed site of an off-track wagering facility by adopting a resolution which shall be valid and binding upon the authority and the commission upon delivery of a duly certified copy of the resolution to the authority and the commission. Whenever a municipality determines to consider a resolution disapproving a proposed off-track wagering facility, the authority shall be given an opportunity to offer a public presentation of the proposed facility prior to consideration of the resolution. A resolution disapproving a proposed off-track wagering facility shall state the reasons for disapproval.

(1) the proposed off-track wagering facility site is not in an area zoned residential;

(2) the authority has submitted its plans to the municipal planning board, and complied with the provisions of section 22 of P.L.1975, c.291 (C.40:55D-31); and

(3) the authority has made reasonable efforts to address the reasonable concerns expressed by the municipal planning board.

7. Section 6 of P.L.2001, c.199 (C.5:5-132) is amended to read as follows:

6. Within 14 days of receipt of a completed application, certification and applicable fees, the executive director shall determine whether the same is in due form and meets the requirements of law in all respects, and upon being satisfied thereof, the commission, within 45 days of receipt of a completed application, certification and applicable fees, shall hold a public hearing in the municipality in which the proposed off-track wagering facility is to be located. The costs of the public hearing shall be paid by the [authority] applicant. The executive director shall cause a display advertisement, approximately 11 inches by 8 inches in size, to be published at least once in a daily newspaper, and at least once in a weekly newspaper, published, or circulated if none is published, in the county where the municipality is located at least 15 days before the date of the public hearing and to be published again in that daily newspaper on the third day preceding the public hearing and in the latest edition of that weekly newspaper that will be in circulation on the third day preceding the public hearing. The advertisement shall contain sufficient information to apprise the public as to the purpose of the hearing, the time and place thereof, and the nature of the license applied for. The advertisement shall be prepared and placed by the executive director, but shall be paid for by the [authority] applicant.

(cf: P.L.2001, c.199, s.6)

8. Section 7 of P.L.2001, c.199 (C.5:5-133) is amended to read as follows:

7. a. No sooner than 30 days nor later than 60 days following the public hearing, the commission shall make a final determination on the license application. The commission shall approve the application only if it determines that the plan for the proposed facility includes appropriate standards of quality for the premises and services it will provide and that the [authority has demonstrated by clear and convincing evidence that establishment of the proposed off-track wagering facility will not be inimical to the interests of the public and the horse racing industry in this State.] applicant has financial resources sufficient for the establishment and sustained operation of the facility. The commission shall consider the following factors in making a final decision to award a license:

(1) the portion of off-track wagering revenue generated at the proposed facility to be retained by the applicant, pursuant to negotiation with the commission in accordance with subsection d. of this section;

(2) demographics of the area in which the proposed facility would be located, including the proximity of the proposed facility to a racetrack or to other off-track wagering facilities;

(3) the amenities and services to be offered at the proposed facility; and

(4) the financial resources of the applicant.

The commission shall submit its [determination] decision to the Attorney General for review and approval. The [determination] decision of the commission shall be deemed approved by the Attorney General if not affirmatively approved or disapproved by the Attorney General within 14 days of the date of submission. The decision of the Attorney General shall be deemed a final decision. Upon approval by the Attorney General, the commission shall issue to the [authority] applicant an off-track wagering license specifying the location of the facility, the periods of time during a calendar year and the hours of operation during which off-track wagering is permitted at the facility, and prescribing any other conditions or terms the commission deems appropriate.

b. (1) With the approval of the commission, and in the event the authority is the licensee, the authority may assign an off-track wagering license to a permit holder, provided that the authority shall retain responsibility for license renewals. In the event the authority assigns an off-track wagering license, the assignee shall reimburse the authority for its costs associated with the application for the license.

(2) With the approval of the commission, [the] an off-track wagering licensee may enter into a contract or agreement with a person or entity to conduct or operate an off-track wagering facility for the licensee and to act as the agent of the licensee in any or all off-track wagering matters approved by the commission.

c. The commission shall deny an off-track wagering license to an applicant that has failed to provide information, documentation and assurances required by the act or requested by the commission, has failed to reveal any fact material to licensure, or who has supplied information which is untrue or misleading as to a material fact pertaining to the criteria for licensure, or to an applicant whose association with off-track wagering or whose proposed off-track wagering facility would be inimical to the interests of the public and the horse racing industry in this State.

d. (1) The commission shall have the power to negotiate with a license applicant the portion of off-track wagering revenue to be retained by the licensee, and if an applicant is approved for licensure, the licensee, as a condition of the license, shall enter into a contract with the commission governing the portion of the revenue to be retained by the licensee.

(2) Notwithstanding the commission's power to negotiate with a license bidder the portion of off-track wagering revenue to be retained by the licensee, the commission shall not award an off-track wagering license to a bidder unless that bidder agrees to the distribution of the funds in accordance with section 14 of P.L. , c. (C. ) (pending before the Legislature as this bill) and section 25 of P.L.2001, c.199 (C.5:5-151), and unless that bidder has reached an agreement with permit holders on the percentage share of off-track wagering proceeds to be distributed to permit holders. In its negotiations with a bidder, the commission shall seek the most advantageous situation possible for the horsemen and permit holders, provided the horsemen shall receive the amount negotiated under the contract, but not less than 40% of the amount of off-track wagering revenue retained by the licensee.

(cf: P.L.2004, c.116, s.7)

9. Section 8 of P.L.2001, c.199 (C.5:5-134) is amended to read as follows:

8. [a. The commission shall have full power to prescribe rules, regulations and conditions under which all off-track wagering licenses are issued and renewed in the State, including requiring an annual audit of the off-track wagering licensee's books and records pertaining to off-track wagering, and to revoke, suspend or refuse to renew a license if in the opinion of the commission the revocation of, suspension of or refusal to renew such license is in the public interest; provided, however, that such rules, regulations and conditions shall be uniform in their application.

b.] The commission shall have no right or power to determine who shall be officers, directors or employees of [any off-track wagering facility] an off-track wagering licensee, or the salaries thereof; provided, however, that the commission may compel the discharge of any official or employee of the licensee [at the off-track wagering facility] with responsibilities concerning off-track wagering who: (1) fails or refuses for any reason to comply with the rules or regulations of the commission; (2) fails or refuses for any reason to comply with any of the provisions of this act; (3) fails to establish by clear and convincing evidence in the opinion of the commission good character, honesty, competency and integrity; or (4) has been convicted of a crime involving fraud, dishonesty or moral turpitude.

(cf: P.L.2001, c.199, s.8)

10. Section 9 of P.L.2001, c.199 (C.5:5-135) is amended to read as follows:

9. a. Nothing in this act shall be deemed to abrogate the common law right or any other right established by law to exclude or eject permanently from any off-track wagering facility any person who disrupts the operations of its premises, threatens the security of its premises or its occupants, or is disorderly or intoxicated.

b. Persons under the age of 18 years shall not be permitted in an off-track wagering facility, except in dining areas if accompanied by a parent or guardian.

(cf: P.L.2001, c.199, s.9)

11. Section 11 of P.L.2001, c.199 (C.5:5-137) is amended to read as follows:

11. It shall be lawful for [the] an off-track wagering licensee to conduct off-track simulcasting at the off-track wagering facility with all in-State sending tracks and with any out-of-State sending track in accordance with [the provisions of] this act and [applicable regulations which the commission may promulgate] regulations promulgated hereunder.

(cf: P.L.2001, c.199, s.11)

12. Section 12 of P.L.2001, c.199 (C.5:5-138) is amended to read as follows:

12. An in-State sending track may transmit to a licensed off-track wagering [facilities] facility all or some of the live races conducted at the racetrack. [The] An off-track wagering licensee, as a condition of continued operation of the off-track wagering facility, shall receive all live races which are offered and transmitted by in-State sending tracks.

(cf: P.L.2001, c.199, s.12)

13. Section 21 of P.L.2001, c.199 (C.5:5-147) is amended to read as follows:

21. Sums wagered [at an off-track wagering facility on races being transmitted to that off-track wagering facility from an in-State sending track and sums wagered] through the account wagering system on a race conducted at an in-State host track shall be deposited in the parimutuel pool generated at the in-State track for those races and shall be distributed in accordance with the provisions of section 44 of P.L.1940, c.17 (C.5:5-64) [or section 1 of P.L.1984, c.236 (C.5:5-64.1), as appropriate]. Such sums wagered [at an off-track wagering facility or] through the account wagering system which remain undistributed pursuant to [those sections] that section shall be distributed as follows, except that moneys resulting from breakage on amounts wagered [at the off-track wagering facility or] through the account wagering system and from outstanding parimutuel ticket moneys issued [at the off-track wagering facility or] through the account wagering system shall be distributed as provided by subsection g. of this section.

a. 6% of the parimutuel pool generated [at the off-track wagering facility or] through the account wagering system shall be paid to the in-State track for overnight purses. [In the event that (1) any racetrack at which a horse race meeting was conducted in calendar year 2000 ceases to operate as a racetrack prior to calendar year 2003 and (2) an off-track wagering facility is operated on that former racetrack site, 6.15% of the parimutuel pool generated at that off-track wagering facility shall be paid to the in-State sending track for overnight purses.]

b. 0.6% of the parimutuel pool generated [at the off-track wagering facility or] through the account wagering system shall be set aside as follows:

(1) in the case of harness races conducted by an in-State track, in the special trust account established pursuant to or specified in section 46a.(2) of P.L.1940, c.17 (C.5:5-66), section 2b. of P.L.1984, c.236 (C.5:5-66.1), section 5a.(1) of P.L.1982, c.201 (C.5:5-98), or section 7f.(1)(a) of P.L.1971, c.137 (C.5:10-7), as appropriate, for use and distribution as provided in section 46a.(2)(a),(b) and (c) of P.L.1940, c.17 (C.5:5-66), sections 2b.(1), (2) and (3) of P.L.1984, c.236 (C.5:5-66.1), section 5a.(1)(a), (b) and (c) of P.L.1982, c.201 (C.5:5-98), or section 7f.(1)(a)(i), (ii) and (iii) of P.L.1971, c.137 (C.5:10-7); and

(2) in the case of running races conducted by an in-State track, in the special trust account established pursuant to or specified in section 46b.(1)(e) or (2)(e) of P.L.1940, c.17 (C.5:5-66), section 5b.(3) of P.L.1982, c.201 (C.5:5-98), or section 7f.(2)(c) of P.L.1971, c.137 (C.5:10-7), as appropriate, for use and distribution as provided therein, as appropriate.

c. 0.02% of the parimutuel pool generated [at the off-track wagering facility or] through the account wagering system shall be paid to Breeding and Development.

d. 0.02% of the parimutuel pool generated [at the off-track wagering facility or] through the account wagering system shall be paid to Backstretch Benevolency.

e. 0.06% of the parimutuel pool generated [at the off-track wagering facility or] through the account wagering system shall be set aside as follows: (1) in the case of harness races, to Health and Welfare; and (2) in the case of running races, to Thoroughbred Breeders and Stallions.

f. The remainder of the parimutuel pool after deduction of the amounts under subsections a. through f. of this section shall be paid to [the off-track wagering licensee or] the account wagering licensee [, as appropriate on a pro rata basis, as determined by the commission based upon the volume of wagering handled by each licensee].

g. All breakage moneys and outstanding parimutuel ticket moneys resulting from wagering [at the off-track wagering facility or] through the account wagering system on races conducted by an in-State track shall be paid to the commission for racing costs in accordance with section 26 of this act. If in any calendar year the total amount of breakage moneys and outstanding parimutuel ticket moneys referred to herein exceeds amounts required to pay racing costs as provided in section 26 of this act, such remaining funds shall be allocated as follows: 50% to [the off-track wagering licensee or] the account wagering licensee [, as appropriate] and 50% to the New Jersey Racing Industry Special Fund.

(cf: P.L.2001, c.199, s.21)

14. (New section) Sums wagered at an off-track wagering facility on races being transmitted to that off-track wagering facility from an in-State sending track shall be deposited in the parimutuel pool generated at the in-State track for those races and shall be distributed in accordance with the provisions of section 44 of P.L.1940, c.17 (C.5:5-64). Such sums wagered at an off-track wagering facility which remain undistributed pursuant to that section shall be distributed as follows:

a. A portion shall be retained by the off-track wagering licensee in an amount specified in the contract with the commission entered into pursuant to subsection d. of section 7 of P.L.2001, c.199 (C.5:5-133). Part of this portion shall be distributed to the in-State sending track permit holder in accordance with an agreement entered into pursuant to subsection d. of section 7 of P.L.2001, c.199 (C.5:5-133), for distribution in accordance with section 15 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. Any amounts designated for the horsemen pursuant to subsection d. of section 7 of P.L.2001, c.199 (C.5:5-133) shall be paid to the off-track wagering sub-accounts within the New Jersey Racing Industry Special Fund pursuant to section 15 of P.L. , c. (C. ) (pending before the Legislature as this bill).

c. Breakage money and outstanding parimutuel ticket money resulting from wagering at an off-track wagering facility on races conducted by an in-State track shall be paid to the commission for racing costs in accordance with section 26 of P.L.2001, c.199 (C.5:5-152). If in any calendar year the total amount of breakage money and outstanding parimutuel ticket money referred to herein exceeds amounts required to pay racing costs, the remaining money shall be allocated as follows: 50% to the off-track wagering licensee and 50% to the off-track wagering sub-accounts within the New Jersey Racing Industry Special Fund pursuant to section 15 of P.L. , c. (C. ) (pending before the Legislature as this bill).

15. (New section) The commission shall establish and administer separate off-track wagering sub-accounts within the New Jersey Racing Industry Special Fund into which shall be deposited the sums dedicated to the sub-accounts pursuant to section 14 of P.L. , c. (C. ) (pending before the Legislature as this bill). The sums deposited into each sub-account shall remain separate from other sums deposited into the fund. The commission shall create and administer separate sub-accounts for off-track wagering revenues on races, one for thoroughbred races and one for standardbred races conducted at each in-State track. Money generated by the Monmouth Park and the Meadowlands thoroughbred meet, and the money generated from the off-track wagering facility located on the former site of the Atlantic City Race Course, shall be deposited into the thoroughbred sub-account. Money generated by the Meadowlands standardbred meet and Freehold Raceway meet, shall be deposited into the standardbred sub-account.

Money deposited into the off-track wagering sub-accounts shall be disbursed monthly by the commission and used as follows:

a. 92% shall be distributed to the relevant in-State tracks for overnight purses in proportion to the amount of money generated by each track.

(1) Of the allocations made pursuant to this subsection to permit holders conducting thoroughbred racing, specific distributions shall be made to the overnight thoroughbred purse account of the relevant in-State track and for programs designed to aid the thoroughbred horsemen and the New Jersey Thoroughbred Horsemen's Association. Expenditures for programs designed to aid the thoroughbred horsemen and the New Jersey Thoroughbred Horsemen's Association shall not exceed 2.9% of such allocations.

(2) Of the allocations made pursuant to this subsection to permit holders conducting standardbred racing, specific distributions shall be made to the overnight standardbred purse account of the relevant in-State track and for programs designed to aid the standardbred horsemen and the Standardbred Breeders and Owners Association of New Jersey. Expenditures for programs designed to aid the standardbred horsemen and the Standardbred Breeders' and Owners' Association of New Jersey shall not exceed 3.5% of such allocations.

b. 8% shall be distributed as follows:

(1) in the case of money in the Monmouth Park, Meadowlands thoroughbred, and Atlantic City Race Course sub-accounts: 94% to Thoroughbred Breeders and Stallions; 3% to Backstretch Benevolency; and 3% to Breeding and Development; and

(2) in the case of money in the Freehold Raceway and Meadowlands standardbred sub-accounts: 75% to Sire Stakes; 8% to Breeders and Stallions; 3.5% to Backstretch Benevolency; 10% to Health and Welfare; and 3.5% to Breeding and Development.

16. Section 22 of P.L.2001, c.199 (C.5:5-148) is amended to read as follows:

22. a. [The] An off-track wagering licensee may, in accordance with the provisions of this act and [any applicable] regulations [of the commission] promulgated hereunder and with the approval of the commission, [also] receive at the facility simulcast horse races conducted at out-of-State sending tracks; provided, however, that the off-track wagering licensee may receive simulcast horse races from only those out-of-State sending tracks that have been approved by the commission, which approval may not be unreasonably withheld.

b. An account wagering licensee may, with the approval of the commission, also accept account wagers on horse races conducted at out-of-State host tracks; provided, however, that the account wagering licensee may receive wagers on out-of-State horse races from only those out-of-State host tracks that have been approved by the commission, which approval may not be unreasonably withheld.

(cf: P.L.2001, c.199, s.22)

17. Section 26 of P.L.2001, c.199 (C.5:5-152) is amended to read as follows:

26. a. The State Treasurer shall certify racing costs on an annual basis. These racing costs shall be the basis for payment and reimbursement to the commission from the following sources, in the following order:

(1) license and permit fees received by the commission;

(2) breakage moneys and outstanding parimutuel ticket moneys as provided in sections 21 and 25 of [this act] P.L.2001, c.199, and section 14 of P.L. , c. (C. ) (pending before the Legislature as this bill), and the outstanding parimutuel ticket moneys as provided in section 44 of P.L.1940, c.17 (C.5:5-64) [, section 1 of P.L.1984, c.236 (C.5:5-64.1)] and section 7 of P.L.1971, c.137 (C.5:10-7).

b. If, in any year, amounts received by the commission from the sources specified in subsection a. of this section are not sufficient to reimburse the commission for racing costs, there shall be an assessment against off-track wagering licensees and permit holders [or successors in interest to permit holders, if applicable,] to reimburse the commission for its costs for which funds are not otherwise appropriated to the commission by law. Such assessment shall be approved by the State Treasurer. The commission shall establish, by regulation, an assessment formula which apportions such costs to each off-track wagering licensee and permit holder [or successor in interest, if applicable].

c. Subject to the approval of the State Treasurer, the commission may adjust the annual assessment when necessary to cover expenditures not anticipated at the time of the assessment.

d. The funds derived from the sources specified in this section shall be held in a non-lapsing dedicated account, for use in accordance with the provisions of this section.

(cf: P.L.2001, c.199, s.26)

18. Section 28 of P.L.2001, c.199 (C.5:5-154) is amended to read as follows:

28. All persons engaged in conducting wagering-related activities at an off-track wagering facility or through [an] the account wagering system, whether employed directly by the licensee or by a person or entity conducting or operating the off-track wagering facility or account wagering system pursuant to an agreement with the licensee, shall be licensed or registered in accordance with [such] regulations [as may be] promulgated by the commission hereunder. All other employees at the off-track wagering facility or [of] the account wagering system shall be licensed or registered in accordance with regulations of the commission. The commission shall [have full power to] prescribe [rules, regulations and] by regulation the conditions under which all such licenses are issued, or registrations made, in this State and [to] the conditions under which the commission may revoke or refuse to issue a license, or revoke or refuse to accept a registration, if in the opinion of the commission the revocation or refusal is in the public interest, provided, however, that such rules, regulations and conditions shall be uniform in their application[, and further provided that no fee shall be in excess of $50 for each license so granted or registration accepted].

(cf: P.L.2001, c.199, s.28)

19. (New section) a. A person who willfully fails to report, remit or truthfully account for off-track wagering revenue owed to the commission pursuant to this act, or willfully attempts in any manner to evade or defeat any such remittance thereof, is guilty of a crime of the fourth degree and subject to the penalties therefor, except that the amount of a fine may be up to $25,000, and in the case of a violation of this subsection by an off-track wagering licensee, the amount of a fine may be up to $100,000, and shall in addition be liable for a penalty of three times the amount of off-track wagering revenue the licensee illegally withheld.

b. A licensee or registrant under this act, who places automated off-track wagering devices or displays such devices in an off-track wagering facility without authority of the commission to do so is guilty of a crime of the fourth degree and subject to the penalties therefor, except that the amount of a fine may be up to $25,000, and in the case of violation of this subsection by an off-track wagering licensee, the amount of a fine may be up to $100,000.

c. A licensee or registrant under this act who accepts wagers at an off-track wagering facility after the license has expired and prior to the renewal thereof is guilty of a crime of the fourth degree and subject to the penalties therefor, except that the amount of a fine may be up to $25,000, and in the case of violation of this subsection by an off-track wagering licensee, the amount of a fine may be up to $100,000.

d. (1) Except as provided in paragraph (2) of this subsection, a person who by fraud or a fraudulent scheme, for himself or herself or for another wins or attempts to win money in connection with off-track wagering is guilty of a crime of the fourth degree and notwithstanding the provisions of N.J.S.2C:43-3 shall be subject to a fine of not more than $25,000, and in the case of a violation of this subsection by an off-track wagering licensee, to a fine of not more than $100,000 and any other appropriate disposition authorized by subsection b. of N.J.S.2C:43-2.

(2) A person who by fraud or a fraudulent scheme, for himself or herself or for another wins or attempts to win money in connection with off-track wagering is guilty of a disorderly persons offense if the value of such money is $25 or under.

e. (1) A person who, without obtaining the requisite license or registration as provided in this act, works or is employed in a position whose duties would require licensing or registration pursuant to section 28 of this act (C.5:5-154) is guilty of a crime of the fourth degree and subject to the penalties therefor, except that the amount of a fine may be up to $10,000.

(2) A person who employs or continues to employ an individual not duly licensed or registered pursuant to section 28 of this act (C.5:5-154) in a position whose duties require a license or registration under the provisions of this act is guilty of a crime of the fourth degree and subject to the penalties therefor, except that the amount of a fine may be up to $10,000, and in the case of a violation of this subsection by an off-track wagering licensee, the amount of a fine may be up to $50,000.

f. A person who violates any provision of this act the penalty for which is not specifically fixed in this act is guilty of a disorderly persons offense.

g. (1) A violation of any of the provisions of this act which is an offense of a continuing nature shall be deemed to be a separate offense on each day during which it occurs. Nothing herein shall be deemed to preclude the commission of finding multiple violations within a day of those provisions of this act which establish offenses consisting of separate and distinct acts.

(2) Any person who aids, abets, counsels, commands, induces, procures or causes another to violate a provision of this act is punishable as a principal and subject to all sanctions and penalties, both civil and criminal, provided by this act and regulations promulgated hereunder.

h. In addition to any penalty, fine or term of imprisonment authorized by law, the commission shall, after appropriate hearings and factual determinations, have the authority to impose the following sanctions upon any person or entity licensed pursuant to this act:

(1) revoke the license of any person or entity for the conviction of any criminal offense under this act or for any other offense or violation of this act which would disqualify such person or entity from holding the license;

(2) revoke the license of any person or entity for willfully and knowingly violating an order of the commission directed to such person or entity;

(3) suspend the license of any person or entity pending hearing and determination, in any case in which license revocation could result;

(5) assess such civil penalties as may be necessary to punish misconduct and to deter future violations, which penalties may not exceed $10,000 in the case of any individual licensee, except that in the case of an off-track wagering licensee the penalty may not exceed $50,000;

(6) order restitution of any moneys or property unlawfully obtained or retained by a licensee;

(7) enter a cease and desist order which specifies the conduct which is to be discontinued, altered or implemented by the licensee;

(8) issue letters of reprimand or censure, which letters shall be made a permanent part of the file of each licensee so sanctioned; or

(9) impose any or all of the foregoing sanctions in combination with each other.

20. Section 34 of P.L.2001, c.199 (C.5:5-159) is amended to read as follows:

34. In addition to any other funds provided by law for prevention, education and treatment programs for compulsive gamblers, beginning on July 1, 2003, there shall be an annual assessment against [permit holders or successors in interest to permit holders, if applicable,] off-track wagering licensees of a total sum of $200,000 in the aggregate which shall be paid into the General Fund for appropriation by the Legislature to the Department of Health and Senior Services for prevention and education and treatment programs for compulsive gambling that meet the criteria developed pursuant to section 2 of P.L.1993, c.229 (C.26:2-169), such as those provided by the Council on Compulsive Gambling of New Jersey. Such funds shall be used to address compulsive gambling issues related to off-track wagering facilities and account wagering. The New Jersey Racing Commission shall, by regulation, establish a formula which apportions the assessment to each [permit holder or successor in interest, if applicable] off-track wagering licensee.

(cf: P.L.2001, c.199, s.34)

21. This act shall take effect immediately.

STATEMENT

This bill makes several substantive revisions to the "Off-Track and Account Wagering Act," P.L.2001, c.199 (C.5:5-127 et seq.), primarily to require that the off-track wagering licenses be subject to competition.

Under current law, the New Jersey Racing Commission is responsible for implementing the licensing and oversight provisions of the act, and the New Jersey Sports and Exposition Authority (NJSEA), which owns Monmouth Park and the Meadowlands Racetrack, is the sole entity eligible for off-track wagering licensure. As a condition of licensure, the NJSEA must enter into a contract with the companies that own Freehold Raceway and the Atlantic City Race Course for the establishment of the facilities.

Since the law was enacted in 2001, the NJSEA has agreed to establish 9 out of the maximum 15 off-track wagering facilities permitted by the act. However, the NJSEA has not established any of these facilities as of this date.

The legislative intent of the "Off-Track and Account Wagering Act" is to assist the ailing horse racing industry in this State by providing a revenue stream to New Jersey's remaining racetracks, and to supplement purses, or prize money, which in turn support the entire horse racing industry. By opening off-track wagering licensure to competition, the State can ensure that the horse racing industry will receive the most advantageous position possible.

Under this bill, applicants for licensure will negotiate their share of off-track wagering revenue with the commission, whereas under current law the licensee share is set by statute and the amount remaining for horsemen does not compare favorably with off-track wagering revenue splits in other states. However, this bill would require that the horsemen receive the greater of either a negotiated amount or at least 40% of the revenue amount received by the licensee.

In addition, this bill revises the act to:

� expand the commission's regulatory authority over off-track wagering;

� revise the funding sources for covering the commission's racing costs;

� provide guidelines for the commission to follow in the awarding of off-track wagering licenses;

� revise formulas for splitting off-track wagering revenues from in-State tracks; and

� establish penalties for violations of the off-track wagering and licensing provisions of the act.

This bill will not affect account wagering, the out-of-State

revenue formula, or the minimum number of required racing days.