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.