SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2440

The Commonwealth of Massachusetts

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In the One Hundred and Eighty-Ninth General Court
(2015-2016)

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at the end thereof by adding the following new section:-

“SECTION A4.  Section 7 of chapter 4 of the General Laws, as appearing in the 2014 Official Edition, is hereby amended by striking out clause Tenth and inserting in place thereof the following clause:-

Tenth, “Illegal gaming”, a banking or percentage game played with cards, dice, tiles or dominoes or an electronic, electrical or mechanical device or machine for money, property, checks, credit or any representative of value, but excluding: (i) a lottery game conducted by the state lottery commission under sections 24, 24A and 27 of chapter 10; (ii) a game conducted under chapter 23K; (iii) pari-mutuel wagering on horse races and greyhound races under chapter 128D; (iv) a game of bingo conducted under chapter 271; and (v) charitable gaming conducted under said chapter 271.; and by inserting after section 24 the following 3 sections:-

“SECTION 24A. Section 7 of chapter 23K of the General Laws is hereby repealed.

SECTION 24B. Section 60 of chapter 23K of the General laws is hereby repealed. 

SECTION 24C.  Chapter 29 of the General Laws is hereby amended by striking out section 2III, as appearing in the 2014 Official Edition, and inserting in place thereof the following section:-

            Section 2III. There shall be an Agricultural Resolve and Security Fund. The money in the fund shall be expended to foster agriculture as defined in section 1A of chapter 128 and for furthering other purposes and programs of the department of agricultural resources as set forth in any general or special law including, but not limited to: (i) agricultural education; (ii) support for sustainable agriculture and pollution prevention; (iii) agricultural integrated pest management programs; (iv) agricultural land preservation; (v) control of animal diseases; (vi) emergency preparedness; (vii) agricultural innovation and education; (viii) the agricultural food safety improvement program; (ix) the farm viability enhancement program; and (x) the urban agriculture program.

            The fund may receive money from: (i) gifts, grants and donations from public or private sources; (ii) federal reimbursements and grants-in-aid; (iii) amounts credited to the fund from the Horse Racing Development Fund pursuant to section 8 of chapter 128D; (iv) any appropriations authorized by the general court and specifically designated to be credited to the fund; and (v) any interest earned from the fund. The state treasurer shall be the custodian of the fund and shall receive, deposit and invest all money transmitted under this section to ensure the highest interest rate available consistent with the safety of the fund. The books and records of the fund shall be subject to an annual audit by the state auditor. The department of agricultural resources may expend money in the fund and no expenditure from the fund shall cause it to be in deficiency at the close of a fiscal year. The commissioner of agricultural resources shall report annually to the house and senate committees on ways and means and the joint committee on environment, natural resources and agriculture on income received into the fund and sources of that income, any expenditure from the fund and the purpose of that expenditure and the fund’s balance. Money in the fund at the end of a fiscal year shall not revert to the General Fund and shall be available for expenditure in the subsequent year and shall not be subject to section 5C of chapter 29.”; and

by inserting after section 40 the following 4 sections:-

“SECTION 40A. Chapter 128A of the General Laws is hereby repealed.

SECTION 40B.   Section 6 of chapter 128C of the General Laws, as appearing in the 2014 Official Edition, is hereby amended by striking out the words “two and one-half percent", wherever appearing, and inserting in place thereof the following words: “three-eights of one percent”.

SECTION 40C.  Said chapter 128C is hereby repealed.”; and

SECTION 40D. The General Laws are hereby amended by inserting after chapter 128C the following chapter:-

CHAPTER 128D.

HORSE RACING AND WAGERING

Section 1.   The following words shall have the following meanings unless the context clearly requires otherwise:

“Advance deposit wagering”, a form of pari-mutuel wagering in which an individual may deposit money into an account established through an agreement with a holder of a racing meeting license or simulcasting license and use the account balance to make and pay for wagers by the holder of the account to the licensee either in person, by direct telephone call or by communication through electronic media.

“Breaks'', in the case of live horse racing meetings conducted by a racing meeting licensee, the odd cents over any multiple of $.10 of winnings per $1 wagered; provided, however, that in the case of a live horse racing meeting conducted at a race track outside the commonwealth, the amount of the breaks shall be determined in accordance with the laws of the state in which the race track is located.

''Commission'', the Massachusetts gaming commission established in chapter 23K.

“Exotic wager”, a bet on the speed or ability of more than 1 horse in a single race.

''Guest track'', a racing meeting licensee or an out-of-state pari-mutuel wagering facility which accepts a simulcast wager on a live race conducted at another track which is presented by simulcast at the facility of the racing meeting licensee or the out-of-state pari-mutuel wagering facility.

''Host track'', a racing meeting licensee or an out-of-state track which conducts a live race which is the subject of intertrack simulcasting and simulcast wagering.

“Pari-Mutuel wagering”, a form of wagering on the outcome of an event in which all wagers are pooled and held by an association for distribution of the total amount, less the deductions authorized by law, to holders of tickets on the winning contestants.

''Premium'', the amount paid to a racing meeting licensee in addition to a host track fee for purposes of providing a simulcast signal.

''Race track'', a track where live horse racing meetings are held including, but not limited to, grounds, auditoriums, amphitheaters and  bleachers, if any, and adjacent places used in connection therewith.

“Racing license”, an authorization awarded by the commission under specified conditions to accept wagers on live horse racing meetings conducted on licensed premises in the commonwealth.

''Rebate'', a portion of pari-mutuel wagers, otherwise payable to a racing licensee, that is paid to a holder of a pari-mutuel wagering ticket and that reduces the amount otherwise payable to the licensee.

''Simulcast'', the broadcast, transmission, receipt or exhibition, by any medium or manner, of a live race conducted live at a race track other than the 1 at which it is being exhibited at, whether inside or outside the commonwealth, including, but not limited to, a system, network or programmer which transmits or receives television or radio signals by wire, satellite or otherwise.

“Simulcasting license”, an authorization awarded by the commission under specified conditions to accept simulcast wagers.

“Takeout”, money deducted from a pari-mutuel wager as required by the commission prior to the payment of winnings.

Section 2.  The commission shall have all powers necessary or convenient to effectively regulate horse racing, simulcasting and pari-mutuel wagering including, but not limited to, the power to adopt, amend or repeal regulations for the implementation, administration and enforcement of this chapter. The commission shall not issue a prohibition on horse racing or simulcasting, or related wagering thereon; provided, however, that the commission may use its powers to act on each individual licensing decision or in all other decisions in the best interest of horse racing with the object of promoting its efficient operation and the honesty and integrity of the wagering process related to it.

The commission shall administer and enforce any general and special law related to pari-mutuel wagering and simulcasting. The commission shall serve as a host racing commission and an off-track betting commission for purposes of 15 U.S.C. 3001, et seq. The commission shall have all requisite powers afforded in accordance with section 4 of chapter 23K.  The power and authority granted to the commission shall be construed as broadly as necessary for the implementation, administration and enforcement of this chapter.

Section 3.  (a) The commission shall promulgate regulations for the implementation, administration and enforcement of this chapter including, without limitation, regulations that:

(i)prescribe the application process and criteria for evaluation of the application and renewal for a racing license; provided, however, that in determining whether to award or renew a racing license, the commission shall take into consideration the physical location of the race track as it relates to other proposed or licensed race tracks, whether the race track will maximize benefits to the commonwealth, the support or opposition to each applicant from the public and any other considerations deemed relevant by the commission;

(ii)prescribe the process and criteria for evaluation of the application and renewal of a simulcasting license; provided, however, that a simulcasting license shall be limited to a racing meeting licensee, a gaming licensee licensed pursuant to chapter 23K at a gaming establishment, and an entity licensed as of June 1, 2016 and, in granting a simulcasting license to a gaming licensee, the commission shall take into consideration the impact on horse racing or simulcasting facilities licensed as of June 1, 2016;

(iii)prescribe the minimum number of live racing days required to be held by a racing meeting licensee;

(iv)prescribe rules governing live horse racing, pari-mutuel wagering, simulcasting and simulcast wagering;

(v) prescribe requirements that may direct a percentage of wagering received on in-state and out-of-state thoroughbred and harness races to the Race Horse Development Fund established in section 8 to support purse assistance and breeding programs;

(vi)prescribe the amount and manner that premiums will be assessed upon a racing meeting and simulcasting licensee;

(vii)prescribe the amount and manner of takeouts;

(viii)prescribe procedures and requirements for the use of breaks and unclaimed wagers;

(ix)establish uniform standards and requirements for horse racing including, but not limited to, safety standards for horses, jockeys, drivers and other participants and drug testing; 

(x)prescribe the types of allowable wagers;

(xi)prescribe procedures for the use of advance deposit wagering accounts, rebates and rewards;

(xii)prescribe the manner in which judges, stewards and race officials shall be qualified and appointed;

(xiii)develop procedures for the voluntary and involuntary exclusion of patrons from a race track in a manner consistent with section 45 of said chapter 23K;

(xiv)require racing meeting licensees and simulcasting licensees to develop protocols to prevent underage wagering and establish security procedures for ensuring the safety of minors at race tracks;

(xv)prescribe the minimum internal control procedures for racing meeting licensees and simulcasting licensees, including those for effective control over the internal fiscal affairs of a licensee and including provisions for implementation of a uniform standard of accounting, 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 by the commission;

(xvi)establish licensure and registration procedures for employees of racing meeting licensees and simulcasting licensees not working at a gaming establishment pursuant to said chapter 23K;

(xvii)establish licensure and registration provisions for veterinarians performing work at race tracks, blacksmiths, owners, trainers, jockeys and stable employees;

(xviii)require that all employees of a racing meeting licensee and simulcasting licensee who have racing responsibilities, including financial responsibilities, to be properly trained in their respective professions;

(xix)establish procedures governing the operation of the Race Horse Development Fund established in section 8;

(xx) prescribe grounds and procedures for the revocation, suspension and discipline of all licenses and registrations issued by the commission; 

(xxi)prescribe the allocation of funds from racing meeting licensees and simulcast licensees for the purpose of funding the activities of the commission relative to racing; and

(xxii)prescribe any other rules related to the honest conduct of horse racing, simulcasting and wagering related to horse racing and simulcasting. 

Section 4. The commission may inspect and shall have access to the entire race track and premises associated therewith upon which activity is conducted pursuant to a racing meeting license or a simulcasting license issued in accordance with this chapter and chapter 23K, including all records, documents, systems, equipment and supplies on the premises.

Section 5. The commission shall audit, as often as the commission determines necessary, the accounts, programs, activities and functions of all racing meeting licensees and simulcasting licensees. To conduct the audit, authorized officers and employees of the commission shall have access to all accounts at reasonable times and the commission may require the production of books, documents, vouchers and other records relating to any matter within the scope of the audit. 

Section 6.  Each racing meeting licensee and simulcasting licensee shall make readily available to the commission all documents, materials, equipment, personnel and any other items requested during an investigation; provided, however, that material that a racing meeting licensee or simulcasting licensee considers a trade secret may, with the commission's approval, be protected from public disclosure and the licensee may require nondisclosure agreements with the commission before disclosing such material.

Section 7. The commission shall establish application fees for all licenses, approvals and renewals awarded under this chapter which may include costs incurred for conducting a background investigation into an applicant.  The commission may seek reimbursement from an applicant for any costs of investigation in excess of the initial application or renewal fee. 

Section 8.  (a) There shall be a Race Horse Development Fund to be administered by the commission which shall be used to support the best interest of the horse racing industry, its participants and the agricultural and equine economy. The fund shall consist of money deposited pursuant to subsection (c) of section 55 of chapter 23K, subclause (l) of clause (2) of section 59 of said chapter 23k and any money credited to or transferred to the fund from any other fund or source, including grants, gifts and donations. Amounts credited to the fund shall be expended:

(i) to fund purses for licensed live horse racing meetings;

(ii) to support the general welfare of the race horsing and race simulcasting industry in the commonwealth;

(iii) for a commission program that supports health, pension, life insurance and other benefits deemed appropriate by the commission for owners, trainers, breeders, jockeys, drivers and others associated with horse racing;

(iv) in consultation with the equine advisory committee established in section 6B of chapter 20, to support the equine economy which shall include, but not be limited to, commonwealth-bred thoroughbred and standardbred horses and veterinary medicine including, but not limited to Tufts University School of Veterinary Medicine, equine care, open space preservation and equestrian sport and therapeutic programs; and

(v)  to support the Agricultural Resolve and Security Fund established in section 2III of chapter 29; and

(v) to support the department of public health for assistance with problem gambling research, prevention, and treatment programs.

The commission shall ensure that not less than 50 per cent of amounts credited to the fund are available for purses under clause (i) in any year when the live race horse industry is sufficient to sustain those purse funds.  No expenditure from the fund shall cause it to be in deficiency at the close of a fiscal year.

Section 9.  (a) A racing meeting licensee that conducts pari-mutuel betting on horse races that it conducts on a licensed race track shall distribute all sums deposited in a pari-mutuel pool to the holders of winning tickets therein, less any takeouts as determined by the commission. 

(b) A simulcasting licensee acting as a guest track shall return to the winning patrons wagering on simulcast races all sums so deposited as an award or dividend, less any takeouts as determined by the commission.

Section 10.  Notwithstanding this chapter or any other general or special law to the contrary, no live dog racing meeting where any form of betting or wagering on the speed or ability of dogs occurs shall be conducted or permitted and the commission shall not accept or approve an application or request for racing dates for dog racing.

Any person who violates this section relative to dog racing shall be subject to a civil penalty of not less than $20,000 which shall be payable to the commission and used for administrative purposes of the commission.

Section 11.  Any person who accepts or pays out a wager or bet on the results of any horse race or dog race or aids or abets any of the foregoing types of wagering or betting, except as authorized by this chapter, shall, for a first offense be punished by a fine of not more than $2,000 or imprisonment in the house of correction for not more than 1 year, or both such fine and imprisonment and, for a second or subsequent offense, by a fine of not more than $10,000 or imprisonment in the house of correction for not more than 2 years, or both such fine and imprisonment.

Section 12.  The gaming commission shall provide an annual report of activity conducted pursuant to this chapter.  The report shall include, but not be limited to, an analysis of commission activities designed to further the race horse industry and equine economy; a full and complete statement of revenues, expenditures, and the balance of the Race Horse Development Fund; an accounting of funds received from racing licensees and simulcast licensees for the purpose of funding the activities of the commission; and an accounting of projected expenditures from the Race Horse Development Fund in the next year.  The report shall be made available on the commission’s website and filed annually with the clerks of the house of representatives and the senate, the chairs of the house and senate committees on ways and means and the chairs of the joint committee on economic development and emerging technologies not later than March 1.”; and by inserting after section 77 the following 5 sections:-

“SECTION 77A. All monies in the Race Horse Development Fund on the effective date of this act pursuant to section 60 of chapter 23K of the General Laws shall be transferred to the Race Horse Development Fund established in section 8 of chapter 128D of the General Laws.  On and after the effective date of this act, all funds directed by any general or special law to be deposited in the Race Horse Development Fund established in said section 60 of said chapter 23K shall be deposited into the Race Horse Development Fund established in said section 8 of said chapter 128D.

SECTION 77B.  Notwithstanding any general or special law to the contrary, facilities licensed pursuant to chapters 128A and 128C as of June 30, 2016 shall be considered licensed and upon applying for continuation of a license to conduct operations shall be subject to the process and criteria for evaluation developed by the commission for a renewal of the license. 

SECTION 77C  Notwithstanding any general or special law to the contrary the Massachusetts Gaming Commission shall consider licensees requests for additional race days during calendar year 2016.

SECTION 77D.  Notwithstanding section 80A, the payment required by section 40B shall not be increased.

“SECTION 77E.  Section 77D is hereby repealed.”; and

by inserting after section 79 the following section:-

“SECTION 79A.  Sections A4, 24A to 24C, inclusive, 40A and 40C shall take effect on July 31, 2016.”; and

by inserting after section 80 the following section:-

“SECTION 80D.  Section 77E shall take effect on December 31, 2016.”