MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Ways and Means

By: Representative Smith (27th)

AN ACT TO LEGALIZE PARI-MUTUEL WAGERING ON HORSE RACES; TO CREATE THE MISSISSIPPI HORSE RACING COMMISSION; TO PROVIDE FOR A LOCAL ELECTION ON THE ISSUE OF WHETHER HORSE RACING SHALL BE CONDUCTED IN THE LOCALITY; TO SET FORTH THE DUTIES OF THE COMMISSION; TO PROVIDE FOR THE OPERATION OF A RACETRACK OR RACE MEETING SCHEDULE; TO AUTHORIZE THE COMMISSION TO PROMULGATE RULES ON PARI-MUTUEL WAGERING; TO PROVIDE THAT THE PROVISIONS OF THIS ACT SHALL NOT APPLY TO CERTAIN RACES; TO PROVIDE FOR THE METHOD OF PARI-MUTUEL WAGERING; TO PROVIDE FOR DISTRIBUTION OF FUNDS; TO AUTHORIZE CERTAIN FUNDS TO BE DEPOSITED IN A TRUST FUND; TO PROVIDE THAT A PERSON SHALL BE GUILTY OF A MISDEMEANOR FOR CONDUCTING WAGERING NOT AUTHORIZED BY THIS ACT; TO PROVIDE THAT ANY PERSON WHO ENGAGES IN THE PRACTICE OF GAMBLING SHALL BE INELIGIBLE TO OPERATE A RACETRACK; TO PROVIDE THAT A PERSON SHALL BE GUILTY OF A FELONY FOR PREARRANGING RESULTS OF A RACE; TO PROVIDE THAT A PERSON SHALL BE GUILTY OF A FELONY FOR UNLAWFUL TRANSMISSION OF RACE RESULTS; TO PROVIDE THAT A PERSON SHALL BE GUILTY OF A MISDEMEANOR FOR UNLAWFULLY PURCHASING PARI-MUTUEL TICKETS; TO RESTRICT MINORS FROM RACES; TO AUTHORIZE THE COMMISSION TO APPROVE COMPUTATIONAL EQUIPMENT; TO ALLOW THE COMMISSION TO EMPLOY SECURITY FORCES; TO ALLOW THE COMMISSION TO ADOPT REGULATIONS PROHIBITING THE USE OF DRUGS ON THE ANIMALS; TO PROVIDE THAT CERTAIN INDIVIDUALS ARE NOT LIABLE FOR ENFORCEMENT OF THIS ACT; TO AUTHORIZE THE COMMISSION TO REVOKE OR SUSPEND AN ASSOCIATION'S CERTIFICATION FOR FAILURE TO COOPERATE WITH THE COMMISSION; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act legalizes wagering on horse races under the form of mutuel wagering by patrons known as "pari-mutuel wagering" to the extent that the wagering is conducted strictly in conformity with this act.

SECTION 2. (1) There is created the Mississippi Horse Racing Commission, referred to in this act as "commission," composed of three (3) commissioners, each being residents of the state for at least ten (10) consecutive years immediately before appointment. The Governor, Lieutenant Governor and State Auditor shall each appoint one (1) commissioner. The Governor's initial appointee shall serve a term of two (2) years; the Lieutenant Governor's initial appointee shall serve a term of four (4) years; and the State Auditor's initial appointee shall serve a term of six (6) years. Commissioners appointed upon the expiration of the initial terms of service shall serve for a term of six (6) years. Commissioners are eligible for reappointment to the commission. Vacancies on the commission shall be filled by the appointing authority for the unexpired term. Any person who owns any financial interest in a racetrack or its operation is ineligible to serve on the commission. The commission shall cease to exist if the local option referendum on horse racing is disapproved in all counties.

(2) Each commissioner is entitled to per diem compensation in accordance with Section 25-3-69 for each day or portion thereof in performing his duties and to reimbursement for actual and necessary expenses incurred in performing his duties.

(3) The commission shall elect one (1) of the members as chairman for a two-year period. The commission shall hold at least six (6) regular meetings per year and may adopt rules providing for special meetings. A majority of the members constitutes a quorum for the transaction of business. All votes by the commission shall be recorded on its minutes.

(4) The commission may employ an executive secretary and other necessary personnel. No person who owns a financial interest in a racetrack, who accepts any remuneration from a racetrack or who owns a horse that races in Mississippi, may be employed by the commission, and no person related to any such person may be employed by the commission. The executive secretary shall serve at the will and pleasure of the commission. The Office of the Attorney General may counsel and represent the commission in legal proceedings.

SECTION 3. Upon the submission of a petition signed by at least two thousand (2,000) or fifteen percent (15%) of the qualified electors of a county, the commission shall authorize the circuit clerk of the county to hold an election on the proposition of horse racing in the county. The referendum shall be held not less than thirty (30) days nor more than sixty (60) days after the legally obtained signatures or percentages are presented to the commission. The referendum shall be advertised, held, conducted and the result thereof canvassed in the manner provided by law for advertising, holding and canvassing county elections. The question to be voted on shall be stated on the ballots or voting machine tabs substantially as follows:

"Do you favor the creation of a pari-mutuel racing of

horses?"

If the majority of the votes cast in the referendum is "Yes," (a) horse racing is legal in that county and this act is operative therein; and (b) a three-person county commission shall be appointed by the board of supervisors for a term concurrent with the term of the board of supervisors to assist the state racing commission in operational matters. If the vote is "No," this act has no further effect in the county where the election is held.

SECTION 4. (1) The commission shall carry out the provisions of this act, and it shall have the following specific duties:

(a) To make rules governing the employment of all persons connected with racetracks, including gatekeepers, announcers, ushers, starters, officials, drivers, owners, agents, trainers, jockeys, grooms, stable foremen, exercise boys, veterinarians, valets, sellers of racing forms or bulletins, and attendants in connection with the wagering machines;

(b) To make rules governing, permitting and regulating the wagering on races under the form of mutuel wagering by patrons known as "pari-mutuel wagering";

(c) To fix and set dates upon which race meetings may be held or operated;

(d) To make an annual report to the Legislature, showing its own actions and rulings, and receipts derived under the provisions of this act, and such suggestions as it may deem proper for the more effective accomplishment of the purposes of this act;

(e) To require each applicant to set forth on the application for authority to operate a race meeting the following information:

(i) The full name of the person, association or corporation, and if a corporation, the name of the state under which it is incorporated, a certified copy of its charter and bylaws, and the name of the corporation's agent for service of process within the State of Mississippi;

(ii) If an association or corporation, the names of the stockholders and directors of the corporation or the names of the officers and directors of the association or of any person having a financial interest in the corporation or association. It is the intent of this requirement that the financial interests of all natural persons be revealed and not be hidden behind a corporate structure;

(iii) The exact location where the applicant desires to conduct or hold a race meeting and a complete set of an architect's renderings and detailed construction plans, showing the site topography, the type of construction, the track design and the concession plans;

(iv) Whether the racing track is owned or leased, and if leased, the name and address of the owner, or if the owner is a corporation, the names of the officers and directors thereof;

(v) The kind of racing to be conducted and the dates upon which racing is requested to be conducted; and

(vi) Such other information as the commission may require;

(f) To require an oath of every applicant, or of the president or executive officer of the association or corporation, stating that the information contained in the application is true;

(g) To make uniform rules and regulations governing the operation of all racetracks, race meetings and races in the county;

(h) To compel the production of any and all books, memoranda or documents showing the receipts and disbursements of any person, association or corporation authorized to conduct race meetings under the provisions of this act;

(i) To require the removal of any employee or official employed by any operator authorized hereunder whenever it has reason to believe that such employee or official is guilty of any improper practice in connection with racing or has failed to comply with any rule adopted by the commission;

(j) To require that the books and financial or other statements of any operator be kept in a manner and method prescribed by the commission;

(k) To visit, investigate and place auditors and inspectors in the offices, tracks or place of business of any person, association or corporation operating under the jurisdiction of the commission;

(l) To summon witnesses before its meetings, to administer oaths to such witnesses and to require testimony on any issue before it; and

(m) To employ such assistants and employees as may be necessary and to prescribe their compensation and duties.

(2) Any person failing to appear before the commission, or failing to produce books, records and documents ordered, or refusing to testify thereon, shall be deemed guilty of a misdemeanor, and upon conviction thereof, shall be punished by a fine of not more than Five Hundred Dollars ($500.00), or by imprisonment not to exceed six (6) months, or by both.

(3) Nothing in this act prevents any person, association or corporation from applying to the commission for a permit to conduct races at a location where the racing track has not been constructed.

(4) (a) Each person authorized to operate a race meeting pursuant to this act and each owner or lessor of a racing track under the jurisdiction of the commission must be a bona fide resident of the State of Mississippi for a period of not less than five (5) years immediately preceding the date of application for such authority.

(b) Each director, officer, general partner, principal or other individual having a substantial financial interest in a corporation, partnership, limited partnership or other entity that is authorized to operate a race meeting in accordance with this act, or is the owner or lessor of a racing track under the jurisdiction of the commission, must be a resident of the State of Mississippi for a period of not less than five (5) years immediately preceding the date of application for such authority.

(c) Each individual subject to the provisions of this subsection must file with the commission a statement disclosing economic interest and financial activities in such form and at such times as may be required by the commission.

(5) The commission shall adopt a schedule of fees. In addition to any fee or schedule of fees for employee permits, premises license or other activity charged by the commission, the commission shall require a fee from each applicant for a license to operate a race meeting which will defray the initial expenses of the commission. The fee shall be payable upon application and periodically thereafter in an amount to be established by the commission. Additional assessments may be made at any time on order of the commission in order to fund the commission's operations, including funds for the investigation of applicants. In the event there is more than one (1) applicant or licensee, the fees and assessments shall be apportioned in an equitable manner among the licensees and applicants pursuant to rules adopted by the commission.

All operations of the commission shall be funded by periodic assessment of permit holders, license fees, permit fees and other similar premises licenses. All funds derived from such fees shall be deposited in a special account created in the State Treasury entitled the "Mississippi Horse Racing Commission Fees Fund."

SECTION 5. (1) The commission may not authorize the operation of a racetrack or race meeting schedule for a period of more than twelve (12) consecutive months by any one (1) entity. The commission may not deny unreasonably the continued operation of a horse racetrack or horse meeting without good cause. Authority granted to any entity under this act is not transferable to any other place, track or enclosure, except as may be specified in the application.

(2) The commission may not authorize two (2) horse racetracks or horse race meetings to operate on the same racing days.

(3) The commission may suspend or revoke its authorization to any person conducting a horse race meeting in violation of any of the provisions of this act, of any statute or ordinance, or of any rule or regulation promulgated by the commission, or it may invoke a civil penalty not to exceed One Thousand Dollars ($1,000.00) per offense in lieu thereof.

SECTION 6. The commission shall make rules regulating the wagering on horse races under the form of mutuel wagering by patrons known as "pari-mutuel wagering," which method is legal to the extent that it is conducted strictly in conformity with this act; however, trifecta wagering shall be prohibited. Only the persons, associations or corporations specifically granted the requisite authority by the commission have the right or privilege to conduct pari-mutuel wagering. Such authorization shall restrict and confine this form of wagering to a space within the horse race meeting grounds. All other forms of wagering on the result of races are illegal, and any wagering outside of the enclosure of such horse races is illegal.

SECTION 7. The provisions of this act do not apply to the running of horse races wherein wagering is not conducted, or to the running of horse races conducted by a state fair association or county fair association that holds not more than one (1) meeting annually and that restricts such annual meeting to fourteen (14) days or less.

SECTION 8. (1) The authorized operator of a pari-mutuel pool may take out seventeen percent (17%) of the total amount contributed to the pari-mutuel pool for win, place and show wagering and twenty-five percent (25%) on all other forms of pari-mutuel wagering.

(2) From the funds taken out as authorized in subsection (1) of this section, every entity conducting horse race meetings under the provisions of this act shall pay to the treasurer of the commission an amount equal to forty percent (40%) of the total amount contributed to all wagering pools conducted or made under this act. The remainder of the funds taken out as authorized in subsection (1) of this section shall be divided as follows: thirty percent (30%) for purses for horses; twenty-eight percent (28%) to the authorized operator; and two percent (2%) to an award fund for Mississippi horse breeders as created in subsection (4) of this section.

(3) After the deduction of the funds taken out as authorized in subsection (1) of this section, the remainder of the total contributions to each pool shall be divided among and redistributed to the contributors to such pools betting on the winning animals. The amount of each redistribution for each winning bet placed shall be determined by dividing the total amount remaining in the pool, after the deductions set forth in subsections (1) and (2) of this section are made, by the number of bets placed on the winning animal. Each redistribution shall be made in a sum equal to the next lowest multiple of ten (10). The operator may retain the odd cents on all redistributions to be known as the "breaks to a dime." Under the pari-mutuel system of wagering herein provided, the operator may provide separate pools for bets to win, place and show, for daily double, and for exactas. Each pool shall be redistributed separately as herein provided. Should there be no ticket bet on the winning animal, the entire pool shall be divided among the holders of tickets on the animal running next in line until the pool has been redistributed to the contributors. The operator must use a totalizator machine or a machine or device having similar functions and capabilities to record the wagering and compute the odds. Rules and regulations governing the operation of each of the pools shall be set out in book form by the commission.

(4) (a) The commission shall establish an award fund for Mississippi horse breeders and funds shall be paid to the treasurer of the commission and deposited into the separate fund as provided in subsection (2) of this section.

(b) The commission shall establish a system of awards to the owners of sires and dams of Mississippi-bred horses and, by rule, shall provide for the designation, registration and certification of Mississippi-bred horses.

(c) The awards shall be distributed to the owner or owners of the sire and dam of any Mississippi-bred horse winning at a race meeting under the jurisdiction of the commission.

(d) The commission shall establish a separate account in such fund for the several breeds of horses which are raced under its jurisdiction and for the administration of this subsection.

(e) The commission is further authorized to adopt such bylaws, rules and regulations as may be necessary to carry out the provisions of this subsection (4) and may charge a separate registration fee for participation in the fund.

SECTION 9. (1) All funds received by the commission under the provisions of this act, except fees and assessments authorized in Section 4(5) of this act, shall be paid into a special account created in the State Treasury entitled the "Mississippi Horse Racing Commission Operations Fund."

(2) All monies remaining after payment of the expenses incurred in the administration of this act, including the payment of the salaries and expenses of the members and employees of the commission, shall be distributed monthly, as follows:

(a) With respect to a county of the state where there exists a substantial interest in horse breeding and a substantial number of breeders of racing horses, which is bordered by a jurisdiction in which pari-mutuel wagering is allowed, which is in an area in which resort trade and tourism are actively promoted, which consists of a population in excess of seventy-five thousand (75,000) according to the 1990 federal decennial census, and in which there are at least three (3) municipalities,

(i) Fifty percent (50%) to the trust fund described in Section 10 of this act;

(ii) Five percent (5%) to the mental health/retardation commissioner of such county for expenditure authorized by Section 41-19-33;

(iii) Five percent (5%) to the county and municipalities located therein for the purpose of law enforcement, to be divided among the county and municipalities located therein on a proportionate basis according to the total population of the entities as shown by the 1990 federal decennial census, with the population of the county being determined by counting only the number of residents of the county living outside the area of any incorporated municipality and with all of the funds so distributed to be deposited in the general fund of the respective county or municipality;

(iv) Five percent (5%) to any municipal policemen's and firemen's retirement and disability fund of the county, to be divided as nearly as possible in the manner described in subsection (2)(a)(iii) of this section;

(v) Five percent (5%) to the junior college district in which the county is located for supplemental expenditures in the county;

(vi) Two and one-half percent (2-1/2%) to the county and municipalities located therein for the support of public libraries, to be divided among the county and municipalities located therein in the same manner as provided in subsection (2)(a)(iii) of this section for law enforcement purposes;

(vii) Ten percent (10%) to the county and municipal public school districts for general support, to be divided among the county school district and municipal school districts located in such county on a proportionate basis according to the student enrollment in such districts on the preceding October 1;

(viii) Ten percent (10%) to the county and municipal public school districts for teacher salary increases, to be divided among the county school district and municipal school districts located in such county on proportionate basis according to the number of teachers employed in such districts;

(ix) Two and one-half percent (2-1/2%) to the volunteer fire departments in the county divided pro rata on the basis of population of service area; and

(x) Five percent (5%) to any county hospital or publicly funded hospital serving the county designated by the commission for the operation of an alcohol and drug treatment center.

(b) With respect to a county of the state in which there is no substantial nonagricultural economic activity, which is bordered by a jurisdiction in which pari-mutuel wagering is allowed, which consists of a population of more than five thousand (5,000) but not more than ten thousand (10,000) according to the 1990 federal decennial census, and in which there is not more than one (1) municipality,

(i) Fifty percent (50%) to the trust fund described in Section 10 of this act;

(ii) The remainder to be divided as follows:

1. Thirty-three and one-third percent (33-1/3%) to the county and municipality located therein for the purpose of law enforcement, to be divided among the county and municipality located therein on a proportionate basis according to the total population of the entities as indicated by the 1990 federal decennial census, with the population of the county being determined by counting only the number of residents of the county living outside the area of any incorporated municipality, and with all of the funds so distributed to be deposited in the general fund of the respective county or municipality;

2. Thirty-three and one-third percent (33-1/3%) to the road and bridge fund of the county to be used for road and bridge construction and maintenance; and

3. Thirty-three and one-third percent (33-1/3%) to the county and municipal public school districts for general support, to be divided among the school districts in the county on a proportionate basis according to the student enrollment in such school districts on the preceding October 1.

(3) The funds shall be distributed periodically by order of the commission.

SECTION 10. All revenues derived from the contributions pursuant to Section 9(2)(a)(i) and Section (2)(b)(i) of this act shall be paid by the commission into the trust fund established in Section 206A, Mississippi Constitution of 1890. The State Treasurer is further authorized to accept contributions to the trust fund from any other source. The State Treasurer shall promulgate appropriate regulations with respect to all such contributions.

SECTION 11. Any corporation, association or person who directly or indirectly holds any race where wagering is permitted otherwise than as prescribed in this act shall be guilty of a misdemeanor. Any person wagering upon the results of such a race, except in the pari-mutuel method of wagering when the same is conducted by an operator and upon the grounds or enclosure of the operator under the jurisdiction of the commission, shall be guilty of a misdemeanor. Any corporation, organization, association or person who violates any provision of this act for which a penalty is not expressly provided shall be guilty of a misdemeanor. Upon conviction of any of the above misdemeanors, the penalty shall be a fine of not less than One Hundred Dollars ($100.00), nor more than One Thousand Dollars ($1,000.00), or by imprisonment of not less than five (5) days nor more than six (6) months, or both.

SECTION 12. (1) Any person who engages in the practice of gambling on races, or in the practice of making gambling or wagering books on such races, or who knowingly takes any part in such practices, is ineligible to operate a racetrack or a race meeting under the provisions of this act, or to be connected therewith in any capacity.

(2) Any association or corporation which has as an officer, director, stockholder, executive, or which employs any person who engages in the practices set forth in subsection (1) of this section is ineligible to operate a race meeting under the provisions of this act or to be connected therewith in any capacity.

(3) The commission may inquire into such matters as set forth in subsection (1) of this section in administering this act.

SECTION 13. Any person who influences or has any understanding or connivance with any owner, groom or other person associated with or interested in any stable or horse, or race in which any horse participates, to prearrange or predetermine the results of any such race, or any person who shall stimulate or depresses a horse for the purpose of affecting the results of a race, shall be guilty of a felony and upon conviction thereof, shall be imprisoned in the State Penitentiary for not less than one (1) year nor more than ten (10) years, or shall be fined not less than One Thousand Dollars ($1,000.00) nor more than Five Thousand Dollars ($5,000.00), or both.

SECTION 14. It is unlawful for any person to transmit or communicate to another by any means whatsoever the results, changing odds, track conditions or any other information relating to any race from any racetrack in the county, between the period of time beginning one (1) hour before the first race of any day and ending thirty (30) minutes after the posting of the official results of each race, as to that particular race, except that this period may be reduced to permit the transmitting of the results of the last race each day not sooner than fifteen (15) minutes after the official posting of such results. The commission, by rule, may permit the immediate transmission by radio, television or press wire of any pertinent information concerning feature races.

It is unlawful for any person to transmit by any means whatsoever racing information to any other person, or to relay the same to any other person by word of mouth, by signal, or by use of telephone, telegraph, radio or any other means, when the information is knowingly used or intended to be used for illegal gambling purposes, or in the furtherance of such gambling purposes.

Any person violating the provisions of this section is guilty of a felony and, upon conviction thereof, shall be imprisoned in the State Penitentiary for not less than one (1) year nor more than ten (10) years, or shall be fined not less than One Thousand Dollars ($1,000.00) nor more than Five Thousand Dollars ($5,000.00), or both.

SECTION 15. It is unlawful for any person to purchase directly or indirectly pari-mutuel tickets or participate in the purchase of any part of a pari-mutuel pool for another for hire or for any gratuity. It is unlawful for any person to purchase any part of a pari-mutuel pool through another, wherein he gives or pays directly or indirectly to such other person anything of value. Any person violating this section is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than Five Hundred Dollars ($500.00), or by imprisonment not to exceed six (6) months, or both.

SECTION 16. Persons under twenty-one (21) years of age may not be permitted to wager on races and persons under eighteen (18) years of age may not enter the viewing section unless accompanied by a parent or guardian.

SECTION 17. The calculation of wagering is limited to commission approved state-of-the-art computational equipment. The commission must approve the information printed on each pari-mutuel ticket.

SECTION 18. An adequate security force shall be employed as prescribed by the commission. Members of security forces have the same powers as other law enforcement officers of the county while performing their duties on the premises of the racetrack.

SECTION 19. (1) The commission may adopt rules prohibiting the illegal influencing of the outcome of a race, including the use of medication, stimulants or depressants to influence the outcome of the race. The commission may require pre-race and post-race drug testing as needed to determine whether a drug has been administered. Detection of prohibited drugs or chemicals shall result in the immediate disqualification of the animal and the suspension of all persons involved. Responsibility for the protection of the animal from illegal drugging is placed on the trainer of each animal. A drug test also may be required by the owner or trainer of an animal or by the association at whose racetrack the animal is entered in a race meeting. Knowing violations of this section shall result in the barring of the person or persons from receiving a license under this act or from participating in any legalized pari-mutuel wagering or horse racing authorized by this act, for a period set by the commission or for life.

(2) A licensee may conduct any other lawful business on the licensee's premises.

SECTION 20. A member of the commission, an employee of the commission, a steward or judge, an association, or any other person regulated under this act is not liable to any individual, corporation, business association or other entity for a cause of action that arises out of that person's performance or exercise of discretion in the implementation or enforcement of this act or a rule adopted under this act if the person has acted in good faith.

SECTION 21. If an operator or racing association refuses to cooperate with the commission or other state agency regarding access to its books and records, or if it becomes delinquent in turning over the state's portion of the pools, the commission immediately shall call a hearing to revoke or suspend the association's certification or take other appropriate action as deemed necessary by the commission.

SECTION 22. The Attorney General of the State of Mississippi shall submit this act, immediately upon approval by the Governor, or upon approval by the Legislature subsequent to a veto, to the Attorney General of the United States or to the United States District Court for the District of Columbia in accordance with the provisions of the Voting Rights Act of 1965, as amended and extended.

SECTION 23. This act shall take effect and be in force from and after the date it is effectuated under Section 5 of the Voting Rights Act of 1965, as amended and extended.