SSB 3134 (LSB 5567XC (4) 86)

SENATE FILE _____

BY  (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON DANIELSON)

A BILL FOR

An Act concerning horse and dog racing, including medication requirements and penalties, and exchange wagering.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
MEDICATION REQUIREMENTS AND FINES

    Section 1.  Section 99D.2, Code 2016, is amended by adding the following new subsection:
   NEW SUBSECTION.  9A.  “Racing industry standards” means the racing standards established by a standard-setting organization that has been formally recognized by both the commission and the Iowa horsemen’s benevolent and protective association.
    Sec. 2.  Section 99D.7, subsection 4, Code 2016, is amended to read as follows:
   4.  To adopt standards under which all race meetings shall be held and, standards for the facilities within which the race meetings shall be held, and racing industry standards.
    Sec. 3.  Section 99D.7, subsection 19, Code 2016, is amended to read as follows:
   19.  To revoke or suspend licenses and impose fines not to exceed one thousand dollars. in the following amounts: 
   a.  For a violation not involving medication of a horse or dog, an amount not to exceed one thousand dollars.
   b.  For a violation involving medication of a horse or dog, an amount not to exceed the following for the following designated periods:
   (1)  For a violation occurring during the period beginning July 1, 2016, and ending December 31, 2016, two thousand five hundred dollars.
   (2)  For a violation occurring during the period beginning January 1, 2017, and ending December 31, 2017, five thousand dollars.
   (3)  For a violation occurring during the period beginning January 1, 2018, and ending December 31, 2018, seven thousand five hundred dollars.
   (4)  For a violation occurring during the period beginning January 1, 2019, and ending December 31, 2019, ten thousand dollars.
   (5)  For a violation occurring on or after January 1, 2020, an amount not to exceed an amount as determined by the commission consistent with racing industry standards for medication violations.
    Sec. 4.  Section 99D.25, subsection 1, paragraph b, Code 2016, is amended to read as follows:
   b.  “Numbing” means the applying of ice or a freezing device or substance to the limbs of a horse or dog within two hours before the start of a race, or a surgical or other procedure which was, at any time, performed in which the nerves of a horse or dog were severed, destroyed, injected, or removed.  For purposes of this paragraph, ice is not a freezing device or substance when used to reduce inflammation.
    Sec. 5.  Section 99D.25A, subsections 2 and 4, Code 2016, are amended to read as follows:
   2.  Phenylbutazone shall not be administered to a horse in dosages which would result in concentrations of more than five micrograms of the substance or its metabolites per milliliter of blood. In races recognized as graded stakes thoroughbred races, the The commission may establish restrictions on dosage amounts for phenylbutazone which would result in concentrations of less than five micrograms of the substance or its metabolites per milliliter of blood and its metabolites which are consistent with racing industry standards.
   4.  If a test detects concentrations of phenylbutazone in the system of a horse in excess of the level permitted in this section, the commission shall assess a civil penalty fine against the trainer of at least two hundred dollars for the first offense and at least five hundred dollars for a second offense. The penalty for a third or subsequent offense shall be in the discretion of the commission in an amount as provided for a medication violation in section 99D.7, subsection 19.
DIVISION II
EXCHANGE WAGERING

    Sec. 6.  Section 99D.11, subsection 6, paragraph a, Code 2016, is amended to read as follows:
   a.  All wagering shall be conducted within the racetrack enclosure where the licensed race is held, except as provided in paragraphs “b” and, “c”, and “d”.
    Sec. 7.  Section 99D.11, subsection 6, Code 2016, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  (1)  For purposes of this paragraph “d”:
   (a)  “Advance deposit exchange wagering” means a form of exchange wagering in which an individual may establish an account, deposit money into the account, and use the account balance to pay for exchange wagering.
   (b)  “Exchange wagering” means a form of pari-mutuel wagering in which two or more persons place identically opposing wagers in a given market. The wagers may be based upon a selected outcome occurring, or not occurring, in a given market.
   (2)  The commission shall authorize the licensee of the horse racetrack located in Polk county to conduct advance deposit exchange wagering through a licensed advance deposit wagering operator subject to the requirements of this paragraph “d”. An exchange wager may be placed in person at a licensed racetrack enclosure, or from any other location via a telephone-type device or any other electronic means.
   (3)  Before granting an advance deposit wagering operator licensee the authority to conduct advance deposit exchange wagering, the commission shall enter into an agreement with the licensee of the horse racetrack located in Polk county, the Iowa horsemen’s benevolent and protective association, and the advance deposit wagering operator licensee for the purpose of determining the charges and fees of any kind that may be assessed or collected by a licensee authorized to conduct advance deposit exchange wagering in connection with the submission of any exchange wagers to the licensee by residents of this state. The commission shall establish the term of the exchange wagering privilege granted an advance deposit wagering operator licensee. Such an advance deposit wagering operator licensee shall accept exchange wagers on live races conducted at the horse racetrack in Polk county from all of its account holders if it accepts wagers from any residents of this state for the purpose of exchange wagering.
   (4)  Of the net revenue, less all taxes paid and expenses directly related to advance deposit exchange wagering incurred by the licensee of the horse racetrack located in Polk county, received through advance deposit exchange wagering, fifty percent shall be designated for the horse purses created pursuant to section 99D.7, subsection 5, and fifty percent shall be designated for the licensee for the horse racetrack located in Polk county.
   (5)  An unlicensed advance deposit wagering operator or an individual taking or receiving exchange wagers from residents of this state is guilty of a class “D” felony.
   (6)  Subsections 4 and 5 of this section shall not apply to advance deposit exchange wagering.
    Sec. 8.  Section 99D.15, Code 2016, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  A tax of five percent is imposed on exchange wagering revenues at each horse race meeting. The tax imposed by this subsection shall be paid by the licensee to the commission within ten days after the close of each horse race meeting. For purposes of this subsection, “exchange wagering revenues” means all charges and fees of any kind assessed or collected by a licensee authorized to conduct advance deposit exchange wagering pursuant to section 99D.11, subsection 6, in connection with the submission of any exchange wagers to the licensee by residents of this state.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill concerns Code chapter 99D relating to pari-mutuel wagering on horse and dog races.
   Division I concerns medication requirements for a horse or dog involved in racing.
   Code section 99D.2 is amended to define “racing industry standards” as the racing standards established by a standard-setting organization recognized by the racing and gaming commission and the Iowa horsemen’s benevolent and protective association. The bill authorizes the commission to adopt racing industry standards.
   Code section 99D.7(19), concerning fines imposed by the commission, is amended. Current law provides that the maximum fine for all violations is $1,000. The bill provides that the maximum fine for a violation not involving medication of a horse or dog is $1,000. The bill provides that for a violation involving medication of a horse or dog, the maximum fine is $2,500 from July through December of calendar year 2016, $5,000 for calendar year 2017, $7,500 for calendar year 2018, $10,000 for calendar year 2019, and the amount as determined consistent with racing industry standards beginning on or after January 1, 2020.
   Code section 99D.25, concerning drugging or numbing, is amended to provide that in defining numbing, ice is not a freezing device or substance constituting numbing when used to reduce inflammation.
   Code section 99D.25A, concerning administration of furosemide or phenylbutazone, is amended to provide that the commission may establish restrictions on dosage amounts for phenylbutazone consistent with racing industry standards instead of specifying in the Code section the allowable concentration levels of the substance. The Code section is further amended to provide that the penalty assessed against a trainer for a horse with an excess concentration of phenylbutazone shall be a fine as provided for a medication violation as established in the bill.
   Division II of the bill permits exchange wagering. The bill defines “exchange wagering” as a form of pari-mutuel wagering in which two or more persons place identically opposing wagers in a given market and defines “advanced deposit exchange wagering” as exchange wagering through the establishment and use of accounts. The bill permits advanced deposit exchange wagering for the pari-mutuel licensee of the racetrack in Polk county through an advance deposit wagering licensee. The bill requires, before granting the authority to conduct advance deposit exchange wagering, an agreement between the licensee of the horse racetrack located in Polk county, the Iowa horsemen’s benevolent and protective association, and the advance deposit wagering operator for the purpose of determining the charges and fees of any kind that may be assessed in connection with the submission of any exchange wagers to the licensee by residents of this state. The bill further provides that of net revenues derived from exchange wagering, 50 percent shall be designated for horse purses and 50 percent shall be designated for the horse racetrack licensee in Polk county. The bill provides that an unlicensed advance deposit wagering operator or an individual taking exchange wagers from Iowa residents on races conducted at the horse racetrack in Polk county is guilty of a class “D” felony. 
   Code section 99D.15 is amended to provide for a tax of 5 percent on “exchange wagering revenues”, which is defined as all charges and fees of any kind assessed or collected in connection with the submission of any exchange wagers to the licensee by residents of this state.