hb 2589 - arizona state legislature17 are harnessed to a sulky, carriage or similar vehicle and...

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REFERENCE TITLE: department of gaming omnibus State of Arizona House of Representatives Fifty-third Legislature Second Regular Session 2018

HB 2589

Introduced by Representatives Cook: Barton, Campbell, Clodfelter, John, Mitchell,

Norgaard, Payne, Stringer

AN ACT

AMENDING SECTIONS 5-101, 5-103, 5-104 AND 5-104.01, ARIZONA REVISED STATUTES; REPEALING SECTION 5-104.02, ARIZONA REVISED STATUTES; AMENDING SECTIONS 5-105, 5-106, 5-107, 5-107.01, 5-107.02, 5-107.03, 5-108, 5-108.01, 5-108.02, 5-108.05, 5-109, 5-109.01, 5-110, 5-111.04, 5-112, 5-113, 5-113.01, 5-114, 5-115, 5-131 AND 5-224, ARIZONA REVISED STATUTES; AMENDING TITLE 5, CHAPTER 2, ARTICLE 2, ARIZONA REVISED STATUTES, BY ADDING SECTION 5-226; AMENDING SECTIONS 5-227, 5-229 AND 5-238, ARIZONA REVISED STATUTES; APPROPRIATING MONIES; RELATING TO GAMING.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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Be it enacted by the Legislature of the State of Arizona: 1 Section 1. Section 5-101, Arizona Revised Statutes, is amended to 2

read: 3 5-101. Definitions 4 In this article, unless the context otherwise requires: 5 1. "Additional wagering facility" means a facility that is not the 6

enclosure in which authorized racing takes place but that meets the 7 requirements of section 5-111, subsection A and is used by a permittee for 8 handling pari-mutuel wagering. 9

2. "Advance deposit wagering" means a form of pari-mutuel wagering 10 that allows a person to deposit monies in advance in an account with an 11 advance deposit provider and use the monies to pay for pari-mutuel 12 wagering on live or simulcast racing that the advance deposit pari-mutuel 13 wagering permittee accepts or makes. 14

3. "Advance deposit wagering provider" means a betting system or 15 multijurisdictional wagering provider that is authorized to conduct 16 advance deposit wagering pursuant to this article. 17

4. "Applicant" means a person, partnership, association or 18 corporation placing before the department DIVISION an application for a 19 permit or license. 20

5. "Association" means a body of persons, corporations, 21 partnerships or associations, united and acting together without a charter 22 from the state for the prosecution of some common enterprise. 23

6. "Commercial horse racing" means horse racing conducted other 24 than by a county fair association. 25

7. "Commission" means the Arizona racing commission. 26 8. "Concessionaire" means a person, partnership, association or 27

corporation that offers goods or services for sale to the public, a 28 permittee or a licensee at an enclosure in which authorized racing takes 29 place or an additional wagering facility. 30

9. "County fair facility" means any place, enclosure or track 31 constructed in accordance with a permit issued by the commission for the 32 purpose of running county fair horse racing dates as well as any 33 commercial dates for horse racing that may be awarded by the commission in 34 reference to the location. 35

10. "County fair racing association" means an association duly 36 authorized by the board of supervisors to conduct a county fair racing 37 meeting for the benefit of the county. 38

11. "Dark day simulcast" means a simulcast received on a day when 39 there are no posted races conducted at the enclosure in which authorized 40 racing takes place. 41

12. "Department" means the department of gaming. 42 13. "Desensitized" means that a horse's legs on arrival at the 43

receiving barn or saddling paddock do not respond appropriately to tests 44 for feeling administered by an official veterinarian. 45

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14. "Director" means the director of the department of gaming 1 DIVISION OF RACING WITHIN THE DEPARTMENT OF GAMING. 2

15. "DIVISION" MEANS THE DIVISION OF RACING WITHIN THE DEPARTMENT 3 OF GAMING. 4

15. 16. "Dog racing" means racing in which greyhound dogs chase a 5 mechanical lure. 6

16. 17. "Entered" means that a horse or dog has been registered 7 with an authorized racing official as a participant in a specified race 8 and has not been withdrawn prior to presentation of the horse or dog for 9 inspection and testing as provided in section 5-105. 10

17. 18. "Financial interest" means any direct pecuniary interest. 11 18. 19. "Firm" means a business unit or enterprise that transacts 12

business. 13 19. 20. "Handle" means the total amount of money contributed to 14

all pari-mutuel pools by bettors. 15 20. 21. "Harness racing" means horse racing in which the horses 16

are harnessed to a sulky, carriage or similar vehicle and driven by a 17 driver. 18

21. 22. "Horse racing" means racing in which horses are mounted 19 and ridden by jockeys. For purposes of county fair racing meetings, 20 "horse racing" means racing in which horses or mules are mounted and 21 ridden by jockeys. 22

22. 23. "License" means the license issued by the department 23 DIVISION to each employee or other person participating in any capacity in 24 a racing meeting, including officials and employees of the pari-mutuel 25 department. 26

23. 24. "Pari-mutuel wagering" means a system of betting that 27 provides for the distribution among the winning patrons of at least the 28 total amount wagered less the amount withheld under state law. 29

24. 25. "Permit" means a permit for a racing meeting issued under 30 the provisions of this article. 31

25. 26. "Racing meeting" means a number of days of racing allotted 32 by the commission in one permit. 33

26. 27. "Simulcast" means the telecast shown within this state of 34 live audio and visual signals of horse, harness or dog races conducted at 35 an out-of-state track or the telecast shown outside this state of live 36 audio and visual signals of horse or harness races originating within this 37 state for the purpose of pari-mutuel wagering. 38

27. 28. "Source market fee" means the fee that an advance deposit 39 wagering provider pays to a commercial permittee in the state where the 40 advance deposit wagering customer resides. 41

28. 29. "Telephone" means any device that a person uses for voice 42 communications in connection with the services of a telephone company. 43

29. 30. "Undesirable" includes known bookmakers, touts, persons 44 convicted of a violation of any provision of this article or of any law 45

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prohibiting bookmaking or any other illegal forms of wagering, or any 1 other person whose presence would, in the opinion of the director, be 2 inimical to the interests of the state. 3

30. 31. "Week" means seven consecutive days beginning on Monday 4 and ending on Sunday, mountain standard time. 5

Sec. 2. Section 5-103, Arizona Revised Statutes, is amended to 6 read: 7

5-103. Commissioners; qualifications; oath; interest in 8 racing prohibited; exception; annual report 9

A. A member of the commission shall have been a resident of this 10 state and a qualified elector for not less than AT LEAST five years next 11 preceding appointment BEFORE THE GOVERNOR APPOINTS THE MEMBER. 12

B. Before entering upon ON the discharge of the appointee's duties, 13 each appointee shall take the official oath. 14

C. A person who has a financial interest, either directly or 15 indirectly, in a racetrack, or the operation of licensed wagering on the 16 results of races, is not qualified for membership on the commission or 17 appointment or employment by the commission, but this subsection shall not 18 be construed to DOES NOT affect the entrance into a race outside this 19 state of a horse or dog belonging to a member, or the winning of a purse 20 or award by such A MEMBER'S horse or dog. 21

D. A commissioner or member or a relative of the commissioner or 22 member to the first degree of consanguinity may not have a financial 23 interest in a licensee or permittee regulated by the department DIVISION. 24

E. Of the five members appointed to the commission, : 25 1. One but not more than one TWO shall have a financial interest or 26

substantial experience in the horse or harness racing industry. 27 2. One but not more than one shall have a financial interest or 28

substantial experience in the dog racing industry. 29 F. Members of the commission are eligible to receive compensation 30

pursuant to section 38-611 for each day spent in the discharge of their 31 duties and reimbursement for all expenses necessarily and properly 32 incurred in attending meetings of or for the commission. 33

G. The governor shall remove any commissioner who ceases to meet 34 the qualifications prescribed by this section. 35


5-104. Arizona racing commission; director; division; powers 38 and duties 39

A. The commission shall: 40 1. Issue racing dates. 41 2. Prepare and adopt complete rules to govern the racing meetings 42

as may be THAT ARE required to protect and promote the safety and welfare 43 of the animals participating in racing meetings, to protect and promote 44 public health, safety and the proper conduct of racing and pari-mutuel 45

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wagering and any other matter pertaining to the proper conduct of racing 1 within this state. 2

3. Conduct hearings on applications for permits and approve permits 3 and shall conduct rehearings on licensing and regulatory decisions made by 4 the director as required pursuant to rules adopted by the commission. 5

4. Conduct all reviews of applications to construct capital 6 improvements at racetracks as provided in this chapter. 7

5. Adopt rules governing the proper and humane methods for the 8 disposition and transportation of dogs by breeders, kennels or others. 9

B. The director shall license personnel and shall regulate and 10 supervise all racing meetings held and pari-mutuel wagering conducted in 11 this state and cause the various places where racing meetings are held and 12 wagering is conducted to be visited and inspected on a regular basis. The 13 director may delegate to stewards any of the director's powers and duties 14 as THAT are necessary to fully carry out and effectuate the purposes of 15 this chapter. The director shall exercise immediate supervision over the 16 department DIVISION. The director is subject to ongoing supervision by 17 the commission, and the commission may approve or reject decisions of the 18 director in accordance with rules established by the commission. 19

C. The commission or the department DIVISION is authorized to allow 20 stewards, with the written approval of the director, to require a jockey, 21 apprentice jockey, sulky driver, groom, horseshoer, outrider, trainer, 22 assistant trainer, exercise rider, pony rider, starter, assistant starter, 23 jockey's agent, veterinarian, assistant veterinarian, cool-out, security 24 or maintenance worker, official or individual licensed in an occupational 25 category whose role requires direct hands-on contact with horses, while on 26 the grounds of a permittee, to submit to a test if the stewards have 27 reason to believe the licensee is under the influence of or unlawfully in 28 possession of any prohibited substance regulated by title 13, chapter 34. 29

D. The department DIVISION shall employ the services of the office 30 of administrative hearings to conduct hearings on matters requested to be 31 heard by the director or the commission for the department DIVISION except 32 for those rehearings that are required by the terms of this chapter to be 33 conducted by the commission. Any person adversely affected by a decision 34 of a steward or by any other decision of the department DIVISION may 35 request a hearing on the decision. The decision of the administrative law 36 judge becomes the decision of the director unless rejected or modified by 37 the director within thirty days. The commission may hear any appeal of a 38 decision of the director in accordance with title 41, chapter 6, 39 article 10. 40

E. The department DIVISION may visit and investigate the offices, 41 tracks or places of business of any permittee and place in those offices, 42 tracks or places of business expert accountants and other persons as it 43 THE DIVISION deems necessary for the purpose of ascertaining that the 44

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permittee or any licensee is in compliance with the rules adopted pursuant 1 to this article. 2

F. The department DIVISION shall establish and collect the 3 following licensing fees and regulatory assessments, which shall not be 4 reduced for capital improvements pursuant to section 5-111.02: 5

1. For each racing license issued, a license fee. 6 2. From the purse accounts provided for in section 5-111, a 7

regulatory assessment to pay for racing animal medication testing, animal 8 safety and welfare. 9

3. From each permittee, a regulatory assessment for each day of 10 dark day simulcasting conducted in excess of the number of live racing 11 days conducted by the permittee. 12

4. From each commercial racing permittee, a regulatory assessment 13 payable from amounts deducted from pari-mutuel pools by the permittee, in 14 addition to the amounts the permittee is authorized to deduct pursuant to 15 section 5-111, subsection B from amounts wagered on live and simulcast 16 races from in-state and out-of-state wagering handled by the permittee. 17

G. The commission shall establish financial assistance procedures 18 for promoting adoption of retired racehorses. The provision of financial 19 assistance to nonprofit enterprises for the purpose of promoting adoption 20 of retired racehorses is contingent on a finding by the commission that 21 the program presented by the enterprise is in the best interest of the 22 racing industry and this state. On a finding by the commission, the 23 commission is authorized to make grants to nonprofit enterprises whose 24 programs promote adoption of retired racehorses. The commission shall 25 develop an application process. The commission shall require an 26 enterprise to report to the commission on the use of grants under this 27 subsection. Financial assistance for nonprofit enterprises that promote 28 adoption of retired racehorses under this subsection shall not exceed the 29 amount of retired racehorse adoption surcharges collected pursuant to this 30 subsection. The commission shall collect a retired racehorse adoption 31 surcharge in addition to each civil penalty assessed in connection with 32 horse or harness racing pursuant to this article. The amount of the 33 retired racehorse adoption surcharge shall be five percent of the amount 34 collected for each applicable civil penalty. 35

H. A license is valid for the period established by the commission, 36 but not to exceed three MORE THAN FIVE years, except for a temporary 37 license issued pursuant to section 5-107.01, subsection F. The licensing 38 period shall begin July 1. 39

I. A PERSON MAY SUBMIT AN APPLICATION IN WRITING THAT OBJECTS TO 40 ANY DECISION OF TRACK STEWARDS WITHIN THREE DAYS AFTER THE OFFICIAL 41 NOTIFICATION OF THE DECISION. On application in writing by an objector to 42 any decision of track stewards, made within three days after the official 43 notification to the objector of the decision complained of, the department 44 DIVISION or administrative law judge shall review the objection. In the 45

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case of a suspension of a license by the track stewards, the suspension 1 shall run for a period of not more than six months. Before the end of 2 this suspension period, filing an application for review is not cause for 3 reinstatement. If at the end of this suspension period the department 4 DIVISION or administrative law judge has not held a hearing to review the 5 decision of the stewards, the suspended license shall be reinstated until 6 the department DIVISION or administrative law judge holds a hearing to 7 review the objection. Except as provided in section 41-1092.08, 8 subsection H, a final decision of the commission is subject to judicial 9 review pursuant to title 12, chapter 7, article 6. 10

J. The commission or the director may issue subpoenas for the 11 attendance of witnesses and the production of books, records and documents 12 relevant and material to a particular matter before the commission or 13 department DIVISION and the subpoenas shall be served and enforced in 14 accordance with title 41, chapter 6, article 10. 15

K. Any member of the commission, the administrative law judge or 16 the director or the director's designee may administer oaths, and the 17 oaths shall be administered to any person who appears before the 18 commission to give testimony or information pertaining to matters before 19 the commission. 20

L. The commission shall adopt rules that require permittees to 21 retain for three months all official race photographs and videotapes. The 22 department DIVISION shall retain all photographs and videotapes that are 23 used as evidence in an administrative proceeding until the conclusion of 24 the proceeding and any subsequent judicial proceeding. All photographs 25 and videotapes must be available to the public on request, including 26 photographs and videotapes of races concerning which an objection is made, 27 regardless of whether the objection is allowed or disallowed. 28

M. The director may establish a management review section for the 29 development, implementation and operation of a system of management 30 reports and controls in major areas of department DIVISION operations, 31 including licensing, work load WORKLOAD management and staffing, and 32 enforcement of this article and the rules of the commission. 33

N. In cooperation with the department of public safety, the 34 director shall establish a cooperative fingerprint registration system. 35 Each applicant for a license or permit under this article or any other 36 person who has a financial interest in the business or corporation making 37 the application shall submit to fingerprint registration as part of the 38 background investigation conducted pursuant to section 5-108. The 39 cooperative fingerprint registration system shall be maintained in an 40 updated form using information from available law enforcement sources and 41 shall provide current information to the director on request as to the 42 fitness of each racing permittee and each racing licensee to engage in the 43 racing industry in this state. 44

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O. The director shall develop and require department DIVISION staff 1 to use uniform procedural manuals in the issuance of any license or permit 2 under this article and in the enforcement of this article and the rules 3 adopted under this article. 4

P. The director shall submit an annual report containing 5 operational and economic performance information as is necessary to 6 evaluate the department's budget request for the forthcoming NEXT fiscal 7 year to the governor, the speaker of the house of representatives, the 8 president of the senate and the Arizona state library, archives and public 9 records no SECRETARY OF STATE NOT later than September 30 each year. The 10 annual report shall be for the preceding fiscal year and shall contain 11 performance information as follows: 12

1. The total state revenues for the previous fiscal year from the 13 overall pari-mutuel handle with an itemization for each horse racing 14 meeting, each harness racing meeting, each advanced deposit wagering 15 permittee and each additional wagering facility. 16

2. The total state revenues for the previous fiscal year from the 17 regulation of racing, including licensing fees assessed pursuant to 18 subsection F of this section and monetary penalties assessed pursuant to 19 section 5-108.02. 20

3. The amount and use of capital improvement funds pursuant to 21 section 5-111.02 that would otherwise be state revenues. 22

4. The number of licenses and permits issued, renewed, pending and 23 revoked during the previous fiscal year. 24

5. The investigations conducted during the previous fiscal year and 25 any action taken as a result of the investigations. 26

6. The department DIVISION budget for the immediately preceding 27 three fiscal years, including the number of full-time, part-time, 28 temporary and contract employees, a statement of budget needs for the 29 forthcoming fiscal year and a statement of the minimum staff necessary to 30 accomplish these objectives. 31

7. Revenues generated for this state for the preceding fiscal year 32 by persons holding racing meeting and advanced deposit wagering permits. 33

8. Recommendations for increasing state revenues from the 34 regulation of the racing industry while maintaining the financial health 35 of the industry and protecting the public interest. 36

Q. The commission may certify animals as Arizona bred or as Arizona 37 stallions. The commission may delegate this authority to a breeders' 38 association it contracts with for these purposes. The commission may 39 authorize the association, racing organization or department DIVISION to 40 charge and collect a reasonable fee to cover the cost of breeding or 41 ownership certification or transfer of ownership for racing purposes. 42

R. The department has responsibility for the collection and 43 accounting of revenues for the state boxing and mixed martial arts 44 commission, including licensing fees required by section 5-230, the levy 45

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of the tax on gross receipts imposed by section 5-104.02 and cash 1 deposited pursuant to section 5-229. All revenues collected pursuant to 2 this subsection, from whatever source, shall be reported and deposited 3 pursuant to section 5-104.02, subsection C, except that licensing fees 4 required by section 5-230 shall be deposited in the racing regulation fund 5 established by section 5-113.01. The director shall adopt rules as 6 necessary to accomplish the purposes of this subsection and chapter 2, 7 article 2 of this title. 8

S. R. The commission may obtain the services of the office of 9 administrative hearings on any matter that the commission is empowered to 10 hear. 11

T. S. The department DIVISION may adopt rules pursuant to title 12 41, chapter 6 to carry out the purposes of this article, ensure the safety 13 and integrity of racing in this state and protect the public interest. 14

Sec. 4. Section 5-104.01, Arizona Revised Statutes, is amended to 15 read: 16

5-104.01. Audits and special investigations; exemption 17 A. The department DIVISION shall require that an annual financial 18

audit be conducted of each permittee licensed under this chapter. The 19 department DIVISION may also require a financial audit from any 20 concessionaire licensed under this article. The department may DIVISION, 21 for any audit required by this section, MAY require a permittee or 22 concessionaire to supply a certified audit to the department DIVISION. 23 The commission shall adopt rules that require each permittee to select an 24 accounting firm approved by the auditor general to conduct the annual 25 financial audit when a certified audit is required. Audits performed 26 pursuant to this section shall be conducted in accordance with auditing 27 standards established by the auditor general. 28

B. All permittees and licensees subject to the financial audit as 29 prescribed by this section shall afford reasonable and needed facilities 30 and make returns and exhibits to the department DIVISION or audit firm in 31 the form and at the time prescribed by the department DIVISION. The 32 auditor representing THAT REPRESENTS the department DIVISION shall have 33 access to all information, records, pari-mutuel betting devices and 34 equipment necessary to conduct electronic data processing and other audits 35 and reviews. The computer software and other proprietary information and 36 records obtained by the auditor are not subject to disclosure and are 37 exempt from title 39, chapter 1. 38

C. The commission may reduce the number of racing days of a 39 permittee or revoke the permit or license of a person who knowingly fails 40 or refuses to make the prescribed returns or exhibits or give information 41 as required. 42

D. The department DIVISION may expend monies for the purpose of 43 special investigations of permittees or licensees to determine compliance 44 with this chapter or the rules issued pursuant to this chapter. 45

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E. The department DIVISION may require that the audit and 1 investigation of a permittee and licensee include any person who has a 2 substantial interest, as defined in section 38-502, in the permittee or 3 licensee. 4

F. This section does not apply to a racing meeting operated by a 5 county fair association. 6

Sec. 5. Repeal 7 Section 5-104.02, Arizona Revised Statutes, is repealed. 8 Sec. 6. Section 5-105, Arizona Revised Statutes, is amended to 9

read: 10 5-105. Appointment of personnel; tests; reports; detention of 11

animals; testing facilities 12 A. For purposes of detecting violations of this article, the 13

department DIVISION shall appoint qualified veterinarians, biochemists and 14 such other personnel subject to title 41, chapter 4, article 4 as the 15 department DIVISION considers necessary or may contract with a duly 16 qualified chemical laboratory located either within or outside this state. 17 The testing personnel may, in accordance with such procedures as the 18 commission by regulation prescribes BY REGULATION, MAY: 19

1. Examine horses entered in a race within six hours before the 20 start of the race to determine if the horse has been desensitized or 21 drugged. For the purposes of the examination a horse does not have to be 22 held in a retaining barn. 23

2. Perform such other tests and inspections as the department 24 DIVISION considers necessary to carry out this article, including the 25 random splitting of samples. 26

3. Store blood, urine and saliva samples in a frozen state or in 27 any other appropriate manner by which they THE SAMPLES may be preserved 28 for future analysis. 29

4. Perform tests on horses that die while on property under the 30 jurisdiction of the department DIVISION. 31

5. Analyze samples of urine, blood or saliva taken immediately 32 after a race from the horse that won the race to determine if the horse 33 has been drugged. The department DIVISION may additionally analyze 34 samples of any other animal entered in a race. 35

B. The veterinarian authorized by the department DIVISION may order 36 the taking and analysis of samples from a losing favorite or from any 37 other horse when the veterinarian, based on the performance of the horse 38 in the race, has probable cause to believe that the horse has been drugged 39 or desensitized. If a blood sample is required, the veterinarian shall 40 take the sample. 41

C. The identity of any horse determined under this section to be 42 drugged or desensitized shall, in accordance with such procedures as the 43 commission prescribes by regulation, SHALL be reported to a steward and 44 the appropriate county attorney. If any horse is not made available in 45

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accordance with such THE regulations as the commission prescribes for any 1 test or inspection required under this section, the identity of such THE 2 horse shall be reported to a steward. 3

D. A permittee shall, in accordance with regulations prescribed by 4 the commission, SHALL provide the testing personnel with adequate space 5 and facilities so that the inspections, tests and other procedures 6 described in subsection A of this section may be performed. Access to 7 such space and facilities shall be restricted in accordance with 8 regulations prescribed by the commission. 9

E. Testing personnel may detain for a period of not to exceed MORE 10 THAN twenty-four hours for examination, testing or the taking of evidence 11 any horse at a race that is drugged or desensitized or that such person 12 THE PERSONNEL, based on the results of an inspection, test or other 13 procedure conducted under this section, has probable cause to believe is 14 drugged or desensitized. Any horse that is detained may not be moved 15 during such THE detention from the place where the horse is detained 16 except as authorized by testing personnel pursuant to rule and regulation 17 of the commission. 18

F. The department DIVISION shall retain for three years copies of 19 all post-mortem reports on animals. The department DIVISION shall retain 20 all such reports that are used as evidence in a judicial proceeding at 21 least until the conclusion of the proceeding. 22


5-106. Supervisor of mutuels; pari-mutuel auditors; other 25 employees; stewards 26

A. The director shall appoint a supervisor of mutuels, security 27 personnel and as many other employees as may be necessary for the 28 enforcement of the laws of this state and the rules relating to racing. 29

B. The director shall determine which employees shall give bond to 30 the state for the faithful performance of their respective duties in an 31 amount as the shall prescribe DIVISION PRESCRIBES. The cost of providing 32 the bonds shall be a charge against the state. 33

C. The compensation of employees shall be as determined pursuant to 34 section 38-611. 35

D. The director shall keep a record of all proceedings and preserve 36 all books, documents and papers of the commission and department DIVISION. 37

E. The supervisor of mutuels shall monitor the wagering and the 38 pari-mutuel departments at all racing meetings and additional wagering 39 facilities and shall MAY NOT enter into no other employment or contracts 40 of employment involving racing or pari-mutuel wagering either within or 41 without the state during days of racing in the state. 42

F. The security personnel appointed by the director shall assist in 43 keeping the peace at all racing meetings and additional wagering 44 facilities, shall enforce all laws of the state relating to racing and all 45

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rules of the commission and shall perform other duties as the commission 1 or director shall prescribe PRESCRIBES and in the discharge of their 2 duties shall have the authority of peace officers. 3

G. The director shall establish a security section charged with the 4 responsibility for investigative matters relating to the proper conduct of 5 racing and pari-mutuel wagering including barring undesirables from 6 racing, undercover investigations, fingerprinting persons licensed by the 7 department DIVISION and reviewing license applications. The person in 8 charge of the security section shall have at least five years of 9 experience in law enforcement or in conducting or supervising 10 investigations in some aspect of racing law enforcement. 11

H. If on investigation by the department DIVISION there is 12 substantial evidence indicating that the security at any track or 13 additional wagering facility is not satisfactory, the director may order 14 the permittee to remedy the deficiency. If after ten days following the 15 order the permittee has not remedied the deficiency, the department 16 DIVISION may institute its own security personnel program until the 17 deficiency in security is remedied and may charge the permittee the actual 18 costs incurred therefor FOR THE SECURITY PERSONNEL PROGRAM. The permittee 19 may petition the department DIVISION for a hearing at any time to review 20 the necessity of the department DIVISION further maintaining its own 21 security personnel. 22

I. Persons employed by the department WITHIN THE DIVISION as 23 investigators must have training in a general investigation course, 24 including instruction in appropriate Arizona law, conducted or approved by 25 the director. 26

J. For each horse or harness racing meeting, the director, with the 27 approval of the commission, shall employ two persons qualified as 28 stewards. For each horse or harness racing meeting, the permittee, with 29 the approval of the commission, shall employ one person qualified and 30 licensed by the department as a steward. An applicant who wishes to be 31 licensed or employed as a steward by the department for a commercial horse 32 or harness racing meeting must be certified as a steward by a national 33 organization approved by the department DIVISION. The director shall 34 designate one of the two stewards employed by the department WITHIN THE 35 DIVISION pursuant to this section as chief steward for each horse or 36 harness racing meeting. The director shall designate the remaining 37 stewards as assistant stewards. For each horse or harness racing meeting 38 conducted by a county fair racing association, the director, with the 39 approval of the commission, shall employ three persons qualified as 40 stewards. The director shall designate one of the three stewards as chief 41 steward for each horse or harness racing meeting conducted by a county 42 fair racing association, and shall designate the remaining stewards as 43 assistant stewards. 44

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5-107. Nature of racing meeting permits; application for 3 permit; cash deposit; return; bond; conditions and 4 priorities for satisfaction of bond 5

A. Permits to conduct racing meetings are deemed to be personal in 6 nature, are nontransferable and shall terminate on a substantial change of 7 ownership of the permittee. The sale or transfer of twenty-five percent 8 or more of the equity of a permittee shall be IS considered a substantial 9 change of ownership. Nothing in This subsection shall be construed so as 10 to DOES NOT cause the termination of a permit on the death of the 11 permittee, or if a corporation, the death of a shareholder thereof OF THE 12 CORPORATION, during the period for which such THE permit was granted. 13

B. Every applicant making application THAT APPLIES for a permit to 14 hold a racing meeting shall file an application with the commission. The 15 commission shall promulgate rules and regulations regarding application 16 procedures. The application shall include: 17

1. The full name and address of the applicant, and if a 18 corporation, the name of the state under which it is incorporated. If 19 such THE applicant is an association or corporation, the residence 20 addresses of the members of the association and the names of all directors 21 of the corporation shall be included, and the stock certificate records of 22 such THE applicant shall be made available to the department DIVISION on 23 request of the director. The department DIVISION shall be notified within 24 ten days of the election of any new officer or director of a permittee, 25 and the identity of every person who acquires ten percent or more of a 26 permittee's equity or interest. Each new officer, director or substantial 27 owner shall furnish all information requested by the department DIVISION 28 to facilitate approval of his participation in racing in this state. 29

2. The exact location where it is desired to conduct or hold a 30 racing meeting. 31

3. A statement as to whether or not the racing plant is owned or 32 leased, and if leased, the name and residence of the fee owner, or if a 33 corporation, the names and addresses of the directors of the corporation. 34

4. A complete financial statement and balance sheet of the person, 35 corporation or other business entity making such THE application, 36 completed and certified by a certified public accountant. In the case of 37 FOR applications for renewal of dog racing meeting permits that were in 38 existence before May 5, 1972, such THE financial statement and balance 39 sheet shall be on a calendar year basis. In the case of FOR applications 40 for renewal of horse or harness racing meeting permits that were in 41 existence before May 5, 1972, such THE financial statement and balance 42 sheet shall be on a fiscal year basis. In the case of FOR all new permit 43 applications made from and after May 5, 1972, and renewal applications of 44 such THE permits, such THE financial statement and balance sheet shall be 45

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on either a calendar year or fiscal year basis, at the discretion of the 1 department DIVISION. In addition, the application shall identify any 2 guarantors or any indebtedness of the applicant, and the DIVISION shall be 3 provided, on request, with a statement from a certified public accountant 4 certifying that the net worth of any guarantor or guarantors is at least 5 equal to the amount of the unpaid indebtedness so guaranteed. 6 Applications for racing meetings operated by county fair racing 7 associations are exempt from this paragraph. 8

5. A complete list of all management and concession contracts in 9 effect at the time of the application, copies of which shall be furnished 10 to the department DIVISION on request. If the applicant is granted a 11 permit he THE APPLICANT shall further be required, on the request of the 12 department DIVISION, to submit a complete list of all subsequent 13 management and concession contracts, and copies of such THE contracts 14 shall be submitted to the department DIVISION on request. 15

6. Such ANY other relevant and material information pertaining to 16 the application as the department may require DIVISION REQUIRES. 17

C. Not less than AT LEAST ten days before the commencement of a 18 commercial racing meeting, the permittee shall submit to the department 19 DIVISION a cash deposit in such AN amount, but not to exceed MORE THAN 20 five thousand dollars, as the director deems necessary to insure payment 21 of fees and the amount due the state as the percentage of pari-mutuel 22 receipts payable to the state as prescribed by law. On termination of the 23 racing meeting, the deposit shall be returned to the applicant, less any 24 fees or pari-mutuel receipts remaining unpaid. 25

D. In addition to the cash deposit and before the issuance of a 26 racing meeting permit, the applicant shall deposit with the department 27 DIVISION a bond payable to the state for the benefit of the state and any 28 person covered by this section, in such AN amount, but not to exceed MORE 29 THAN three hundred thousand dollars in the case of horse or harness racing 30 meeting permittees, as the director deems necessary, with a surety or 31 sureties to be approved by the department DIVISION and the attorney 32 general and conditioned in accordance with the following order of 33 priorities: 34

1. That the permittee shall first faithfully pay to the state the 35 percentage of the pari-mutuel receipts, as applicable, prescribed by law 36 and all taxes due to the state. 37

2. That thereafter the permittee shall pay to the owner thereof all 38 funds held by the permittee for the account of such THE owner, including 39 purses won, if such THE owner is or has been licensed by the department 40 DIVISION. 41

3. That thereafter the permittee shall pay all salaries and wages 42 due to the employees of such THE permittee in connection with the conduct 43 of the racing meeting. 44

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4. That thereafter the permittee shall pay all amounts due to the 1 breeder of any horse for a breeder's award. 2

E. Any person, including the state, claiming against the bond may 3 maintain an action at law against the permittee and the surety or 4 sureties, and the surety or sureties may be sued on the bond in successive 5 actions until the penal sum thereof is exhausted. If it appears that 6 there is more than one claim on such THE bond or if it appears that the 7 state may have an interest therein IN THE BOND, the state or any other 8 claimant may move the court in which such actions are filed to intervene 9 or to consolidate such THE actions to determine the priority order of 10 claims in accordance with subsection D of this section. No suit may be 11 commenced on the bond after the expiration of one year following the day 12 of the closing of the racing meeting during which any act or failure to 13 act giving rise to a claim against the bond shall arise. 14

F. The bond prescribed by this section shall be IS effective for 15 the period of the racing permit granted by the commission, and the 16 liability of the surety for all claims shall be IS limited to the face 17 amount of the bond. If the surety desires to make payment without 18 awaiting court action, the amount of any bond filed in compliance with 19 this chapter shall be reduced to the extent of any payments made by such 20 THE surety in good faith thereunder. Any such payment shall be based 21 first on the priority of claim order as established by subsection D of 22 this section and thereafter on the priority of the date the written claims 23 are received by the surety before court action. 24


5-107.01. Necessity for permits for racing meetings; licenses 27 for officials and other persons 28

A. A person, association or corporation shall not hold any racing 29 meeting without having first obtained and having in full force and effect 30 a permit that is issued by the department DIVISION. 31

B. A trainer, driver, jockey, apprentice jockey, horse owner, 32 exercise rider, agent, jockey's agent, stable foreman, groom, valet, 33 veterinarian, horseshoer, steward, stable watchman, starter, timer, judge, 34 food and beverage concessionaire, manager or other person acting as a 35 participant or official at any racing meeting including all employees of 36 the pari-mutuel department and any other person or official the department 37 DIVISION deems proper shall not participate in racing meetings without 38 having first obtained and having in full force and effect a license or 39 credentials that are issued by the department DIVISION, pursuant to such 40 rules as the commission shall make COMMISSION RULE. The department 41 DIVISION shall not revoke a license except for cause and after a hearing. 42

C. Each person, association or corporation that holds a permit or a 43 license under this chapter shall comply with all rules and orders of the 44 commission or department DIVISION. 45

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D. Any credential or license that is issued by the department 1 DIVISION to a licensee shall be used only as prescribed by commission rule 2 or order of the director. Use for purposes other than those prescribed is 3 grounds for suspension or revocation or imposition of a civil penalty as 4 provided in section 5-108.02, subsection E. 5

E. All applicants for a permit or license shall submit to the 6 department DIVISION a full set of fingerprints, background information and 7 the fees that are required pursuant to section 41-1750. The department of 8 gaming DIVISION shall submit the fingerprints to the department of public 9 safety for the purpose of obtaining a state and federal criminal records 10 check pursuant to section 41-1750 and Public Law 92-544. The department 11 of public safety may exchange this fingerprint data with the federal 12 bureau of investigation. The applicant shall pay the fingerprint fee and 13 costs of the background investigation in an amount that is determined by 14 the department DIVISION. For such THIS purpose the department of gaming 15 DIVISION and the department of public safety may enter into an 16 intergovernmental agreement pursuant to title 11, chapter 7, article 3. 17 The fees shall be credited pursuant to section 35-148. 18

F. The director may issue a temporary license to an owner, trainer, 19 driver or jockey who is duly licensed in another jurisdiction for special 20 races or special circumstances for a period of not to exceed MORE THAN 21 thirty days. The director may allow a trainer so licensed to complete an 22 application for a temporary license for an owner if the owner is not 23 immediately available to personally submit the application. 24

G. A licensed owner, lessee or trainer of a qualified horse who has 25 applied to a permittee to be stabled at a track and who has not been 26 granted a stall shall not be IS NOT prohibited from bringing the horse on 27 the race grounds for the purpose of entering the animal in races that are 28 held by the permittee or for the purposes of qualifying to race solely for 29 the reason that the animal is not being stabled at the track if the owner, 30 lessee or trainer is in compliance with rules adopted by the commission. 31


5-107.02. Qualification for eligibility of racing meeting 34 operator 35

No A person, association or corporation is NOT eligible to operate a 36 racing meeting with a permit issued under this chapter unless he THE 37 PERSON, ASSOCIATION OR CORPORATION is an owner or the lessee of the track 38 named in the permit. A permit shall not be issued to any corporation or 39 association unless the corporation or association in its application for 40 the permit has specifically named the manager who will operate the racing 41 meeting, has supplied the department DIVISION with all relevant 42 information concerning this manager including his relationship with the 43 corporation or association, any previous experience in the racing 44 field, and any other relevant and material information the commission may 45

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have requested REQUESTS, and has obtained OBTAINS the commission's 1 approval of the manager so named in the application. 2


5-107.03. Separate financial records of permittee and 5 concessionaire; violations 6

A. Each permittee and each concessionaire who has a proprietary 7 interest in a permit shall keep separate financial books, statements and 8 records with respect to the operations conducted by him THE PERMITTEE OR 9 CONCESSIONAIRE at each particular place, track, additional wagering 10 facility or enclosure. A commercial racing permittee and concessionaire 11 shall keep and maintain the financial books, statements and records in 12 accordance with generally accepted accounting principles so as to reflect 13 accurately the operations conducted by each permittee and concessionaire 14 who has a proprietary interest in a permit. A county fair racing 15 association may keep and maintain the financial books, statements and 16 records on a cash basis on approval of the department DIVISION. Such 17 Financial books, statements and records shall be open for examination by 18 the director or his THE DIRECTOR'S designated representative. 19

B. All financial information that is given by a commercial racing 20 permittee or concessionaire to any state agency, body or department shall 21 accurately reflect the total income of each permittee and concessionaire 22 who has a proprietary interest in a permit from each particular place, 23 track or enclosure. 24

C. Any violation of this section by any permittee is a ground for 25 refusal to renew or for the revocation of a permit only after written 26 notice to the permittee and a full hearing thereon ON THE VIOLATION. 27


5-108. Issuance of permit or license; grounds for refusal to 30 issue; nontransferable; renewal 31

A. The department DIVISION shall conduct a thorough investigation 32 concerning the application for a permit or a license and: 33

1. The department DIVISION may refuse to issue or renew a license 34 or the commission may refuse to approve or renew a permit for any 35 applicant if there is substantial evidence to find that the applicant: 36

(a) Has been suspended or ruled off a recognized course in another 37 jurisdiction by the racing board or commission thereof OF THAT COURSE. 38

(b) Is not of good repute and moral character. 39 (c) Has, when previously licensed or granted a permit, violated the 40

racing laws of this state or of any other state or the regulations of the 41 commission. 42

(d) Is a corporation, firm or association not duly qualified and 43 authorized to conduct business within IN this state. 44

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(e) If an individual, has been convicted of a felony or any crime 1 involving moral turpitude, or, if a corporation, firm or association, is 2 controlled or operated directly or indirectly by a person or persons who 3 have been convicted of a felony or any crime involving moral turpitude. 4

(f) If an individual, is engaged in or has been convicted of 5 wagering by other than the mutuel method or in pool selling or bookmaking 6 in any state of the United States or foreign country where such THE other 7 method, pool selling or bookmaking is illegal or, if a corporation, firm 8 or association, is controlled or operated directly or indirectly by a 9 person who is engaged in or has been convicted of wagering by other than 10 the mutuel method or in pool selling or bookmaking in any state of the 11 United States or foreign country where such THE other method, pool selling 12 or bookmaking is illegal. 13

(g) Has wilfully violated any provision of this chapter or any of 14 the rules and regulations of the commission. 15

(h) Should not, in the best interest of the safety, welfare, 16 economy, health and peace of the people of the state, be granted a license 17 or permit. 18

(i) Has entered into any contract or contracts that will not 19 further the best interests of racing or be in the public interest or, in 20 the case of FOR permittees or applicants for permits to conduct racing 21 meetings, has failed to file with the department DIVISION a contract, as 22 an addendum to an application for a permit to conduct a racing meeting, 23 providing for food and beverage concession rights, if any, at that racing 24 meeting. A food and beverage concessionaire contract filed with the 25 department DIVISION pursuant to this section shall be available to the 26 public on request. 27

(j) Has failed to inform the department DIVISION on or before May 28 15 of each year in writing of any material change, occurring during the 29 immediately preceding year of the license or permit term, in the 30 information supplied by the applicant in the application, for a license or 31 permit. If a licensee or permittee fails to file such information, the 32 department DIVISION shall notify the licensee or permittee of the failure 33 to file and the licensee or permittee shall have an additional fifteen 34 days, after the notice is mailed to the last known address of the licensee 35 or permittee, to file the information. 36

2. The commission may refuse to approve or renew a permit to 37 conduct a racing meeting or a food and beverage concessionaire license for 38 any ground set forth in paragraph 1 of this subsection or if there is 39 substantial evidence to find that: 40

(a) The applicant is not possessed of DOES NOT POSSESS or has not 41 demonstrated financial responsibility sufficient to meet adequately the 42 requirements of the enterprise proposed to be authorized. 43

(b) The applicant is not the true owner of the enterprise proposed 44 to be granted a permit, that other persons have ownership in the 45

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enterprise which fact has not been disclosed or, if the applicant is a 1 corporation, that ten per cent PERCENT of the stock of the corporation is 2 subject to a contract or option to purchase at any time during the period 3 for which the permit is issued unless the contract or option was disclosed 4 to the department DIVISION and the department DIVISION approved the sale 5 or transfer during the period of the permit. 6

(c) The granting of a permit or license in the locality set out in 7 the application is not in the public interest or convenience. 8

(d) The applicant, if a corporation or any holder of more than ten 9 per cent PERCENT of the outstanding stock of any class, transferred, 10 pledged or in any other way collateralized any of its stock after an 11 application for a permit or license was filed with the department 12 DIVISION, without prior department DIVISION approval. The provisions of 13 subdivision (b) of this paragraph and this subdivision shall DO not apply 14 to day-to-day transfers of stock of a publicly held corporation unless the 15 transfer, or a combination of transfers, involves a controlling interest 16 in or affects the operational control of the corporation, or involves ten 17 per cent PERCENT or more of any class of stock of the corporation owned by 18 the controlling shareholders or the manager of any racing meeting. 19

(e) The applicant has, or if the applicant is a corporation, its 20 officers, managerial employees, directors or substantial stockholders 21 have, committed acts of moral turpitude in this state or have wilfully 22 violated a material racing statute of this state or a material rule or 23 regulation of the commission. If the commission makes such a finding, with 24 respect to an officer, managerial employee, director or substantial 25 stockholder, the applicant may be denied a permit only on the failure to 26 remove the officer, managerial employee or director or the failure of the 27 substantial stockholder to sell its stock interest. For THE purposes of 28 this subdivision, a substantial stockholder is one who owns ten per cent 29 PERCENT of the issued and outstanding stock of the applicant. 30

3. The department DIVISION may deny or refuse to renew a license or 31 the commission may refuse to approve or renew a permit for any person who 32 has made a knowingly false statement of a material fact to the department. 33

4. The department DIVISION may deny or refuse to renew a license or 34 the commission may refuse to approve or renew a permit to any applicant if 35 the applicant has failed to meet any monetary obligation in connection 36 with any racing meeting held in this state. 37

5. The department DIVISION shall refuse to issue or renew a license 38 or the commission shall refuse to approve or renew a permit for any 39 applicant if there is substantial evidence to find that the applicant, if 40 an individual, has been convicted within the last five years of a felony 41 or any crime involving moral turpitude or, if a corporation, firm or 42 association, is controlled or operated directly or indirectly by a person 43 or persons who have been convicted within the last five years of a felony 44 or any crime involving moral turpitude. 45

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B. The department DIVISION in conducting the investigation referred 1 to in this section shall have the full cooperation of all state agencies 2 and departments, including the department of public safety, and the 3 agencies and departments shall make their personnel available to the 4 department DIVISION, on request. 5

C. If the commission determines that the applicant for a permit, 6 whether such THE applicant is a lessee or an individual or corporate owner 7 of the tracksite, meets the requirements prescribed by this article and 8 the rules and regulations of the commission, it shall approve the permit. 9 The permit shall be approved for a period of not to exceed MORE THAN three 10 years. Any renewal of a permit shall be pursuant to subsection D of this 11 section. 12

D. Except as provided by subsection C of this section, permits 13 shall be renewed for successive periods of not more than three years 14 unless the commission revokes the permit or refuses to renew the permit 15 for any of the grounds enumerated in this section or section 5-108.03. 16 The renewal of a permit shall be denied only after a full hearing and a 17 finding of good cause for refusing renewal has been made by the 18 commission. 19

E. The director shall suspend or revoke a license or the commission 20 shall deny or revoke a permit of a person who intentionally provides false 21 information to the department DIVISION or any other governmental agency 22 concerning the person's criminal history background. The director may 23 suspend or revoke a license or the commission may deny or revoke a permit 24 of a person who negligently or recklessly provides false information to 25 the department DIVISION or any other governmental agency concerning the 26 person's criminal history background. 27

F. Except as provided by this subsection, the director may grant a 28 license or the commission may approve a permit to engage in the racing 29 industry in this state only after all necessary investigation of the 30 background of the applicant required by this article has been completed. 31 A temporary permit approved by the commission or a temporary license valid 32 for a period of not to exceed MORE THAN ninety days may be issued by the 33 director before the time the investigation of the background of the 34 applicant for the license or permit has been completed. After a temporary 35 license or permit has been issued, the director may suspend or revoke a 36 temporary license or the commission may revoke a temporary permit for any 37 reason that would be grounds to refuse to issue, approve or renew a 38 license or permit under the provisions of subsection A of this section. 39

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5-108.01. Hearing on application for or renewal of original 3 permit; notice of hearing; decisions of 4 commission and director; appeal; transfer of 5 permit 6

A. The commission shall hold a public hearing on an original 7 application for a racing permit or renewal of a current racing permit 8 under this article. At least fifteen days' notice shall be given to all 9 permittees holding a permit, and they may appear and be heard as parties 10 in interest upon the hearing of an application. 11

B. The commission may provide by rule for rehearings of any final 12 decision of the department DIVISION in accordance with section 5-104, 13 subsection D. Except as provided in section 41-1092.08, subsection H, the 14 parties to the proceeding before the commission or department DIVISION may 15 commence an action in the superior court in Maricopa county after a 16 decision of the commission or director has become final to review the 17 decision pursuant to title 12, chapter 7, article 6. Pending 18 determination of the appeal, the decision and order shall remain in full 19 force and effect, and may not be superseded. 20

C. The commission shall not approve an original permit to conduct a 21 horse racing, harness racing or dog racing meeting at any place, enclosure 22 or track not used for racing purposes pursuant to permits actually issued 23 as authorized by law prior to BEFORE February 1, 1971, unless before the 24 beginning of construction or preparation of the place, enclosure or track 25 the commission determines that each of the following applies: 26

1. The conducting of horse, harness or dog racing meetings at such 27 place will serve the public interest, convenience or necessity. 28

2. The plan of racing is economically feasible. 29 3. The issuance of a permit is in the best interest of racing and 30

this state generally. 31 D. No place, enclosure or track used for horse, harness or dog 32

racing on or before February 1, 1971 may be used for any other type of 33 animal racing, except that in counties with a population of less than 34 seven hundred thousand persons as shown by the last United States census, 35 a place, enclosure or track used for one type of animal racing may be used 36 for any other type of animal racing. In considering an application for a 37 permit under this section, the commission shall give consideration to 38 CONSIDER the number and location of existing tracks, the number of permits 39 already granted and the economic effect the granting of a new permit may 40 have on existing tracks and permittees and the revenues of this state. 41

E. If the owner or lessee of any place, enclosure or track used for 42 racing purposes pursuant to permits issued as authorized by law on or 43 before February 1, 1971 is obligated for any reason to abandon the use of 44 the place, enclosure or track, the owner or lessee may transfer the use 45

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and rights to use the premises for racing purposes to any other location 1 in the same county. 2


5-108.02. Revocation of permits; penalties 5 A. The commission may revoke the permit of any permittee upon ON 6

any of the grounds upon ON which the commission could refuse to approve a 7 permit in section 5-108 or who has failed to pay the department DIVISION 8 all sums required under this chapter. 9

B. The commission may revoke the permit to hold a racing meeting of 10 any corporate permittee which transfers ten per cent PERCENT of its stock 11 after a permit to hold a racing meeting is issued, and before the 12 termination of the permit period, except as authorized in section 5-108, 13 subsection A, paragraph 2, subdivision (d). 14

C. Revocation shall be made only after a hearing before the 15 commission for which ten days' notice in writing by certified mail has 16 been given to the permittee specifying the grounds for the proposed 17 revocation. 18

D. At the hearing, the permittee shall be given an opportunity to 19 be heard and present evidence in opposition to the proposed revocation. 20

E. When the IF grounds exist for the imposition of a civil penalty 21 or revocation of a permit issued pursuant to this chapter, the department 22 DIVISION may impose a civil penalty, OF not to exceed MORE THAN five 23 thousand dollars per day nor OR more than a total of twenty-five thousand 24 dollars, on the permittee in lieu of or in addition to revocation of the 25 permit by the commission. The department DIVISION, in addition to any 26 criminal penalties provided in this chapter, may levy a civil penalty as 27 to a permittee in an amount not to exceed OF NOT MORE THAN five hundred 28 dollars for violation of any provision of this chapter or rule or 29 regulation adopted pursuant to this chapter which THAT does not constitute 30 grounds for revocation of a permit. All sums paid to the department 31 DIVISION pursuant to this subsection shall be deposited in the general 32 fund. 33


5-108.05. Revocation and suspension of licenses; probation; 36 civil penalties; exception 37

A. Except as provided by subsections C and D of this section, the 38 department DIVISION may revoke or suspend the license of a licensee or 39 impose probation requirements or a civil penalty, or any combination of 40 these sanctions, based on any of the grounds for which the department 41 could refuse to issue a license pursuant to section 5-108 or for a 42 violation of any provision of this article or the rules of the commission 43 or department DIVISION. 44

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B. The department DIVISION shall suspend or revoke a license only 1 after a hearing before the department DIVISION pursuant to rules adopted 2 by the commission. 3

C. Except as provided in subsection E of this section, the 4 department DIVISION shall revoke for a period of not to exceed MORE THAN 5 one year the license of any person who commits an initial violation of any 6 provision of section 5-115. If the licensee is a corporation, the 7 department DIVISION shall revoke the license if the corporation is 8 controlled or operated directly or indirectly by such a person. 9

D. Except as provided in subsection E of this section, the 10 department DIVISION shall revoke permanently the license of any person who 11 commits a subsequent violation of any provision of section 5-115. 12

E. The department DIVISION may impose a lesser penalty or sanction 13 authorized by this article for a violation of a rule with respect to 14 medication if the department DIVISION finds by clear and convincing 15 evidence that the permitted medication or medication which THAT reduces 16 exercise induced EXERCISE-INDUCED pulmonary hemorrhage, which is revealed 17 in a sample or test, was administered to the animal in a lawful manner. 18


5-109. Identification of animals; exemptions 21 A horse shall not take part in any race conducted under this article 22

unless satisfactorily identified and registered by an association 23 recognized by the department DIVISION. A horse shall not be allowed to 24 leave the racetrack premises unless it is accompanied by the certificate 25 required by section 3-1335 unless: 26

1. An emergency situation requires immediate removal of the animal 27 from the premises. 28

2. The director of the Arizona department of agriculture issues 29 special permission in situations he THE DIRECTOR determines to be in the 30 best interest of the animal. 31


5-109.01. Requirements of permittee regarding Arizona bred 34 horses; powers of commission 35

A. A permittee, in addition to all other requirements, shall: 36 1. Admit to qualifying any horse that is foaled in this state or 37

any dog that is whelped at a facility licensed by the department DIVISION 38 and that is: 39

(a) Of suitable racing age. 40 (b) Physically qualified and registered pursuant to department 41

DIVISION requirements. 42 (c) Owned by a resident of this state, who has been engaged for at 43

least two consecutive years, in this state, in the business of breeding, 44 racing, raising or training horses for racing purposes. 45

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2. Adopt no rule that discriminates in any way against a resident 1 of this state who is engaged in this state in the business of breeding, 2 racing, raising or training horses for racing purposes. 3

B. Failure of a permittee to comply with subsection A of this 4 section constitutes grounds for revocation of or refusal to renew any 5 permit. 6

C. The commission may adopt rules to further the purposes of this 7 section. 8


5-110. Racing days, times and allocations; emergency 11 transfer; county fairs; charity days 12

A. Permits for horse or harness racing meetings shall be approved 13 and issued for substantially the same dates allotted to permittees for the 14 same type of racing during the preceding year or for other dates that 15 permittees request, provided that, in the event IF there is a conflict in 16 dates requested between two or more permittees in the same county for the 17 same kind of racing, the permittee whose application is for substantially 18 the same dates as were allotted to the permittee in the preceding year 19 shall be entitled to have HAS preference over other permittees. In the 20 event two or more permittees have agreed that the dates to be allotted to 21 each of them each year shall be alternated from one year to the next, the 22 commission shall recognize their agreement and those permittees may be 23 accorded preference over any other permittee as to those dates to be 24 allotted to those permittees on an alternating basis. Except as otherwise 25 provided, the commission shall allot dates to the respective permittees 26 after giving due consideration to CONSIDERING all of the factors involved 27 and the interests of permittees, the public and this state. 28

B. The commission may require by the terms of any permit that the 29 permittee offer such THE number of races during any racing meeting as the 30 commission shall determine, provided that DETERMINES, BUT the permittee 31 shall be permitted to MAY offer at least the same number of races each day 32 as offered in the prior year. The commission shall require each horse 33 racing permittee to conduct for a period of thirty days a number of races 34 equal to an average of at least two races for each day of racing 35 exclusively for quarter horses. If, in the opinion of the commission, the 36 permittee is offering acceptable quarter horse races but an honest effort 37 is not being put forth to fill these races by the horsemen, the commission 38 may rescind the two race per day quarter horse requirement. 39

C. Live racing and wagering on simulcast races shall be permissible 40 in either daytime or nighttime. Unless otherwise agreed by written 41 contract that is submitted to the department DIVISION between all the 42 permittees in the same county, there shall be no wagering on simulcast dog 43 races before 4:15 p.m., mountain standard time, on the same day that there 44 is live daytime horse or harness racing in any county in which commercial 45

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horse or harness racing has been conducted before February 1, 1971. THE 1 COMMISSION SHALL DETERMINE the hours during which any other harness or 2 horse racing is to be conducted shall be determined by the commission. 3 The application for a permit shall state the exact days on which racing 4 will be held and the time of day during which racing will be conducted. 5

D. If the commission determines that an emergency has obligated or 6 may obligate a permittee to discontinue racing at a location, the 7 commission may authorize the permittee to transfer racing for the number 8 of days lost to any other location. 9

E. THE LIMIT ON DAYS OF RACING IN THIS SECTION DOES NOT APPLY TO a 10 racing meeting, when operated by a county fair racing association or under 11 lease during the county fair to any individual, corporation or 12 association, shall not come under the limitation placed on days of racing 13 in this section. 14

F. The department shall be DIVISION IS the judge of whether a 15 county fair racing meeting is being operated pursuant to this section. A 16 county fair racing meeting conducted by an individual, corporation or 17 association, other than the properly authorized county fair racing 18 association, shall come under the general provisions of this article the 19 same as a commercial meeting. Notwithstanding this subsection, a county 20 fair racing meeting, whether conducted by a county fair racing association 21 or by an individual, corporation or association other than a county fair 22 racing association, is exempt from the requirement prescribed in section 23 5-111 to pay to the state a percentage of the pari-mutuel pool collected 24 at the meeting. 25

G. The commission may allow a permittee, in addition to the days 26 specified in this permit, to operate up to three racing days during any 27 one meeting as charity days. From the amount deducted from the total 28 handled in the pari-mutuel pool on charity days, the permittee shall 29 deduct an amount equal to the purses and the cost of conducting racing on 30 these days, and shall donate the balance to nonprofit organizations and 31 corporations that benefit the general public, that are engaged in 32 charitable, benevolent and other like work and that are selected by the 33 permittee and approved by the department DIVISION. In no event shall The 34 amount given to charity from charity racing days SHALL NOT be less than 35 the amount that otherwise would have gone to this state as the state's 36 share on a noncharity racing day. 37

H. Notwithstanding any other law, live dog racing shall not be 38 conducted in this state after December 31, 2016. This subsection does not 39 apply to nonprofit organizations that host lure coursing or similar events 40 that test a dog's ability, stamina and breeding or training for such 41 events. Notwithstanding any other provision of this article, any dog 42 racing permittee that offered live dog racing in 2016 or that has offered 43 live dog racing in eight out of ten calendar years from 1980 to 1990 in 44 counties that have a population of less than five hundred thousand persons 45

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shall be considered as operating a racetrack enclosure for all purposes 1 under this article and shall not be authorized or required to conduct live 2 racing as a condition of that permittee's racing permit. Any permittee 3 qualified under this subsection may conduct advance deposit wagering, 4 wagering at additional wagering facilities that are owned or leased by 5 that permittee and wagering on telecasts of races conducted at racetrack 6 enclosures within this state or at racetrack enclosures outside this state 7 without offering live racing at that permittee's racetrack enclosure. 8


5-111.04. Repayment of nonapproved expenditures of capital 11 monies; judicial review 12

A. If it is determined by the commission DETERMINES, through the 13 findings of the commission or through information provided to the 14 commission by the department DIVISION or the auditor general, that a 15 permittee has retained monies for approved capital improvements pursuant 16 to section 5-111.02 in excess of the amount approved for such capital 17 improvements, the permittee shall repay the excess amount to this state 18 within one year after notification of the determination by the commission. 19 The commission shall determine the repayment method, and the repayment may 20 be made directly by the permittee or through reductions in future 21 entitlements for capital improvements which THAT have been approved by the 22 commission. This section shall DOES not prohibit the use of capital 23 expenditure monies received pursuant to section 5-111.02 for repayment of 24 obligations of the permittee which THAT directly relate to approved 25 capital improvements. 26

B. Except as provided in section 41-1092.08, subsection H, final 27 decisions of the commission are subject to judicial review pursuant to 28 title 12, chapter 7, article 6. 29


5-112. Wagering legalized; simulcasting of races; 32 unauthorized wagering prohibited; violation; 33 classification; report 34

A. Except as provided in subsection J of this section, section 35 5-101.01, subsection F and title 13, chapter 33, any person within the 36 enclosure of a racing meeting held pursuant to this article may wager on 37 the results of a race held at the meeting or televised to the racetrack 38 enclosure by simulcasting pursuant to this section by contributing money 39 to a pari-mutuel pool operated by the permittee as provided by this 40 article. 41

B. The department DIVISION, on request by a permittee, may grant 42 permission for electronically televised simulcasts of horse, harness or 43 dog races to be received by the permittee. In counties having WITH a 44 population of one million five hundred thousand persons or more, the 45

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simulcasts shall be received at the racetrack enclosure where a horse or 1 harness racing meeting is being conducted, provided that the simulcast may 2 only be received during, immediately before or immediately after a minimum 3 of nine posted races for that racing day. In counties having WITH a 4 population of five hundred thousand persons or more but less than one 5 million five hundred thousand persons, the simulcasts shall be received at 6 the racetrack enclosure where a horse or harness racing meeting is being 7 conducted provided that the simulcast may only be received during, 8 immediately before or immediately after a minimum of four posted races for 9 that racing day. In all other counties, the simulcasts shall be received 10 at a racetrack enclosure at which authorized racing has been conducted, 11 whether or not posted races have been offered for the day the simulcast is 12 received. The simulcasts shall be ARE limited to horse, harness or dog 13 races. The simulcasts shall be ARE limited to the same type of racing as 14 authorized in the permit for live racing conducted by the permittee. The 15 department DIVISION, on request by a permittee, may grant permission for 16 the permittee to transmit the live race from the racetrack enclosure where 17 a horse or harness racing meeting is being conducted to a facility or 18 facilities in another state. All simulcasts of horse or harness races 19 shall comply with the interstate horseracing act of 1978 (P.L. 95-515; 92 20 Stat. 1811; 15 United States Code chapter 57). All forms of pari-mutuel 21 wagering shall be ARE allowed on horse, harness or dog races, whether or 22 not televised by simulcasting. All monies wagered by patrons on these 23 horse, harness or dog races shall be computed in the amount of money 24 wagered each racing day for purposes of section 5-111. 25

C. Notwithstanding subsection B of this section, in counties having 26 WITH a population of one million five hundred thousand persons or more, 27 simulcasts may be received at the racetrack enclosure, and the permittee 28 may offer pari-mutuel wagering on the simulcast racing at any additional 29 wagering facility used by a permittee for handling wagering as provided in 30 section 5-111, subsection A during a permittee's racing meeting as 31 approved by the commission, whether or not the simulcasts are televised to 32 the additional wagering facilities and whether or not posted races have 33 been conducted on the day the simulcast is received, if the permittee's 34 racing permit requires the permittee to conduct a minimum of one hundred 35 fifty-six days of live racing with an average of nine posted races on an 36 average of five racing days each week at the permittee's racetrack 37 enclosure during the period beginning on October 1 and ending on the first 38 full week in May, unless otherwise agreed in writing by the permittee and 39 the recognized horsemen's organization that represents the horsemen 40 participating in the race meet at the racetrack enclosure, subject to 41 approval by the department DIVISION. 42

D. Notwithstanding subsection B of this section, in counties having 43 WITH a population of seven hundred thousand persons or more but less than 44 one million five hundred thousand persons, simulcasts may be received at 45

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the racetrack enclosure, and the permittee may offer pari-mutuel wagering 1 on the simulcast racing at any additional wagering facility used by a 2 permittee for handling wagering as provided in section 5-111, subsection A 3 during a permittee's racing meeting as approved by the commission, whether 4 or not the simulcasts are televised to the additional wagering facilities 5 and whether or not posted races have been conducted on the day the 6 simulcast is received. The permittee may conduct wagering on dark day 7 simulcasts for twenty days, provided the permittee conducts a minimum of 8 seven posted races on each of the racing days mandated in the permittee's 9 commercial racing permit. In order to conduct wagering on dark day 10 simulcasts for more than twenty days, the permittee is required to conduct 11 a minimum of seven posted races on one hundred forty racing days at the 12 permittee's racetrack enclosure. 13

E. In an emergency and on a showing of good cause by a permittee, 14 the commission may grant an exception to the minimum racing day 15 requirements of subsections C and D of this section. 16

F. The minimum racing day requirements of subsections C and D of 17 this section shall be computed by adding all racing days, including any 18 county fair racing days operated in accordance with section 5-110, 19 subsection F, allotted to the permittee's racetrack enclosure in one or 20 more racing permits. 21

G. Simulcast signals or teletracking of simulcast signals does not 22 prohibit live racing or teletracking of that live racing in any county at 23 any time. 24

H. Except as provided in subsection J of this section, section 25 5-101.01, subsection F and title 13, chapter 33, any person within a 26 racetrack enclosure or an additional facility authorized for wagering 27 pursuant to section 5-111, subsection A may wager on the results of a race 28 televised to the facility pursuant to section 5-111, subsection A by 29 contributing to a pari-mutuel pool operated as provided by this article. 30

I. Except as provided in this article and in title 13, chapter 33, 31 all forms of wagering or betting on the results of a race, including 32 buying, selling, cashing, exchanging or acquiring a financial interest in 33 pari-mutuel tickets, except by operation of law, whether the race is 34 conducted in this state or elsewhere, are illegal. 35

J. A permittee shall not knowingly permit a person who is under 36 twenty-one years of age to be a patron of the pari-mutuel system of 37 wagering. 38

K. Except as provided in title 13, chapter 33, any person who 39 violates this article with respect to any wagering or betting, whether the 40 race is conducted in or outside this state, is guilty of a class 6 felony. 41

L. Simulcasting may only be authorized for the same type of racing 42 authorized by a permittee's live racing permit. 43

M. In addition to pari-mutuel wagering otherwise authorized by this 44 chapter, a commercial live-racing permittee or a commercial dog racing 45

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permittee that conducted live dog racing in 2016 may conduct advance 1 deposit wagering as approved by the commission. The commission also may 2 allow advance deposit wagering by an advance deposit wagering provider if 3 a racing authority in the state where the advance deposit wagering 4 provider is located approves the advance deposit wagering provider and, 5 for horse racing, if the advance deposit wagering provider annually 6 secures the approval of the commercial live horse racing permittees in a 7 county where the advance deposit wagering provider or commercial 8 live-racing permittee accepts advance deposit wagers for horse racing and 9 of the organization that represents the majority of owners and trainers at 10 each of the commercial live horse racing enclosures in each county. An 11 advance deposit wagering provider that the commission approves shall pay 12 source market fees on wagers placed on horse racing from this state to 13 commercial live horse racing permittees in this state. The advance 14 deposit wagering provider shall divide the source market fees on horse 15 racing wagers on the basis of the proportion of the permittees' total live 16 and simulcast handle during the previous year and the advance deposit 17 wagering provider shall pay source market fees on wagers on dog racing 18 from the county in which the live or simulcast racing is conducted to the 19 commercial live racing permittee in that county. The advance deposit 20 wagering provider shall divide the source market fees on dog racing from 21 wagering in any other county as provided in a written agreement that is 22 submitted to the department DIVISION between all commercial dog racing 23 permittees. 24

N. The commission may issue a permit to authorize an advance 25 deposit wagering provider to accept advance deposit wagering on racing 26 from persons in this state. The procedures for the approval of the permit 27 must be similar to the procedures for the approval of racing permits under 28 this article, subject to the following requirements: 29

1. The commission shall issue an advance deposit wagering permit 30 only if the state agency that regulates racing in the state where the 31 advance deposit wagering provider is located approves the permittee or 32 provider to conduct advance deposit wagering. 33

2. An advance deposit wagering provider may accept advance deposit 34 pari-mutuel wagers from natural persons in this state on racing conducted 35 by a commercial live-racing permittee in this state or on racing conducted 36 outside this state if the commercial live-racing permittee in this state 37 at a racetrack enclosure in a county where live horse or live dog racing 38 has been conducted for a period of at least forty days per year for at 39 least twelve consecutive years beginning after 1992 or at a new racetrack 40 enclosure in the same county that replaced the previously existing 41 racetrack enclosure on which advance deposit wagering is accepted or that 42 conducts a racing program with the same type of racing on which the 43 advance deposit wagering is accepted enters into an agreement with the 44 advance deposit wagering provider providing for the payment of a source 45

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market fee that is agreed to by the commercial live-racing permittee on 1 all advance deposit wagering. 2

3. An advance deposit wagering provider shall pay source market 3 fees in an amount that is agreed to by the commercial live-racing 4 permittee on all advance deposit wagering by persons in this state on the 5 same type of racing the commercial live-racing permittee conducts. Source 6 market fees from wagers by persons in this state through an advance 7 deposit wagering provider shall be allocated as provided in paragraph 7 of 8 this subsection to a commercial live horse racing permittee at a racetrack 9 enclosure in a county where live horse racing has been conducted for a 10 period of at least forty days per year for at least twelve consecutive 11 years beginning after 1992 or at a new racetrack enclosure in the same 12 county that replaced the previously existing racetrack enclosure during 13 the period of time that the commercial live-racing permittee conducts a 14 racing program. Source market fees for dog racing from wagering through 15 the advance deposit wagering provider from persons wagering in a county 16 shall be allocated as provided in paragraph 7 of this subsection to a 17 commercial dog racing permittee at a racetrack enclosure in a county where 18 live dog racing had been conducted in 2016 or had been conducted for a 19 period of at least forty days per year for at least twelve consecutive 20 years beginning after 1992 or at a new racetrack enclosure in the same 21 county that replaced the previously existing racetrack enclosure. Source 22 market fees from wagers by persons in this state in all other counties for 23 pari-mutuel wagering on dog racing through an advance deposit wagering 24 provider shall be allocated as provided in paragraph 7 of this subsection. 25

4. Advance deposit wagering agreements that are executed between 26 permittees in this state must contain the same or substantially equivalent 27 terms and conditions, including provisions for revenue sharing, as the 28 terms and conditions contained in simulcasting agreements that are 29 executed between those same permittees in order to accept advance deposit 30 wagering on horse racing from a county with a commercial dog racing 31 permittee. 32

5. The advance wagering provider shall transmit daily a percentage 33 determined by the department DIVISION of the gross revenues generated by 34 advance deposit wagers to the department DIVISION for deposit in the 35 racing regulation fund established by section 5-113.01. 36

6. The advance deposit wagering provider shall file the consent 37 provided for in this subsection with the commission, and the consent is 38 valid for a period of at least one year. 39

7. The source market fees are allocated, after deductions, as 40 provided for in section 5-111, subsection C for horse racing for any fees 41 or payments to the state, county and city for taxes or other fees, in the 42 same manner as the proceeds of simulcast pari-mutuel wagering as provided 43 in section 5-111, subsection C for horse racing. From the source market 44 fees from advance deposit wagering on horse racing allocated for purses as 45

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provided in section 5-111, subsection C, five percent is paid to the 1 department DIVISION for deposit in the Arizona breeders' award fund 2 account for distributions for Arizona bred horses as provided in section 3 5-114. 4

O. The owner of the advance deposit wagering account may make an 5 advance deposit pari-mutuel wager only by telephone. 6

P. Only the advance deposit wagering provider may make an advance 7 deposit wager, pursuant to wagering instructions the owner of the monies 8 issues by telephone. The advance deposit wagering provider shall ensure 9 the identification of the owner of the account by using methods and 10 technologies approved by the commission. Any advance deposit wagering 11 provider that accepts wagering instructions on races that are conducted in 12 this state, or accepts wagering instructions originating in this state, 13 shall provide a daily report that contains a full accounting and 14 verification of the source of the wagers made, including the postal zip 15 code of the source of the wagers and all pari-mutuel data, in a form and 16 manner that is approved by the commission. All reasonable costs 17 associated with the creation, provision and transfer of the data is the 18 responsibility of the advance deposit wagering provider. 19

Q. Any person other than a permittee or any advance deposit 20 wagering provider who is approved by the commission under this article and 21 who accepts a wager or who bets on the results of a race, whether the race 22 is conducted in or outside this state, including buying, selling, cashing, 23 exchanging or acquiring a financial interest in a pari-mutuel ticket from 24 a person in this state outside of a racing enclosure or an additional 25 wagering facility that is approved by the commission and that is located 26 in this state is guilty of a class 6 felony. 27

R. Pursuant to section 13-108, a pari-mutuel wager or a bet placed 28 or made by a person in this state is deemed for all purposes to occur in 29 this state. 30

S. The department DIVISION and the attorney general shall enforce 31 subsections Q and R of this section and shall submit an annual report that 32 summarizes these enforcement activities to the governor, the speaker of 33 the house of representatives and the president of the senate. The 34 department DIVISION and the attorney general shall provide a copy of this 35 report to the secretary of state. 36


5-113. Disposition of revenues and monies; funds; committee 39 A. All revenues derived from permittees, permits and licenses as 40

provided by this article shall be deposited, pursuant to sections 35-146 41 and 35-147, in the racing regulation fund established by section 5-113.01. 42 The commission shall further allocate all monies deposited in the Arizona 43 breeders' award fund pursuant to this subsection to support incentives as 44

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authorized by subsection F of this section for thoroughbred and quarter 1 horse breeds only. 2

B. The Arizona county fairs racing betterment fund is established 3 under the jurisdiction of the department DIVISION. The department 4 DIVISION shall distribute monies from the fund to the county fair 5 association or county fair racing association of each county conducting a 6 county fair racing meeting in a proportion that the department DIVISION 7 deems necessary for the promotion and betterment of county fair racing 8 meetings. All expenditures from the fund shall be made on claims approved 9 by the department DIVISION. In order to be eligible for distributions 10 from the fund, a county fair association must provide the department 11 DIVISION with an annual certification in the form required by the 12 department DIVISION supporting expenditures made from the fund. Balances 13 remaining in the fund at the end of a fiscal year do not revert to the 14 state general fund. 15

C. The county fairs livestock and agriculture promotion fund is 16 established under the control of the governor and shall be used for the 17 purpose of promoting the livestock and agricultural resources of the state 18 and for the purpose of conducting an annual Arizona national livestock 19 fair by the Arizona exposition and state fair board to further promote 20 livestock resources. The direct expenses less receipts of the livestock 21 fair shall be paid from this fund, but this payment shall not exceed 22 thirty percent of the receipts of the fund for the preceding fiscal year. 23 Balances remaining in the fund at the end of a fiscal year do not revert 24 to the state general fund. All expenditures from the fund shall be made 25 on claims approved by the governor, as recommended by the livestock and 26 agriculture committee, for the promotion and betterment of the livestock 27 and agricultural resources of this state. The livestock and agriculture 28 committee is established and shall be composed of the following members, 29 at least three of whom are from counties that have a population of less 30 than five hundred thousand persons, appointed by the governor: 31

1. Three members representing county fairs. 32 2. One member representing Arizona livestock fairs. 33 3. One member representing the university of Arizona college of 34

agriculture. 35 4. One member representing the livestock industry. 36 5. One member representing the farming industry. 37 6. One member representing the governor's office. 38 7. One member representing the Arizona state fair conducted by the 39

Arizona exposition and state fair board. 40 8. One member representing the general public. 41 D. The governor shall appoint a chairman from the members. Terms 42

of members shall be four years. 43

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E. Members of the committee are not eligible to receive 1 compensation but are eligible to receive reimbursement for expenses 2 pursuant to title 38, chapter 4, article 2. 3

F. The Arizona breeders' award fund is established under the 4 jurisdiction of the department DIVISION. The department DIVISION shall 5 distribute monies from the fund to the breeder, or the breeder's heirs, 6 devisees or successors, of every winning horse or greyhound foaled or 7 whelped in this state, as defined by section 5-114, in a manner and in an 8 amount established by rules of the commission to protect the integrity of 9 the racing industry and promote, improve and advance the quality of race 10 horse and greyhound breeding within this state. The department DIVISION 11 may contract with a breeders' association to provide data, statistics and 12 other information necessary to enable the department DIVISION to carry out 13 the purposes of this subsection. Persons who are not eligible to be 14 licensed under section 5-107.01 or persons who have been refused licenses 15 under section 5-108 are not eligible to participate in the Arizona 16 greyhound breeders' award fund. Balances remaining in the fund at the end 17 of a fiscal year do not revert to the state general fund. For the 18 purposes of this subsection, "breeder" means the owner or lessee of the 19 dam of the animal at the time the animal was foaled or whelped. 20

G. The Arizona stallion award fund is established under the 21 jurisdiction of the department DIVISION to promote, improve and advance 22 the quality of stallions in this state. The department DIVISION shall 23 distribute monies from the fund to the owner or lessee, or the owner's or 24 lessee's heirs, devisees or successors, of every Arizona stallion whose 25 certified Arizona bred offspring, as prescribed in section 5-114, finishes 26 first, second or third in an eligible race in this state. The department 27 DIVISION may contract with a breeders' association to provide data, 28 statistics and other information necessary to enable the department 29 DIVISION to carry out the purposes of this subsection. Balances remaining 30 in the fund at the end of a fiscal year do not revert to the state general 31 fund. The commission shall adopt rules pursuant to title 41, chapter 6 to 32 carry out the purposes of this subsection. The rules shall prescribe at a 33 minimum: 34

1. The manner and procedure for distribution from the fund, 35 including eligibility requirements for owners and lessees. 36

2. Subject to availability of monies in the fund, the amount to be 37 awarded. 38

3. The requirements for a stallion registered with the jockey club, 39 Lexington, Kentucky or with the American quarter horse association, 40 Amarillo, Texas to be certified as an Arizona stallion. 41

4. The types and requirements of races for which an award may be 42 made. 43

H. The retired racehorse adoption fund is established. The 44 DIVISION shall administer the fund. All revenues derived from retired 45

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racehorse adoption surcharges collected pursuant to section 5-104, 1 subsection G shall be deposited, pursuant to sections 35-146 and 35-147, 2 in the fund. The department DIVISION shall distribute monies from the 3 fund to provide financial assistance to nonprofit enterprises approved by 4 the commission to promote the adoption of retired racehorses pursuant to 5 section 5-104, subsection G in a manner and in an amount established by 6 rules of the commission. Balances remaining in the fund at the end of a 7 fiscal year do not revert to the state general fund. 8

I. The county fair racing fund is established. The department 9 DIVISION shall administer the fund. Monies in the fund are continuously 10 appropriated. The department DIVISION shall use fund monies for the 11 administration of county fair racing. Any monies remaining unspent in the 12 fund at the end of the fiscal year in excess of seventy-five thousand 13 dollars shall revert to the state general fund. 14

J. The agricultural consulting and training trust fund is 15 established for the exclusive purpose of implementing, continuing and 16 supporting the agricultural consulting and training program established by 17 section 3-109.01. The director of the Arizona department of agriculture 18 shall administer the trust fund as trustee. The state treasurer shall 19 accept, separately account for and hold in trust any monies deposited in 20 the state treasury, which are considered to be trust monies as defined in 21 section 35-310 and which shall not be commingled with any other monies in 22 the state treasury except for investment purposes. On notice from the 23 director, the state treasurer shall invest and divest any trust fund 24 monies deposited in the state treasury as provided by sections 35-313 and 25 35-314.03, and monies earned from investment shall be credited to the 26 trust fund. The beneficiary of the trust is the agricultural consulting 27 and training program established by section 3-109.01. Surplus monies, 28 including balances remaining in the trust fund at the end of a fiscal 29 year, do not revert to the state general fund. 30


5-113.01. Racing regulation fund; exemption; assessment 33 The racing regulation fund is established. All revenues derived 34

from permittees, permits and licenses pursuant to this article and section 35 5-230 and any grants or donations received by the department shall be 36 deposited, pursuant to sections 35-146 and 35-147, in the racing 37 regulation fund. The department DIVISION shall administer the racing 38 regulation fund. Monies in the racing regulation fund are subject to 39 legislative appropriation and are to be used by the department DIVISION to 40 support the mission of the department DIVISION. The racing regulation 41 fund is exempt from the provisions of section 35-190 relating to lapsing 42 of appropriations, EXCEPT THAT BY THE END OF EACH FISCAL YEAR: 43

1. THE DIVISION MAY RETAIN UP TO TWENTY PERCENT OF THE UNEXPENDED 44 AND UNENCUMBERED BALANCE OF MONIES, IF ANY, REMAINING IN THE FUND AT THE 45

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END OF EACH FISCAL YEAR. THE REMAINING UNEXPENDED AND UNENCUMBERED 1 BALANCE OF MONIES IN THE FUND AT THE END OF A FISCAL YEAR SHALL BE USED TO 2 REDUCE THE REGULATORY WAGERING ASSESSMENT PRESCRIBED IN PARAGRAPH 2 OF 3 THIS SECTION. 4

2. THE REGULATORY WAGERING ASSESSMENT OF PARI-MUTUEL POOLS MAY NOT 5 EXCEED 0.5 PERCENT. 6


5-114. Races exclusively for Arizona bred horses; breeders' 9 awards; certification; fee 10

A. For the purpose of promoting and encouraging the breeding of 11 Arizona bred horses, each meeting shall offer not less than one race each 12 day of racing which shall be exclusively for Arizona bred horses. In the 13 event such race does not fill, it shall be offered as an open race in 14 which Arizona bred horses have a preference of entry. 15

B. To promote and improve the breeding of horses within this state, 16 a sum of money equal to ten percent of the first money of every purse won 17 by a horse bred in this state shall be paid by the permittee to the owner 18 or lessee, or his heirs, devisees or successors, of the dam of the animal 19 at the time the animal was foaled. Such THE amount shall be paid within 20 thirty days after the close of the racing meeting. All claims or disputes 21 as to the dam of a horse bred in this state shall be determined by the 22 permittee, subject to review by the commission, and the decision of the 23 commission shall be final and conclusive. A horse bred in this state 24 means a horse foaled in this state and certified by the commission. To be 25 eligible for Arizona bred certification, the horse must be physically 26 present within this state for not less than six months during the period 27 from the date he is foaled to the first anniversary date of his having 28 been foaled. 29

C. The commission may contract with a breeders' association to 30 certify that an animal is Arizona bred or is an Arizona stallion. The 31 commission may authorize the association, racing organization or 32 department DIVISION to charge and collect a reasonable fee from a stallion 33 owner to cover the cost of certification or transfer and verification that 34 the animal is Arizona bred or an Arizona stallion. 35


5-115. Violation; classification; civil penalties 38 A. At any racing meeting conducted under this article, a person is 39

guilty of a class 4 felony, if the person: 40 1. Knowingly influences or has any understanding or connivance with 41

any official, owner, jockey, trainer, groom, starter, assistant starter or 42 other person associated with a stable, kennel or race in which any horse 43 or dog participates to predetermine the result of a race. 44

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2. Knowingly gives or offers a bribe in any form to any official, 1 owner, trainer, jockey, driver or groom, starter or assistant starter or 2 any other person licensed by the department DIVISION or accepts or 3 solicits a bribe in any form. 4

3. Knowingly has in the person's possession or in use, while riding 5 or driving in any horse race, any mechanical or electric device capable of 6 affecting a horse's performance other than an ordinary whip. 7

4. Knowingly commits any other corrupt or fraudulent practice in 8 relation to racing that affects or may affect the result of a race. 9

5. For the purpose of selling or offering to sell predictions on 10 horse races, harness races or dog races, advertises that he has predicted 11 the outcome of any race that has been run in this state, unless the person 12 has notified in writing the department DIVISION or a representative of the 13 department DIVISION of his predictions at least three hours before the 14 race involved on forms prescribed by the department DIVISION. A person 15 shall not advertise the fact that he has notified the department DIVISION 16 or use the name of the department DIVISION in any way whatsoever to 17 promote the activities described in this section. For the purposes of 18 this paragraph, "advertise" means the use of any newspaper, magazine or 19 other publication, book, notice, circular, pamphlet, letter, handbill, tip 20 sheet, poster, bill, sign, placard, card, label, tag window display, store 21 sign, radio or television announcement, or other means or methods now or 22 hereafter employed to bring to the attention of the public information 23 concerning the outcome of horse or dog races. Nothing contained in this 24 paragraph applies to any daily newspaper of general circulation that is 25 regularly entered in the United States mail, or any other daily 26 publication carrying complete past performances of horses or dogs entered 27 in races, or to any regularly published magazine or periodical devoted to 28 racing news, that has been published for at least two years. 29

B. It is a class 4 felony for: 30 1. A trainer or owner to enter a horse in a race if the trainer or 31

owner knows that the horse is drugged or desensitized and that the racing 32 performance of the animal is affected. 33

2. A person to perform the drugging or desensitizing of a horse if 34 the person knows that the horse will compete in a race while so drugged or 35 desensitized and knows that the racing performance of the animal is 36 affected. 37

3. A person to intentionally fail to notify a steward as soon as 38 reasonably possible that a horse entered in a race is drugged or 39 desensitized or that a horse was not properly made available for the 40 required tests or inspections and knows that the racing performance of the 41 animal may be affected. 42

4. A person to intentionally impair or alter the normal performance 43 of a pari-mutuel wagering system with the intent to defraud or injure the 44

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state or a permittee. Alteration of the normal performance of a 1 pari-mutuel system includes: 2

(a) Altering, changing or interfering with any equipment or device 3 used in connection with pari-mutuel wagering. 4

(b) Causing any false, inaccurate, delayed or unauthorized data, 5 impulse or signal to be fed into, transmitted over, registered in or 6 displayed on any equipment or device used in connection with pari-mutuel 7 wagering. 8

5. A person to impair or alter the normal operation of simulcast 9 broadcasts by intentionally doing any of the following with the intent to 10 defraud or injure the state or a permittee: 11

(a) Intercepting or decoding a transmission of a simulcast signal, 12 either in whole or in part, which THAT has been authorized in writing for 13 the use of pari-mutuel wagering and that the director has not provided 14 written authorization for the person to receive or decode. 15

(b) Without written authorization from the director, manufacturing, 16 distributing or selling a device, a plan or a kit for a device capable of 17 intercepting or decoding a transmission of a simulcast signal with the 18 intent that the device, plan or kit be used for interception or decoding. 19

(c) Without written authorization from the director, possessing a 20 device, a plan or a kit for a device capable of intercepting or decoding a 21 transmission of a simulcast signal with the intent that the device, plan 22 or kit be used for the interception or decoding. 23

C. The department DIVISION, in addition to any criminal penalties 24 provided in this chapter and in addition to suspension or revocation of a 25 credential or a license, may levy a civil penalty as to ON a licensee or a 26 holder of a credential as follows: 27

1. In an amount of not more than five thousand dollars for each 28 violation of any provision of subsection A of this section. 29

2. In an amount of not more than two thousand five hundred dollars 30 for each violation of any provision of this chapter that constitutes 31 grounds for suspension or revocation of a credential or license, except 32 for A violation of those provisions contained in subsection A of this 33 section. All sums paid to the department DIVISION pursuant to this 34 subsection shall be deposited, pursuant to sections 35-146 and 35-147, in 35 the state general fund. 36

D. Any person who holds or conducts any racing meeting or operates 37 an additional wagering facility without first complying with the 38 provisions of this article, or any person who fails to submit to a drug 39 test as directed by stewards or who violates any other provision of this 40 article for which no other penalty is prescribed, is guilty of a class 2 41 misdemeanor. 42

E. A member of the commission or an employee of the department who 43 at any time, directly or indirectly, knowingly receives any money, bribe, 44 tip or other thing of value or service from any person connected with 45

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racing given with an intent to influence the member's or employee's 1 official action, or any person connected with racing who, directly or 2 indirectly, knowingly gives money, a bribe, a tip or any other thing of 3 value or service to a member of the commission or an employee of the 4 department with intent to influence the member's or employee's official 5 action, is guilty of a class 4 felony. 6

F. A person who knowingly removes or alters, either directly or 7 indirectly, any tattoo, other marking, device, coloration or special 8 characteristic that is required by the department DIVISION for the purpose 9 of identifying a greyhound used or bred for racing purposes or a person 10 who knowingly subjects a greyhound used or bred for racing purposes 11 regulated under this chapter to grossly inhumane conditions or severe 12 mistreatment is guilty of a class 6 felony. For the purposes of this 13 subsection: 14

1. "Grossly inhumane conditions" means conditions arising from a 15 person's reckless indifference to the consequences of an act or omission 16 if the person, without any actual intent to injure, is aware from the 17 person's knowledge of existing circumstances and conditions that the 18 person's conduct will inevitably or probably result in injury to a 19 greyhound used or bred for racing purposes. 20

2. "Severe mistreatment" means the infliction of physical pain, 21 suffering or death on a greyhound used or bred for racing purposes in a 22 manner that is either wanton or with reckless indifference to pain or 23 suffering. 24


5-131. Compact; authority to join; definitions 27 The RACING DIVISION WITHIN THE department of gaming and the ARIZONA 28

racing commission may join with other states in an interstate compact on 29 licensure of participants in live racing with pari-mutuel wagering as 30 follows: 31

Article I 32 Rights and Responsibilities of Each Party State 33

Section 1. Rights and responsibilities of each party state. 34 A. By enacting this compact, each party state: 35 1. Agrees to accept the decisions of the compact committee 36

regarding the issuance of compact committee licenses to participants in 37 live racing pursuant to the committee's licensure requirements. 38

2. Agrees not to treat a notification to an applicant by the 39 compact committee that the compact committee will not be able to process 40 the application further as the denial of a license, or to penalize such an 41 applicant in any other way based solely on such a decision by the compact 42 committee. 43

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3. Reserves the right: 1 (a) To charge a fee for the use of a compact committee license in 2

that state. 3 (b) To apply its own standards in determining whether, on the facts 4

of a particular case, a compact committee license should be suspended or 5 revoked. 6

(c) To apply its own standards in determining licensure 7 eligibility, under the laws of that party state, for categories of 8 participants in live racing that the compact committee determines not to 9 license and for individual participants in live racing who do not meet the 10 licensure requirements of the compact committee. 11

(d) To establish its own licensure standards for the licensure of 12 nonracing employees at pari-mutuel racetracks and employees at separate 13 satellite wagering facilities. 14

B. Any party state that suspends or revokes a compact committee 15 license, through its racing commission or its equivalent or otherwise, 16 shall promptly notify the compact committee of that suspension or 17 revocation. 18

C. A party state shall not be held liable for the debts or other 19 financial obligations incurred by the compact committee. 20

D. The department of gaming may adopt rules to carry out the 21 purposes of this section. 22

Article II 23 Construction and Severability 24

Section 2. Construction and severability. 25 This compact shall be liberally construed so as to effectuate its 26

purposes. The provisions of this compact shall be severable, and, if any 27 phrase, clause, sentence or provision of this compact is declared to be 28 contrary to the Constitution of the United States or of any party state, 29 or the applicability of this compact to any government, agency, person or 30 circumstance is held invalid, the validity of the remainder of this 31 compact and its applicability to any government, agency, person or 32 circumstance shall not be affected thereby. If all or some portion of 33 this compact is held to be contrary to the constitution of any party 34 state, the compact shall remain in full force and effect as to the 35 remaining party states and in full force and effect as to the state 36 affected as to all severable matters. 37

Article III 38 Definitions 39

For the purposes of this compact: 40 1. "Compact committee" means the organization of officials from the 41

party states that is authorized and empowered by the compact to carry out 42 the purposes of this compact. 43

2. "Official" means the appointed, elected, designated or otherwise 44 duly elected representative of a racing commission or the equivalent 45

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thereof in a party state who represents that party as a member of the 1 compact committee. 2

3. "Participants in live racing" means participants in live racing 3 with pari-mutuel wagering in the party states. 4

4. "Party state" means each state that has enacted this compact. 5 5. "State" means each of the several states of the United States, 6

the District of Columbia, the Commonwealth of Puerto Rico and each 7 territory or possession of the United States. 8


5-224. Division of boxing and mixed martial arts regulation; 11 powers and duties 12

A. A division of boxing and mixed martial arts regulation is 13 established in the department to provide staff support for the Arizona 14 state boxing and mixed martial arts commission. Subject to title 41, 15 chapter 4, article 4, the director of the department shall appoint an 16 executive director to perform the duties prescribed in this article. The 17 resources for the Arizona state boxing and mixed martial arts commission 18 shall come from monies appropriated to the department from the racing 19 regulation fund established by section 5-113.01 or from other sources 20 prescribed in section 5-225, subsection D. 21

B. The commission shall obtain from a physician licensed to 22 practice in this state rules and standards for the physical examination of 23 boxers and referees. A schedule of fees to be paid physicians by the 24 promoter or matchmaker for the examination shall be set by the commission. 25

C. The commission may adopt and issue rules pursuant to title 41, 26 chapter 6 to carry out the purposes of this chapter. 27

D. The commission shall hold regular meetings at least quarterly 28 and in addition may hold special meetings. Except as provided in section 29 5-223, subsection B, all meetings of the commission shall be open to the 30 public and reasonable notice of the meetings shall be given pursuant to 31 title 38, chapter 3, article 3.1. 32

E. The commission shall: 33 1. Make and maintain a record of the acts of the division, 34

including the issuance, denial, renewal, suspension or revocation of 35 licenses. 36

2. Keep records of the commission open to public inspection at all 37 reasonable times. 38

3. Assist the director in the development of rules to be 39 implemented pursuant to section 5-104, subsection T. 40

4. Conform to the rules adopted pursuant to section 5-104, 41 subsection T. 42

F. The commission may enter into intergovernmental agreements with 43 Indian tribes, tribal councils or tribal organizations to provide for the 44 regulation of boxing and mixed martial arts contests on Indian 45

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reservations. Nothing in This chapter shall be construed to DOES NOT 1 diminish the authority of the department. 2

Sec. 27. Title 5, chapter 2, article 2, Arizona Revised Statutes, 3 is amended by adding section 5-226, to read: 4

5-226. Levy of tax on gross receipts; disposition; 5 verification and financial audit; definition 6

A. ANY PERSON WHO PROMOTES A BOXING CONTEST IN THIS STATE PURSUANT 7 TO THIS ARTICLE SHALL COMPLY WITH RULES ADOPTED PURSUANT TO THIS ARTICLE 8 AND SHALL WITHIN TEN DAYS AFTER THE CONTEST PAY TO THE DEPARTMENT FOUR 9 PERCENT OF THE GROSS RECEIPTS, AFTER THE DEDUCTION OF CITY, STATE AND 10 FEDERAL TAXES, OF THE MATCH OR EXHIBITION. 11

B. THE DEPARTMENT SHALL VERIFY THE GROSS RECEIPTS OF A CONTEST. 12 THE DIRECTOR MAY REQUIRE A PERSON LICENSED UNDER THIS ARTICLE TO SUPPLY A 13 CERTIFIED FINANCIAL AUDIT TO THE DEPARTMENT. THE DIRECTOR SHALL ADOPT 14 RULES THAT REQUIRE EACH PERSON LICENSED UNDER THIS ARTICLE TO SELECT A 15 CERTIFIED PUBLIC ACCOUNTANT TO CONDUCT THE FINANCIAL AUDIT. THE FINANCIAL 16 STATEMENTS PREPARED PURSUANT TO THIS SECTION SHALL BE PREPARED IN 17 ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND SHALL INCLUDE 18 ANY ADDITIONAL SCHEDULES THE DIRECTOR REQUIRES. A PERSON SUBJECT TO A 19 FINANCIAL AUDIT UNDER THIS SECTION SHALL AFFORD REASONABLE AND NEEDED 20 FACILITIES AND MAKE RETURNS AND EXHIBITS TO THE DEPARTMENT IN THE FORM AND 21 AT THE TIME PRESCRIBED BY THE DIRECTOR. 22

C. AT THE END OF EACH MONTH THE DIRECTOR SHALL REPORT TO THE 23 DEPARTMENT OF ADMINISTRATION THE TOTAL AMOUNT RECEIVED UNDER THIS CHAPTER 24 FROM ALL SOURCES, INCLUDING LICENSE FEES, AND SHALL DEPOSIT THAT AMOUNT, 25 EXCLUDING LICENSE FEES, PURSUANT TO SECTIONS 35-146 AND 35-147, IN THE 26 STATE GENERAL FUND. 27

D. A PROMOTER MAY ISSUE COMPLIMENTARY TICKETS THAT ARE EXEMPT FROM 28 TAXATION PURSUANT TO THIS TITLE. IF A PROMOTER ISSUES COMPLIMENTARY 29 TICKETS, THE EXEMPTION FROM TAXATION APPLIES TO TWO PERCENT OF THE TOTAL 30 NUMBER OF TICKETS ISSUED FOR THE EVENT OR SEVENTY-FIVE TICKETS, WHICHEVER 31 IS GREATER. 32

E. THE DEPARTMENT SHALL COLLECT AND ACCOUNT FOR REVENUES FOR THE 33 COMMISSION, INCLUDING LICENSE FEES REQUIRED BY SECTION 5-230, THE LEVY OF 34 THE TAX ON GROSS RECEIPTS IMPOSED BY THIS SECTION AND THE CASH BOND OR 35 SURETY BOND DEPOSITED PURSUANT TO SECTION 5-229. THE DIRECTOR SHALL 36 REPORT AND DEPOSIT ALL REVENUES COLLECTED PURSUANT TO THIS SUBSECTION, 37 FROM WHATEVER SOURCE, PURSUANT TO SUBSECTION C OF THIS SECTION, EXCEPT 38 THAT LICENSE FEES REQUIRED BY SECTION 5-230 SHALL BE DEPOSITED IN THE 39 RACING REGULATION FUND ESTABLISHED BY SECTION 5-113.01. THE DIRECTOR 40 SHALL ADOPT RULES AS NECESSARY TO ACCOMPLISH THE PURPOSES OF THIS SECTION. 41

F. FOR THE PURPOSES OF THIS SECTION, "GROSS RECEIPTS" MEANS ALL 42 RECEIPTS FROM THE FACE VALUE OF TICKETS SOLD. 43

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5-227. Jurisdiction of commission 3 A. The commission shall: 4 1. Except for the financial and accounting functions delegated to 5

the director pursuant to section 5-104 5-226, have sole direction, 6 management, control and jurisdiction over all boxing and mixed martial 7 arts contests held within this state unless exempt from the application of 8 this chapter by section 5-222. 9

2. Have sole control, authority and jurisdiction over all licenses 10 required by this chapter. 11

B. The commission shall grant a license to an applicant if in the 12 judgment of the commission the financial responsibility, experience, 13 character and general fitness of the applicant are such that his THE 14 APPLICANT'S participation is consistent with the public interest, 15 convenience or necessity and the best interests of boxing and in 16 conformity with the purposes of this chapter. The commission may delegate 17 the commission's licensing authority to the commission's executive 18 director. 19


5-229. Promoters; licenses; bond; proof of financial 22 responsibility 23

A. The commission may in its discretion withhold the granting of a 24 license to a promoter until the applicant furnishes proof of his financial 25 responsibility to promote contests in accordance with section 5-104.02 26 5-226, subsection B and the rules adopted by the director. The commission 27 may issue a license to conduct, hold or give boxing contests to any 28 qualified person or to a corporation duly authorized to do business under 29 the laws of this state. 30

B. In addition to the cash bond or surety bond required pursuant to 31 section 5-228, subsection E, the commission may require a promoter to 32 deposit with the department prior to each contest a cash bond or surety 33 bond in an amount set by the commission as a guarantee for the fulfillment 34 of the promoter's contract obligations for that contest, the payment of 35 licenses and taxes on gross receipts of that contest and reimbursement to 36 ticket purchasers if the contest is not held as advertised. 37


5-238. Sham boxing; withholding a purse 40 A. The commission may withhold all or part of a purse or other 41

monies payable to any contestant, manager or second if in the judgment of 42 the commission a boxing contestant is participating in a sham or fake 43 boxing contest or is otherwise not competing honestly or to the best of 44 his THE CONTESTANT'S ability. 45

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B. If the commission withholds a purse or part of a purse or other 1 monies the commission shall give notice to all interested parties and hold 2 a hearing upon the matter within ten days. 3

C. If the commission determines that a contestant, manager or 4 second is not entitled to a purse, part of a purse or other monies the 5 promoter shall turn such monies over to the director to be applied 6 pursuant to section 5-104.02 5-226, subsection C. 7

Sec. 31. Retention of members 8 Notwithstanding section 5-103, Arizona Revised Statutes, as amended 9

by this act, all persons serving as members of the Arizona racing 10 commission on the effective date of this act may continue to serve until 11 the expiration of their normal terms. The governor shall make all 12 subsequent appointments as prescribed by statute. 13

Sec. 32. Exemption from rulemaking 14 The department of gaming is exempt from the rulemaking requirements 15

of title 41, chapter 6, Arizona Revised Statutes, for one year after the 16 effective date of this act for the purposes of adopting rules to include a 17 unique pari-mutuel wager to be known as the cactus pick 6. 18

Sec. 33. Rural county fair racing fund; delayed repeal 19 A. The rural county fair racing fund is established. The department 20

of gaming shall administer the fund. Monies in the fund are continuously 21 appropriated. The department shall transfer two hundred thousand dollars 22 of surplus monies in each of fiscal years 2018-2019 and 2019-2020 from the 23 racing regulation fund established by section 5-113.01, Arizona Revised 24 Statutes, as amended by this act, into the rural county fair racing fund. 25 The department shall distribute matching grants from the rural county fair 26 racing fund to counties with a population of less than eight hundred 27 thousand persons and that operate county fair racing. The Arizona racing 28 commission shall establish application procedures for counties to apply 29 for grants from the rural county fair racing fund. The Arizona racing 30 commission shall review the applications submitted by counties and 31 distribute grant monies from the rural county fair racing fund on a 32 first-come, first-served basis. A county is not eligible for a grant from 33 the rural county fair racing fund unless the county agrees to contribute 34 county revenues for county fair racing in an amount that is equal to at 35 least fifty percent of the amount of the grant from the rural county fair 36 racing fund. A county may not receive a grant of more than forty thousand 37 dollars from the rural county fair racing fund during any fiscal year. 38

B. This section is repealed from and after June 30, 2020. Any 39 monies remaining in the rural county fair racing fund that are unspent and 40 unencumbered on July 1, 2020 revert to the department of gaming and shall 41 be deposited in the racing regulation fund established by section 42 5-113.01, Arizona Revised Statutes, as amended by this act. 43

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