La. Admin. Code tit. 35 § XVII-13111

Current through Register Vol. 50, No. 8, August 20, 2024

Section XVII-13111 - Wagering on Historical Horse Races Authorized

A. Wagering on historical horse races is hereby authorized and may be conducted in accordance with R.S. 4:149 and 4:213.

B. Wagering on historical horse races shall only be conducted by associations licensed to operate a pari-mutuel facility, pursuant to R.S. 4:149, and/or by offtrack wagering facilities, pursuant to R.S. 4:213.

C. The commission may create classifications of licenses and establish a fee structure for license categories. Applicants for each category of license must apply on forms approved by the commission to be accompanied by the corresponding license application fee. All application fees are non-refundable.

1. The following license fees have been approved by the commission:

a. applicant association (initial)-$125,000;

b. license fee per establishment/OTB (initial)- $7,000;

c. wagering vendor license (initial)-$2,000;

d. wagering vendor license (annual renewal)- $500;

e. background investigation-up to $4,000;

f. non-key person license (initial)-$200; and

g. key person license (initial)-$1,000.

D. An application for a license under R.S. 4:141 et seq. and this Chapter is a request by the applicant seeking a revocable privilege. A license may be granted by the commission if the applicant meets the licensing requirements of the act and these rules. The commission may require holders of a current pari-mutuel wagering facility license to complete an updated application form and undergo additional background screening prior to being authorized to conduct historical horse racing. The commission may issue new licenses to such existing license holders to include the conditions and licensing requirements contained in this Chapter.

E. An applicant for a license under R.S. 4:141 et seq. and this Chapter shall, at all times, have the burden of demonstrating to the commission, by clear and convincing evidence, that the applicant is eligible, qualified, and suitable to be granted and retain the license for which application is made under the applicable licensing standards and requirements of R.S. 4:141 et seq. and the Rules of Racing.

F. A license issued by the commission under R.S. 4:141 et seq. or this Chapter is a revocable privilege granted by the commission. A person who holds a license does not acquire, and shall not be deemed to acquire, a vested property right or other right, in the license.

G. Applicants for any license issued by the commission under the provisions of this Chapter must pay all fees and assessments prescribed either by law or the Rules of Racing in the manner and at the time prescribed by law and/or the Rules of Racing. Application fees and applicable assessments for all historical horse racing wagering licenses and must be paid by the applicant at the time that an application is filed with the commission. None of the licenses listed in this Chapter may be transferred or assigned.

H. The commission may refuse to take final action on any application if all license regulation, investigation, and fingerprint fees have not been paid in full. The commission may deny the application if the applicant refuses or fails to pay all such fees. Additionally, an applicant who has refused or failed to pay the required costs will not be eligible to file any other application with the commission until all such fees are paid in full. Neither the license fee or regulation fees nor any other fee is refundable.

I. Materials, or portions of materials, submitted under R.S. 4:141 et seq. or these rules may be identified as confidential by a licensee, an applicant for a license, or any other person. If the materials are exempt from disclosure by statute, the materials shall not be disclosed by the commission, except to other jurisdictions or law enforcement agencies as provided in R.S. 4:141 et seq.

J. An applicant or licensee shall accept any risk of adverse publicity, public notice, notoriety, embarrassment, criticism, financial loss, or other unfavorable or harmful consequences that may occur in connection with, or as a result of, the application and licensing process or the public disclosure of information submitted to the commission with a license application or at the commission's request under R.S. 4:141 et seq. and the Rules of Racing.

K. Licensees have a continuing obligation to demonstrate suitability to hold a license by complying with R.S. 4:141 et seq., the Rules of Racing, and all federal, state, and local laws relating to the suitability of the licensee. The commission may reopen the investigation of a licensee at any time. The licensee shall be assessed fees, if any, to cover the additional costs of the investigation.

L. An applicant or licensee may claim any privilege afforded by the Constitution or laws of the United States or of the State of Louisiana in refusing to answer questions or provide information requested by the commission. However, a claim of privilege with respect to any testimony or evidence pertaining to the eligibility, qualifications, or suitability of an applicant or licensee to be granted or hold a license under R.S. 4:141 et seq. and the Rules of Racing may constitute cause for denial, suspension, revocation or restriction of the license.

M. An applicant and licensee shall have a continuing duty to do all of the following:

1. promptly notify the commission in writing within 10 business days of a material change in the information submitted in the license application submitted by the applicant or licensee or a change in circumstance, that may render the applicant or licensee ineligible, unqualified, or unsuitable to hold the license under the licensing standards and requirements of the act and these rules; and

2. provide any information requested by the commission relating to licensing or regulation, cooperate with the commission in investigations, hearings, and enforcement and disciplinary actions within the period of time requested by the commission, and comply with all conditions, restrictions, requirements, orders, and rulings of the commission in accordance with R.S. 4:141 et seq. and the Rules of Racing.

N. The following persons are required to hold an occupational license:

1. a person employed by an association or management company and whose duties are directly related to the conduct of historical horse racing;

2. all security personnel;

3. employees whose duties are performed off the wagering facility and whose duties include the handling of money or performing accounting and auditing functions that involve money obtained as a result of historical horse racing;

a. An occupational license level one is the highest level of occupational license. An occupational licensee may perform any activity included within the occupational licensee's level of occupational license or any lower level of occupational license.

b. An employee of an association or management company who does not hold an occupational license shall not perform any duties relating to the conduct of historical horse racing at any time.

c. A person under 18 years of age shall not hold an occupational license of any level. Applicants for occupational license level one must be at least 21 years of age.

d. An application for an occupational license shall not be processed by the commission unless the applicant has an agreement or a statement of intent hire with an association or management company licensee or applicant, documenting that the applicant will be employed upon receiving the appropriate occupational license.

e. Employees of an authorized gaming operator who perform the following functions, regardless of title, shall obtain an occupational license level one:

i. audit director;

ii. chief regulatory compliance officer;

iii. information technology director and managers;

iv. security director;

v. surveillance director;

vi. chief financial officer or controller, or both;

vii. historical racing operations director;

viii. general manager;

ix. assistant general manager; or

x. any other employee of an authorized gaming operator whom the commission deems necessary, to ensure compliance with R.S. 4:141 et seq. and the Rules of Racing, to hold an occupational license level one.

f. A person holding a level one license employed by an association or management company may not be employed concurrently by a wagering vendor, except that a person holding a level one license may be employed by a licensed management company that is also licensed as a wagering vendor.

4. employees of an association who perform the following functions, regardless of title, shall obtain an occupational license level two:

a. security personnel and surveillance personnel;

b. any employee of an association whose duties are performed are directly related to the conducting of historical horse racing;

c. any employee of an association whose duties include accounting and auditing functions and whose duties relate to money obtained as a result of historical horse racing; and

d. any other employee of an association whom the commission deems necessary, to ensure compliance with R.S. 4:141 et seq. and the Rules of Racing, to hold an occupational license level two;

5. the term of all occupational license levels is three years and requires an initial license application fee to be determined by the commission and an annual license fee.

O. Applicants for a historical horse racing wagering license, an occupational license, and applicants for renewals of such licenses shall comply with the following procedures:

1. Every application for a license category authorized by the commission must be submitted on forms supplied or approved by the commission and must contain such information and documents as required for such license category.

2. The applicant must file with the application all required supplemental forms.

3. Upon request of the commission, the applicant must further supplement any information provided in the application. The applicant must provide all requested documents, records, supporting data, and other information within the time period specified in the request. If the applicant fails to provide the requested information within the required time period as set forth in the request or the Rules of Racing, the commission may deny the application unless good cause is shown.

4. All information required to be included in an application must be true and complete as of the date of commission action sought by the applicant. If there is any change in the information contained in the application, the applicant must file a written amendment within 30 days of the change of information in accordance with the Rules of Racing.

5. The application and any amendments must be sworn to or affirmed by the applicant. If any document is signed by an attorney for the applicant, the signature must certify that the attorney has read the document and that, to the best of the attorney's knowledge, information and belief, based on diligent inquiry, the contents of the documents supplied are true.

6. The applicant must cooperate fully with the commission with respect to the background investigation of the applicant, including, upon request, making available any and all of its books and records for inspection. The commission will examine the background, personal history, financial associations, character, record, and reputation of the applicant to the extent the commission determines.

7. The commission will automatically deny the application of any applicant that refuses to submit to a background investigation as required pursuant to R.S. 4:141 et seq. and the Rules of Racing.

8. Neither the state, the commission, any agency with which the commission contracts to conduct background investigations, nor the employees of any of the foregoing, may be held liable for any inaccurate information obtained through such an investigation.

P. In addition to specific conditions imposed in any license issued by the commission under these rules, any license issued by the commission for the operation of historical horse racing wagering is subject to the following conditions.

1. With respect to a historical horse racing wagering operator's license, the licensed operator will at all times make its wagering facility available for inspection by the commission or their authorized representatives with or without prior announcement. Additionally, the licensed operator understands that a commission agent is authorized to be present anywhere within the wagering facility each day any time during operation of historical horse racing wagering, and whenever else deemed appropriate by the director of enforcement.

2. The operator licensee consents to the examination of all accounts, bank accounts, and records of, or under the control of the operator licensee, or any entity in which the operator licensee has a direct or indirect controlling interest. Upon request of the commission or its authorized representative, the operator licensee must authorize all third parties in possession or control of the requested documents to allow the commission or commission agents to examine such documents.

3. The operator licensee will observe and enforce all rules, regulations, decisions, and orders issued by the commission. The operator's license is granted on the condition that the operator licensee, management, and its employees will obey all decisions and orders of the commission. Each operator licensee will have a continuing duty to report to the commission enforcement division any violation of the Rules of Racing or applicable laws of the State of Louisiana by the operator licensee, management, and its employees. Failure to report violations will result in disciplinary action against the operator licensee. The licensee is required to notify the commission in writing within 30 days of the violation.

Q. The commission may refuse to issue an operator licensee or deny any operator licensee application on any grounds deemed reasonable by the commission. Without limiting the foregoing, the commission may deny the application on any of the following grounds:

1. evidence of an applicant submitting an untrue or misleading statement of material fact, or willful omission of any material fact, in any application, statement, or notice filed with the commission, made in connection with any investigation, including the background investigation, or otherwise made to the commission or its staff;

2. conviction of any felony in any jurisdiction by key persons of the applicant or by the applicant which may affect the applicant's ability to properly perform his or her duties or reflect unfavorably on the integrity of a historical horse racing wagering facility;

3. conviction of any gambling offense in any jurisdiction by key persons or by the applicant;

4. entry of any civil or administrative judgment against the applicant or its key persons that is based, in whole or in part, on conduct that allegedly constituted a felony crime in the state or other jurisdiction in which the conduct occurred that may affect the applicant's ability to properly perform his or her duties or reflect unfavorably on the integrity of a historical horse racing wagering facility, or involved a gambling violation(s);

5. association by the applicant, applicant's spouse or members of applicant's immediate household with persons or businesses of known criminal background or persons of disreputable character that may adversely affect the general credibility, security, integrity, honesty, fairness or reputation of the historical horse racing wagering industry;

6. any aspect of the applicant's or any key person's past conduct, character, or behavior that the commission determines would adversely affect the credibility, security, integrity, honesty, fairness or reputation of the proposed historical horse racing wagering activity;

7. failure of the applicant or its key persons to demonstrate adequate business ability and experience to establish, operate, and maintain the business for the type of activity for which application is made;

8. failure to demonstrate adequate financing for the operation proposed in the application;

9. failure to satisfy any requirement for application or to timely respond to any request by the commission for additional information;

10. permanent suspension, revocation, denial or other limiting action on any license related to historical horse racing wagering issued by any jurisdiction; and

11. approval of the application would otherwise be contrary to Louisiana law or public policy.

R. The commission, in the same manner and in accordance with the Louisiana Administrative Procedures Act, will provide the applicant with written notice of the denial, and the applicant shall have the opportunity to appeal the commission decision in conformity with R.S. 4:214(J).

S. The commission may issue a provisional license to any applicant who provides the required fingerprint cards, photographs, completed application, and intent to employ statement. Provisional licenses may be valid for a period established by the commission but shall not be more than 90 days and is subject to the license conditions enumerated in the commission's authorization of the provisional license.

1. The commission may extend the duration of provisional licenses in 30-day increments if the licensing process has not been completed.

T. Wagering on historical horse races shall only be permitted in the designated area on the licensed premises of the pari-mutuel facility and/or offtrack wagering facility. Wagering on historical horse races shall not be offered in any other location.

U. An applicant for a license to offer pari-mutuel wagering on historical horse racing shall apply for a license to conduct the same with the commission at its offices. An application fee, set by the commission-approved license fee schedule, shall be paid for each location where the applicant seeks to offer pari-mutuel wagering on historical horse racing to reimburse the commission for the cost of regulation. The initial application fee shall be paid upon filing of the application.

1. Licensees authorized to offer pari-mutuel wagering on historical horse racing shall pay an annual license fee set by the commission-approved license fee schedule, to be paid monthly, to reimburse the commission for the cost of regulation.

2. The annual total for initial application fees or annual licenses fees shall not exceed the commission's budgeted costs for the regulation of historical horse racing in any calendar year.

V. An applicant for a license to offer pari-mutuel wagering on historical horse racing shall submit a plan of operation that includes:

1. the number of terminals to be operated at the facility, broken down by terminal provider, make, and model;

2. a detailed description of the proposed area designated for the sale of pari-mutuel pool, and the placement of terminals within the area, including a drawn-to-scale architectural rendering that describes:

a. the size, construction, and capacity of the area;

b. the number and location of each terminal; and

c. the location of surveillance and other security equipment.

3. a description of the type of data processing, communication, totalizator and transmission equipment to be utilized;

4. a networking diagram detailing the manner in which the machines will be networked with the wagering servers and back office systems;

5. an IT security plan detailing the logical security measures for the wagering system;

6. the type, number and denominations of pari-mutuel wagers to be offered;

7. the terminal provider, make, and model of each terminal, including a copy of all literature supplied by the manufacturer of the terminal;

8. the maintenance and repair procedures that will ensure the integrity of the terminals;

9. detailed information on the wager types, including breakage, to be offered by the applicant, including information demonstrating compliance with the requirements of this chapter;

10. wager specification documentation, which shall include the rules for the mathematical models, methodology of calculating payouts of the pools, configuration of pools, how money is allocated to or from the pools (including seed pool(s) as applicable), and pool payout methodology. As used herein, a seed pool refers to a pool of money that is used to ensure that all patrons are paid the minimum payout on winning wagers.

W. Before offering wagering on historical horse races, an association shall first obtain the commission's written approval of all wagers offered as set forth in LAC 35:XIII.10703, LAC 35:XIII.10901, LAC 35:XIII.11105, LAC 35:XIII.11201, LAC 35:XIII.11507, LAC 35:XIII.11607, LAC 35:XIII.11701, and LAC 35:XIII.11801 or other accepted pari-mutuel wager type as approved by the commission.

X. A license for conducting pari-mutuel wagering on historical horse racing shall run concurrent with the association's license to conduct horse racing and/or operate offtrack wagering facilities. A licensee may not transfer its license, or assign responsibility for compliance with the conditions of its license, to any party, including, without limitation, a transfer of effective control of the licensee, without commission approval.

Y. Failure to comply with requirements in R.S. 4:149, and/or offtrack wagering facility requirements pursuant to R.S. 4:213 and the Rules of Racing may result in suspension or revocation of the license for conducting pari-mutuel wagering at the discretion of the commission.

La. Admin. Code tit. 35, § XVII-13111

Promulgated by the Office of the Governor, Division of Administration, Racing Commission, LR 481813 (7/1/2022).

AUTHORITY NOTE: Promulgated in accordance with R.S. 4:141, R.S. 4:142 and R.S. 4:148.