SB 403 — Licensing advance deposit wagering

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Red = new code to be enacted WEST virginia legislature regular session IntroducedCommittee Substitute for Senate Bill 403 By Senators Rucker, Baldwin, Blair, Cline, Ferns, Jeffries, Romano, Swope, Trump, and Woelfel [Introduced[Originating Januaryin 26,the 2108;Committee on the Judiciary;

Referredreported on February 26, 2018]     A BILL to amend the CommitteeCode onof West Virginia, 1931, as amended, by adding thereto a new section, designated §19-23-12e, relating to the Judiciary;licensing of advance deposit wagering;

anddefining thenterms; to the Committee on Finance] A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §19-23-12e, relating to the licensing of advance deposit wagering;

providing for thecertain distribution of thosesource feesmarket from wagers made by West Virginia account holders, for distribution of those fees derived from wagers made by account holders located within and outside 50 miles of a licensed horse racing association, and for distribution of those fees from wagers made by account holdersholders; located within 50 miles of two or more licensed horse racing associations;

providing forthat regulatoryadvance authoritydeposit inaccount thewagers Racingare Commissionauthorized; over advance deposit wagering;

providing forexception thefrom assessmentcertain andprovisions imposition of regulatorycode; fees and taxes on advance deposit wagering licensees’ wagering in West Virginia and for the distribution of the fees and taxes;

prohibitingconferring advancejurisdiction depositto wageringthe inRacing WestCommission; Virginia unless conducted through an advance deposit wagering licensee or as otherwise provided by law;

providing for criminalthe penaltiesassessment forand acceptingimposition orof attemptinglicensing toand acceptannual advancerenewal depositfees; wagers without a license;

providing that applicants may bear certain costs;

prohibiting advance deposit wagering in West Virginia unless conducted through an advance deposit wagering licensee;

exempting advance deposit wagering from certain provisions of code and implementing rules;

providing for criminal penalties for accepting advance deposit wagers without a license;

providing for a regulatory fee;

authorizingproviding rulemaking;for an investigation as to whether nonresident account holders of a licensee placed wagers while physically located in West Virginia;

and definingauthorizing terms.rulemaking and emergency rulemaking.

(1) “Account”"Account" means an advance deposit wagering account(ADW) or ADW account owned by an account holder and managed by an ADW licensee that the Racing Commission has determined will maintain a specific identifiable record of account deposits, wagers, credits, debitsdebits, and withdrawals and protect the account holder's confidential information.

(2) “Account"Account holder”holder" means ana resident individual, at least 18 years of age who applies for,for and successfully opens an account with an ADW licensee,licensee. including all resident account holders.

(3) “Advance"Advance deposit account wagering,”wagering" or “ADW,” means a method of pari-mutuel wagering that is permissible under the Interstate Horseracing Act, 15 U.S.C.U.S.C §3001, et seq., in which an individual may establish an account with a person or entity, licensed by the Racing Commission, to place pari-mutuel wagers on horse or greyhound racing with the ADW licensee via electronic media or by telephone, but not including account wagering conducted through a licensee under §19-23-9(a) of this code, and the Racing Commission's rules thereunder with respect to wagering conducted pursuant to Racing Commission Rule §178-5-5.

§3001,(4) et"Advance seq.,deposit inwagering whichlicensee" anmeans individual may establish an accountentity with a person or entity, licensed by the Racing Commission,Commission to placeconduct pari-mutueladvance wagersdeposit onaccount horsewagering racingthat withaccepts thedeposits ADWand licenseewagers, viaissues electronica mediareceipt or byother telephone,confirmation butto notthe including account wageringholder conductedevidencing throughthe adeposits licenseeand underwagers subsectionand (a),transfers sectioncredits nine of this article, and thedebits Racing Commission's rules thereunder with respect to wageringand conductedfrom pursuantan toaccount. Racing Commission Rule §178-5-5.

(4)(5) “Advance"Confidential depositinformation" wageringmeans: licensee” or “ADW licensee” means an entity licensed by the Racing Commission to conduct advance deposit account wagering that accepts deposits and wagers, issues a receipt or other confirmation to the account holder evidencing the deposits and wagers and transfers credits and debits to and from an account.

(5) “Confidential information” means:

(6) “Electronic"Electronic media”media" means any electronic communication device or combination of devices including, but not limited to, personal computers, the Internet, private networks, interactive televisionstelevisions, and wireless communication technologies or other technologies approved by the Racing Commission.

(7) “Licensee” means any horse racing association holding a license as defined by §19-23-3 of this code;

(8) “Located”"Located" means, in regard to a resident account holder, where his or her principal residence is located.

(9) “Principal"Principal residence”residence" means the street address identified by a resident account holder as that individual’sindividual's residential address, as the address may be verified by the ADW licensee to the satisfaction of the Racing Commission.

(10) “Resident”"Resident" is an individual who:

(11) “Source market fee” means a fee that must be paid by the ADW licensee, which shall be six percent of total ADW handle, excluding refunds and cancellations wagered by ADW licensee under this section, payable on a monthly basis to the West Virginia Racing Commission and distributed as follows:set forth in §19-23-12e(b) of this code.

(A)(12) All“Total sourcehandle” marketmeans feesthe derivedtotal fromannual wagersdollar sales amount of accountall holderspari-mutuel notwagering locatedon inhorse aand zipgreyhound coderaces withinconducted 50at, milesor generated from imports or exports of anysimulcast licensee,horse shalland begreyhound proratedraces byto dividingor eachfrom, racinga licensee'slicensee, totalincluding handleall bymoneys thefrom totalwagering handleconducted ofunder all§19-23-9, West§19-23-12a, Virginia§19-23-12b, licenseesand in§19-23-12c theof priorthis calendarcode, year,but excluding refunds, cancellations, and distributedadvance asdeposit follows:wagering under this section.

(i)(b) TenThe percentsource ofmarket eachfee licensee’smust proratedbe amountpaid by the ADW licensee on a monthly basis to the West Virginia ThoroughbredRacing DevelopmentCommission Fund;and distributed as provided in this subsection.

(ii)(1) Forty-fiveAll percentsource tomarket thefees Pursederived Fundfrom wagers of eachaccount holders shall be prorated licensee;between the licensees by dividing each licensee's total handle by the total handle of all West Virginia licensees in the prior calendar year, and distributed as follows:

and(A) (iii)Ten Forty-five percent toof each horse racing licensee's prorated licensee.amount to the West Virginia Thoroughbred Development Fund;

(B) Unless otherwise agreed between a racing association licensee and an10 organizationpercent of ownerseach anddog trainersracing oflicensees permitprorated holdersamount pursuant to the termsWest ofVirginia theRacing InterstateCommission HorseracingSpecial ActAccount-West ofVirginia 1978,Greyhound 15Breeding U.S.C.Development Fund;

§3004(a)(1),(B) allForty-five sourcepercent marketto feesthe derivedpurse fromfund wagers of accounteach holdersprorated locatedlicensee; in a zip code within 50 miles of a particular licensee, that is licensed to conduct live racing, shall be distributed as follows:

(i)and Ten(C) Forty-five percent to theeach Westprorated Virginialicensee. Thoroughbred Development Fund established in §19-23-13b of this code;

(ii)(2) Forty-fiveThe percentRacing toCommission shall be responsible for the Pursedistribution Fundof all source market fee payments pursuant to §19-23-12e(b)(1) of this code.   (c) The advance deposit account wagers placed by account holders with an ADW licensee licensed by the licensee;Racing Commission in accordance with this section are authorized and the provisions of §61-10-1 of this code relating to gaming do not apply to advance deposit account wagering conducted in accordance with this section.

and(d) (iii)The Forty-fiveRacing percentCommission tois thevested licensee.with jurisdiction over any person or entity that solicits account holders or offers advance deposit wagering in West Virginia.

(C)Any Unlessperson otherwiseor agreedentity betweenunder athe racingjurisdiction associationof licenseethe Racing Commission shall be licensed and anthe organizationRacing ofCommission ownersmay impose a nonrefundable initial and trainersannual ofrenewal permitlicensing holdersapplication pursuantfee not to exceed $5,000.  Further, the termsRacing ofCommission may require any applicant for an initial or renewal ADW license to bear the Interstatecosts Horseracinginvolved Actin ofconducting 1978,background 15checks U.S.C.and reviews.

§3004(a)(1),If alla sourcelicensee, marketor feesan derivedaffiliate from wagers of account holders who were, when wagering, located in an overlapping area located within a ziplicensee, codeapplies withinfor an 50ADW mileslicense ofunder twothis orsection, moreall licensees,fees thatunder arethis licensedsubsection to conduct live racing, shall be prorateddeemed betweenpaid theand licenseesan byADW dividinglicense eachissued licensee’sas totalpart handle by the total handle of all licensees within a 50licensee’s mileannual radiuslicensing, ofor, theif arealicense whereapplication theis wageringsubmitted accountapart holderfrom wasannual located,licensing, andan onceADW prorated,license distributedshall inbe accordanceissued withat subparagraphsthe (ii)time and (iii), paragraph (B) of this subdivision, with 10 percent of each licensee's prorated amount distributed to the Westapplication Virginiais Thoroughbredsubmitted. Development Fund (D) The Racing Commission shall determine, and shall make available to all licensed ADW licensees, a list of all zip codes applicable in paragraphs (B) and (C) of this subdivision.

If(e) aA portionperson ofor aentity zipmay codenot isconduct withinadvance thedeposit 50wagering milein radiusWest pursuantVirginia tounless thisthe section,person theor entireentity ziphas codeapplied shallfor beand consideredbeen forgranted allan calculationsADW andlicense paymentsby underthe thisRacing section.Commission.