Bill Text: VA HB1826 | 2015 | Regular Session | Chaptered
Bill Title: Virginia Racing Commission; powers, definitions, advance deposit account wagering revenues.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Passed) 2015-04-15 - Governor: Acts of Assembly Chapter text (CHAP0731) [HB1826 Detail]
Download: Virginia-2015-HB1826-Chaptered.html
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Be it enacted by the General Assembly of Virginia: 1. That §§59.1-365, 59.1-369, 59.1-376, 59.1-378, 59.1-378.1, and 59.1-392 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 59.1-392.1 as follows: §59.1-365. Definitions.
"Advance deposit account wagering" means a method of pari-mutuel wagering conducted in the Commonwealth that is permissible under the Interstate Horseracing Act, §3001 et seq. of Chapter 57 of Title 15 of the United States Code, and in which an individual may establish an account with an entity, licensed by the Commission, to place pari-mutuel wagers in person or electronically. "Breakage" means the odd cents by which the amount payable on each dollar wagered exceeds a multiple of $0.10. "Commission" means the Virginia Racing Commission. "Dependent" means a son, daughter, father, mother, brother, sister, or other person, whether or not related by blood or marriage, if such person receives from an officer or employee more than one-half of his financial support. "Drug" shall have the meaning prescribed by § 54.1-3401. The Commission shall by regulation define and designate those drugs the use of which is prohibited or restricted. "Enclosure" means all areas of the property of a track to which admission can be obtained only by payment of an admission fee or upon presentation of authorized credentials, and any additional areas designated by the Commission. "Handle" means the total amount of all pari-mutuel wagering sales excluding refunds and cancellations. "Horse racing" means a competition on a set course involving a race between horses on which pari-mutuel wagering is permitted. "Immediate family" means (i) a spouse and (ii) any other person residing in the same household as an officer or employee, who is a dependent of the officer or employee or of whom the officer or employee is a dependent. "Licensee" includes any person holding an owner's "Member" includes any person designated a member of a nonstock corporation, and any person who by means of a pecuniary or other interest in such corporation exercises the power of a member. "Pari-mutuel wagering" means the system of wagering
on horse races in which those who wager on horses that finish in the position
or positions for which wagers are taken share in the total amounts wagered,
plus any amounts provided by "Participant" means any person who (i) has an ownership interest in any horse entered to race in the Commonwealth or who acts as the trainer, jockey, or driver of any horse entered to race in the Commonwealth or (ii) takes part in any horse racing subject to the jurisdiction of the Commission or in the conduct of a race meeting or pari-mutuel wagering there, including but not limited to a horse owner, trainer, jockey, or driver, groom, stable foreman, valet, veterinarian, agent, pari-mutuel employee, concessionaire or employee thereof, track employee, or other position the Commission deems necessary to regulate to ensure the integrity of horse racing in Virginia. "Permit holder" includes any person holding a permit to participate in any horse racing subject to the jurisdiction of the Commission or in the conduct of a race meeting or pari-mutuel wagering thereon as provided in §59.1-387. "Person" means any individual, group of individuals, firm, company, corporation, partnership, business, trust, association, or other legal entity. "Pool" means the amount wagered during a race meeting or during a specified period thereof. "Principal stockholder" means any person who individually or in concert with his spouse and immediate family members, beneficially owns or controls, directly or indirectly, five percent or more of the stock of any person which is a licensee, or who in concert with his spouse and immediate family members, has the power to vote or cause the vote of five percent or more of any such stock. However, "principal stockholder" shall not include a broker-dealer registered under the Securities Exchange Act of 1934, as amended, which holds in inventory shares for sale on the financial markets for a publicly traded corporation holding, directly or indirectly, a license from the Commission. "Race meeting" means the whole consecutive period of time during which horse racing with pari-mutuel wagering is conducted by a licensee. "Racetrack" means an outdoor course located in Virginia which is laid out for horse racing and is licensed by the Commission. "Recognized majority horsemen's group" means the organization recognized by the Commission as the representative of the majority of owners and trainers racing at race meetings subject to the Commission's jurisdiction. "Retainage" means the total amount deducted from the
pari-mutuel wagering pool for (i) a license fee to the Commission and
localities, (ii) the "Satellite facility" means all areas of the property at which simulcast horse racing is received for the purposes of pari-mutuel wagering, and any additional areas designated by the Commission. "Significant infrastructure facility" means a horse racing facility that has been approved by a local referendum pursuant to §59.1-391 and has a minimum racing infrastructure consisting of (i) a one-mile dirt track for flat racing, (ii) a seven-eighths-mile turf course for flat or jump racing, (iii) covered seating for no fewer than 500 persons, and (iv) barns with no fewer than 400 permanent stalls. "Significant infrastructure limited licensee" means a person who owns or operates a significant infrastructure facility and holds a limited license under §59.1-376. "Simulcast horse racing" means the simultaneous transmission of the audio or video portion, or both, of horse races from a licensed horse racetrack or satellite facility to another licensed horse racetrack or satellite facility, regardless of state of licensure, whether such races originate within the Commonwealth or any other jurisdiction, by satellite communication devices, television cables, telephone lines, or any other means for the purposes of conducting pari-mutuel wagering. "Steward" means a racing official, duly appointed by the Commission, with powers and duties prescribed by Commission regulations. "Stock" includes all classes of stock, partnership interest, membership interest, or similar ownership interest of an applicant or licensee, and any debt or other obligation of such person or an affiliated person if the Commission finds that the holder of such interest or stock derives therefrom such control of or voice in the operation of the applicant or licensee that he should be deemed an owner of stock. "Virginia Breeders Fund" means the fund established to foster the industry of breeding race horses in the Commonwealth of Virginia. §59.1-369. Powers and duties of the Commission. The Commission shall have all powers and duties necessary to carry out the provisions of this chapter and to exercise the control of horse racing as set forth in §59.1-364. Such powers and duties shall include but not be limited to the following: 1. The Commission is vested with jurisdiction and supervision over all horse racing licensed under the provisions of this chapter including all persons conducting, participating in, or attending any race meeting. It shall employ such persons to be present at race meetings as are necessary to ensure that they are conducted with order and the highest degree of integrity. It may eject or exclude from the enclosure or from any part thereof any person, whether or not he possesses a license or permit, whose conduct or reputation is such that his presence may, in the opinion of the Commission, reflect on the honesty and integrity of horse racing or interfere with the orderly conduct of horse racing. 2. The Commission, its representatives, and employees shall
visit, investigate, and have free access to the office, track, facilities,
satellite facilities or other places of business of any license or permit
holder, and may compel the production of any of the books, documents, records,
or memoranda of any license or permit holder for the purpose of satisfying itself
that this chapter and its regulations are strictly complied with. In addition,
the Commission may require 3. The Commission shall promulgate regulations and conditions under which horse racing with pari-mutuel wagering shall be conducted in the Commonwealth, and all such other regulations it deems necessary and appropriate to effect the purposes of this chapter, including a requirement that licensees post, in a conspicuous place in every place where pari-mutuel wagering is conducted, a sign which bears a toll-free telephone number for "Gamblers Anonymous" or other organization which provides assistance to compulsive gamblers. Such regulations shall include provisions for affirmative action to assure participation by minority persons in contracts granted by the Commission and its licensees. Nothing in this subdivision shall be deemed to preclude private local ownership or participation in any horse racetrack. Such regulations may include penalties for violations. The regulations shall be subject to the Administrative Process Act (§2.2-4000 et seq.). 4. The Commission shall promulgate regulations and conditions
under which simulcast horse racing shall be conducted at a licensed horse racetrack
or satellite facility in the Commonwealth and all such other regulations it
deems necessary and appropriate to effect the purposes of this chapter. Such
regulations shall include provisions that all simulcast horse racing shall
comply with the Interstate Horse Racing Act of 1978 (15 U.S.C. §3001 et seq.)
and shall require the holder of 5. The Commission shall promulgate regulations and conditions
regulating and controlling advance deposit account wagering. Such regulations
shall include, but not be limited to, (i) standards, qualifications, and
procedures for the issuance of a license to an entity for the operation of
pari-mutuel wagering in the Commonwealth; except that the Commission shall not
issue a license to, and shall revoke the license of, an entity that, either
directly or through an entity under common control with it, withholds the sale
at fair market value to
Nothing in this subdivision shall be construed to limit the Commission's authority as set forth elsewhere in this section. 6. The Commission may issue subpoenas for the attendance of witnesses before it, administer oaths, and compel production of records or other documents and testimony of such witnesses whenever, in the judgment of the Commission, it is necessary to do so for the effectual discharge of its duties. 7. The Commission may compel any person holding a license or permit to file with the Commission such data as shall appear to the Commission to be necessary for the performance of its duties including but not limited to financial statements and information relative to stockholders and all others with any pecuniary interest in such person. It may prescribe the manner in which books and records of such persons shall be kept. 8. The Commission may enter into arrangements with any foreign or domestic government or governmental agency, for the purposes of exchanging information or performing any other act to better ensure the proper conduct of horse racing. 9. The Commission shall report annually on or before March 1 to the Governor and the General Assembly, which report shall include a financial statement of the operation of the Commission. 10. The Commission may order such audits, in addition to those required by §59.1-394, as it deems necessary and desirable. 11. The Commission shall upon the receipt of a complaint of an alleged criminal violation of this chapter immediately report the complaint to the Attorney General of the Commonwealth and the State Police for appropriate action. 12. The Commission shall provide for the withholding of the applicable amount of state and federal income tax of persons claiming a prize or pay-off for a winning wager and shall establish the thresholds for such withholdings. 13. The Commission, its representatives and employees may, within the enclosure, stable, or other facility related to the conduct of racing, and during regular or usual business hours, subject any (i) permit holder to personal inspections, including alcohol and drug testing for illegal drugs, inspections of personal property, and inspections of other property or premises under the control of such permit holder and (ii) horse eligible to race at a race meeting licensed by the Commission to testing for substances foreign to the natural horse within the racetrack enclosure or other place where such horse is kept. Any item, document or record indicative of a violation of any provision of this chapter or Commission regulations may be seized as evidence of such violation. All permit holders consent to the searches and seizures authorized by this subdivision, including breath, blood and urine sampling for alcohol and illegal drugs, by accepting the permit issued by the Commission. The Commission may revoke or suspend the permit of any person who fails or refuses to comply with this subdivision or any rules of the Commission. Commission regulations in effect on July 1, 1998, shall continue in full force and effect until modified by the Commission in accordance with law. 14. The Commission shall require the existence of a contract
between 15. Notwithstanding the provisions of §59.1-391, the Commission may grant provisional limited licenses or provisional unlimited licenses to own or operate racetracks or satellite facilities to an applicant prior to the applicant securing the approval through the local referendum required by §59.1-391. The provisional licenses issued by the Commission shall only become effective upon the approval of the racetrack or satellite wagering facilities in a referendum conducted pursuant to §59.1-391 in the jurisdiction in which the racetrack or satellite wagering facility is to be located. §59.1-376. Limited licenses; transfer of meet; taxation; authority to issue; limitations. A. Notwithstanding the provisions of §59.1-375 or §59.1-378
but subject to such regulations and criteria as it may prescribe, the
Commission is authorized to issue limited licenses, provided such licenses
shall permit any holder to conduct a race meeting or meetings for a period not
to exceed B. The Commission may at any time, in its discretion, authorize any organization or association licensed under this section to transfer its race meeting or meetings from its own track or place for holding races, to the track or place for holding races of any other organization or association licensed under this chapter upon the payment of any and all appropriate license fees. No such authority to transfer shall be granted without the express consent of the organization or association owning or leasing the track to which such transfer is made. C. For any such meeting the licensee shall retain and pay from the pool the tax as provided in §59.1-392. D. No person to whom a limited license has been issued nor any officer, director, partner, or spouse or immediate family member thereof shall make any contribution to any candidate for public office or public office holder at the local or state level. §59.1-378. Issuance of owner's license. A. The Commission shall consider all applications for an owner's
license and may grant a valid owner's license to applicants who meet the
criteria set forth in this chapter and established by the Commission. The
Commission shall deny a license to any applicant B. The Commission shall deny a license to an applicant if it finds that for any reason the issuance of a license to the applicant would not be in the interest of the people of the Commonwealth or the horse racing industry in the Commonwealth, or would reflect adversely on the honesty and integrity of the horse racing industry in the Commonwealth, or that the applicant, or any officer, partner, principal stockholder, or director of the applicant: 1. Has knowingly made a false statement of material fact or has deliberately failed to disclose any information requested; 2. Is or has been found guilty of any illegal, corrupt, or fraudulent act, practice, or conduct in connection with any horse racing in this or any other state, or has been convicted of a felony; 3. Has at any time knowingly failed to comply with the provisions of this chapter or of any regulations of the Commission; 4. Has had a license or permit to hold or conduct a horse race meeting denied for just cause, suspended, or revoked in any other state or country; 5. Has legally defaulted in the payment of any obligation or debt due to the Commonwealth; 6. Has constructed or caused to be constructed a racetrack or satellite facility for which a license was required under §59.1-377 hereof without obtaining such license, or has deviated substantially, without the permission of the Commission, from the plans and specifications submitted to the Commission; or 7. Is not qualified to do business in Virginia or is not subject to the jurisdiction of the courts of this Commonwealth. C. The Commission shall deny a license to any applicant unless it finds: 1. That, if the corporation is a stock corporation, that such stock is fully paid and nonassessable, has been subscribed and paid for only in cash or property to the exclusion of past services, and, if the corporation is a nonstock corporation, that there are at least twenty members; 2. That all principal stockholders or members have submitted to the jurisdiction of the Virginia courts, and all nonresident principal stockholders or members have designated the Executive Secretary of the Commission as their agent for receipt of process; 3. That the applicant's articles of incorporation provide that the corporation may, on vote of a majority of the stockholders or members, purchase at fair market value the entire membership interest of any stockholder or require the resignation of any member who is or becomes unqualified for such position under §59.1-379; and 4. That the applicant meets the criteria established by the Commission for the granting of an owner's license. §59.1-378.1. Licensing of owners or operators of certain pari-mutuel facilities. A. Notwithstanding the provisions of §59.1-391, the
Commission may grant a license, for a duration to be determined by the
Commission, to the owner or operator of a
B. In deciding whether to grant any license pursuant to this section, the Commission shall consider (i) the results of, circumstances surrounding, and issues involved in any referendum conducted under the provisions of §59.1-391 and (ii) whether the Commission had previously granted a license to such facility, owner, or operator. C. In no event shall the Commission issue more than 12 licenses in a calendar year pursuant to this section. §59.1-392. Percentage retained; tax. A. Any person holding an operator's license to operate a horse racetrack or satellite facility in the Commonwealth pursuant to this chapter shall be authorized to conduct pari-mutuel wagering on horse racing subject to the provisions of this chapter and the conditions and regulations of the Commission. B. On pari-mutuel pools generated by wagering at the racetrack
on live horse racing conducted within the Commonwealth, involving win, place
and show wagering, the licensee shall retain a percentage amount approved by
the Commission as jointly requested by a recognized majority C. On pari-mutuel pools generated by wagering at each Virginia
satellite facility on live horse racing conducted within the Commonwealth,
involving win, place and show wagering, the licensee shall retain a percentage
amount approved by the Commission as jointly requested by a recognized majority D. On pari-mutuel pools generated by wagering at the racetrack
and each Virginia satellite facility on live horse racing conducted within the
Commonwealth, involving win, place and show wagering, the licensee shall retain
a percentage amount approved by the Commission as jointly requested by a
recognized majority 1. Eight percent as purses or prizes to the participants in such race meeting; 2. Seven and one-half percent, and all of the breakage and the proceeds of pari-mutuel tickets unredeemed 180 days from the date on which the race was conducted, to the operator; 3. One percent to the Virginia Breeders Fund; 4. Fifteen one-hundredths percent to the Virginia-Maryland Regional College of Veterinary Medicine; 5. Five one-hundredths percent to the Virginia Horse Center Foundation; 6. Five one-hundredths percent to the Virginia Horse Industry Board; and 7. The remainder of the retainage shall be paid as appropriate under subsection B or C. E. On pari-mutuel pools generated by wagering at the racetrack
on live horse racing conducted within the Commonwealth involving wagering other
than win, place and show wagering, the licensee shall retain a percentage
amount approved by the Commission as jointly requested by a recognized majority F. On pari-mutuel pools generated by wagering at each Virginia
satellite facility on live horse racing conducted within the Commonwealth
involving wagering other than win, place and show wagering, the licensee shall
retain a percentage amount approved by the Commission as jointly requested by a
recognized majority G. On pari-mutuel pools generated by wagering at the racetrack
and each Virginia satellite facility on live horse racing conducted within the
Commonwealth involving wagering other than win, place and show wagering, the
licensee shall retain a percentage amount approved by the Commission as jointly
requested by a recognized majority 1. Nine percent as purses or prizes to the participants in such race meeting; 2. Nine percent, and the proceeds of the pari-mutuel tickets unredeemed 180 days from the date on which the race was conducted, to the operator; 3. One percent to the Virginia Breeders Fund; 4. Fifteen one-hundredths percent to the Virginia-Maryland Regional College of Veterinary Medicine; 5. Five one-hundredths percent to the Virginia Horse Center Foundation; 6. Five one-hundredths percent to the Virginia Horse Industry Board; and 7. The remainder of the retainage shall be paid as appropriate under subsection E or F. H. On pari-mutuel wagering generated by simulcast horse racing transmitted from jurisdictions outside the Commonwealth, the licensee may, with the approval of the Commission, commingle pools with the racetrack where the transmission emanates or establish separate pools for wagering within the Commonwealth. All simulcast horse racing in this subsection must comply with the Interstate Horse Racing Act of 1978 (15 U.S.C. §3001 et seq.). I. On pari-mutuel pools generated by wagering at the racetrack on simulcast horse racing transmitted from jurisdictions outside the Commonwealth, involving win, place and show wagering, the licensee shall retain one and one-quarter percent of such pool to be distributed as follows: three-quarters percent to the Commonwealth as a license tax, and one-half percent to the Virginia locality in which the racetrack is located. J. On pari-mutuel pools generated by wagering at each Virginia satellite facility on simulcast horse racing transmitted from jurisdictions outside the Commonwealth, involving win, place and show wagering, the licensee shall retain one and one-quarter percent of such pool to be distributed as follows: three-quarters percent to the Commonwealth as a license tax, one-quarter percent to the locality in which the satellite facility is located, and one-quarter percent to the Virginia locality in which the racetrack is located. K. On pari-mutuel pools generated by wagering at the racetrack and each Virginia satellite facility on simulcast horse racing transmitted from jurisdictions outside the Commonwealth, involving win, place and show wagering, the licensee shall retain one and thirty one-hundredths percent of such pool to be distributed as follows: 1. One percent of the pool to the Virginia Breeders Fund; 2. Fifteen one-hundredths percent to the Virginia-Maryland Regional College of Veterinary Medicine; 3. Five one-hundredths percent to the Virginia Horse Center Foundation; 4. Five one-hundredths percent to the Virginia Horse Industry Board; and 5. Five one-hundredths percent to the Virginia Thoroughbred Association for the promotion of breeding in the Commonwealth. L. On pari-mutuel pools generated by wagering at the racetrack on simulcast horse racing transmitted from jurisdictions outside the Commonwealth, involving wagering other than win, place and show wagering, the licensee shall retain two and three-quarters percent of such pool to be distributed as follows: one and three-quarters percent to the Commonwealth as a license tax, and one percent to the Virginia locality in which the racetrack is located. M. On pari-mutuel pools generated by wagering at each Virginia satellite facility on simulcast horse racing transmitted from jurisdictions outside the Commonwealth, involving wagering other than win, place and show wagering, the licensee shall retain two and three-quarters percent of such pool to be distributed as follows: one and three-quarters percent to the Commonwealth as a license tax, one-half percent to the locality in which the satellite facility is located, and one-half percent to the Virginia locality in which the racetrack is located. N. On pari-mutuel pools generated by wagering at the racetrack and each Virginia satellite facility on simulcast horse racing transmitted from jurisdictions outside the Commonwealth, involving wagering other than win, place and show wagering, the licensee shall retain one and thirty one-hundredths percent of such pool to be distributed as follows: 1. One percent of the pool to the Virginia Breeders Fund; 2. Fifteen one-hundredths percent to the Virginia-Maryland Regional College of Veterinary Medicine; 3. Five one-hundredths percent to the Virginia Horse Center Foundation; 4. Five one-hundredths percent to the Virginia Horse Industry Board; and 5. Five one-hundredths percent to the Virginia Thoroughbred Association for the promotion of breeding in the Commonwealth. O. Moneys payable to the Commonwealth shall be deposited in the general fund. Gross receipts for license tax purposes under Chapter 37 (§ 58.1-3700 et seq.) of Title 58.1 shall not include pari-mutuel wagering pools and license taxes authorized by this section. P. All payments by the licensee to the Commonwealth or any locality shall be made within five days from the date on which such wagers are received by the licensee. All payments by the licensee to the Virginia Breeders Fund shall be made to the Commission within five days from the date on which such wagers are received by the licensee. All payments by the licensee to the Virginia-Maryland Regional College of Veterinary Medicine, the Virginia Horse Center Foundation, the Virginia Horse Industry Board, and the Virginia Thoroughbred Association shall be made by the first day of each quarter of the calendar year. All payments made under this section shall be used in support of the policy of the Commonwealth to sustain and promote the growth of a native industry. Q. If a satellite facility is located in more than one locality, any amount a licensee is required to pay under this section to the locality in which the satellite facility is located shall be prorated in equal shares among those localities. R. Any contractual agreement between a licensee and other entities concerning the distribution of the remaining portion of the retainage under subsections I through N shall be subject to the approval of the Commission. S. The T. The legitimate breakage from each pari-mutuel pool for both live racing and simulcast horse racing shall be distributed as follows: 1. Seventy percent to be retained by the licensee to be used for capital improvements that are subject to approval of the Commission; and 2. Thirty percent to be deposited in the Racing Benevolence
Fund, administered jointly by the licensee and the §59.1-392.1. Advance deposit account wagering revenues; distribution. A. Notwithstanding the provisions of §59.1-392, the allocation of revenue from advance deposit account wagering shall include (i) a licensee fee of 1.5 percent paid to the Commission; (ii) an additional fee equal to one percent of all wagers made within the Commonwealth placed through an advance deposit account wagering licensee, which shall be paid to the Virginia Breeders Fund, and (iii) an additional fee equal to nine percent of all wagers made within the Commonwealth placed through an advance deposit account wagering licensee, out of which shall be paid: 1. Four percent to a nonprofit industry stakeholder organization recognized by, and with oversight from, the Commission to include the recognized majority horsemen's group, a breeder's organization, and a licensed track operator for the purpose of promoting, sustaining, and advancing horse racing within the Commonwealth; and 2. Five percent to representatives of the recognized majority horsemen's group by breed to be used for purse funds at races conducted in the Commonwealth, unless otherwise authorized by the Commission. Notwithstanding the foregoing, if the advance deposit account wagering licensee is a significant infrastructure limited licensee, the additional fee equal to nine percent of the wagers placed through such advance deposit account wagering licensee since November 1, 2014, shall instead be retained by such licensee for operational expenses, including defraying the costs of live racing. B. The Commission-recognized nonprofit industry stakeholder organization shall make distributions from fees received from advance deposit wagering to organizations within the Commonwealth providing care for retired race horses, the Virginia-Maryland Regional College of Veterinary Medicine, the Virginia Horse Center Foundation, the Virginia Horse Industry Board, and the Virginia Thoroughbred Association in the percentages of wagering handles set forth in subsections K and N of §59.1-392, and shall make a distribution of thirty-five one-hundredths of one percent of all wagers made within the Commonwealth placed through such advance deposit account wagering licensee to the locality where live racing licensed by the Commission occurred prior to January 1, 2012, and beginning January 1, 2020, to the locality or localities where such live racing occurs to be shared in a ratio of the number of such annual live races in a locality to the total number of such annual lives races in the Commonwealth. Distributions under this section from the Commission-recognized nonprofit stakeholder organization to the foregoing entities and locality or localities, when added to the distributions to such entities and locality or localities under §59-1.392, shall be capped at the sum necessary to equal distributions made in the 2013 calendar year to each entity under §59-1.392, and shall be capped at the sum necessary to equal $400,000 for a locality or localities. C. Any additional distribution of fees received from advance deposit account licensees by the Commission-recognized nonprofit industry stakeholder organization shall be approved by the Commission. |
