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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of historical racing pari-mutuel |
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wagering by licensed horse and greyhound racetracks and the |
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distribution of certain live, simulcast, and historical |
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pari-mutuel pools. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2021.003, Occupations Code, is amended |
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by adding Subdivisions (17-a), (17-b), (17-c), (17-d), (17-e), and |
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(17-f) and amending Subdivisions (32), (33), (40), (41), and (42) |
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to read as follows: |
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(17-a) "Historical pari-mutuel wagering" means |
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pari-mutuel wagering on the outcomes of historical racing. |
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(17-b) "Historical race" means a previously conducted |
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horse or greyhound race or groups of horse races or of greyhound |
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races that were: |
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(A) authorized by the commission or another |
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racing jurisdiction and conducted in this state or another racing |
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jurisdiction; and |
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(B) concluded with official results that did not |
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include any scratches, disqualifications, or dead-heat finishes. |
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(17-c) "Historical racing" means the display, |
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including by graphical representation, of historical races. |
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(17-d) "Historical racing machine" means a peripheral |
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electronic device used by a historical racing totalisator system to |
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offer historical pari-mutuel racing. |
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(17-e) "Historical racing totalisator system" means a |
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system for registering, computing, or displaying the wagering and |
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payment of winnings in historical pari-mutuel wagering. |
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(17-f) "Historical racing totalisator system company" |
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means a company selling, leasing, servicing, maintaining, or |
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operating a historical racing totalisator system. |
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(32) "Pari-mutuel pool" means the total amount of |
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money wagered by patrons on the result of a particular race or |
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combination of races, divided into separate mutuel pools for win, |
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place, show, or combinations. The term includes pari-mutuel pools |
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created by pari-mutuel wagering on live and simulcast races and |
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pools created by pari-mutuel wagering on historical races. |
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(33) "Pari-mutuel voucher" means a bearer instrument, |
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issued by a pari-mutuel wagering machine or a historical racing |
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machine, that represents money owned by a wagering patron and held |
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by a racetrack association, including winnings from a pari-mutuel |
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wager. |
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(40) "Race" includes a live audio and visual signal of |
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and a graphical representation of a race. |
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(41) "Racetrack" means a facility licensed under this |
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subtitle for the conduct of pari-mutuel wagering on horse racing or |
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greyhound racing, including historical racing. |
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(42) "Racetrack association" means a person licensed |
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under this subtitle to conduct the following with pari-mutuel |
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wagering: |
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(A) a horse race meeting; |
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(B) [or] a greyhound race meeting; or |
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(C) a historical race [with pari-mutuel |
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wagering]. |
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SECTION 2. Section 2023.001(a), Occupations Code, is |
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amended to read as follows: |
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(a) Notwithstanding any contrary provision in this |
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subtitle, the commission may license and regulate all aspects of |
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horse racing and greyhound racing in this state, including |
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historical racing, regardless of whether that racing involves |
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pari-mutuel wagering. |
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SECTION 3. Section 2023.004(a), Occupations Code, is |
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amended to read as follows: |
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(a) The commission shall adopt: |
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(1) rules for conducting horse racing or greyhound |
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racing in this state, including historical racing, that involves |
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wagering; and |
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(2) rules for administering this subtitle in a manner |
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consistent with this subtitle. |
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SECTION 4. Section 2025.001(d), Occupations Code, is |
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amended to read as follows: |
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(d) The commission by rule shall set fees in amounts |
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reasonable and necessary to cover the commission's costs of |
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regulating, overseeing, and licensing live, [and] simulcast, and |
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historical racing at racetracks. |
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SECTION 5. Section 2025.051, Occupations Code, is amended |
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to read as follows: |
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Sec. 2025.051. RACETRACK LICENSE REQUIRED; CRIMINAL |
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PENALTY. A person may not conduct wagering on a live or simulcast |
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horse or greyhound race meeting or on a historical race without |
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first obtaining a racetrack license issued by the commission. A |
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person who violates this section commits an offense. |
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SECTION 6. Section 2025.054, Occupations Code, is amended |
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to read as follows: |
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Sec. 2025.054. MANAGEMENT, CONCESSION, HISTORICAL RACING |
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TOTALISATOR SYSTEM, AND TOTALISATOR CONTRACTS. (a) The commission |
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shall require each applicant for an original racetrack license to |
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submit with the application for inspection and review by the |
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commission a copy of each management, concession, historical racing |
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totalisator system, and totalisator contract associated with the |
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proposed license at the proposed location in which the applicant |
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has an interest. |
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(b) An applicant or license holder shall advise the |
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commission of any change in any management, concession, historical |
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racing totalisator system, or totalisator contract. |
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(c) The criminal history record information, fingerprint, |
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and other information required of a license applicant under |
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Sections 2023.057, 2025.003, and 2025.052(a)(1)-(3) are required |
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of proposed totalisator firms, historical racing totalisator |
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system companies, concessionaires, and managers and management |
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firms. |
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SECTION 7. Section 2025.056(a), Occupations Code, is |
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amended to read as follows: |
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(a) The commission shall require a complete personal, |
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financial, and business background check of the applicant or of any |
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person who owns an interest in or exercises control over an |
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applicant for a racetrack license, including the partners, |
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stockholders, concessionaires, management personnel, management |
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firms, historical racing totalisator system companies, and |
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creditors. |
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SECTION 8. Section 2025.103(a), Occupations Code, is |
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amended to read as follows: |
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(a) After a racetrack association has been granted a license |
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to operate a racetrack and before the completion of construction at |
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the designated place for which the license was issued, the |
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commission may, on application by the racetrack association, issue |
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a temporary license that authorizes the racetrack association to |
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conduct races or offer historical racing at a location in the same |
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county until the earlier of: |
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(1) the second anniversary of the date of issuance of |
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the temporary license; or |
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(2) the completion of the permanent facility. |
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SECTION 9. Sections 2025.104(b) and (c), Occupations Code, |
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are amended to read as follows: |
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(b) The commission shall designate a racetrack license as an |
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active license if the license holder: |
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(1) holds live racing events or offers historical |
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racing at the racetrack; or |
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(2) makes good faith efforts to conduct live racing or |
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offer historical racing. |
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(c) The commission by rule shall provide guidance on actions |
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that constitute, for purposes of this subtitle, good faith efforts |
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to conduct live racing or offer historical racing. |
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SECTION 10. Sections 2025.105(b) and (c), Occupations Code, |
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are amended to read as follows: |
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(b) In determining whether to renew an inactive license, the |
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commission shall consider: |
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(1) the inactive license holder's: |
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(A) financial stability; |
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(B) ability to conduct live racing or offer |
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historical racing; |
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(C) ability to construct and maintain a |
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racetrack; and |
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(D) other good faith efforts to conduct live |
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racing or offer historical racing; and |
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(2) other necessary factors considered in the issuance |
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of the original license. |
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(c) The commission may refuse to renew an inactive license |
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if, after notice and a hearing, the commission determines that: |
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(1) renewal of the license is not in the best interests |
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of the racing industry or the public; or |
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(2) the license holder has failed to make a good faith |
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effort to conduct live racing or offer historical racing. |
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SECTION 11. Section 2026.002, Occupations Code, is amended |
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to read as follows: |
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Sec. 2026.002. PREVENTION OF SUBTERFUGE IN RACETRACK |
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OWNERSHIP OR OPERATION. This subtitle shall be liberally construed |
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to prevent subterfuge in the ownership and operation of a racetrack |
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or in the offering of historical racing. |
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SECTION 12. Section 2026.151(a), Occupations Code, is |
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amended to read as follows: |
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(a) All concession, management, historical racing |
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totalisator system, and totalisator contracts submitted by an |
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applicant under Section 2025.054 must have the prior approval of |
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the commission. |
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SECTION 13. Section 2026.152(a), Occupations Code, is |
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amended to read as follows: |
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(a) On receipt of a plan for the security of a racetrack, or |
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a copy of a concession, management, historical racing totalisator |
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system, or totalisator contract for review under Section 2026.151, |
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the commission shall review the security plan or contract in an |
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executive session. Documents submitted by an applicant to the |
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commission under this section or Section 2025.052 or 2025.054 are |
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subject to discovery in a suit brought under this subtitle but are |
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not public records and are not subject to Chapter 552, Government |
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Code. |
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SECTION 14. Section 2027.001(a), Occupations Code, is |
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amended to read as follows: |
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(a) The commission shall adopt rules to regulate wagering on |
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horse races and greyhound races, including historical races, under |
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the system known as pari-mutuel wagering. |
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SECTION 15. Chapter 2027, Occupations Code, is amended by |
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adding Subchapter C-1 to read as follows: |
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SUBCHAPTER C-1. PARI-MUTUEL WAGERING ON HISTORICAL RACES |
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Sec. 2027.151. HISTORICAL PARI-MUTUEL WAGERING RULES. The |
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commission shall adopt rules to regulate pari-mutuel wagering on |
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historical races. |
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Sec. 2027.152. HISTORICAL RACING. A racetrack association |
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may offer historical racing, subject to the requirements of this |
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subchapter. |
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Sec. 2027.153. REQUIREMENTS AND LIMITATIONS ON HISTORICAL |
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RACING MACHINES. (a) The commission may not require the use of a |
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particular brand or model of historical racing machine. |
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(b) A historical racing machine may not display any |
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information that would allow a patron to identify the historical |
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race on which the patron is wagering, including the location of the |
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race, the date on which the race was run, the names of the animals in |
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the race, or the names of the jockeys that participated in the race |
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before the patron places a wager on the machine. This subsection |
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does not prohibit a historical racing machine from displaying |
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non-identifying race information in written or graphical form. |
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(c) After a patron finalizes the patron's wager selections |
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on a historical racing machine, the machine must display: |
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(1) the race, a portion of the race, or a graphical |
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representation of the race; and |
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(2) the official results and identity of the race. |
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(d) A racetrack association offering wagering on a |
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historical racing machine that has a complete malfunction during |
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use by a patron shall fully refund the balance of the patron's wager |
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on the machine at the time of the malfunction, as verified by the |
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historical racing totalisator system. |
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(e) To prevent fraud or liability for malfunction of a |
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significant portion of the historical racing machines at one |
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location, a racetrack association shall ensure that all historical |
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race information used by each historical racing machine at the |
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location is stored on the machine or a server located within the |
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association's enclosure. |
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(f) A racetrack association shall ensure that: |
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(1) a single historical racing totalisator system |
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controls not more than 40 percent of the historical racing machines |
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at the association's racetrack; and |
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(2) a person does not have a financial interest in or |
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exercise control over one or more historical racing totalisator |
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systems that control more than 40 percent of the historical racing |
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machines at the racetrack. |
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Sec. 2027.154. REQUIREMENTS AND LIMITATIONS ON HISTORICAL |
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RACING TOTALISATOR SYSTEMS. (a) The commission may not require the |
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use of a particular brand or model of historical racing totalisator |
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system. |
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(b) A historical racing totalisator system may be operated |
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only within a racetrack association's enclosure. Pari-mutuel |
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wagering on historical racing may not be offered on a historical |
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racing totalisator system that is connected to the Internet or |
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another offsite location. |
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(c) Pari-mutuel wagering on historical racing may be |
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offered only on historical racing machines controlled by a |
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historical racing totalisator system approved by the commission. |
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Sec. 2027.155. REQUEST FOR COMMISSION APPROVAL OF |
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HISTORICAL RACING TOTALISATOR SYSTEM. (a) A historical racing |
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totalisator company may request commission approval of a historical |
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racing totalisator system for use in offering historical racing at |
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a racetrack. |
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(b) A request for commission approval submitted under this |
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section must be accompanied by a certification and associated |
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report issued by an independent testing laboratory verifying that: |
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(1) the laboratory tested the historical racing |
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totalisator system to ensure its integrity and proper working |
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order; and |
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(2) the system and the proposed wagers to be offered |
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through the system meet all applicable state laws and commission |
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rules for use in offering historical racing at a racetrack. |
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Sec. 2027.156. CONSTRUCTION OF LAWS RELATED TO HISTORICAL |
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RACING. (a) No provision of this subtitle may be construed to |
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allow pari-mutuel wagering on historical racing, the offer of |
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historical racing, or the use of historical racing machines at any |
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location other than a racetrack licensed under this subtitle. |
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(b) No provision of this subtitle may be construed to |
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prohibit pari-mutuel wagering on: |
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(1) a historical horse race offered at a greyhound |
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racetrack licensed under this subtitle; or |
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(2) a historical greyhound race offered at a horse |
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racetrack licensed under this subtitle. |
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Sec. 2027.157. HISTORICAL RACING PARI-MUTUEL POOLS; SEED |
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POOLS. (a) Except as otherwise provided by Subsection (c), a |
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racetrack association shall pay patrons who win historical racing |
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wagers exclusively from the pari-mutuel pools created by wagers |
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placed on historical racing. |
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(b) A racetrack association may not: |
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(1) conduct historical racing in a manner that allows |
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patrons to wager against the racetrack association or that renders |
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the association's compensation dependent on the outcome of any |
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particular historical race or the success of any particular wager |
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on historical racing; |
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(2) pay a winning wager in an amount that exceeds the |
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amount available in the applicable historical racing pari-mutuel |
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pool; or |
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(3) pay a patron using any consideration other than |
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cash or a pari-mutuel voucher. |
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(c) A racetrack association shall maintain and fund seed |
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pools as necessary to ensure a sufficient amount of money is |
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available to pay a patron the minimum payment for a winning wager |
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specified by the historical racing machine through which the patron |
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places the wager. A historical racing totalisator system may |
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assign a percentage of each historical racing wager to fund seed |
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pools. |
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(d) A racetrack association may provide funding for the |
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initial seed pool for each type of wager and may be refunded an |
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amount equal to the amount of the initial funding after the |
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historical racing pari-mutuel pool is fully funded. Except for |
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amounts used to fund seed pools under Subsection (c), a racetrack |
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association may not receive any funding for the initial seed pool |
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from any person, including any historical racing totalisator system |
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company. |
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SECTION 16. Section 2028.001(a), Occupations Code, is |
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amended to read as follows: |
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(a) For any organization that receives funds generated by |
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live, [or] simulcast, or historical [pari-mutuel] racing with |
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pari-mutuel wagering, the commission shall adopt reporting, |
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monitoring, and auditing requirements or other appropriate |
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performance measures for: |
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(1) any funds distributed to or used by the |
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organization; and |
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(2) any function or service provided by the |
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expenditure of the funds described by Subdivision (1). |
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SECTION 17. Section 2028.002(a), Occupations Code, is |
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amended to read as follows: |
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(a) An organization that receives funds generated by live, |
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[or] simulcast, or historical [pari-mutuel] racing with |
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pari-mutuel wagering shall annually file with the commission a copy |
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of an audit report prepared by an independent certified public |
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accountant. The audit must include a verification of any |
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performance report sent to or required by the commission. |
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SECTION 18. Section 2028.101(b), Occupations Code, is |
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amended to read as follows: |
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(b) The total maximum deduction under Subsection (a) is: |
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(1) 18 percent from a regular wagering pool or |
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historical racing pari-mutuel pool; |
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(2) 21 percent from a multiple two wagering pool; and |
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(3) 25 percent from a multiple three wagering pool. |
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SECTION 19. Sections 2028.105(b) and (c), Occupations Code, |
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are amended to read as follows: |
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(b) A horse racetrack association shall pay to the |
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commission for use by the appropriate state horse breed registry, |
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subject to commission rules, 10 percent of the total breakage from a |
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live, [pari-mutuel pool or a] simulcast, or historical racing |
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pari-mutuel pool. The appropriate state horse breed registries are |
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as follows: |
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(1) the Texas Thoroughbred Breeders Association for |
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Thoroughbred horses; |
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(2) the Texas Quarter Horse Association for quarter |
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horses; |
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(3) the Texas Appaloosa Horse Club for Appaloosa |
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horses; |
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(4) the Texas Arabian Breeders Association for Arabian |
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horses; and |
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(5) the Texas Paint Horse Breeders Association for |
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paint horses. |
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(c) A horse racetrack association shall retain 10 percent of |
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the total breakage from a [live pari-mutuel pool or a simulcast] |
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pari-mutuel pool to be used in stakes races restricted to |
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accredited Texas-bred horses. |
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SECTION 20. Section 2028.151, Occupations Code, is amended |
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to read as follows: |
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Sec. 2028.151. APPLICATION OF SUBCHAPTER. The deductions |
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and allocations made under this subchapter apply to live, |
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simulcast, and historical racing pari-mutuel pools, except as |
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otherwise specifically provided by this subchapter. |
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SECTION 21. Section 2028.152, Occupations Code, is amended |
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to read as follows: |
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Sec. 2028.152. DISTRIBUTION OF LIVE OR SIMULCAST |
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PARI-MUTUEL POOL. Each greyhound racetrack association shall |
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distribute all money deposited in any live or simulcast pari-mutuel |
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pool to the winning ticket holders who present tickets for payment |
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not later than the 60th day after the closing day of the greyhound |
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race meeting at which the pool was formed less: |
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(1) an amount paid as a commission of 18 percent of the |
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total deposits in pools resulting from regular win, place, and show |
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wagering; |
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(2) an amount not to exceed 21 percent of the total |
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deposits in pools resulting from multiple two wagering; and |
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(3) an amount not to exceed 25 percent of the total |
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deposits in pools resulting from multiple three wagering. |
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SECTION 22. Section 2028.154, Occupations Code, is amended |
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by amending Subsection (a) and adding Subsection (a-1) to read as |
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follows: |
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(a) A greyhound racetrack association shall pay 50 percent |
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of the breakage to the appropriate state greyhound breed registry. |
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Of that breakage percentage: |
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(1) 25 percent is to be used in stakes races; and |
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(2) 25 percent of that total breakage from a live |
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[pari-mutuel pool] or [a] simulcast pari-mutuel pool is to be paid |
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to the commission for deposit into the Texas-bred incentive fund |
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established under Section 2028.301. |
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(a-1) The commission shall distribute the money collected |
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under this section and deposited into the fund to the state |
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greyhound breed registry for use in accordance with this section |
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and commission rules. |
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SECTION 23. Section 2028.155(a), Occupations Code, is |
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amended to read as follows: |
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(a) The purse in a live or simulcast greyhound race may not |
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be less than 4.7 percent of the total deposited in each pari-mutuel |
|
pool. |
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SECTION 24. Subchapter D, Chapter 2028, Occupations Code, |
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is amended by adding Section 2028.156 to read as follows: |
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Sec. 2028.156. DISTRIBUTION OF HISTORICAL RACING |
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PARI-MUTUEL POOL. A greyhound racetrack association may receive as |
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compensation an amount not to exceed 18 percent of the |
|
association's historical racing pari-mutuel pools. |
|
SECTION 25. Chapter 2028, Occupations Code, is amended by |
|
adding Subchapter E-1 to read as follows: |
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SUBCHAPTER E-1. GENERAL DEDUCTIONS FROM HISTORICAL RACING |
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PARI-MUTUEL POOLS |
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Sec. 2028.231. SET-ASIDE FROM HISTORICAL RACING |
|
PARI-MUTUEL POOL. A horse or greyhound racetrack association shall |
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set aside for this state from each pari-mutuel pool created by |
|
historical racing offered at the racetrack an amount equal to 1.25 |
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percent of that pool. |
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SECTION 26. As soon as practical after the effective date of |
|
this Act, the Texas Racing Commission shall adopt the rules and |
|
procedures necessary to implement the changes in law made by this |
|
Act. |
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SECTION 27. This Act takes effect September 1, 2021. |