HOUSE BILL No. 4310

 

 

March 7, 2019, Introduced by Rep. Vaupel and referred to the Committee on Regulatory Reform.

 

     A bill to amend 1995 PA 279, entitled

 

"Horse racing law of 1995,"

 

by amending sections 8, 17, 20, and 22 (MCL 431.308, 431.317,

 

431.320, and 431.322), as amended by 2016 PA 271.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

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

 

general classes of licenses:

 

     (a) Occupational licenses issued to individuals participating

 

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

 

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

 

state.

 

     (b) Race meeting licenses issued annually for the succeeding

 

year to persons to conduct live horse racing, simulcasting, and

 

pari-mutuel wagering on the results of live and simulcast horse


races at a licensed race meeting in this state under this act.

 

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

 

racetrack at which 1 or more race meeting licensees may conduct

 

licensed race meetings in this state.

 

     (d) Third-party facilitator licenses issued to persons

 

contracted by race meeting licensees to facilitate wagering on live

 

and simulcast racing. The racing commissioner shall establish the

 

terms and conditions and the appropriate fee for a third-party

 

facilitator license subject to all of the following:

 

     (i) The third-party facilitator must comply with consumer

 

protections, as determined by the racing commissioner, to protect

 

the public.

 

     (ii) The third-party facilitator must cooperate in any audit

 

necessary to comply with section 23.

 

     (iii) The racing commissioner must have received from the race

 

meeting licensee both a letter of intent and a certification that

 

the race meeting licensee assumes and acknowledges responsibility

 

for all conduct of its third-party facilitator.

 

     (iv) The third-party facilitator must comply with the

 

conditions and suitability standards under section 10(1)(e) and (f)

 

and rules promulgated under this act.

 

     (v) The license must terminate or expire as follows:

 

     (A) On the date and at the time set by the racing commissioner

 

in the license.

 

     (B) When the contract with the race meeting licensee to

 

facilitate live and simulcast wagering expires.

 

     (C) If the license is suspended or revoked by the racing


commissioner.

 

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

 

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

 

race meeting at another licensed racetrack in this state and the

 

person has a controlling interest in or co-ownership of the other

 

licensed racetrack.

 

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

 

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

 

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

 

must be conducted at a licensed under a race meeting shall be

 

license preapproved by the racing commissioner under by rule or

 

written order of the commissioner.

 

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

 

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

 

conduct and supervise pari-mutuel wagering on the results of horse

 

races as permitted by this act. If pari-mutuel wagering is used at

 

a race meeting, a totalisator or other device that is equal in

 

accuracy and clearness to a totalisator and approved by the racing

 

commissioner must be used. The odds display of the totalisator or

 

other device must be placed in full view of the patrons.

 

     (3) Subject to section 18(3), each holder of a race meeting

 

license shall retain as his or her commission on all forms of

 

straight wagering 17% of all money wagered involving straight

 

wagers wagering on the results of live and simulcast horse races

 

conducted at the licensee's race meetings. Subject to section

 

18(3), each holder of a race meeting license shall retain as his or

 

her commission on all forms of multiple wagering , without the


written permission of the racing commissioner not more than 28% and

 

with the written permission of the racing commissioner not more

 

than 35% of all money wagered involving any form of multiple wager

 

wagering on the results of live and simulcast horse races conducted

 

at the licensee's race meeting. Except as otherwise provided by

 

contract, 50% of all commissions from wagering on the results of

 

live racing at the racetrack where the live racing was conducted

 

shall must be paid to the horsemen's purse pool at the racetrack

 

where the live racing was conducted. As used in this subsection:

 

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

 

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

 

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

 

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

 

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

 

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

 

licensee and paid directly to the city or township in which the

 

racetrack is located as a fee for services provided under section

 

21.

 

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

 

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

 

Each holder of a race meeting license shall distribute to the

 

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

 

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

 

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

 

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

 

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

 

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


the total value of the pool.

 

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

 

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

 

pari-mutuel wagering conducted or supervised by the holder.

 

     (7) Any act or transaction relative to pari-mutuel wagering on

 

the results of live or simulcast horse races may be conducted by a

 

race meeting licensee under this act for the race meeting licensee

 

to comply with the auditing requirements of section 23. A person

 

shall not provide messenger service for the placing of a bet for

 

another person who is not a patron. However, this subsection does

 

not prevent simulcasting or intertrack or interstate common pool

 

wagering inside or outside this state as permitted by this act or

 

the rules promulgated under this act.

 

     (8) Any form of pari-mutuel wagering on the results of live or

 

simulcast horse races must only occur or be permitted to occur at a

 

licensed race meeting. A person shall not participate or be a party

 

to any act or transaction relative to placing a wager or carrying a

 

wager for placement outside of a race meeting ground. A person

 

shall not provide messenger service for the placing of a bet for

 

another person who is not a patron. However, this subsection does

 

not prevent simulcasting or intrastate or interstate common pool

 

wagering inside or outside this state as permitted by this act or

 

the rules promulgated under this act.be conducted or operated by a

 

race meeting licensee, which may use its contracted licensed third-

 

party facilitators, as determined and approved by the racing

 

commissioner. The race meeting licensee is responsible for all

 

conduct of its third-party facilitators. All wagers must be placed


by persons within this state and may be placed only in person at a

 

licensed race meeting or electronically through a licensed third-

 

party facilitator. Wagers must be placed only on live races offered

 

at or live races simulcast to licensed race meetings at racetracks

 

operated by persons that hold track licenses issued under this act.

 

Each race meeting licensee and licensed third-party facilitator

 

shall not solicit, offer, accept, or process wagers on or in

 

connection with any other horse races, form of horse racing, or

 

other form of gaming or gambling product, including, but not

 

limited to, historical horse races, slot machines, or any

 

electronic game of chance that simulates, imitates, or emulates an

 

electronic gaming device such as a video lottery terminal, pulltab

 

dispenser, or any other electronic or mechanical device.

 

     (9) A person that does not hold a race meeting license or a

 

third-party facilitator license that solicits or accepts wagers on

 

the results of live or simulcast horse races from individuals in

 

this state is guilty of a felony punishable by imprisonment for not

 

more than 5 years or a fine of not more than $10,000.00, or both.

 

Each act of solicitation or wager that is accepted in violation of

 

this section is a separate offense.

 

     (10) Only a race meeting licensee or its contracted licensed

 

third-party facilitator may process, accept, offer, or solicit

 

wagers on the results of live or simulcast horse races as

 

determined and approved by the racing commissioner.

 

     (11) (10) As used in this section, "act or transaction

 

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

 

simulcast horse races" means those steps taken by a race meeting


licensee to accept a wager and process it within the ordinary

 

course of its business and in accordance with this act.

 

     Sec. 20. (1) It is the policy of this state to encourage the

 

breeding of horses of all breeds in this state and the ownership of

 

such horses by residents of this state to provide for sufficient

 

numbers of high quality race horses of all breeds to participate in

 

licensed race meetings in this state; to promote the positive

 

growth and development of high quality horse racing and other

 

equine competitions in this state as a business and entertainment

 

activity for residents of this state; and to establish and preserve

 

the substantial agricultural and commercial benefits of the horse

 

racing and breeding industry to this state. It is the intent of the

 

legislature to further this policy by the provisions of this act

 

and annual appropriations to administer this act and adequately

 

fund the agriculture and equine industry programs established by

 

this section.

 

     (2) Money received by the racing commissioner and the state

 

treasurer under this act shall must be paid promptly into the state

 

treasury and placed in the Michigan agriculture equine industry

 

development fund created in subsection (3).

 

     (3) The Michigan agriculture equine industry development fund

 

is created in the department of treasury. The Michigan agriculture

 

equine industry development fund shall must be administered by the

 

director of the department of agriculture and rural development

 

with the assistance and advice of the racing commissioner.

 

     (4) Money shall must not be expended from the Michigan

 

agriculture equine industry development fund except as appropriated


by the legislature. Money appropriated by the legislature for from

 

the Michigan agriculture equine industry development fund shall

 

must be expended by the director of the department of agriculture

 

and rural development with the advice and assistance of the racing

 

commissioner to provide funding for agriculture and equine industry

 

development programs as provided in subsections (5) to (11).

 

     (5) The following amounts shall must be paid to standardbred

 

and fair programs:

 

     (a) A sum not to exceed 75% of the purses for standardbred

 

harness horse races offered by fairs and races at licensed pari-

 

mutuel racetracks. Purse supplements paid under this subdivision

 

for overnight races at fairs for which Michigan sired, Michigan

 

bred, or Michigan owned harness horses are eligible must be

 

$1,000.00. However, if the average purse offered for maiden

 

overnight races of the same breed at any licensed race meeting in

 

this state during the previous year as calculated by the department

 

of agriculture and rural development was less than $1,000.00, purse

 

supplements for overnight races at fairs paid under this

 

subdivision shall must not exceed that average purse.

 

     (b) A sum to be allotted on a matching basis, but not to

 

exceed $15,000.00 each year to a single fair, for the purpose of

 

equipment rental during fairs; ground improvement; constructing,

 

maintaining, and repairing buildings; and making the racetrack more

 

suitable and safe for racing at fairs.

 

     (c) A sum to be allotted for paying special purses at fairs on

 

2-year-old and 3-year-old standardbred harness horses conceived

 

after January 1, 1992, that is Michigan bred, or that is sired by a


standardbred stallion registered with the department of agriculture

 

and rural development, that was leased or owned by a resident or

 

residents of this state, and that did not serve a mare at a

 

location outside of this state from February 1 through July 31 of

 

the calendar year in which the conception occurred. A foal that is

 

born on or after January 1, 2002 of a mare owned by a nonresident

 

of this state and that is conceived outside of this state from

 

transported semen of a stallion registered with the department of

 

agriculture and rural development is eligible for Michigan tax-

 

supported races only if, in the year that the foal is conceived,

 

the department of agriculture and rural development's agent for

 

receiving funds as the holding agent for stakes and futurities is

 

paid a transport fee as determined by the department of agriculture

 

and rural development and administered by the Michigan harness

 

horsemen's association.Harness Horsemen's Association.

 

     (d) A sum to pay not more than 75% of an eligible cash premium

 

paid by a fair or exposition. The commission of agriculture and

 

rural development shall promulgate rules establishing which

 

premiums are eligible for payment and a dollar limit for all

 

eligible payments.

 

     (e) A sum to pay breeders' awards in an amount not to exceed

 

10% of the gross purse to breeders of Michigan bred standardbred

 

harness horses for each time the horse wins a race at a licensed

 

race meeting or fair in this state. As used in this subdivision,

 

"Michigan bred standardbred harness horse" means a horse from a

 

mare owned by a resident or residents of this state at the time of

 

conception, that was conceived after January 1, 1992, and sired by


a standardbred stallion registered with the department of

 

agriculture and rural development that was leased or owned by a

 

resident or residents of this state and that did not serve a mare

 

at a location outside of this state from February 1 through July 31

 

of the calendar year in which the conception occurred. To be

 

eligible, each mare must be registered with the department of

 

agriculture and rural development. A foal that is born on or after

 

January 1, 2002 of a mare owned by a nonresident of this state and

 

that is conceived outside of this state from transported semen of a

 

stallion registered with the department of agriculture and rural

 

development is eligible for Michigan tax-supported races only if,

 

in the year that the foal is conceived, the department of

 

agriculture and rural development's agent for receiving funds as

 

the holding agent for stakes and futurities is paid a transport fee

 

as determined by the department of agriculture and rural

 

development and administered by the Michigan harness horsemen's

 

association.Harness Horsemen's Association.

 

     (f) A sum not to exceed $4,000.00 each year to be allotted to

 

fairs to provide training and stabling facilities for standardbred

 

harness horses.

 

     (g) A sum to be allotted to pay the presiding judges and

 

clerks of the course at fairs. Presiding judges and clerks of the

 

course shall must be hired by the fair's administrative body with

 

the advice and approval of the racing commissioner. The director of

 

the department of agriculture and rural development may allot funds

 

for a photo finish system and a mobile starting gate. The director

 

of the department of agriculture and rural development shall allot


funds for the conducting of tests, the collection and laboratory

 

analysis of urine, saliva, blood, and other samples from horses,

 

and the taking of blood alcohol tests on drivers, jockeys, and

 

starting gate employees, for those races described in this

 

subdivision. The department may require a driver, jockey, or

 

starting gate employee to submit to a breathalyzer test, urine

 

test, or other noninvasive fluid test to detect the presence of

 

alcohol or a controlled substance. If the results of a test show

 

that a person has more than .05% of alcohol in his or her blood, or

 

has present in his or her body a controlled substance, the person

 

shall is not be permitted to continue in his or her duties on that

 

race day and until he or she can produce, at his or her own

 

expense, a negative test result.

 

     (h) A sum to pay purse supplements to licensed pari-mutuel

 

harness race meetings for special 4-year-old filly and colt horse

 

races.

 

     (i) A sum not to exceed 0.25% of all money wagered on live and

 

simulcast horse races in this state shall must be placed in a

 

special standardbred sire stakes fund each year, 100% of which

 

shall must be used to provide purses for races run exclusively for

 

2-year-old and 3-year-old Michigan sired standardbred horses at

 

licensed harness race meetings in this state. As used in this

 

subdivision, "Michigan sired standardbred horses" means

 

standardbred horses conceived after January 1, 1992 and sired by a

 

standardbred stallion registered with the department of agriculture

 

and rural development that was leased or owned by a resident or

 

residents of this state and that did not serve a mare at a location


outside of this state from February 1 through July 31 of the

 

calendar year in which the conception occurred. A foal that is born

 

on or after January 1, 2002 of a mare owned by a nonresident of

 

this state and that is conceived outside of this state from

 

transported semen of a stallion registered with the department of

 

agriculture and rural development is eligible for Michigan tax-

 

supported races only if, in the year that the foal is conceived,

 

the department of agriculture and rural development's agent for

 

receiving funds as the holding agent for stakes and futurities is

 

paid a transport fee as determined by the department of agriculture

 

and rural development and administered by the Michigan harness

 

horsemen's association.Harness Horsemen's Association.

 

     (6) The following amounts shall must be paid to thoroughbred

 

programs:

 

     (a) A sum to be allotted thoroughbred race meeting licensees

 

to supplement the purses for races to be conducted exclusively for

 

Michigan bred horses.

 

     (b) A sum to pay awards to owners of Michigan bred horses that

 

finish first, second, or third in races open to non-Michigan bred

 

horses.

 

     (c) A sum to pay breeders' awards in an amount not to exceed

 

10% of the gross purse to the breeders of Michigan bred

 

thoroughbred horses for each time Michigan bred thoroughbred horses

 

win at a licensed race meeting in this state.

 

     (d) A sum to pay purse supplements to licensed thoroughbred

 

race meetings for special 4-year-old and older filly and colt horse

 

races.


     (e) A sum not to exceed 0.25% of all money wagered on live and

 

simulcast horse races in Michigan shall this state must be placed

 

in a special thoroughbred sire stakes fund each year, 100% of which

 

shall must be used to provide purses for races run exclusively for

 

2-year-old and 3-year-old and older Michigan sired thoroughbred

 

horses at licensed thoroughbred race meetings in this state and

 

awards for owners of Michigan sired horses or stallions. As used in

 

this subdivision, "Michigan sired thoroughbred horses" means

 

thoroughbred horses sired by a stallion registered with the

 

department of agriculture and rural development that was leased or

 

owned exclusively by a resident or residents of this state and that

 

did not serve a mare at a location outside of this state during the

 

calendar year in which the service occurred.

 

     (7) The following amounts shall must be paid for quarter horse

 

programs:

 

     (a) A sum to supplement the purses for races to be conducted

 

exclusively for Michigan bred quarter horses.

 

     (b) A sum to pay not more than 75% of the purses for

 

registered quarter horse races offered by fairs.

 

     (c) A sum to pay breeders' awards in an amount not to exceed

 

10% of a gross purse to breeders of Michigan bred quarter horses

 

for each time a Michigan bred quarter horse wins at a county fair

 

or licensed race meeting in this state.

 

     (d) As used in this subsection, "Michigan bred quarter horse"

 

means that term as defined in R 285.817.1 of the Michigan

 

Administrative Code. Each mare and stallion shall must be

 

registered with the director of the department of agriculture and


rural development.

 

     (8) The following amounts shall must be paid for Appaloosa

 

programs:

 

     (a) A sum to supplement the purses for races to be conducted

 

exclusively for Michigan bred Appaloosa horses.

 

     (b) A sum to pay not more than 75% of the purses for

 

registered Appaloosa horse races offered by fairs.

 

     (c) A sum to pay breeders' awards in an amount not to exceed

 

10% of the gross purse to the breeders of Michigan bred Appaloosa

 

horses for each time Michigan bred horses win at a fair or licensed

 

race meeting in this state.

 

     (d) As used in this subsection, "Michigan bred Appaloosa

 

horse" means a Michigan bred appaloosa horse as that term as is

 

defined in R 285.819.1 of the Michigan Administrative Code. Each

 

mare and stallion shall must be registered with the director of the

 

department of agriculture and rural development.

 

     (9) The following amounts shall must be paid for Arabian

 

programs:

 

     (a) A sum to supplement the purses for races to be conducted

 

exclusively for Michigan bred Arabian horses.

 

     (b) A sum to pay not more than 75% of the purses for

 

registered Arabian horse races offered by fairs.

 

     (c) A sum to pay breeders' awards in an amount not to exceed

 

10% of the gross purse to the breeders of Michigan bred Arabian

 

horses for each time Michigan bred horses win at a fair or licensed

 

racetrack in this state.

 

     (d) As used in this subsection, "Michigan bred Arabian horse"


means a Michigan-bred horse as that term is defined in R

 

285.822.1(i) of the Michigan Administrative Code. Each mare and

 

stallion shall be registered with the director of the department of

 

agriculture and rural development.

 

     (10) The following sums shall must be paid for American paint

 

horse programs:

 

     (a) A sum to supplement the purses for races to be conducted

 

exclusively for Michigan bred American paint horses.

 

     (b) A sum to pay not more than 75% of the purses for

 

registered American paint horse races offered by fairs.

 

     (c) A sum to pay breeders' awards in an amount not to exceed

 

10% of the gross purse to the breeders of Michigan bred American

 

paint horses for each time a Michigan bred American paint horse

 

wins at a county fair or licensed race meeting in this state.

 

     (d) As used in this subsection, "Michigan bred American paint

 

horse" means a Michigan-bred paint horse as that term is defined in

 

R 285.823.1 of the Michigan Administrative Code.

 

     (11) The following amounts shall must be paid for the equine

 

industry research, planning, and development grant fund program:

 

     (a) A sum to fund grants for research projects conducted by

 

persons affiliated with a university or governmental research

 

agency or institution or other private research entity approved by

 

the racing commissioner, which are beneficial to the horse racing

 

and breeding industry in this state.

 

     (b) A sum to fund the development, implementation, and

 

administration of new programs that promote the proper growth and

 

development of the horse racing and breeding industry in this state


and other valuable equine-related commercial and recreational

 

activities in this state.

 

     (12) As used in subsection (11), "equine industry research"

 

means the study, discovery and generation of accurate and reliable

 

information, findings, conclusions, and recommendations that are

 

useful or beneficial to the horse racing and breeding industry in

 

this state through improvement of the health of horses; prevention

 

of equine illness and disease, and performance-related accidents

 

and injuries; improvement of breeding technique and racing

 

performance; and compilation and study of valuable and reliable

 

statistical data regarding the size, organization, and economics of

 

the industry in this state; and strategic planning for the

 

effective promotion, growth, and development of the industry in

 

this state.

 

     (13) An amount shall must be allotted annually to the racing

 

commissioner that is sufficient to pay for the collection and

 

laboratory analysis of urine, saliva, blood, and other samples from

 

horses and licensed individuals involved in horse racing on which

 

pari-mutuel wagers are made and for the conducting of tests

 

described in section 16(4).

 

     (14) Money appropriated and allotted to the Michigan

 

agriculture equine industry development fund shall must not revert

 

to the general fund and shall must be carried forward from year to

 

year until disbursed to fund grants for research projects

 

beneficial to the industry.

 

     (15) A percentage of the Michigan agriculture equine industry

 

development fund that is equal to 1/100 1/15 of 1% of the gross


wagers made each year in each of the racetracks licensed under this

 

act shall must be deposited in the compulsive gaming prevention

 

fund created in section 3 of the compulsive gaming prevention act,

 

1997 PA 70, MCL 432.253.

 

     (16) The director of the department of agriculture and rural

 

development shall promulgate rules pursuant to the administrative

 

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

 

implement this section. The rules promulgated under this subsection

 

shall must do all of the following:

 

     (a) Prescribe the conditions under which the Michigan

 

agriculture equine industry development fund and related programs

 

described in subsections (1) to (14) shall must be funded.

 

     (b) Establish conditions and penalties regarding the programs

 

described in subsections (5) to (12).

 

     (c) Develop and maintain informational programs related to

 

this section.

 

     (17) Funds under the control of the department of agriculture

 

and rural development in this section shall must be disbursed under

 

the rules promulgated pursuant to under subsection (16). All funds

 

under the control of the department of agriculture and rural

 

development approved for purse supplements and breeders' awards

 

shall must be paid by the state treasurer not later than 45 days

 

from the date of the race.

 

     (18) Purses paid under this section must be based on actual

 

purses awarded in a race. If the actual purses awarded are less

 

than the purse supplement amount requested by a fair or licensed

 

pari-mutuel racetrack at the time they applied to the department of


agriculture and rural development for the purse supplement, the

 

purse supplement paid must be the lesser amount.

 

     Sec. 22. (1) A licensed racetrack shall pay a license fee to

 

the racing commissioner of $1,000.00 annually.

 

     (2) Each holder of a race meeting license shall pay to the

 

state treasurer, from the holder's commission, including any wagers

 

processed through licensed third-party facilitators operating under

 

this act, a tax in the amount of 3.5% of money wagered on

 

interstate and intertrack simulcast races conducted at the holder's

 

licensed race meetings.

 

     (3) By eliminating the pari-mutuel wagering tax on live racing

 

programs and altering the calculation of the tax on simulcast horse

 

racing, it is not the intent of the legislature to diminish the

 

funding and appropriations for the Michigan agriculture equine

 

industry development fund and related programs described in section

 

20. The pari-mutuel tax alteration effected by this section is

 

intended to generally allow for the improvement of the pari-mutuel

 

horse racing and breeding industry in this state by increasing

 

purses at licensed race meetings and making additional pari-mutuel

 

revenues available for capital improvements at licensed racetracks

 

in this state.