House Study Bill 696 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON MERTZ) A BILL FOR An Act concerning gambling and horse racing, by providing 1 for pari-mutuel wagering, purse agreements for races of 2 standardbred horses at county fairs, and county gambling 3 elections, and including effective date and retroactive 4 applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 6110HC (2) 83 ec/sc

H.F. _____ Section 1. Section 99D.11, subsection 6, paragraph b, Code 1 Supplement 2009, is amended to read as follows: 2 b. (1) The commission may authorize the licensee to 3 simultaneously telecast within the racetrack enclosure, for 4 the purpose of pari-mutuel wagering, a horse or dog race 5 licensed by the racing authority of another state. It is 6 the responsibility of each licensee to obtain the consent of 7 appropriate racing officials in other states as required by 8 the federal Interstate Horseracing Act of 1978, 15 U.S.C. 9 § 3001-3007, to televise races for the purpose of conducting 10 pari-mutuel wagering. 11 (2) A licensee may also obtain the permission of a person 12 licensed by the commission to conduct horse or dog races 13 in this state to televise races conducted by that person 14 for the purpose of conducting pari-mutuel racing. However, 15 arrangements made by a licensee to televise any race for 16 the purpose of conducting pari-mutuel wagering are subject 17 to the approval of the commission, and the commission shall 18 select the races to be televised. The races selected by the 19 commission shall be the same for all licensees approved by the 20 commission to televise races for the purpose of conducting 21 pari-mutuel wagering. The commission shall not authorize the 22 simultaneous telecast or televising of and a licensee shall 23 not simultaneously telecast or televise any horse or dog race 24 for the purpose of conducting pari-mutuel wagering unless the 25 simultaneous telecast or televising is done at the racetrack of 26 a licensee that schedules no less than sixty performances of 27 nine live races each day of the season or is done for an entity 28 licensed in another state to conduct pari-mutuel wagering and 29 such entity accepts wagers only within states in which it is 30 licensed or authorized to accept wagers . 31 (3) For purposes of the taxes imposed under this chapter, 32 races televised by a licensee for purposes of pari-mutuel 33 wagering shall be treated as if the races were held at the 34 racetrack of the licensee. Notwithstanding any contrary 35 -1- LSB 6110HC (2) 83 ec/sc 1/ 8

H.F. _____ provision in this chapter, the commission may allow a licensee 1 to adopt the same deductions as those of the pari-mutuel 2 racetrack from which the races are being simultaneously 3 telecast. 4 Sec. 2. Section 99F.6, subsection 4, paragraph a, Code 2009, 5 is amended to read as follows: 6 a. (1) Before a license is granted, the division of 7 criminal investigation of the department of public safety 8 shall conduct a thorough background investigation of the 9 applicant for a license to operate a gambling game operation 10 on an excursion gambling boat. The applicant shall provide 11 information on a form as required by the division of criminal 12 investigation. 13 (2) A qualified sponsoring organization licensed to operate 14 gambling games under this chapter shall distribute the receipts 15 of all gambling games, less reasonable expenses, charges, 16 taxes, fees, and deductions allowed under this chapter, as 17 winnings to players or participants or shall distribute the 18 receipts for educational, civic, public, charitable, patriotic, 19 or religious uses as defined in section 99B.7, subsection 3, 20 paragraph “b” . However, a licensee to conduct gambling games 21 under this chapter shall, unless an operating agreement for an 22 excursion gambling boat otherwise provides, distribute at least 23 three percent of the adjusted gross receipts for each license 24 year for educational, civic, public, charitable, patriotic, 25 or religious uses as defined in section 99B.7, subsection 3, 26 paragraph “b” . However, if a licensee who is also licensed to 27 conduct pari-mutuel wagering at a horse racetrack has unpaid 28 debt from the pari-mutuel racetrack operations, the first 29 receipts of the gambling games operated within the racetrack 30 enclosure less reasonable operating expenses, taxes, and fees 31 allowed under this chapter shall be first used to pay the 32 annual indebtedness. 33 (3) The commission shall authorize, subject to the debt 34 payments for horse racetracks and the provisions of paragraph 35 -2- LSB 6110HC (2) 83 ec/sc 2/ 8

H.F. _____ “b” for dog racetracks, a licensee who is also licensed to 1 conduct pari-mutuel dog or horse racing to use receipts from 2 gambling games within the racetrack enclosure to supplement 3 purses for races particularly for Iowa-bred horses pursuant to 4 an agreement which shall be negotiated between the licensee and 5 representatives of the dog or horse owners. For agreements 6 subject to commission approval concerning purses for horse 7 racing beginning on or after January 1, 2006, and ending 8 before January 1, 2021, the agreements shall provide that 9 total annual purses for all horse racing shall be no less than 10 eleven percent of the first two hundred million dollars of net 11 receipts, and six percent of net receipts above two hundred 12 million dollars. In addition, for agreements concerning horse 13 racing between the licensee operating the horse racetrack 14 in Polk county and representatives of standardbred horse 15 owners, the agreement shall include a supplemental amount 16 for standardbred horse races held at county fair racetracks 17 in the state, and the supplemental amount shall be included 18 in determining the total annual purses for all horse racing 19 that is required to be paid as provided by this paragraph 20 “a” . Agreements that are subject to commission approval 21 concerning horse purses for a particular period of time 22 beginning on or after January 1, 2006, and ending before 23 January 1, 2021, shall be jointly submitted to the commission 24 for approval. 25 (4) A qualified sponsoring organization shall not make a 26 contribution to a candidate, political committee, candidate’s 27 committee, state statutory political committee, county 28 statutory political committee, national political party, or 29 fund-raising event as these terms are defined in section 30 68A.102. The membership of the board of directors of a 31 qualified sponsoring organization shall represent a broad 32 interest of the communities. 33 (5) For purposes of this paragraph “a” , “net receipts” means 34 the annual adjusted gross receipts from all gambling games less 35 -3- LSB 6110HC (2) 83 ec/sc 3/ 8

H.F. _____ the annual amount of money pledged by the owner of the facility 1 to fund a project approved to receive vision Iowa funds as of 2 July 1, 2004. 3 Sec. 3. Section 99F.7, subsection 11, Code 2009, is amended 4 to read as follows: 5 11. a. A license to conduct gambling games on an 6 excursion gambling boat , gambling structure, or at a racetrack 7 enclosure in a county shall be issued only if the county 8 electorate approves the conduct of the gambling games as 9 provided in this subsection. The board of supervisors, 10 upon receipt of a valid petition meeting the requirements of 11 section 331.306, and subject to the requirements of paragraph 12 “e” , shall direct the commissioner of elections to submit 13 to the registered voters of the county a proposition to 14 approve or disapprove the conduct of gambling games on an 15 excursion gambling boat , gambling structure, or at a racetrack 16 enclosure in the county. The proposition shall be submitted 17 at an election held on a date specified in section 39.2, 18 subsection 4, paragraph “a” . To be submitted at a general 19 election, the petition must be received by the board of 20 supervisors at least five working days before the last day for 21 candidates for county offices to file nomination papers for 22 the general election pursuant to section 44.4. If a majority 23 of the county voters voting on the proposition favor the 24 conduct of gambling games, the commission may issue one or 25 more licenses as provided in this chapter. If a majority of 26 the county voters voting on the proposition do not favor the 27 conduct of gambling games, a license to conduct gambling games 28 in the county shall not be issued. 29 b. If licenses a license to conduct gambling games and to 30 operate on an excursion gambling boat are , gambling structure, 31 or at a racetrack enclosure is in effect pursuant to a 32 referendum as set forth in this section and are is subsequently 33 disapproved by a referendum of the county electorate, the 34 licenses license issued by the commission after a referendum 35 -4- LSB 6110HC (2) 83 ec/sc 4/ 8

H.F. _____ approving gambling games on an excursion gambling boats boat, 1 gambling structure, or at a racetrack enclosure shall remain 2 valid and are is subject to renewal for a total of nine 3 years one year from the date of original issue the referendum 4 disapproving the conduct of gambling games in the county unless 5 the commission revokes a license at an earlier date as provided 6 in this chapter. 7 c. If a licensee of a pari-mutuel racetrack who held a 8 valid license issued under chapter 99D as of January 1, 1994, 9 requests a license to operate gambling games as provided in 10 this chapter, the board of supervisors of a county in which 11 the licensee of a pari-mutuel racetrack requests a license to 12 operate gambling games shall submit to the county electorate a 13 proposition to approve or disapprove the operation of gambling 14 games at pari-mutuel racetracks at an election held on a date 15 specified in section 39.2, subsection 4, paragraph “a” . If the 16 operation of gambling games at the pari-mutuel racetrack is not 17 approved by a majority of the county electorate voting on the 18 proposition at the election, the commission shall not issue a 19 license to operate gambling games at the racetrack. 20 d. If the proposition to operate gambling games on an 21 excursion gambling boat or at a racetrack enclosure is 22 approved by a majority of the county electorate voting on 23 the proposition, the board of supervisors shall submit 24 the same a proposition requiring the approval or defeat of 25 gambling games to the county electorate at the general election 26 held in 2002 and, unless the operation of gambling games is 27 terminated earlier as provided in this chapter or chapter 28 99D , at the next general election held at each subsequent 29 eight-year interval no sooner than the eighth calendar year 30 following the election approving gambling games, unless the 31 operation of gambling games is terminated earlier as provided 32 in this chapter or chapter 99D . However, if a proposition 33 to operate gambling games is approved by a majority of the 34 county electorate voting on the proposition in two successive 35 -5- LSB 6110HC (2) 83 ec/sc 5/ 8

H.F. _____ elections, a proposition under this paragraph shall not 1 thereafter be required to be submitted to the electorate to 2 authorize the conduct of gambling games pursuant to this 3 chapter. 4 e. After a referendum has been held which approved 5 or defeated a proposal to conduct gambling games on excursion 6 gambling boats or which defeated a proposal to conduct gambling 7 games at a licensed pari-mutuel racetrack enclosure as provided 8 in this section, another referendum on a proposal to conduct 9 gambling games on an excursion gambling boat or at a licensed 10 pari-mutuel racetrack shall not be held for at least eight 11 years until calendar year 2015 and then may only be held every 12 eighth calendar year thereafter . However, if any proposition 13 to operate gambling games is approved by a vote in favor of 14 such proposition equal to at least sixty percent of the total 15 votes cast for and against the proposition, another referendum 16 on a proposal to conduct gambling games shall not be held until 17 calendar year 2022 and then may only be held every fifteenth 18 calendar year thereafter. 19 Sec. 4. EFFECTIVE UPON ENACTMENT AND RETROACTIVE 20 APPLICABILITY. The section of this Act amending section 21 99F.7, subsection 11, being deemed of immediate importance, 22 takes effect upon enactment and is retroactively applicable to 23 elections occurring on and after January 1, 1994. 24 EXPLANATION 25 This bill concerns gambling and horse racing by providing 26 for pari-mutuel wagering, purse agreements for races of 27 standardbred horses at county fairs, and county gambling 28 elections. 29 Code section 99D.11(6), concerning pari-mutuel wagering on 30 simultaneous telecasts of horse or dog races, is amended to 31 allow a simultaneous telecast of horse or dog races in this 32 state for pari-mutuel wagering if the telecast is done for 33 an entity licensed in another state to conduct pari-mutuel 34 wagering and the entity only accepts wagers from within states 35 -6- LSB 6110HC (2) 83 ec/sc 6/ 8

H.F. _____ in which it is authorized to accept wagers. Under current 1 law, simulcast telecasting of races can only be allowed at 2 a racetrack of a licensee that schedules no less than 60 3 performances of nine live races each day of the season. 4 Code section 99F.6 is amended to provide that agreements 5 concerning horse racing between the horse racetrack in Polk 6 county and representatives of standardbred horses shall include 7 a supplemental amount for standardbred races held at county 8 fairs which amount shall be included in determining the total 9 amount of horse purses that is required to be paid. 10 Code section 99F.7(11), concerning the requirements relative 11 to conducting a referendum to approve or disapprove gambling 12 games in a county is amended. The amended Code section 13 provides that if a proposition to operate gambling games 14 on an excursion boat, gambling structure, or racetrack has 15 been approved in two successive elections in a county, the 16 proposition to authorize gambling games is not thereafter 17 required to be submitted to the county electorate. Current law 18 provides that the proposition to conduct gambling games shall 19 be resubmitted to the county electorate every eight years. 20 The amended Code section also provides that if a proposal 21 to operate gambling games has been approved, another election 22 shall not be held sooner than the eighth calendar year 23 following the approval, but in no event prior to calendar year 24 2015, and then, may only be held each eighth year thereafter. 25 In addition, the bill provides that if any proposition to 26 conduct gambling games in a county passes with 60 percent 27 approval, then no referendum shall be held in that county until 28 calendar year 2022, and then may only be held each fifteenth 29 calendar year thereafter. The provision that the county may 30 hold a referendum on the proposition to conduct gambling games 31 upon submission of a petition from the county electorate is 32 maintained but is made subject to the bill’s requirements on 33 when elections can be held. Current law provides that no 34 election shall be held for eight years after a proposal has 35 -7- LSB 6110HC (2) 83 ec/sc 7/ 8

H.F. _____ been defeated but is silent as to when an election can be held 1 if the proposal to conduct gambling games has been approved. 2 The amended Code section also provides that if gambling 3 games are authorized in a county but a subsequent referendum 4 to conduct gambling games has been defeated, any license to 5 conduct gambling games in that county shall remain valid for 6 one year following the defeat of the referendum. Current 7 law provides that the license remains valid for nine years 8 following the date of the original issue of a license to 9 conduct gambling games in that county. 10 The amendments to Code section 99F.7(11) take effect 11 upon enactment and are retroactively applicable to elections 12 occurring on and after January 1, 1994. 13 -8- LSB 6110HC (2) 83 ec/sc 8/ 8