S.F. _____ DIVISION I 1 MEDICATION REQUIREMENTS AND FINES 2 Section 1. Section 99D.2, Code 2016, is amended by adding 3 the following new subsection: 4 NEW SUBSECTION . 9A. “Racing industry standards” means the 5 racing standards established by a standard-setting organization 6 that has been formally recognized by both the commission and 7 the Iowa horsemen’s benevolent and protective association. 8 Sec. 2. Section 99D.7, subsection 4, Code 2016, is amended 9 to read as follows: 10 4. To adopt standards under which all race meetings shall be 11 held and , standards for the facilities within which the race 12 meetings shall be held , and racing industry standards . 13 Sec. 3. Section 99D.7, subsection 19, Code 2016, is amended 14 to read as follows: 15 19. To revoke or suspend licenses and impose fines not to 16 exceed one thousand dollars. in the following amounts: 17 a. For a violation not involving medication of a horse or 18 dog, an amount not to exceed one thousand dollars. 19 b. For a violation involving medication of a horse or 20 dog, an amount not to exceed the following for the following 21 designated periods: 22 (1) For a violation occurring during the period beginning 23 July 1, 2016, and ending December 31, 2016, two thousand five 24 hundred dollars. 25 (2) For a violation occurring during the period beginning 26 January 1, 2017, and ending December 31, 2017, five thousand 27 dollars. 28 (3) For a violation occurring during the period beginning 29 January 1, 2018, and ending December 31, 2018, seven thousand 30 five hundred dollars. 31 (4) For a violation occurring during the period beginning 32 January 1, 2019, and ending December 31, 2019, ten thousand 33 dollars. 34 (5) For a violation occurring on or after January 1, 35 -1- LSB 5567XC (4) 86 ec/nh 1/ 6

S.F. _____ 2020, an amount not to exceed an amount as determined by 1 the commission consistent with racing industry standards for 2 medication violations. 3 Sec. 4. Section 99D.25, subsection 1, paragraph b, Code 4 2016, is amended to read as follows: 5 b. “Numbing” means the applying of ice or a freezing device 6 or substance to the limbs of a horse or dog within two hours 7 before the start of a race, or a surgical or other procedure 8 which was, at any time, performed in which the nerves of a 9 horse or dog were severed, destroyed, injected, or removed. 10 For purposes of this paragraph, ice is not a freezing device or 11 substance when used to reduce inflammation. 12 Sec. 5. Section 99D.25A, subsections 2 and 4, Code 2016, are 13 amended to read as follows: 14 2. Phenylbutazone shall not be administered to a horse in 15 dosages which would result in concentrations of more than five 16 micrograms of the substance or its metabolites per milliliter 17 of blood. In races recognized as graded stakes thoroughbred 18 races, the The commission may establish restrictions on 19 dosage amounts for phenylbutazone which would result in 20 concentrations of less than five micrograms of the substance 21 or its metabolites per milliliter of blood and its metabolites 22 which are consistent with racing industry standards . 23 4. If a test detects concentrations of phenylbutazone in 24 the system of a horse in excess of the level permitted in this 25 section , the commission shall assess a civil penalty fine 26 against the trainer of at least two hundred dollars for the 27 first offense and at least five hundred dollars for a second 28 offense. The penalty for a third or subsequent offense shall 29 be in the discretion of the commission in an amount as provided 30 for a medication violation in section 99D.7, subsection 19 . 31 DIVISION II 32 EXCHANGE WAGERING 33 Sec. 6. Section 99D.11, subsection 6, paragraph a, Code 34 2016, is amended to read as follows: 35 -2- LSB 5567XC (4) 86 ec/nh 2/ 6

S.F. _____ a. All wagering shall be conducted within the racetrack 1 enclosure where the licensed race is held, except as provided 2 in paragraphs “b” and , “c” , and “d” . 3 Sec. 7. Section 99D.11, subsection 6, Code 2016, is amended 4 by adding the following new paragraph: 5 NEW PARAGRAPH . d. (1) For purposes of this paragraph “d” : 6 (a) “Advance deposit exchange wagering” means a form of 7 exchange wagering in which an individual may establish an 8 account, deposit money into the account, and use the account 9 balance to pay for exchange wagering. 10 (b) “Exchange wagering” means a form of pari-mutuel wagering 11 in which two or more persons place identically opposing wagers 12 in a given market. The wagers may be based upon a selected 13 outcome occurring, or not occurring, in a given market. 14 (2) The commission shall authorize the licensee of the horse 15 racetrack located in Polk county to conduct advance deposit 16 exchange wagering through a licensed advance deposit wagering 17 operator subject to the requirements of this paragraph “d” . An 18 exchange wager may be placed in person at a licensed racetrack 19 enclosure, or from any other location via a telephone-type 20 device or any other electronic means. 21 (3) Before granting an advance deposit wagering operator 22 licensee the authority to conduct advance deposit exchange 23 wagering, the commission shall enter into an agreement with 24 the licensee of the horse racetrack located in Polk county, 25 the Iowa horsemen’s benevolent and protective association, and 26 the advance deposit wagering operator licensee for the purpose 27 of determining the charges and fees of any kind that may be 28 assessed or collected by a licensee authorized to conduct 29 advance deposit exchange wagering in connection with the 30 submission of any exchange wagers to the licensee by residents 31 of this state. The commission shall establish the term of the 32 exchange wagering privilege granted an advance deposit wagering 33 operator licensee. Such an advance deposit wagering operator 34 licensee shall accept exchange wagers on live races conducted 35 -3- LSB 5567XC (4) 86 ec/nh 3/ 6

S.F. _____ at the horse racetrack in Polk county from all of its account 1 holders if it accepts wagers from any residents of this state 2 for the purpose of exchange wagering. 3 (4) Of the net revenue, less all taxes paid and expenses 4 directly related to advance deposit exchange wagering incurred 5 by the licensee of the horse racetrack located in Polk county, 6 received through advance deposit exchange wagering, fifty 7 percent shall be designated for the horse purses created 8 pursuant to section 99D.7, subsection 5, and fifty percent 9 shall be designated for the licensee for the horse racetrack 10 located in Polk county. 11 (5) An unlicensed advance deposit wagering operator or an 12 individual taking or receiving exchange wagers from residents 13 of this state is guilty of a class “D” felony. 14 (6) Subsections 4 and 5 of this section shall not apply to 15 advance deposit exchange wagering. 16 Sec. 8. Section 99D.15, Code 2016, is amended by adding the 17 following new subsection: 18 NEW SUBSECTION . 5. A tax of five percent is imposed on 19 exchange wagering revenues at each horse race meeting. The tax 20 imposed by this subsection shall be paid by the licensee to the 21 commission within ten days after the close of each horse race 22 meeting. For purposes of this subsection, “ exchange wagering 23 revenues” means all charges and fees of any kind assessed or 24 collected by a licensee authorized to conduct advance deposit 25 exchange wagering pursuant to section 99D.11, subsection 6, in 26 connection with the submission of any exchange wagers to the 27 licensee by residents of this state. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill concerns Code chapter 99D relating to pari-mutuel 32 wagering on horse and dog races. 33 Division I concerns medication requirements for a horse or 34 dog involved in racing. 35 -4- LSB 5567XC (4) 86 ec/nh 4/ 6

S.F. _____ Code section 99D.2 is amended to define “racing industry 1 standards” as the racing standards established by a 2 standard-setting organization recognized by the racing and 3 gaming commission and the Iowa horsemen’s benevolent and 4 protective association. The bill authorizes the commission to 5 adopt racing industry standards. 6 Code section 99D.7(19), concerning fines imposed by the 7 commission, is amended. Current law provides that the maximum 8 fine for all violations is $1,000. The bill provides that the 9 maximum fine for a violation not involving medication of a 10 horse or dog is $1,000. The bill provides that for a violation 11 involving medication of a horse or dog, the maximum fine is 12 $2,500 from July through December of calendar year 2016, $5,000 13 for calendar year 2017, $7,500 for calendar year 2018, $10,000 14 for calendar year 2019, and the amount as determined consistent 15 with racing industry standards beginning on or after January 16 1, 2020. 17 Code section 99D.25, concerning drugging or numbing, is 18 amended to provide that in defining numbing, ice is not a 19 freezing device or substance constituting numbing when used to 20 reduce inflammation. 21 Code section 99D.25A, concerning administration of 22 furosemide or phenylbutazone, is amended to provide that the 23 commission may establish restrictions on dosage amounts for 24 phenylbutazone consistent with racing industry standards 25 instead of specifying in the Code section the allowable 26 concentration levels of the substance. The Code section 27 is further amended to provide that the penalty assessed 28 against a trainer for a horse with an excess concentration of 29 phenylbutazone shall be a fine as provided for a medication 30 violation as established in the bill. 31 Division II of the bill permits exchange wagering. The bill 32 defines “exchange wagering” as a form of pari-mutuel wagering 33 in which two or more persons place identically opposing wagers 34 in a given market and defines “advanced deposit exchange 35 -5- LSB 5567XC (4) 86 ec/nh 5/ 6

S.F. _____ wagering” as exchange wagering through the establishment and 1 use of accounts. The bill permits advanced deposit exchange 2 wagering for the pari-mutuel licensee of the racetrack in Polk 3 county through an advance deposit wagering licensee. The bill 4 requires, before granting the authority to conduct advance 5 deposit exchange wagering, an agreement between the licensee of 6 the horse racetrack located in Polk county, the Iowa horsemen’s 7 benevolent and protective association, and the advance deposit 8 wagering operator for the purpose of determining the charges 9 and fees of any kind that may be assessed in connection with 10 the submission of any exchange wagers to the licensee by 11 residents of this state. The bill further provides that of net 12 revenues derived from exchange wagering, 50 percent shall be 13 designated for horse purses and 50 percent shall be designated 14 for the horse racetrack licensee in Polk county. The bill 15 provides that an unlicensed advance deposit wagering operator 16 or an individual taking exchange wagers from Iowa residents on 17 races conducted at the horse racetrack in Polk county is guilty 18 of a class “D” felony. 19 Code section 99D.15 is amended to provide for a tax of 5 20 percent on “exchange wagering revenues”, which is defined as 21 all charges and fees of any kind assessed or collected in 22 connection with the submission of any exchange wagers to the 23 licensee by residents of this state. 24 -6- LSB 5567XC (4) 86 ec/nh 6/ 6