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CHAPTER 53-06.2PARI-MUTUEL HORSE RACING53-06.2-01. Definitions. As used in this chapter:1.&quot;Breeders' fund&quot; means a fund, administered by the commission, established to<br>financially reward breeders or owners of North Dakota-bred horses to be paid in<br>accordance with rules as approved by the commission.2.&quot;Certificate system&quot; means the system of betting described in section 53-06.2-10.3.&quot;Charitable organization&quot; means a nonprofit organization operated for the relief of<br>poverty, distress, or other conditions of public concern in this state and has been so<br>engaged in this state for at least two years.4.&quot;Civic and service club&quot; means a branch, lodge, or chapter of a nonprofit national or<br>state organization that is authorized by its written constitution, charter, articles of<br>incorporation, or bylaws to engage in a civic or service purpose in this state and has<br>so existed in this state for at least two years. The term includes a similar local<br>nonprofit organization, not affiliated with a state or national organization, which is so<br>recognized by a resolution adopted by the governing body of the local jurisdiction in<br>which the organization conducts its principal activities, and which has existed in this<br>state for at least two years.5.&quot;Commission&quot; means the North Dakota racing commission.6.&quot;Director&quot; means the director of the commission.7.&quot;Fraternal organization&quot; means a nonprofit organization in this state, which is a<br>branch, lodge, or chapter of a national or state organization and exists for the<br>common business, brotherhood, or other interests of its members, and has so<br>existed in this state for two years. The term does not include a college or high<br>school fraternity.8.&quot;Local jurisdiction&quot; means, with respect to a site inside the city limits of a city, that<br>city, and with respect to a site not inside the city limits of a city, the county in which<br>the site is located.9.&quot;Other public-spirited organization&quot; means a nonprofit organization recognized by<br>the governing body of the appropriate local jurisdiction by resolution as<br>public-spirited and eligible under this chapter.10.&quot;Purse fund&quot; means a fund, administered by the commission, established to<br>supplement and improve purses offered at racetracks within the state.11.&quot;Racing&quot; means live or simulcast horse racing under the certificate system or<br>simulcast dog racing under the certificate system.12.&quot;Racing promotion fund&quot; means a fund administered by the commission established<br>to assist in improving and upgrading racetracks in the state, promoting horse racing<br>in the state, and developing new racetracks in the state as necessary and approved<br>by the commission.13.&quot;Religiousorganization&quot;meansanonprofitorganization,church,body ofcommunicants, or group gathered in common membership for mutual support and<br>edification in piety, worship, and religious observances, and which has been so<br>gathered or united in this state for at least two years.Page No. 114.&quot;Veterans' organization&quot; means a congressionally chartered organization in this<br>state, or a branch, lodge, or chapter of a nonprofit national or state organization in<br>this state, the membership of which consists of individuals who were members of the<br>armed services or forces of the United States, and which has so been in existence in<br>this state for at least two years.53-06.2-02. Racing commission - Members - Appointment - Term - Qualifications -Compensation.1.A North Dakota racing commission is established consisting of the chairman and<br>four other members appointed by the governor.One of the members must beappointed from a list of four nominees, one of whom is nominated by the state<br>chapter or affiliate of the American quarter horse racing association, one of whom is<br>nominated by the state chapter or affiliate of the United States trotting association,<br>one of whom is nominated by the state chapter or affiliate of the international<br>Arabian horse association, and one of whom is nominated by the state chapter or<br>affiliate of the North Dakota thoroughbred association. The members serve five-year<br>terms and until a successor is appointed and qualified. A member appointed to fill a<br>vacancy arising from other than the natural expiration of a term serves for the<br>unexpired portion of the term and may be reappointed.The terms of thecommissioners must be staggered so that one term expires each July first. At the<br>expiration of the five-year term of each incumbent member of the commission, the<br>governor shall appoint a new member to the commission.2.A person is ineligible for appointment to the commission if that person has not been<br>a resident of this state for at least two years before the date of appointment. A<br>person is also ineligible if that person is not of such character and reputation as to<br>promote public confidence in the administration of racing in this state. A person who<br>has a financial interest in racing cannot be a member of the commission and cannot<br>be employed by the commission.Failure to maintain compliance with thissubsection is grounds for removal from the commission or from employment with<br>the commission. For purposes of this section, a person has a financial interest in<br>racing if that person has an ownership interest in horses running at live or simulcast<br>meets conducted or shown in this state subject to this chapter or rules of the<br>commission, is required to be licensed under this chapter or the rules of the<br>commission, or who derives any direct financial benefit from racing, individually or by<br>or through an entity or other person, as regulated by this chapter or the rules of the<br>commission.3.Commission members are entitled to seventy-five dollars per day for compensation,<br>and mileage and expense reimbursement as allowed to other state employees.53-06.2-03. Director of racing - Appointment - Qualifications - Salary - Duties -Other personnel.1.The commission shall appoint a director of racing. The commission shall establish<br>the director's qualifications and salary.2.The director shall devote such time to the duties of the office as the commission may<br>prescribe. The director is the executive officer of the commission and shall enforce<br>the rules and orders of the commission. The director shall perform other duties the<br>commission prescribes.3.The director may employ other persons as authorized by the commission.53-06.2-04. Duties of commission. The commission shall:1.Provide for racing under the certificate system.Page No. 22.Set racing dates.3.Adopt rules for effectively preventing the use of any substance, compound items, or<br>combinations of any medicine, narcotic, stimulant, depressant, or anesthetic which<br>could alter the normal performance of a racehorse, unless specifically authorized by<br>the commission.4.Supervise and check the making of pari-mutuel pools, pari-mutuel machines, and<br>equipment at all races held under the certificate system.5.Adopt rules governing, restricting, or regulating bids on licensees' concessions and<br>leases on equipment.6.Consider all proposed extensions, additions, or improvements to the buildings,<br>stables, or tracks on property owned or leased by a licensee.7.Exclude from racetracks or simulcast pari-mutuel wagering facilities any person who<br>violates any rule of the commission or any law.8.Determine the cost of inspections performed under subsection 3 of section<br>53-06.2-05 and require the licensee to pay that cost.9.Report biennially to the legislative council regarding the operation of the<br>commission.10.Provide notice to the North Dakota horsemen's council of meetings held by the<br>commission and permit the North Dakota horsemen's council to participate in the<br>meetings through placement of items on the agenda.11.Complete, distribute, and post on the commission's web site the minutes of each<br>commission meeting within thirty days of that meeting or before the next meeting of<br>the commission, whichever occurs first.53-06.2-04.1. North Dakota-bred registry - Contract requirements. The commissionshall provide for registration of a North Dakota-bred horse for qualification for breeders' fund<br>awards or purse supplements. The commission shall contract with a private person to maintain<br>the registry. Through a competitive bidding process, the commission shall award the contract to<br>the lowest responsible bidder. The cost of the contract must be paid from the breeders' fund.53-06.2-05. Powers of commission. The commission may:1.Compel the production of all documents showing the receipts and disbursements of<br>any licensee and determine the manner in which such financial records are to be<br>kept.2.Investigate the operations of any licensee and enter any vehicle or place of<br>business, residence, storage, or racing of any licensee on the grounds of a licensed<br>association to determine whether there has been compliance with the provisions of<br>this chapter and rules adopted under this chapter, and to discover and seize any<br>evidence of noncompliance.3.Request appropriate state officials to perform inspections necessary for the health<br>and safety of spectators, employees, participants, and horses that are lawfully on a<br>racetrack.4.License all participants in the racing and simulcast pari-mutuel wagering industry<br>and require and obtain information the commission deems necessary from license<br>applicants. Licensure of service providers, totalizator companies, site operators, and<br>organizations applying to conduct or conducting pari-mutuel wagering must bePage No. 3approved by the attorney general. The attorney general may not grant a license<br>denied by the commission. The commission may obtain a statewide and nationwide<br>criminal history record check from the bureau of criminal investigation for the<br>purpose of determining suitability or fitness for a license. The nationwide check<br>must be conducted in the manner provided in section 12-60-24. All costs associated<br>with obtaining a background check are the responsibility of the applicant for a<br>license.5.Receive moneys from the North Dakota horse racing foundation for deposit in the<br>purse fund, breeders' fund, or racing promotion fund in accordance with subsection 6<br>of section 53-06.2-11.6.Adopt additional rules for the administration, implementation, and regulation of<br>activities conducted pursuant to this chapter. The commission shall deposit any fees<br>collected under authority of this subsection in the racing commission operating fund.<br>Subject to legislative appropriation, the commission may spend the fees for<br>operating costs of the commission.53-06.2-06.Organizations eligible to conduct racing and simulcast pari-mutuelwagering. Civic and service clubs; charitable, fraternal, religious, and veterans' organizations;<br>and other public-spirited organizations may be licensed to conduct racing and simulcast<br>pari-mutuel wagering as authorized by this chapter.53-06.2-07. Issuance of licenses - Applications.1.On compliance by an applicant with this chapter and the approval of the attorney<br>general, the commission may issue a license to conduct races.The attorneygeneral may not grant a license denied by the commission.2.An application for a license to conduct a racing meet must be signed under oath and<br>filed with the commission. The application must contain at least the following:a.The name and post-office address of the applicant.b.The location of the racetrack and whether it is owned or leased. If the racetrack<br>is leased, a copy of the lease must be included.c.A statement of the applicant's previous history and association sufficient to<br>establish that the applicant is an eligible organization.d.The time, place, and number of days the racing meet is proposed to be<br>conducted.e.The type of racing to be conducted.f.Other information the commission requires.3.At least thirty days before the commission issues or renews a license to conduct<br>races, the applicant shall deliver a complete copy of the application to the local<br>jurisdiction governing body.The application to the commission must include acertificate verified by a representative of the applicant, indicating delivery of the<br>application copy to the governing body. If the governing body of the local jurisdiction<br>adopts a resolution disapproving the application for license or renewal and so<br>informs the director within thirty days of receiving a copy of the application, the<br>license to conduct races may not be issued or renewed.53-06.2-08. License authorization and fees.Page No. 41.Each license issued under the certificate system must describe the place, track, or<br>racecourse at which the licensee may hold races. Every license must specify the<br>number of days the licensed races may continue, the hours during which racing may<br>be conducted, and the number of races that may be held each day.Racesauthorized under this chapter may be held during the hours approved by the<br>commission and within the hours permitted by state law.2.The commission may charge a license fee for racing commensurate with the size<br>and attendance of the race meet.3.Each applicant for a license under this chapter shall give bond payable to this state<br>with good security as approved by the commission.The bond must be in theamount the commission determines will adequately protect the amount normally due<br>and owing to this state in a regular payment period or, in the case of new or altered<br>conditions, based on the projected revenues.4.The commission may grant licenses to horse owners, jockeys, riders, agents,<br>trainers,grooms,stableforemen,exerciseworkers,veterinarians,valets,concessionaires, service providers, employees of racing associations, and such<br>other persons as determined by the commission. Licensure of service providers,<br>totalizator companies, site operators, and organizations applying to conduct or<br>conducting pari-mutuel wagering must be approved by the attorney general. The<br>attorney general may not grant a license denied by the commission. License fees<br>are as established by the commission.5.The commission may establish the period of time for which licenses issued under<br>this chapter are valid.6.The commission shall deposit all fees collected under this section in the racing<br>commission operating fund.Subject to legislative appropriation, the commissionmay spend the fees for operating costs of the commission.53-06.2-09. Allotment of racing days. If an applicant is eligible to receive a licenseunder this chapter, the commission shall fix the racing days that are allotted to that applicant and<br>issue a license for the holding of racing meets.53-06.2-10. Certificate system - Rules. The certificate system allows a licensee toreceive money from any person present at a live horse race, simulcast horse race, or simulcast<br>dog race who desires to bet on any entry in that race. A person betting on an entry to win<br>acquires an interest in the total money bet on all entries in the race, in proportion to the amount<br>of money bet by that person, under rules adopted by the commission. The licensee shall receive<br>the bets and for each bet shall issue a certificate to the bettor on which is at least shown the<br>number of the race, the amount bet, and the number or name of the entry selected by the bettor.<br>The commission may adopt rules for place, show, quinella, combination, or other types of betting<br>usually connected with racing.53-06.2-10.1. Simulcast wagering. In addition to racing under the certificate system, asauthorized by this chapter, and conducted upon the premises of a racetrack, simulcast<br>pari-mutuel wagering may be conducted in accordance with this chapter or rules adopted by the<br>commission under this chapter in accordance with chapter 28-32. Any organization qualified<br>under section 53-06.2-06 to conduct racing may make written application to the commission for<br>the conduct of simulcast pari-mutuel wagering on races held at licensed racetracks inside the<br>state or racetracks outside the state, or both.Licensure of service providers, totalizatorcompanies, site operators, or organizations applying to conduct or conducting simulcast or<br>account wagering must be approved by the attorney general. The attorney general may not<br>grant a license denied by the commission. Notwithstanding any other provision of this chapter,<br>the commission may authorize any licensee to participate in interstate or international combined<br>wagering pools with one or more other racing jurisdictions. Anytime that a licensee participates<br>in an interstate or international combined pool, the licensee, as prescribed by the commission,Page No. 5may adopt the take-out of the host jurisdiction or facility. The commission may permit a licensee<br>to use one or more of its races or simulcast programs for an interstate or international combined<br>wagering pool at locations outside its jurisdiction and may allow pari-mutuel pools in other states<br>to be combined with pari-mutuel pools in its jurisdiction for the purpose of establishing an<br>interstate or international combined wagering pool. The participation by a licensee in a combined<br>interstate or international wagering pool does not cause that licensee to be considered to be<br>doing business in any jurisdiction other than the jurisdiction in which the licensee is physically<br>located. Pari-mutuel taxes or commissions may not be imposed on any amounts wagered in an<br>interstate or international combined wagering pool other than amounts wagered within this<br>jurisdiction. The certificate system also permits pari-mutuel wagering to be conducted through<br>account wagering. As used in this section, &quot;account wagering&quot; means a form of pari-mutuel<br>wagering in which an individual deposits money in an account and uses the account balance to<br>pay for pari-mutuel wagers. An account wager made on an account established in this state may<br>only be made through the licensed simulcast service provider approved by the attorney general<br>and authorized by the commission to operate the simulcast pari-mutuel wagering system under<br>the certificate system. The attorney general may not grant a license denied by the commission.<br>An account wager may be made in person, by direct telephone communication, or through other<br>electronic communication in accordance with rules adopted by the commission. Breakage for<br>interstate or international combined wagering pools must be calculated in accordance with the<br>statutes or rules of the host jurisdiction and must be distributed among the participating<br>jurisdictions in a manner agreed to among the jurisdictions.53-06.2-11.(Effective through June 30, 2013) Bet payoff formulas - Uses bylicensee of funds in excess of expenses - Payment to general fund.1.For wagering on live horse racing and simulcast wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.Of the amount wagered, thelicensee shall pay:(1)One-half of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.b.In daily double, quinella, exacta, trifecta, or other combination pari-mutuel<br>pools, the licensee may deduct no more than twenty-five percent of the amount<br>wagered. Of the amount wagered, the licensee shall pay:(1)One-half of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.Page No. 62.For account wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.Of the amount wagered byaccount wagering in win, place, and show pari-mutuel pools, the licensee shall<br>pay:(1)One-sixteenth of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-sixteenth of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-sixteenth of one percent to the commission to be deposited in the<br>purse fund.(4)One-sixteenth of one percent to the commission to be deposited in the<br>racing promotion fund.b.Of the amount wagered by account wagering in daily double, quinella, exacta,<br>trifecta, or other combination pari-mutuel pools, the licensee shall pay:(1)One-sixteenth of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-sixteenth of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-sixteenth of one percent to the commission to be deposited in the<br>purse fund.(4)One-sixteenth of one percent to the commission to be deposited in the<br>racing promotion fund.3.For all pari-mutuel wagering the licensee shall pay to the commission the amount<br>due for all unclaimed tickets and all breakage of which twenty percent is to be<br>deposited in the racing promotion fund, thirty percent is to be deposited in the<br>breeders' fund, and fifty percent is to be deposited in the purse fund.4.The licensee conducting wagering on live racing, simulcast wagering, or account<br>wagering shall retain all other money in the pari-mutuel pool and pay it to bettors<br>holding winning tickets as provided by rules adopted by the commission.5.A licensee may not use any of the portion deducted for expenses under<br>subsections 1 and 2 for expenses not directly incurred by the licensee in conducting<br>pari-mutuel racing under the certificate system. After paying qualifying expenses,<br>the licensee shall use the remainder of the amount so withheld only for eligible uses<br>allowed to charitable gambling organizations under section 53-06.1-11.1.6.The commission shall deposit the moneys received pursuant to subsections 1, 2,<br>and 3 and from the North Dakota horse racing foundation pursuant to subsection 5<br>of section 53-06.2-05 in the breeders' fund, the purse fund, and the racing promotion<br>fund. Moneys, and any earnings on the moneys, in the breeders' fund, purse fund,<br>and racing promotion fund are appropriated to the commission on a continuing basis<br>to carry out the purposes of those funds under this chapter and must be<br>administered and disbursed in accordance with rules adopted by the commission.<br>The commission may not transfer money among the funds. The commission shall<br>distribute awards and payment supplements from the breeders' fund in the same<br>calendar year the money was earned by the recipient.The commission shallPage No. 7distribute payments awarded to qualified owners and breeders from the breeders'<br>fund without requiring owners and breeders to apply for the payments.Thecommission, upon approval of the emergency commission, may receive no more<br>than twenty-five percent of the racing promotion fund for the payment of the<br>commission's operating expenses.(Effective after June 30, 2013) Bet payoff formulas - Uses by licensee of funds inexcess of expenses - Payment to general fund.1.For wagering on live horse racing and simulcast wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.Of the amount wagered, thelicensee shall pay:(1)Two percent to the state treasurer to be deposited in the general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.b.In daily double, quinella, exacta, trifecta, or other combination pari-mutuel<br>pools, the licensee may deduct no more than twenty-five percent of the amount<br>wagered. Of the amount wagered, the licensee shall pay:(1)Two and one-half percent to the state treasurer to be deposited in the<br>general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.2.For account wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.(1)Before eleven million dollars is wagered in all pari-mutuel wagering in<br>each biennium, of the amount wagered by account wagering in win,<br>place, and show pari-mutuel pools, the licensee shall pay:(a)Two percent to the state treasurer to be deposited in the general<br>fund.(b)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(c)One-half of one percent to the commission to be deposited in the<br>purse fund.Page No. 8(d)One-half of one percent to the commission to be deposited in the<br>racing promotion fund.(2)After eleven million dollars is wagered in all pari-mutuel wagering in each<br>biennium, of the amount wagered by account wagering in win, place, and<br>show pari-mutuel pools, the licensee shall pay:(a)One-sixteenth of one percent to the state treasurer to be deposited<br>in the general fund.(b)One-sixteenth of one percent to the commission to be deposited in<br>the breeders' fund.(c)One-sixteenth of one percent to the commission to be deposited in<br>the purse fund.(d)One-sixteenth of one percent to the commission to be deposited in<br>the racing promotion fund.b.In daily double, quinella, exacta, trifecta, or other combination pari-mutuel<br>pools, the licensee may deduct no more than twenty-five percent of the amount<br>wagered.(1)Before eleven million dollars is wagered in each biennium, of the amount<br>wagered by account wagering in daily double, quinella, exacta, trifecta, or<br>other combination pari-mutuel pools, the licensee shall pay:(a)Two and one-half percent to the state treasurer to be deposited in<br>the general fund.(b)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(c)One-half of one percent to the commission to be deposited in the<br>purse fund.(d)One-half of one percent to the commission to be deposited in the<br>racing promotion fund.(2)After eleven million dollars is wagered in all pari-mutuel wagering in each<br>biennium, of the amount wagered by account wagering in daily double,<br>quinella, exacta, trifecta, or other combination pari-mutuel pools, the<br>licensee shall pay:(a)One-sixteenth of one percent to the state treasurer to be deposited<br>in the general fund.(b)One-sixteenth of one percent to the commission to be deposited in<br>the breeders' fund.(c)One-sixteenth of one percent to the commission to be deposited in<br>the purse fund.(d)One-sixteenth of one percent to the commission to be deposited in<br>the racing promotion fund.3.For all pari-mutuel wagering the licensee shall pay to the commission the amount<br>due for all unclaimed tickets and all breakage to be deposited in the racing<br>promotion fund.Page No. 94.The licensee conducting wagering on live racing, simulcast wagering, or account<br>wagering shall retain all other money in the pari-mutuel pool and pay it to bettors<br>holding winning tickets as provided by rules adopted by the commission.5.A licensee may not use any of the portion deducted for expenses under<br>subsections 1 and 2 for expenses not directly incurred by the licensee in conducting<br>pari-mutuel racing under the certificate system. After paying qualifying expenses,<br>the licensee shall use the remainder of the amount so withheld only for eligible uses<br>allowed to charitable gambling organizations under section 53-06.1-11.1.6.The commission shall deposit the moneys received pursuant to subsections 1, 2,<br>and 3 and from the North Dakota horse racing foundation pursuant to subsection 5<br>of section 53-06.2-05 in the breeders' fund, the purse fund, and the racing promotion<br>fund. Moneys, and any earnings on the moneys, in the breeders' fund, purse fund,<br>and racing promotion fund are appropriated to the commission on a continuing basis<br>to carry out the purposes of those funds under this chapter and must be<br>administered and disbursed in accordance with rules adopted by the commission.<br>The commission may not transfer money among the funds. The commission shall<br>distribute awards and payment supplements from the breeders' fund in the same<br>calendar year the money was earned by the recipient.The commission shalldistribute payments awarded to qualified owners and breeders from the breeders'<br>fund without requiring owners and breeders to apply for the payments.Thecommission, upon approval of the emergency commission, may receive no more<br>than twenty-five percent of the racing promotion fund for the payment of the<br>commission's operating expenses.53-06.2-12.Audits and investigations by state auditor.On request of thecommission, the state auditor shall conduct audits and investigate the operations of any licensee.<br>The commission shall reimburse the state auditor for all services rendered.53-06.2-13.Duty of attorney general to participate in certain hearings and toconduct investigations - Employment of private counsel by commission.1.The attorney general shall represent the state in all hearings before the commission<br>and shall prosecute all criminal proceedings arising from violations of this chapter.<br>The attorney general may require payment for any services rendered to the racing<br>commission. Payment for the services must be deposited in the attorney general's<br>operating fund. The commission may employ private counsel for adoption of rules<br>and to ensure that its hearings are conducted fairly.2.a.The attorney general may audit and investigate service providers, totalizator<br>companies, site operators, or organizations applying to conduct or conducting<br>pari-mutuel wagering. The attorney general may:(1)Inspect all sites in which pari-mutuel wagering is conducted.(2)Inspect all pari-mutuel wagering equipment and supplies.(3)Seize, remove, or impound any pari-mutuel equipment, supplies, or<br>books and records for the purpose of examination and inspection.(4)Inspect, examine, photocopy, and audit all books and records.b.The commission shall reimburse the attorney general for auditing and<br>investigation. Payment for auditing and investigation must be deposited in the<br>attorney general's operating fund.53-06.2-14.Denial, suspension, and revocation of licenses - Reasons.Thecommission may deny, suspend, or revoke licenses under the certificate system and privilegesPage No. 10granted by it, and it may terminate racing privileges for just cause. Actions constituting just<br>cause include:1.Any action or attempted action by a person contrary to any law.2.Corrupt practices, which include:a.Prearranging or attempting to prearrange the order of finish of a race.b.Failing to properly pay winnings to a bettor or to properly return change to a<br>bettor purchasing a ticket.c.Falsifying or manipulating the odds on any entrant in a race.3.Any violation of the rules of racing adopted by the commission.4.Willful falsification or misstatement of fact in an application for racing privileges.5.Material false statement to a racing official or to the commission.6.Willful disobedience of a commission order or of a lawful order of a racing official<br>other than a commission member.7.Continued failure or inability to meet financial obligations connected with racing<br>meets.8.Failure or inability to properly maintain a racetrack.53-06.2-15. Revocation, suspension, fine - Procedure. The commission, on proof ofviolation by a licensee, its agents or employees, of this chapter or any rule adopted by the<br>commission may, on reasonable notice to the licensee and after giving the licensee an<br>opportunity to be heard, fine the licensee or revoke or suspend the license. If the license is<br>revoked, the licensee is not eligible to receive another license within twelve months from the date<br>of revocation. Every decision or order of the commission must be made in writing and filed with<br>the director for preservation as a permanent record of the commission. The decision must be<br>signed by the chairman, attested by the director, and dated.53-06.2-16. Prohibited acts - Penalties.1.No person may conduct a pari-mutuel horse race unless that person is licensed by<br>the commission. Violation of this subsection is a class A misdemeanor.2.No person may prearrange or attempt to prearrange the order of finish of a race.<br>Violation of this subsection is a class C felony.Page No. 11Document Outlinechapter 53-06.2 pari-mutuel horse racing

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CHAPTER 53-06.2PARI-MUTUEL HORSE RACING53-06.2-01. Definitions. As used in this chapter:1.&quot;Breeders' fund&quot; means a fund, administered by the commission, established to<br>financially reward breeders or owners of North Dakota-bred horses to be paid in<br>accordance with rules as approved by the commission.2.&quot;Certificate system&quot; means the system of betting described in section 53-06.2-10.3.&quot;Charitable organization&quot; means a nonprofit organization operated for the relief of<br>poverty, distress, or other conditions of public concern in this state and has been so<br>engaged in this state for at least two years.4.&quot;Civic and service club&quot; means a branch, lodge, or chapter of a nonprofit national or<br>state organization that is authorized by its written constitution, charter, articles of<br>incorporation, or bylaws to engage in a civic or service purpose in this state and has<br>so existed in this state for at least two years. The term includes a similar local<br>nonprofit organization, not affiliated with a state or national organization, which is so<br>recognized by a resolution adopted by the governing body of the local jurisdiction in<br>which the organization conducts its principal activities, and which has existed in this<br>state for at least two years.5.&quot;Commission&quot; means the North Dakota racing commission.6.&quot;Director&quot; means the director of the commission.7.&quot;Fraternal organization&quot; means a nonprofit organization in this state, which is a<br>branch, lodge, or chapter of a national or state organization and exists for the<br>common business, brotherhood, or other interests of its members, and has so<br>existed in this state for two years. The term does not include a college or high<br>school fraternity.8.&quot;Local jurisdiction&quot; means, with respect to a site inside the city limits of a city, that<br>city, and with respect to a site not inside the city limits of a city, the county in which<br>the site is located.9.&quot;Other public-spirited organization&quot; means a nonprofit organization recognized by<br>the governing body of the appropriate local jurisdiction by resolution as<br>public-spirited and eligible under this chapter.10.&quot;Purse fund&quot; means a fund, administered by the commission, established to<br>supplement and improve purses offered at racetracks within the state.11.&quot;Racing&quot; means live or simulcast horse racing under the certificate system or<br>simulcast dog racing under the certificate system.12.&quot;Racing promotion fund&quot; means a fund administered by the commission established<br>to assist in improving and upgrading racetracks in the state, promoting horse racing<br>in the state, and developing new racetracks in the state as necessary and approved<br>by the commission.13.&quot;Religiousorganization&quot;meansanonprofitorganization,church,body ofcommunicants, or group gathered in common membership for mutual support and<br>edification in piety, worship, and religious observances, and which has been so<br>gathered or united in this state for at least two years.Page No. 114.&quot;Veterans' organization&quot; means a congressionally chartered organization in this<br>state, or a branch, lodge, or chapter of a nonprofit national or state organization in<br>this state, the membership of which consists of individuals who were members of the<br>armed services or forces of the United States, and which has so been in existence in<br>this state for at least two years.53-06.2-02. Racing commission - Members - Appointment - Term - Qualifications -Compensation.1.A North Dakota racing commission is established consisting of the chairman and<br>four other members appointed by the governor.One of the members must beappointed from a list of four nominees, one of whom is nominated by the state<br>chapter or affiliate of the American quarter horse racing association, one of whom is<br>nominated by the state chapter or affiliate of the United States trotting association,<br>one of whom is nominated by the state chapter or affiliate of the international<br>Arabian horse association, and one of whom is nominated by the state chapter or<br>affiliate of the North Dakota thoroughbred association. The members serve five-year<br>terms and until a successor is appointed and qualified. A member appointed to fill a<br>vacancy arising from other than the natural expiration of a term serves for the<br>unexpired portion of the term and may be reappointed.The terms of thecommissioners must be staggered so that one term expires each July first. At the<br>expiration of the five-year term of each incumbent member of the commission, the<br>governor shall appoint a new member to the commission.2.A person is ineligible for appointment to the commission if that person has not been<br>a resident of this state for at least two years before the date of appointment. A<br>person is also ineligible if that person is not of such character and reputation as to<br>promote public confidence in the administration of racing in this state. A person who<br>has a financial interest in racing cannot be a member of the commission and cannot<br>be employed by the commission.Failure to maintain compliance with thissubsection is grounds for removal from the commission or from employment with<br>the commission. For purposes of this section, a person has a financial interest in<br>racing if that person has an ownership interest in horses running at live or simulcast<br>meets conducted or shown in this state subject to this chapter or rules of the<br>commission, is required to be licensed under this chapter or the rules of the<br>commission, or who derives any direct financial benefit from racing, individually or by<br>or through an entity or other person, as regulated by this chapter or the rules of the<br>commission.3.Commission members are entitled to seventy-five dollars per day for compensation,<br>and mileage and expense reimbursement as allowed to other state employees.53-06.2-03. Director of racing - Appointment - Qualifications - Salary - Duties -Other personnel.1.The commission shall appoint a director of racing. The commission shall establish<br>the director's qualifications and salary.2.The director shall devote such time to the duties of the office as the commission may<br>prescribe. The director is the executive officer of the commission and shall enforce<br>the rules and orders of the commission. The director shall perform other duties the<br>commission prescribes.3.The director may employ other persons as authorized by the commission.53-06.2-04. Duties of commission. The commission shall:1.Provide for racing under the certificate system.Page No. 22.Set racing dates.3.Adopt rules for effectively preventing the use of any substance, compound items, or<br>combinations of any medicine, narcotic, stimulant, depressant, or anesthetic which<br>could alter the normal performance of a racehorse, unless specifically authorized by<br>the commission.4.Supervise and check the making of pari-mutuel pools, pari-mutuel machines, and<br>equipment at all races held under the certificate system.5.Adopt rules governing, restricting, or regulating bids on licensees' concessions and<br>leases on equipment.6.Consider all proposed extensions, additions, or improvements to the buildings,<br>stables, or tracks on property owned or leased by a licensee.7.Exclude from racetracks or simulcast pari-mutuel wagering facilities any person who<br>violates any rule of the commission or any law.8.Determine the cost of inspections performed under subsection 3 of section<br>53-06.2-05 and require the licensee to pay that cost.9.Report biennially to the legislative council regarding the operation of the<br>commission.10.Provide notice to the North Dakota horsemen's council of meetings held by the<br>commission and permit the North Dakota horsemen's council to participate in the<br>meetings through placement of items on the agenda.11.Complete, distribute, and post on the commission's web site the minutes of each<br>commission meeting within thirty days of that meeting or before the next meeting of<br>the commission, whichever occurs first.53-06.2-04.1. North Dakota-bred registry - Contract requirements. The commissionshall provide for registration of a North Dakota-bred horse for qualification for breeders' fund<br>awards or purse supplements. The commission shall contract with a private person to maintain<br>the registry. Through a competitive bidding process, the commission shall award the contract to<br>the lowest responsible bidder. The cost of the contract must be paid from the breeders' fund.53-06.2-05. Powers of commission. The commission may:1.Compel the production of all documents showing the receipts and disbursements of<br>any licensee and determine the manner in which such financial records are to be<br>kept.2.Investigate the operations of any licensee and enter any vehicle or place of<br>business, residence, storage, or racing of any licensee on the grounds of a licensed<br>association to determine whether there has been compliance with the provisions of<br>this chapter and rules adopted under this chapter, and to discover and seize any<br>evidence of noncompliance.3.Request appropriate state officials to perform inspections necessary for the health<br>and safety of spectators, employees, participants, and horses that are lawfully on a<br>racetrack.4.License all participants in the racing and simulcast pari-mutuel wagering industry<br>and require and obtain information the commission deems necessary from license<br>applicants. Licensure of service providers, totalizator companies, site operators, and<br>organizations applying to conduct or conducting pari-mutuel wagering must bePage No. 3approved by the attorney general. The attorney general may not grant a license<br>denied by the commission. The commission may obtain a statewide and nationwide<br>criminal history record check from the bureau of criminal investigation for the<br>purpose of determining suitability or fitness for a license. The nationwide check<br>must be conducted in the manner provided in section 12-60-24. All costs associated<br>with obtaining a background check are the responsibility of the applicant for a<br>license.5.Receive moneys from the North Dakota horse racing foundation for deposit in the<br>purse fund, breeders' fund, or racing promotion fund in accordance with subsection 6<br>of section 53-06.2-11.6.Adopt additional rules for the administration, implementation, and regulation of<br>activities conducted pursuant to this chapter. The commission shall deposit any fees<br>collected under authority of this subsection in the racing commission operating fund.<br>Subject to legislative appropriation, the commission may spend the fees for<br>operating costs of the commission.53-06.2-06.Organizations eligible to conduct racing and simulcast pari-mutuelwagering. Civic and service clubs; charitable, fraternal, religious, and veterans' organizations;<br>and other public-spirited organizations may be licensed to conduct racing and simulcast<br>pari-mutuel wagering as authorized by this chapter.53-06.2-07. Issuance of licenses - Applications.1.On compliance by an applicant with this chapter and the approval of the attorney<br>general, the commission may issue a license to conduct races.The attorneygeneral may not grant a license denied by the commission.2.An application for a license to conduct a racing meet must be signed under oath and<br>filed with the commission. The application must contain at least the following:a.The name and post-office address of the applicant.b.The location of the racetrack and whether it is owned or leased. If the racetrack<br>is leased, a copy of the lease must be included.c.A statement of the applicant's previous history and association sufficient to<br>establish that the applicant is an eligible organization.d.The time, place, and number of days the racing meet is proposed to be<br>conducted.e.The type of racing to be conducted.f.Other information the commission requires.3.At least thirty days before the commission issues or renews a license to conduct<br>races, the applicant shall deliver a complete copy of the application to the local<br>jurisdiction governing body.The application to the commission must include acertificate verified by a representative of the applicant, indicating delivery of the<br>application copy to the governing body. If the governing body of the local jurisdiction<br>adopts a resolution disapproving the application for license or renewal and so<br>informs the director within thirty days of receiving a copy of the application, the<br>license to conduct races may not be issued or renewed.53-06.2-08. License authorization and fees.Page No. 41.Each license issued under the certificate system must describe the place, track, or<br>racecourse at which the licensee may hold races. Every license must specify the<br>number of days the licensed races may continue, the hours during which racing may<br>be conducted, and the number of races that may be held each day.Racesauthorized under this chapter may be held during the hours approved by the<br>commission and within the hours permitted by state law.2.The commission may charge a license fee for racing commensurate with the size<br>and attendance of the race meet.3.Each applicant for a license under this chapter shall give bond payable to this state<br>with good security as approved by the commission.The bond must be in theamount the commission determines will adequately protect the amount normally due<br>and owing to this state in a regular payment period or, in the case of new or altered<br>conditions, based on the projected revenues.4.The commission may grant licenses to horse owners, jockeys, riders, agents,<br>trainers,grooms,stableforemen,exerciseworkers,veterinarians,valets,concessionaires, service providers, employees of racing associations, and such<br>other persons as determined by the commission. Licensure of service providers,<br>totalizator companies, site operators, and organizations applying to conduct or<br>conducting pari-mutuel wagering must be approved by the attorney general. The<br>attorney general may not grant a license denied by the commission. License fees<br>are as established by the commission.5.The commission may establish the period of time for which licenses issued under<br>this chapter are valid.6.The commission shall deposit all fees collected under this section in the racing<br>commission operating fund.Subject to legislative appropriation, the commissionmay spend the fees for operating costs of the commission.53-06.2-09. Allotment of racing days. If an applicant is eligible to receive a licenseunder this chapter, the commission shall fix the racing days that are allotted to that applicant and<br>issue a license for the holding of racing meets.53-06.2-10. Certificate system - Rules. The certificate system allows a licensee toreceive money from any person present at a live horse race, simulcast horse race, or simulcast<br>dog race who desires to bet on any entry in that race. A person betting on an entry to win<br>acquires an interest in the total money bet on all entries in the race, in proportion to the amount<br>of money bet by that person, under rules adopted by the commission. The licensee shall receive<br>the bets and for each bet shall issue a certificate to the bettor on which is at least shown the<br>number of the race, the amount bet, and the number or name of the entry selected by the bettor.<br>The commission may adopt rules for place, show, quinella, combination, or other types of betting<br>usually connected with racing.53-06.2-10.1. Simulcast wagering. In addition to racing under the certificate system, asauthorized by this chapter, and conducted upon the premises of a racetrack, simulcast<br>pari-mutuel wagering may be conducted in accordance with this chapter or rules adopted by the<br>commission under this chapter in accordance with chapter 28-32. Any organization qualified<br>under section 53-06.2-06 to conduct racing may make written application to the commission for<br>the conduct of simulcast pari-mutuel wagering on races held at licensed racetracks inside the<br>state or racetracks outside the state, or both.Licensure of service providers, totalizatorcompanies, site operators, or organizations applying to conduct or conducting simulcast or<br>account wagering must be approved by the attorney general. The attorney general may not<br>grant a license denied by the commission. Notwithstanding any other provision of this chapter,<br>the commission may authorize any licensee to participate in interstate or international combined<br>wagering pools with one or more other racing jurisdictions. Anytime that a licensee participates<br>in an interstate or international combined pool, the licensee, as prescribed by the commission,Page No. 5may adopt the take-out of the host jurisdiction or facility. The commission may permit a licensee<br>to use one or more of its races or simulcast programs for an interstate or international combined<br>wagering pool at locations outside its jurisdiction and may allow pari-mutuel pools in other states<br>to be combined with pari-mutuel pools in its jurisdiction for the purpose of establishing an<br>interstate or international combined wagering pool. The participation by a licensee in a combined<br>interstate or international wagering pool does not cause that licensee to be considered to be<br>doing business in any jurisdiction other than the jurisdiction in which the licensee is physically<br>located. Pari-mutuel taxes or commissions may not be imposed on any amounts wagered in an<br>interstate or international combined wagering pool other than amounts wagered within this<br>jurisdiction. The certificate system also permits pari-mutuel wagering to be conducted through<br>account wagering. As used in this section, &quot;account wagering&quot; means a form of pari-mutuel<br>wagering in which an individual deposits money in an account and uses the account balance to<br>pay for pari-mutuel wagers. An account wager made on an account established in this state may<br>only be made through the licensed simulcast service provider approved by the attorney general<br>and authorized by the commission to operate the simulcast pari-mutuel wagering system under<br>the certificate system. The attorney general may not grant a license denied by the commission.<br>An account wager may be made in person, by direct telephone communication, or through other<br>electronic communication in accordance with rules adopted by the commission. Breakage for<br>interstate or international combined wagering pools must be calculated in accordance with the<br>statutes or rules of the host jurisdiction and must be distributed among the participating<br>jurisdictions in a manner agreed to among the jurisdictions.53-06.2-11.(Effective through June 30, 2013) Bet payoff formulas - Uses bylicensee of funds in excess of expenses - Payment to general fund.1.For wagering on live horse racing and simulcast wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.Of the amount wagered, thelicensee shall pay:(1)One-half of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.b.In daily double, quinella, exacta, trifecta, or other combination pari-mutuel<br>pools, the licensee may deduct no more than twenty-five percent of the amount<br>wagered. Of the amount wagered, the licensee shall pay:(1)One-half of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.Page No. 62.For account wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.Of the amount wagered byaccount wagering in win, place, and show pari-mutuel pools, the licensee shall<br>pay:(1)One-sixteenth of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-sixteenth of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-sixteenth of one percent to the commission to be deposited in the<br>purse fund.(4)One-sixteenth of one percent to the commission to be deposited in the<br>racing promotion fund.b.Of the amount wagered by account wagering in daily double, quinella, exacta,<br>trifecta, or other combination pari-mutuel pools, the licensee shall pay:(1)One-sixteenth of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-sixteenth of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-sixteenth of one percent to the commission to be deposited in the<br>purse fund.(4)One-sixteenth of one percent to the commission to be deposited in the<br>racing promotion fund.3.For all pari-mutuel wagering the licensee shall pay to the commission the amount<br>due for all unclaimed tickets and all breakage of which twenty percent is to be<br>deposited in the racing promotion fund, thirty percent is to be deposited in the<br>breeders' fund, and fifty percent is to be deposited in the purse fund.4.The licensee conducting wagering on live racing, simulcast wagering, or account<br>wagering shall retain all other money in the pari-mutuel pool and pay it to bettors<br>holding winning tickets as provided by rules adopted by the commission.5.A licensee may not use any of the portion deducted for expenses under<br>subsections 1 and 2 for expenses not directly incurred by the licensee in conducting<br>pari-mutuel racing under the certificate system. After paying qualifying expenses,<br>the licensee shall use the remainder of the amount so withheld only for eligible uses<br>allowed to charitable gambling organizations under section 53-06.1-11.1.6.The commission shall deposit the moneys received pursuant to subsections 1, 2,<br>and 3 and from the North Dakota horse racing foundation pursuant to subsection 5<br>of section 53-06.2-05 in the breeders' fund, the purse fund, and the racing promotion<br>fund. Moneys, and any earnings on the moneys, in the breeders' fund, purse fund,<br>and racing promotion fund are appropriated to the commission on a continuing basis<br>to carry out the purposes of those funds under this chapter and must be<br>administered and disbursed in accordance with rules adopted by the commission.<br>The commission may not transfer money among the funds. The commission shall<br>distribute awards and payment supplements from the breeders' fund in the same<br>calendar year the money was earned by the recipient.The commission shallPage No. 7distribute payments awarded to qualified owners and breeders from the breeders'<br>fund without requiring owners and breeders to apply for the payments.Thecommission, upon approval of the emergency commission, may receive no more<br>than twenty-five percent of the racing promotion fund for the payment of the<br>commission's operating expenses.(Effective after June 30, 2013) Bet payoff formulas - Uses by licensee of funds inexcess of expenses - Payment to general fund.1.For wagering on live horse racing and simulcast wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.Of the amount wagered, thelicensee shall pay:(1)Two percent to the state treasurer to be deposited in the general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.b.In daily double, quinella, exacta, trifecta, or other combination pari-mutuel<br>pools, the licensee may deduct no more than twenty-five percent of the amount<br>wagered. Of the amount wagered, the licensee shall pay:(1)Two and one-half percent to the state treasurer to be deposited in the<br>general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.2.For account wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.(1)Before eleven million dollars is wagered in all pari-mutuel wagering in<br>each biennium, of the amount wagered by account wagering in win,<br>place, and show pari-mutuel pools, the licensee shall pay:(a)Two percent to the state treasurer to be deposited in the general<br>fund.(b)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(c)One-half of one percent to the commission to be deposited in the<br>purse fund.Page No. 8(d)One-half of one percent to the commission to be deposited in the<br>racing promotion fund.(2)After eleven million dollars is wagered in all pari-mutuel wagering in each<br>biennium, of the amount wagered by account wagering in win, place, and<br>show pari-mutuel pools, the licensee shall pay:(a)One-sixteenth of one percent to the state treasurer to be deposited<br>in the general fund.(b)One-sixteenth of one percent to the commission to be deposited in<br>the breeders' fund.(c)One-sixteenth of one percent to the commission to be deposited in<br>the purse fund.(d)One-sixteenth of one percent to the commission to be deposited in<br>the racing promotion fund.b.In daily double, quinella, exacta, trifecta, or other combination pari-mutuel<br>pools, the licensee may deduct no more than twenty-five percent of the amount<br>wagered.(1)Before eleven million dollars is wagered in each biennium, of the amount<br>wagered by account wagering in daily double, quinella, exacta, trifecta, or<br>other combination pari-mutuel pools, the licensee shall pay:(a)Two and one-half percent to the state treasurer to be deposited in<br>the general fund.(b)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(c)One-half of one percent to the commission to be deposited in the<br>purse fund.(d)One-half of one percent to the commission to be deposited in the<br>racing promotion fund.(2)After eleven million dollars is wagered in all pari-mutuel wagering in each<br>biennium, of the amount wagered by account wagering in daily double,<br>quinella, exacta, trifecta, or other combination pari-mutuel pools, the<br>licensee shall pay:(a)One-sixteenth of one percent to the state treasurer to be deposited<br>in the general fund.(b)One-sixteenth of one percent to the commission to be deposited in<br>the breeders' fund.(c)One-sixteenth of one percent to the commission to be deposited in<br>the purse fund.(d)One-sixteenth of one percent to the commission to be deposited in<br>the racing promotion fund.3.For all pari-mutuel wagering the licensee shall pay to the commission the amount<br>due for all unclaimed tickets and all breakage to be deposited in the racing<br>promotion fund.Page No. 94.The licensee conducting wagering on live racing, simulcast wagering, or account<br>wagering shall retain all other money in the pari-mutuel pool and pay it to bettors<br>holding winning tickets as provided by rules adopted by the commission.5.A licensee may not use any of the portion deducted for expenses under<br>subsections 1 and 2 for expenses not directly incurred by the licensee in conducting<br>pari-mutuel racing under the certificate system. After paying qualifying expenses,<br>the licensee shall use the remainder of the amount so withheld only for eligible uses<br>allowed to charitable gambling organizations under section 53-06.1-11.1.6.The commission shall deposit the moneys received pursuant to subsections 1, 2,<br>and 3 and from the North Dakota horse racing foundation pursuant to subsection 5<br>of section 53-06.2-05 in the breeders' fund, the purse fund, and the racing promotion<br>fund. Moneys, and any earnings on the moneys, in the breeders' fund, purse fund,<br>and racing promotion fund are appropriated to the commission on a continuing basis<br>to carry out the purposes of those funds under this chapter and must be<br>administered and disbursed in accordance with rules adopted by the commission.<br>The commission may not transfer money among the funds. The commission shall<br>distribute awards and payment supplements from the breeders' fund in the same<br>calendar year the money was earned by the recipient.The commission shalldistribute payments awarded to qualified owners and breeders from the breeders'<br>fund without requiring owners and breeders to apply for the payments.Thecommission, upon approval of the emergency commission, may receive no more<br>than twenty-five percent of the racing promotion fund for the payment of the<br>commission's operating expenses.53-06.2-12.Audits and investigations by state auditor.On request of thecommission, the state auditor shall conduct audits and investigate the operations of any licensee.<br>The commission shall reimburse the state auditor for all services rendered.53-06.2-13.Duty of attorney general to participate in certain hearings and toconduct investigations - Employment of private counsel by commission.1.The attorney general shall represent the state in all hearings before the commission<br>and shall prosecute all criminal proceedings arising from violations of this chapter.<br>The attorney general may require payment for any services rendered to the racing<br>commission. Payment for the services must be deposited in the attorney general's<br>operating fund. The commission may employ private counsel for adoption of rules<br>and to ensure that its hearings are conducted fairly.2.a.The attorney general may audit and investigate service providers, totalizator<br>companies, site operators, or organizations applying to conduct or conducting<br>pari-mutuel wagering. The attorney general may:(1)Inspect all sites in which pari-mutuel wagering is conducted.(2)Inspect all pari-mutuel wagering equipment and supplies.(3)Seize, remove, or impound any pari-mutuel equipment, supplies, or<br>books and records for the purpose of examination and inspection.(4)Inspect, examine, photocopy, and audit all books and records.b.The commission shall reimburse the attorney general for auditing and<br>investigation. Payment for auditing and investigation must be deposited in the<br>attorney general's operating fund.53-06.2-14.Denial, suspension, and revocation of licenses - Reasons.Thecommission may deny, suspend, or revoke licenses under the certificate system and privilegesPage No. 10granted by it, and it may terminate racing privileges for just cause. Actions constituting just<br>cause include:1.Any action or attempted action by a person contrary to any law.2.Corrupt practices, which include:a.Prearranging or attempting to prearrange the order of finish of a race.b.Failing to properly pay winnings to a bettor or to properly return change to a<br>bettor purchasing a ticket.c.Falsifying or manipulating the odds on any entrant in a race.3.Any violation of the rules of racing adopted by the commission.4.Willful falsification or misstatement of fact in an application for racing privileges.5.Material false statement to a racing official or to the commission.6.Willful disobedience of a commission order or of a lawful order of a racing official<br>other than a commission member.7.Continued failure or inability to meet financial obligations connected with racing<br>meets.8.Failure or inability to properly maintain a racetrack.53-06.2-15. Revocation, suspension, fine - Procedure. The commission, on proof ofviolation by a licensee, its agents or employees, of this chapter or any rule adopted by the<br>commission may, on reasonable notice to the licensee and after giving the licensee an<br>opportunity to be heard, fine the licensee or revoke or suspend the license. If the license is<br>revoked, the licensee is not eligible to receive another license within twelve months from the date<br>of revocation. Every decision or order of the commission must be made in writing and filed with<br>the director for preservation as a permanent record of the commission. The decision must be<br>signed by the chairman, attested by the director, and dated.53-06.2-16. Prohibited acts - Penalties.1.No person may conduct a pari-mutuel horse race unless that person is licensed by<br>the commission. Violation of this subsection is a class A misdemeanor.2.No person may prearrange or attempt to prearrange the order of finish of a race.<br>Violation of this subsection is a class C felony.Page No. 11Document Outlinechapter 53-06.2 pari-mutuel horse racing

State Codes and Statutes

State Codes and Statutes

Statutes > North-dakota > T53 > T53c062

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CHAPTER 53-06.2PARI-MUTUEL HORSE RACING53-06.2-01. Definitions. As used in this chapter:1.&quot;Breeders' fund&quot; means a fund, administered by the commission, established to<br>financially reward breeders or owners of North Dakota-bred horses to be paid in<br>accordance with rules as approved by the commission.2.&quot;Certificate system&quot; means the system of betting described in section 53-06.2-10.3.&quot;Charitable organization&quot; means a nonprofit organization operated for the relief of<br>poverty, distress, or other conditions of public concern in this state and has been so<br>engaged in this state for at least two years.4.&quot;Civic and service club&quot; means a branch, lodge, or chapter of a nonprofit national or<br>state organization that is authorized by its written constitution, charter, articles of<br>incorporation, or bylaws to engage in a civic or service purpose in this state and has<br>so existed in this state for at least two years. The term includes a similar local<br>nonprofit organization, not affiliated with a state or national organization, which is so<br>recognized by a resolution adopted by the governing body of the local jurisdiction in<br>which the organization conducts its principal activities, and which has existed in this<br>state for at least two years.5.&quot;Commission&quot; means the North Dakota racing commission.6.&quot;Director&quot; means the director of the commission.7.&quot;Fraternal organization&quot; means a nonprofit organization in this state, which is a<br>branch, lodge, or chapter of a national or state organization and exists for the<br>common business, brotherhood, or other interests of its members, and has so<br>existed in this state for two years. The term does not include a college or high<br>school fraternity.8.&quot;Local jurisdiction&quot; means, with respect to a site inside the city limits of a city, that<br>city, and with respect to a site not inside the city limits of a city, the county in which<br>the site is located.9.&quot;Other public-spirited organization&quot; means a nonprofit organization recognized by<br>the governing body of the appropriate local jurisdiction by resolution as<br>public-spirited and eligible under this chapter.10.&quot;Purse fund&quot; means a fund, administered by the commission, established to<br>supplement and improve purses offered at racetracks within the state.11.&quot;Racing&quot; means live or simulcast horse racing under the certificate system or<br>simulcast dog racing under the certificate system.12.&quot;Racing promotion fund&quot; means a fund administered by the commission established<br>to assist in improving and upgrading racetracks in the state, promoting horse racing<br>in the state, and developing new racetracks in the state as necessary and approved<br>by the commission.13.&quot;Religiousorganization&quot;meansanonprofitorganization,church,body ofcommunicants, or group gathered in common membership for mutual support and<br>edification in piety, worship, and religious observances, and which has been so<br>gathered or united in this state for at least two years.Page No. 114.&quot;Veterans' organization&quot; means a congressionally chartered organization in this<br>state, or a branch, lodge, or chapter of a nonprofit national or state organization in<br>this state, the membership of which consists of individuals who were members of the<br>armed services or forces of the United States, and which has so been in existence in<br>this state for at least two years.53-06.2-02. Racing commission - Members - Appointment - Term - Qualifications -Compensation.1.A North Dakota racing commission is established consisting of the chairman and<br>four other members appointed by the governor.One of the members must beappointed from a list of four nominees, one of whom is nominated by the state<br>chapter or affiliate of the American quarter horse racing association, one of whom is<br>nominated by the state chapter or affiliate of the United States trotting association,<br>one of whom is nominated by the state chapter or affiliate of the international<br>Arabian horse association, and one of whom is nominated by the state chapter or<br>affiliate of the North Dakota thoroughbred association. The members serve five-year<br>terms and until a successor is appointed and qualified. A member appointed to fill a<br>vacancy arising from other than the natural expiration of a term serves for the<br>unexpired portion of the term and may be reappointed.The terms of thecommissioners must be staggered so that one term expires each July first. At the<br>expiration of the five-year term of each incumbent member of the commission, the<br>governor shall appoint a new member to the commission.2.A person is ineligible for appointment to the commission if that person has not been<br>a resident of this state for at least two years before the date of appointment. A<br>person is also ineligible if that person is not of such character and reputation as to<br>promote public confidence in the administration of racing in this state. A person who<br>has a financial interest in racing cannot be a member of the commission and cannot<br>be employed by the commission.Failure to maintain compliance with thissubsection is grounds for removal from the commission or from employment with<br>the commission. For purposes of this section, a person has a financial interest in<br>racing if that person has an ownership interest in horses running at live or simulcast<br>meets conducted or shown in this state subject to this chapter or rules of the<br>commission, is required to be licensed under this chapter or the rules of the<br>commission, or who derives any direct financial benefit from racing, individually or by<br>or through an entity or other person, as regulated by this chapter or the rules of the<br>commission.3.Commission members are entitled to seventy-five dollars per day for compensation,<br>and mileage and expense reimbursement as allowed to other state employees.53-06.2-03. Director of racing - Appointment - Qualifications - Salary - Duties -Other personnel.1.The commission shall appoint a director of racing. The commission shall establish<br>the director's qualifications and salary.2.The director shall devote such time to the duties of the office as the commission may<br>prescribe. The director is the executive officer of the commission and shall enforce<br>the rules and orders of the commission. The director shall perform other duties the<br>commission prescribes.3.The director may employ other persons as authorized by the commission.53-06.2-04. Duties of commission. The commission shall:1.Provide for racing under the certificate system.Page No. 22.Set racing dates.3.Adopt rules for effectively preventing the use of any substance, compound items, or<br>combinations of any medicine, narcotic, stimulant, depressant, or anesthetic which<br>could alter the normal performance of a racehorse, unless specifically authorized by<br>the commission.4.Supervise and check the making of pari-mutuel pools, pari-mutuel machines, and<br>equipment at all races held under the certificate system.5.Adopt rules governing, restricting, or regulating bids on licensees' concessions and<br>leases on equipment.6.Consider all proposed extensions, additions, or improvements to the buildings,<br>stables, or tracks on property owned or leased by a licensee.7.Exclude from racetracks or simulcast pari-mutuel wagering facilities any person who<br>violates any rule of the commission or any law.8.Determine the cost of inspections performed under subsection 3 of section<br>53-06.2-05 and require the licensee to pay that cost.9.Report biennially to the legislative council regarding the operation of the<br>commission.10.Provide notice to the North Dakota horsemen's council of meetings held by the<br>commission and permit the North Dakota horsemen's council to participate in the<br>meetings through placement of items on the agenda.11.Complete, distribute, and post on the commission's web site the minutes of each<br>commission meeting within thirty days of that meeting or before the next meeting of<br>the commission, whichever occurs first.53-06.2-04.1. North Dakota-bred registry - Contract requirements. The commissionshall provide for registration of a North Dakota-bred horse for qualification for breeders' fund<br>awards or purse supplements. The commission shall contract with a private person to maintain<br>the registry. Through a competitive bidding process, the commission shall award the contract to<br>the lowest responsible bidder. The cost of the contract must be paid from the breeders' fund.53-06.2-05. Powers of commission. The commission may:1.Compel the production of all documents showing the receipts and disbursements of<br>any licensee and determine the manner in which such financial records are to be<br>kept.2.Investigate the operations of any licensee and enter any vehicle or place of<br>business, residence, storage, or racing of any licensee on the grounds of a licensed<br>association to determine whether there has been compliance with the provisions of<br>this chapter and rules adopted under this chapter, and to discover and seize any<br>evidence of noncompliance.3.Request appropriate state officials to perform inspections necessary for the health<br>and safety of spectators, employees, participants, and horses that are lawfully on a<br>racetrack.4.License all participants in the racing and simulcast pari-mutuel wagering industry<br>and require and obtain information the commission deems necessary from license<br>applicants. Licensure of service providers, totalizator companies, site operators, and<br>organizations applying to conduct or conducting pari-mutuel wagering must bePage No. 3approved by the attorney general. The attorney general may not grant a license<br>denied by the commission. The commission may obtain a statewide and nationwide<br>criminal history record check from the bureau of criminal investigation for the<br>purpose of determining suitability or fitness for a license. The nationwide check<br>must be conducted in the manner provided in section 12-60-24. All costs associated<br>with obtaining a background check are the responsibility of the applicant for a<br>license.5.Receive moneys from the North Dakota horse racing foundation for deposit in the<br>purse fund, breeders' fund, or racing promotion fund in accordance with subsection 6<br>of section 53-06.2-11.6.Adopt additional rules for the administration, implementation, and regulation of<br>activities conducted pursuant to this chapter. The commission shall deposit any fees<br>collected under authority of this subsection in the racing commission operating fund.<br>Subject to legislative appropriation, the commission may spend the fees for<br>operating costs of the commission.53-06.2-06.Organizations eligible to conduct racing and simulcast pari-mutuelwagering. Civic and service clubs; charitable, fraternal, religious, and veterans' organizations;<br>and other public-spirited organizations may be licensed to conduct racing and simulcast<br>pari-mutuel wagering as authorized by this chapter.53-06.2-07. Issuance of licenses - Applications.1.On compliance by an applicant with this chapter and the approval of the attorney<br>general, the commission may issue a license to conduct races.The attorneygeneral may not grant a license denied by the commission.2.An application for a license to conduct a racing meet must be signed under oath and<br>filed with the commission. The application must contain at least the following:a.The name and post-office address of the applicant.b.The location of the racetrack and whether it is owned or leased. If the racetrack<br>is leased, a copy of the lease must be included.c.A statement of the applicant's previous history and association sufficient to<br>establish that the applicant is an eligible organization.d.The time, place, and number of days the racing meet is proposed to be<br>conducted.e.The type of racing to be conducted.f.Other information the commission requires.3.At least thirty days before the commission issues or renews a license to conduct<br>races, the applicant shall deliver a complete copy of the application to the local<br>jurisdiction governing body.The application to the commission must include acertificate verified by a representative of the applicant, indicating delivery of the<br>application copy to the governing body. If the governing body of the local jurisdiction<br>adopts a resolution disapproving the application for license or renewal and so<br>informs the director within thirty days of receiving a copy of the application, the<br>license to conduct races may not be issued or renewed.53-06.2-08. License authorization and fees.Page No. 41.Each license issued under the certificate system must describe the place, track, or<br>racecourse at which the licensee may hold races. Every license must specify the<br>number of days the licensed races may continue, the hours during which racing may<br>be conducted, and the number of races that may be held each day.Racesauthorized under this chapter may be held during the hours approved by the<br>commission and within the hours permitted by state law.2.The commission may charge a license fee for racing commensurate with the size<br>and attendance of the race meet.3.Each applicant for a license under this chapter shall give bond payable to this state<br>with good security as approved by the commission.The bond must be in theamount the commission determines will adequately protect the amount normally due<br>and owing to this state in a regular payment period or, in the case of new or altered<br>conditions, based on the projected revenues.4.The commission may grant licenses to horse owners, jockeys, riders, agents,<br>trainers,grooms,stableforemen,exerciseworkers,veterinarians,valets,concessionaires, service providers, employees of racing associations, and such<br>other persons as determined by the commission. Licensure of service providers,<br>totalizator companies, site operators, and organizations applying to conduct or<br>conducting pari-mutuel wagering must be approved by the attorney general. The<br>attorney general may not grant a license denied by the commission. License fees<br>are as established by the commission.5.The commission may establish the period of time for which licenses issued under<br>this chapter are valid.6.The commission shall deposit all fees collected under this section in the racing<br>commission operating fund.Subject to legislative appropriation, the commissionmay spend the fees for operating costs of the commission.53-06.2-09. Allotment of racing days. If an applicant is eligible to receive a licenseunder this chapter, the commission shall fix the racing days that are allotted to that applicant and<br>issue a license for the holding of racing meets.53-06.2-10. Certificate system - Rules. The certificate system allows a licensee toreceive money from any person present at a live horse race, simulcast horse race, or simulcast<br>dog race who desires to bet on any entry in that race. A person betting on an entry to win<br>acquires an interest in the total money bet on all entries in the race, in proportion to the amount<br>of money bet by that person, under rules adopted by the commission. The licensee shall receive<br>the bets and for each bet shall issue a certificate to the bettor on which is at least shown the<br>number of the race, the amount bet, and the number or name of the entry selected by the bettor.<br>The commission may adopt rules for place, show, quinella, combination, or other types of betting<br>usually connected with racing.53-06.2-10.1. Simulcast wagering. In addition to racing under the certificate system, asauthorized by this chapter, and conducted upon the premises of a racetrack, simulcast<br>pari-mutuel wagering may be conducted in accordance with this chapter or rules adopted by the<br>commission under this chapter in accordance with chapter 28-32. Any organization qualified<br>under section 53-06.2-06 to conduct racing may make written application to the commission for<br>the conduct of simulcast pari-mutuel wagering on races held at licensed racetracks inside the<br>state or racetracks outside the state, or both.Licensure of service providers, totalizatorcompanies, site operators, or organizations applying to conduct or conducting simulcast or<br>account wagering must be approved by the attorney general. The attorney general may not<br>grant a license denied by the commission. Notwithstanding any other provision of this chapter,<br>the commission may authorize any licensee to participate in interstate or international combined<br>wagering pools with one or more other racing jurisdictions. Anytime that a licensee participates<br>in an interstate or international combined pool, the licensee, as prescribed by the commission,Page No. 5may adopt the take-out of the host jurisdiction or facility. The commission may permit a licensee<br>to use one or more of its races or simulcast programs for an interstate or international combined<br>wagering pool at locations outside its jurisdiction and may allow pari-mutuel pools in other states<br>to be combined with pari-mutuel pools in its jurisdiction for the purpose of establishing an<br>interstate or international combined wagering pool. The participation by a licensee in a combined<br>interstate or international wagering pool does not cause that licensee to be considered to be<br>doing business in any jurisdiction other than the jurisdiction in which the licensee is physically<br>located. Pari-mutuel taxes or commissions may not be imposed on any amounts wagered in an<br>interstate or international combined wagering pool other than amounts wagered within this<br>jurisdiction. The certificate system also permits pari-mutuel wagering to be conducted through<br>account wagering. As used in this section, &quot;account wagering&quot; means a form of pari-mutuel<br>wagering in which an individual deposits money in an account and uses the account balance to<br>pay for pari-mutuel wagers. An account wager made on an account established in this state may<br>only be made through the licensed simulcast service provider approved by the attorney general<br>and authorized by the commission to operate the simulcast pari-mutuel wagering system under<br>the certificate system. The attorney general may not grant a license denied by the commission.<br>An account wager may be made in person, by direct telephone communication, or through other<br>electronic communication in accordance with rules adopted by the commission. Breakage for<br>interstate or international combined wagering pools must be calculated in accordance with the<br>statutes or rules of the host jurisdiction and must be distributed among the participating<br>jurisdictions in a manner agreed to among the jurisdictions.53-06.2-11.(Effective through June 30, 2013) Bet payoff formulas - Uses bylicensee of funds in excess of expenses - Payment to general fund.1.For wagering on live horse racing and simulcast wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.Of the amount wagered, thelicensee shall pay:(1)One-half of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.b.In daily double, quinella, exacta, trifecta, or other combination pari-mutuel<br>pools, the licensee may deduct no more than twenty-five percent of the amount<br>wagered. Of the amount wagered, the licensee shall pay:(1)One-half of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.Page No. 62.For account wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.Of the amount wagered byaccount wagering in win, place, and show pari-mutuel pools, the licensee shall<br>pay:(1)One-sixteenth of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-sixteenth of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-sixteenth of one percent to the commission to be deposited in the<br>purse fund.(4)One-sixteenth of one percent to the commission to be deposited in the<br>racing promotion fund.b.Of the amount wagered by account wagering in daily double, quinella, exacta,<br>trifecta, or other combination pari-mutuel pools, the licensee shall pay:(1)One-sixteenth of one percent to the state treasurer to be deposited in the<br>general fund.(2)One-sixteenth of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-sixteenth of one percent to the commission to be deposited in the<br>purse fund.(4)One-sixteenth of one percent to the commission to be deposited in the<br>racing promotion fund.3.For all pari-mutuel wagering the licensee shall pay to the commission the amount<br>due for all unclaimed tickets and all breakage of which twenty percent is to be<br>deposited in the racing promotion fund, thirty percent is to be deposited in the<br>breeders' fund, and fifty percent is to be deposited in the purse fund.4.The licensee conducting wagering on live racing, simulcast wagering, or account<br>wagering shall retain all other money in the pari-mutuel pool and pay it to bettors<br>holding winning tickets as provided by rules adopted by the commission.5.A licensee may not use any of the portion deducted for expenses under<br>subsections 1 and 2 for expenses not directly incurred by the licensee in conducting<br>pari-mutuel racing under the certificate system. After paying qualifying expenses,<br>the licensee shall use the remainder of the amount so withheld only for eligible uses<br>allowed to charitable gambling organizations under section 53-06.1-11.1.6.The commission shall deposit the moneys received pursuant to subsections 1, 2,<br>and 3 and from the North Dakota horse racing foundation pursuant to subsection 5<br>of section 53-06.2-05 in the breeders' fund, the purse fund, and the racing promotion<br>fund. Moneys, and any earnings on the moneys, in the breeders' fund, purse fund,<br>and racing promotion fund are appropriated to the commission on a continuing basis<br>to carry out the purposes of those funds under this chapter and must be<br>administered and disbursed in accordance with rules adopted by the commission.<br>The commission may not transfer money among the funds. The commission shall<br>distribute awards and payment supplements from the breeders' fund in the same<br>calendar year the money was earned by the recipient.The commission shallPage No. 7distribute payments awarded to qualified owners and breeders from the breeders'<br>fund without requiring owners and breeders to apply for the payments.Thecommission, upon approval of the emergency commission, may receive no more<br>than twenty-five percent of the racing promotion fund for the payment of the<br>commission's operating expenses.(Effective after June 30, 2013) Bet payoff formulas - Uses by licensee of funds inexcess of expenses - Payment to general fund.1.For wagering on live horse racing and simulcast wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.Of the amount wagered, thelicensee shall pay:(1)Two percent to the state treasurer to be deposited in the general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.b.In daily double, quinella, exacta, trifecta, or other combination pari-mutuel<br>pools, the licensee may deduct no more than twenty-five percent of the amount<br>wagered. Of the amount wagered, the licensee shall pay:(1)Two and one-half percent to the state treasurer to be deposited in the<br>general fund.(2)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(3)One-half of one percent to the commission to be deposited in the purse<br>fund.(4)One-half of one percent to the commission to be deposited in the racing<br>promotion fund.2.For account wagering:a.In win, place, and show pari-mutuel pools, the licensee may deduct no more<br>than twenty percent of the amount wagered.(1)Before eleven million dollars is wagered in all pari-mutuel wagering in<br>each biennium, of the amount wagered by account wagering in win,<br>place, and show pari-mutuel pools, the licensee shall pay:(a)Two percent to the state treasurer to be deposited in the general<br>fund.(b)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(c)One-half of one percent to the commission to be deposited in the<br>purse fund.Page No. 8(d)One-half of one percent to the commission to be deposited in the<br>racing promotion fund.(2)After eleven million dollars is wagered in all pari-mutuel wagering in each<br>biennium, of the amount wagered by account wagering in win, place, and<br>show pari-mutuel pools, the licensee shall pay:(a)One-sixteenth of one percent to the state treasurer to be deposited<br>in the general fund.(b)One-sixteenth of one percent to the commission to be deposited in<br>the breeders' fund.(c)One-sixteenth of one percent to the commission to be deposited in<br>the purse fund.(d)One-sixteenth of one percent to the commission to be deposited in<br>the racing promotion fund.b.In daily double, quinella, exacta, trifecta, or other combination pari-mutuel<br>pools, the licensee may deduct no more than twenty-five percent of the amount<br>wagered.(1)Before eleven million dollars is wagered in each biennium, of the amount<br>wagered by account wagering in daily double, quinella, exacta, trifecta, or<br>other combination pari-mutuel pools, the licensee shall pay:(a)Two and one-half percent to the state treasurer to be deposited in<br>the general fund.(b)One-half of one percent to the commission to be deposited in the<br>breeders' fund.(c)One-half of one percent to the commission to be deposited in the<br>purse fund.(d)One-half of one percent to the commission to be deposited in the<br>racing promotion fund.(2)After eleven million dollars is wagered in all pari-mutuel wagering in each<br>biennium, of the amount wagered by account wagering in daily double,<br>quinella, exacta, trifecta, or other combination pari-mutuel pools, the<br>licensee shall pay:(a)One-sixteenth of one percent to the state treasurer to be deposited<br>in the general fund.(b)One-sixteenth of one percent to the commission to be deposited in<br>the breeders' fund.(c)One-sixteenth of one percent to the commission to be deposited in<br>the purse fund.(d)One-sixteenth of one percent to the commission to be deposited in<br>the racing promotion fund.3.For all pari-mutuel wagering the licensee shall pay to the commission the amount<br>due for all unclaimed tickets and all breakage to be deposited in the racing<br>promotion fund.Page No. 94.The licensee conducting wagering on live racing, simulcast wagering, or account<br>wagering shall retain all other money in the pari-mutuel pool and pay it to bettors<br>holding winning tickets as provided by rules adopted by the commission.5.A licensee may not use any of the portion deducted for expenses under<br>subsections 1 and 2 for expenses not directly incurred by the licensee in conducting<br>pari-mutuel racing under the certificate system. After paying qualifying expenses,<br>the licensee shall use the remainder of the amount so withheld only for eligible uses<br>allowed to charitable gambling organizations under section 53-06.1-11.1.6.The commission shall deposit the moneys received pursuant to subsections 1, 2,<br>and 3 and from the North Dakota horse racing foundation pursuant to subsection 5<br>of section 53-06.2-05 in the breeders' fund, the purse fund, and the racing promotion<br>fund. Moneys, and any earnings on the moneys, in the breeders' fund, purse fund,<br>and racing promotion fund are appropriated to the commission on a continuing basis<br>to carry out the purposes of those funds under this chapter and must be<br>administered and disbursed in accordance with rules adopted by the commission.<br>The commission may not transfer money among the funds. The commission shall<br>distribute awards and payment supplements from the breeders' fund in the same<br>calendar year the money was earned by the recipient.The commission shalldistribute payments awarded to qualified owners and breeders from the breeders'<br>fund without requiring owners and breeders to apply for the payments.Thecommission, upon approval of the emergency commission, may receive no more<br>than twenty-five percent of the racing promotion fund for the payment of the<br>commission's operating expenses.53-06.2-12.Audits and investigations by state auditor.On request of thecommission, the state auditor shall conduct audits and investigate the operations of any licensee.<br>The commission shall reimburse the state auditor for all services rendered.53-06.2-13.Duty of attorney general to participate in certain hearings and toconduct investigations - Employment of private counsel by commission.1.The attorney general shall represent the state in all hearings before the commission<br>and shall prosecute all criminal proceedings arising from violations of this chapter.<br>The attorney general may require payment for any services rendered to the racing<br>commission. Payment for the services must be deposited in the attorney general's<br>operating fund. The commission may employ private counsel for adoption of rules<br>and to ensure that its hearings are conducted fairly.2.a.The attorney general may audit and investigate service providers, totalizator<br>companies, site operators, or organizations applying to conduct or conducting<br>pari-mutuel wagering. The attorney general may:(1)Inspect all sites in which pari-mutuel wagering is conducted.(2)Inspect all pari-mutuel wagering equipment and supplies.(3)Seize, remove, or impound any pari-mutuel equipment, supplies, or<br>books and records for the purpose of examination and inspection.(4)Inspect, examine, photocopy, and audit all books and records.b.The commission shall reimburse the attorney general for auditing and<br>investigation. Payment for auditing and investigation must be deposited in the<br>attorney general's operating fund.53-06.2-14.Denial, suspension, and revocation of licenses - Reasons.Thecommission may deny, suspend, or revoke licenses under the certificate system and privilegesPage No. 10granted by it, and it may terminate racing privileges for just cause. Actions constituting just<br>cause include:1.Any action or attempted action by a person contrary to any law.2.Corrupt practices, which include:a.Prearranging or attempting to prearrange the order of finish of a race.b.Failing to properly pay winnings to a bettor or to properly return change to a<br>bettor purchasing a ticket.c.Falsifying or manipulating the odds on any entrant in a race.3.Any violation of the rules of racing adopted by the commission.4.Willful falsification or misstatement of fact in an application for racing privileges.5.Material false statement to a racing official or to the commission.6.Willful disobedience of a commission order or of a lawful order of a racing official<br>other than a commission member.7.Continued failure or inability to meet financial obligations connected with racing<br>meets.8.Failure or inability to properly maintain a racetrack.53-06.2-15. Revocation, suspension, fine - Procedure. The commission, on proof ofviolation by a licensee, its agents or employees, of this chapter or any rule adopted by the<br>commission may, on reasonable notice to the licensee and after giving the licensee an<br>opportunity to be heard, fine the licensee or revoke or suspend the license. If the license is<br>revoked, the licensee is not eligible to receive another license within twelve months from the date<br>of revocation. Every decision or order of the commission must be made in writing and filed with<br>the director for preservation as a permanent record of the commission. The decision must be<br>signed by the chairman, attested by the director, and dated.53-06.2-16. Prohibited acts - Penalties.1.No person may conduct a pari-mutuel horse race unless that person is licensed by<br>the commission. Violation of this subsection is a class A misdemeanor.2.No person may prearrange or attempt to prearrange the order of finish of a race.<br>Violation of this subsection is a class C felony.Page No. 11Document Outlinechapter 53-06.2 pari-mutuel horse racing