AN ACT relating to wagering.

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AN ACT relating to wagering. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 230.210 is amended to read as follows: 3
As used in this chapter, unless the context requires otherwise: 4
(1) "Advance deposit account wagering" means a form of pari -mutuel wagering in 5
which an individual may establish an account with a person or entity licensed by the 6
corporation, and may place a pari -mutuel wager through that account that is 7
permitted by law; 8
(2) "Advance deposit account wagering licensee" means a person or entity licensed by 9
the corporation to conduct advance deposit account wagerin g and accept deposits 10
and wagers, issue a receipt or other confirmation to the account holder evidencing 11
such deposits and wagers, and transfer credits and debits to and from accounts; 12
(3) "Amateur youth sporting event" means any sporting event in which an individual: 13
(a) Shall be less than eighteen (18) years of age to participate; and 14
(b) Is prohibited, as a condition of participating in the sporting event, from 15
receiving direct or indirec t compensation for the use of the individual's 16
athletic skill in any manner with respect to the sport in which the particular 17
sporting event is conducted; 18
(4) "Appaloosa race" or "Appaloosa racing" means that form of horse racing in which 19
each horse participating in the race is registered with the Appaloosa Horse Club of 20
Moscow, Idaho, and is mounted by a jockey; 21
(5) "Arabian" means a horse that is registered with the Arabian Horse Registry of 22
Denver, Colorado; 23
(6) "Association" means any person licensed by the Kentucky Horse Racing and 24
Gaming Corporation under KRS 230.300 and engaged in the conduct of a 25
recognized horse race meeting; 26
(7) "Charitable gaming" means gaming licensed by the corporation on and after July 1, 27
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2025, as authorized under this chapter and KRS Chapter 238; 1
(8) "Corporation" means the Kentucky Horse Racing and Gaming Corporation; 2
(9) "Geofence" means a virtual geographic boundary defined by Global Positioning 3
System (GPS) or Radio Frequency Identification (RFID) technology; 4
(10) "Harness race" or "harness racing" means trotting and pacing races of the 5
standardbred horses; 6
(11) "Horse race meeting" means horse racing run at an association licensed and 7
regulated by the Kentucky Horse Racing and Gaming Corporation, and may include 8
Thoroughbred, harness, Appaloosa, Arabian, paint, and quarter horse racing; 9
(12) "Host track" means the track conducting racing and offering its racing for intertrack 10
wagering, or, in the case of interstate wagering, means the Kentucky track 11
conducting racing and off ering simulcasts of races conducted in other states or 12
foreign countries; 13
(13) "Interstate wagering" means pari -mutuel wagering on simulcast horse races from a 14
track located in another state or foreign country by patrons at a receiving track or 15
simulcast facility; 16
(14) "Intertrack wagering" means pari -mutuel wagering on simulcast horse races from a 17
host track by patrons at a receiving track; 18
(15) "Kentucky paint horse, Appaloosa, and Arabian purse fund" means a purse fund 19
established to receive funds as spe cified in KRS 230.3771 for purse programs 20
established in KRS 230.446 to supplement purses for paint horse, Appaloosa, and 21
Arabian horse races. The purse program shall be administered by the Kentucky 22
Horse Racing and Gaming Corporation; 23
(16) "Kentucky quart er horse purse fund" means a purse fund established to receive 24
funds as specified in KRS 230.3771 for purse programs established in KRS 230.407 25
to supplement purses for quarter horse races. The purse program shall be 26
administered by the Kentucky Horse Racing and Gaming Corporation; 27
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(17) "Kentucky resident" means: 1
(a) An individual domiciled within this state; 2
(b) An individual who maintains a place of abode in this state and spends, in the 3
aggregate, more than one hundred eighty-three (183) days of the calendar year 4
in this state; or 5
(c) An individual who lists a Kentucky address as his or her principal place of 6
residence when applying for an account to participate in advance deposit 7
account wagering; 8
(18) "Licensed facility for sports wagering" means the de signated areas to conduct 9
sports wagering for a track licensed to conduct sports wagering pursuant to KRS 10
230.811; 11
(19) "Licensed premises" means a track or simulcast facility licensed by the corporation 12
under this chapter; 13
(20) "Paint horse" means a horse registered with the American Paint Horse Association 14
of Fort Worth, Texas; 15
(21) "Pari-mutuel wagering," "pari -mutuel system of wagering," or "mutuel wagering" 16
each means any method of wagering previously or hereafter approved by the 17
corporation in which o ne (1) or more patrons wager on a horse race or races, 18
whether live, simulcast, or previously run. Wagers shall be placed in one (1) or 19
more wagering pools, and wagers on different races or sets of races may be pooled 20
together. Patrons may establish odds o r payouts, and winning patrons share in 21
amounts wagered including any carryover amounts, plus any amounts provided by 22
an association less any deductions required, as approved by the corporation and 23
permitted by law. Pools may be paid out incrementally over time as approved by 24
the corporation; 25
(22) "Person" means an individual, sole proprietorship, partnership, association, 26
fiduciary, corporation, limited liability company, or any other business entity; 27
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(23) "President" means the president of the Kentucky Ho rse Racing and Gaming 1
Corporation, who shall serve as chief executive officer of the corporation; 2
(24) "Principal" means any of the following individuals associated with a partnership, 3
trust, association, limited liability company, or corporation that is l icensed to 4
conduct a horse race meeting or an applicant for a license to conduct a horse race 5
meeting: 6
(a) The chairman and all members of the board of directors of a corporation; 7
(b) All partners of a partnership and all participating members of a limited 8
liability company; 9
(c) All trustees and trust beneficiaries of an association; 10
(d) The president or chief executive officer and all other officers, managers, and 11
employees who have po licymaking or fiduciary responsibility within the 12
organization; 13
(e) All stockholders or other individuals who own, hold, or control, either directly 14
or indirectly, five percent (5%) or more of stock or financial interest in the 15
collective organization; and 16
(f) Any other employee, agent, guardian, personal representative, or lender or 17
holder of indebtedness who has the power to exercise a significant influence 18
over the applicant's or licensee's operation; 19
(25) "Proof of wagers" includes any paper, card, cert ificate, token, or ticket, which 20
indicates the details of one (1) or more pari -mutuel wagers that were placed and, if 21
such wagers are successful, that winnings are due to the ticket holder from the 22
track; 23
(26) "Quarter horse" means a horse that is register ed with the American Quarter Horse 24
Association of Amarillo, Texas; 25
(27) "Receiving track" means a track where simulcasts are displayed for wagering 26
purposes. A track that submits an application for intertrack wagering shall meet all 27
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the regulatory criteria for granting an association license of the same breed as the 1
host track, and shall have a heated and air -conditioned facility that meets all state 2
and local life safety code requirements and seats a number of patrons at least equal 3
to the average daily attendance for intertrack wagering on the requested breed in the 4
county in which the track is located during the immediately preceding calendar 5
year. If a receiving track has allowed an outside person or facility to display its 6
simulcasts through an agreemen t pursuant to subsection (1)(b) of Section 5 of 7
this Act, the receiving track shall still be deemed the responsible party for any 8
simulcast excise taxes or simulcast agreements with any host track; 9
(28) "Simulcast facility" means any facility approved purs uant to KRS 230.380 to 10
simulcast live racing and conduct pari -mutuel wagering on live racing or races 11
previously run; 12
(29) "Simulcasting" means the telecast of live audio and visual signals of horse races for 13
the purpose of pari-mutuel wagering; 14
(30) "Sporting event" means an event at which two (2) or more persons participate in 15
athletic contests, or an event that takes place in relation to athletic contests as 16
approved by the corporation, but shall not include horse racing or amateur youth 17
sports or athlet ic events in which the majority of participants are under the age of 18
eighteen (18) years; 19
(31) "Sports governing body" means the organization, league, or association that 20
oversees a sport, prescribes final rules, and enforces codes of conduct with respect 21
to such sport and participants therein; 22
(32) "Sports wagering" means the wagering conducted under this chapter on sporting 23
events or portions of sporting events, or on the individual performance statistics of 24
athletes in a sporting event or combination of sporting events, in conformance with 25
federal law and as authorized by the corporation pursuant to this chapter; 26
(33) "Sports wagering device": 27
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(a) Means a mechanical, electrical, or computerized contrivance, terminal, 1
device, apparatus, software, piece of equipment, or supply approved by the 2
corporation for conducting sports wagering under this chapter; and 3
(b) Includes a personal computer, mobile device, or other device used in 4
connection with sports wagering not conducted at a licensed facility for sports 5
wagering; 6
(34) "Sports wagering service provider" or "service provider" means a person authorized 7
to conduct or manage sports wagering through an agreement with a track and 8
provide these services at a licensed facility for sports wagering, simulcast facil ity, 9
or through a website or mobile interface approved by the corporation; 10
(35) "Telephone account wagering" means a form of pari -mutuel wagering where an 11
individual may deposit money in an account at a track and may place a wager by 12
direct telephone call or by communication through other electronic media owned by 13
the holder of the account to the track; 14
(36) "Thoroughbred race" or "Thoroughbred racing" means a form of horse racing in 15
which each horse participating in the race is a Thoroughbred, (i.e., meeti ng the 16
requirements of and registered with The Jockey Club of New York) and is mounted 17
by a jockey; 18
(37) "Track" means any association duly licensed by the Kentucky Horse Racing and 19
Gaming Corporation to conduct horse racing and includes: 20
(a) For facilities in operation as of 2010, the location and physical plant described 21
in the "Commonwealth of Kentucky Initial/Renewal Application for License 22
to Conduct Live Horse Racing, Simulcasting, and Pari -Mutuel Wagering," 23
filed for racing to be conducted in 2010; 24
(b) Real property of an association, if the association received or receives 25
approval from the corporation after 2010 for a location at which live racing is 26
to be conducted; or 27
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(c) One (1) facility or real property that is: 1
1. Owned, leased, or purchased by an association within a sixty (60) mile 2
radius of the association's racetrack but not contiguous to racetrack 3
premises, upon corporation approval; and 4
2. Not within a sixty (60) mile radius of another licensed track premise 5
where live racing is conducted and not within a forty (40) mile radius of 6
a simulcast facility, unless any affected track or simulcast facility agrees 7
in writing to permit a noncontiguous facility within the protected 8
geographic area; 9
(38) "Unclaimed pari-mutuel winning ticket": 10
(a) Means the proof of wager that would require payment of winnings upon 11
submission to the track, but has been presumed abandoned under KRS 12
230.361; and 13
(b) Includes proof of wagers from live racing and simulcasting; and 14
(39) "Unredeemed pari-mutuel voucher": 15
(a) Means a voucher issued by a licensed track that evidences the value of funds 16
or credits available that a patron may use for placing pari -mutuel wagers on 17
live or previously run horse races, or which the patron may rede em for cash, 18
but has been presumed abandoned under KRS 230.361; and 19
(b) Does not include: 20
1. Any proof of wagers or any other information related to specific wagers 21
placed on live or historical horse racing; or 22
2. Any vouchers that were voluntarily surrend ered for donation to charity 23
or similar purposes. 24
Section 2. KRS 230.361 is amended to read as follows: 25
(1) (a) The corporation may promulgate administrative regulations governing and 26
regulating mutuel wagering on horse races under what is known as the pari -27
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mutuel system of wagering. 1
(b) The wagering shall be conducted only by a person licensed under this chapter 2
to conduct a race meeting and only upon the licensed premises or by a person 3
licensed under subsection (1)(b) of Section 5 of this Act ,[ and] provided[ 4
further] that only pari -mutuel wagering on simulcasting or races previously 5
run shall be allowed at simulcast facilities. 6
(c) The pari-mutuel system of wagering shall be operated only by a totalizator or 7
other mech anical equipment approved by the corporation. The corporation 8
shall not require any particular make of equipment. 9
(2) The corporation may promulgate administrative regulations governing and 10
regulating sports wagering, including administrative regulations f or the deposit of 11
funds by credit or debit cards or other means of electronic funds transfer. The 12
corporation may promulgate administrative regulations to establish a fully 13
functioning sports wagering system within six (6) months after June 29, 2023. 14
(3) The operation of a pari -mutuel system for betting, or the conduct of sports 15
wagering, where authorized by law shall not constitute grounds for the revocation 16
or suspension of any license issued and held under KRS 242.1238 and 243.265. 17
(4) Notwithstanding any law to the contrary: 18
(a) The corporation may promulgate administrative regulations governing all 19
reported but unclaimed pari -mutuel winning tickets and unredeemed pari -20
mutuel vouchers held in this state by any person or association operating a 21
pari-mutuel or similar system of betting authorized under this chapter; and 22
(b) The unclaimed pari -mutuel winning tickets and unredeemed pari -mutuel 23
vouchers shall be presumed abandoned if not claimed by the person entitled to 24
them within one (1) year from the time the ticket was issued. 25
(5) The corporation may issue a license to conduct pari -mutuel wagering on steeple 26
chases or other racing over jumps; if all proceeds from the wagering, after expenses 27
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are deducted, is used for charitable purposes. If the dates reque sted for such a 1
license have been granted to a track within a forty (40) mile radius of the race site, 2
the corporation shall not issue a license until it has received written approval from 3
the affected track. Pari -mutuel wagering licensed and approved unde r this 4
subsection shall be limited to four (4) days per year. All racing and wagering 5
authorized by this subsection shall be conducted in accordance with applicable 6
administrative regulations promulgated by the corporation. 7
Section 3. KRS 230.3615 is amended to read as follows: 8
(1) The commission, including the tax levied in KRS 138.510, deducted from the gross 9
amount wagered by the association which operates a race track under the 10
jurisdiction of the Kentucky Horse Racin g and Gaming Corporation and conducts 11
the Thoroughbred racing at which betting is conducted through a pari -mutuel or 12
other similar system, in races where the patron is required to select one (1) horse, 13
and the breaks, which breaks shall be made and calcula ted to the penny, except on 14
races previously run in which the breaks shall be made and calculated to the penny 15
or retained in the pari -mutuel pools, shall not be more than seventeen and one -half 16
percent (17.5%). 17
(2) The commission, including the tax levied in KRS 138.510, deducted from the gross 18
amount wagered by the person, corporation, or association which operates a race 19
track under the jurisdiction of the Kentucky Horse Racing and Gaming Corporation 20
and conducts Thoroughbred racing at which betting is c onducted through a pari -21
mutuel or other similar system shall not exceed twenty -two percent (22%) of the 22
gross handle in races where the patron is required to select two (2) or more horses, 23
and the breaks, which breaks shall be made and calculated to the pe nny, except on 24
races previously run in which the breaks shall be made and calculated to the penny 25
or retained in the pari-mutuel pools. 26
(3) The minimum wager to be accepted by any licensed association or simulcast 27
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facility shall be ten cents ($0.10). The m inimum pay-off on a one dollar ($1) wager 1
shall be one dollar and ten cents ($1.10); but, in the event of a minus pool, the 2
minimum pay -off for a one dollar ($1) wager shall be one dollar and five cents 3
($1.05). 4
(4) Each association conducting Thoroughbred racing shall pay to the corporation all 5
moneys allocated to the backside improvement fund in an amount equal to one -half 6
of one percent (0.5%) of its on-track pari-mutuel wagers. 7
Section 4. KRS 230.378 is amended to read as follows: 8
(1) A receiving track may accept wagers only at the track where it is licensed to 9
conduct its race meeting or conduct intertrack wagering or at a facility it has 10
established through an agreement pursuant to subsection (1)(b) of Section 5 of 11
this Act . A receiving track may accept wagers through a telephone account 12
wagering system. Wagers at a receiving track, simulcast facility, or on telephone 13
account wagering shall form a common pool with wagers at a host track. This 14
common pool requirement s hall not apply to wagers made in connection with 15
interstate simulcasting pursuant to KRS 230.3771; however, common pools shall be 16
encouraged. 17
(2) Except as provided in KRS 230.3771(2), the commission of a receiving track, 18
simulcast facility, or on telephon e account wagering shall be the same as the 19
commission of the host track as determined in KRS 230.3615 or 230.750. 20
(3) In the absence of a valid contract with a horsemen's organization, the commission 21
of a receiving track, after deduction of applicable tax es and other applicable 22
deductions, shall be split as follows: twenty -two percent (22%) to the host track, 23
twenty-two percent (22%) to the purse program at the host track, twenty -two 24
percent (22%) to the receiving track and twenty -two percent (22%) to the purse 25
program at the receiving track. Twelve percent (12%) of the commission shall be 26
allocated evenly between the host track and the receiving track to cover the cost of 27
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simulcasting, unless otherwise agreed to by contract. 1
(4) The deduction for the backside improvement fund, as provided for in KRS 2
230.3615(4) shall not apply to the commission or pari -mutuel tax of a receiving 3
track or telephone account wagering. 4
(5) A receiving track shall be exempt from any license fee imposed by statute or 5
administrative regulation by the corporation. 6
Section 5. KRS 230.380 is amended to read as follows: 7
(1) (a) Any track licensed by the corporation to conduct horse racing and desiring to 8
establish a simulcas t facility shall apply for and may receive approval from 9
the corporation for each simulcast facility. Prior to considering an application 10
for approval of a simulcast facility, the corporation shall notify by regular 11
mail, each state senator, state represen tative, county judge/executive, and 12
mayor in the jurisdiction in which the proposed simulcast facility is located, at 13
least ten (10) days in advance of the corporation meeting at which the 14
application is to be considered or voted upon. Consideration of an application 15
shall be based on criteria contained in administrative regulations promulgated 16
under KRS 230.300. Approval, if granted, shall be granted for a term of one 17
(1) calendar year. 18
(b) 1. Any track licensed by the corporation that chooses not to estab lish a 19
simulcast facility may transfer its ability to establish one (1) simulcast 20
facility to another person. 21
2. a. i. Any person that enters into an agreement with a track to 22
establish a simulcast facility shall file an application 23
following the procedure required in paragraph (a) of this 24
subsection and a license to operate a simulcast facility shall 25
be issued to the person upon approval. 26
ii. The agreement between the track and the simulcast facility 27
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shall establish how the percentage in subsection (9)(a) of 1
this section is divided. 2
b. Consideration of an application shall be based on criteria 3
contained in administrative regulations promulgated by the 4
corporation. 5
(2) A track or tracks or person may proceed with the establishment of a simulcast 6
facility unless, within sixty (60) days of the date on which the corporation approved 7
the facility, the governing body of the local government jurisdiction in which the 8
facility is to be located votes, by simple majority of those voting, to disapprove the 9
establishment of the simulcast facility. For the purposes of this section, "governing 10
body" means, in an incorporated area, the board of aldermen, city council or board 11
of commissioners; in a county, the fiscal court; in an urban -county government, the 12
urban-county co uncil, or in a charter county, the legislative body created in 13
accordance with KRS 67.825 to 67.875. 14
(3) The corporation shall not approve the establishment of any simulcast facility within 15
a radius of forty (40) [fifty (50)] miles of a licensed track. The corporation may 16
approve the establishment of one (1) simulcast facility within a radius of greater 17
than forty (40)[fifty (50)] miles but less than seventy -five (75) miles of a licensed 18
track, but the facility shall not be approved to operate without the pr ior written 19
consent of the licensed track within whose seventy -five (75) mile radius the facility 20
is located. 21
(4) The corporation may promulgate administrative regulations as it deems appropriate 22
to protect the integrity of pari-mutuel wagering at any simulcast facility. 23
(5) Licensed tracks conducting horse racing may enter into joint agreements to 24
establish or operate one (1) or more simulcast facilities, on terms and conditions as 25
the participating tracks may determine. Any agreements respecting these 26
arrangements shall be filed with the corporation, and applications for simulcast 27
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facilities shall be filed by and licenses may be issued to, these licensed tracks by the 1
corporation. 2
(6) A simulcast facility may be established and operated on property that is owned or 3
leased and which is not used solely for the operation of a simulcast facility; 4
provided however, that a simulcast facility may not be established on the premises 5
of a lottery vendor. 6
(7) A simulcast facility shall not be subject to and shall not pay any excise tax imposed 7
pursuant to KRS 138.510, or any license tax imposed under KRS 137.170. 8
(8) One percent (1%) of all moneys wagered at a simulcast facility shall be dedicated 9
for local economic development and shall be allocated as follows: 10
(a) If a simulcast facility is located in an incorporated area, seventy -five percent 11
(75%) shall be allocated to the governing body of the city in which the facility 12
is located, and twenty-five percent (25%) to the governing body of the county 13
in which the facility is located. 14
(b) If a simulcast facility is located in an unincorporated area, all moneys shall be 15
allocated to the governing body of the county or charter county in which the 16
facility is located. 17
(9) (a) After the deduction of moneys under subsection ( 8) of this section, a 18
simulcast facility shall deduct a commission allowed under KRS 230.3615 19
with respect to all wagers made at the simulcast facility. The commission, less 20
moneys allocated in subsection (8) of this section, shall be split as follows: 21
1. Thirty percent (30%) shall be allocated to the host track; 22
2. Forty-six and one-half percent (46.5%) to the purse program at the host 23
track; 24
3. Thirteen and one -half percent (13.5%) to be retained by the track or 25
tracks or person owning the simulcast facil ity for the purpose of 26
application to expenses incurred in connection therewith; 27
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4. Six percent (6%) to be allocated to the Kentucky Thoroughbred Owners 1
and Breeders, Inc., to be expended as follows: 2
a. Up to three percent (3%) for capital improvements and promotion 3
of off-track betting; and 4
b. The remainder for marketing and promoting the Kentucky 5
Thoroughbred industry; and 6
5. Four percent (4%) to be allocated to the corporation to be used for 7
purses at county fairs in Kentucky licensed and approved by the 8
corporation, and for the standardbred sires stakes program established 9
under KRS 230.770. 10
(b) The commission of a simulcast facility derived from interstate wagering shall 11
be reduced by any amounts required to be paid by contract to the host track or 12
track conducting the live race before it is divided as set forth in this section. 13
No simulcast facility may receive any interstate simulcast except with the 14
approval of the live Kentucky host track. 15
(c) The Kentucky Thoroughbred Owners and Breeders, Inc., shall annually report 16
to the corporation on all money expended in accordance with subsection 17
(9)(a)4. of this section. The report shall be in the form required, and provide 18
all information required by the corporation. 19
(10) Subsections (1) and (2) of this section shall also apply to the establishment by a 20
track of a noncontiguous facility in a county in which pari -mutuel racing and 21
wagering is not being conducted. Subsection (8) of this section shall also appl y to a 22
noncontiguous race track facility referenced in this subsection, unless there is a 23
written agreement to the contrary between the track establishing the facility and the 24
governing body of the local government jurisdiction in which the facility is to be 25
established. 26